Growing a BPM Center of Excellence


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Presentation given at the BPM Executive Day, Bogota, Colombia, December 4, 2012. The presentation outlines the different dimensions of BPM activities an organization should consider when organizing their BPM efforts.

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Growing a BPM Center of Excellence

  1. 1. Building BPM CompetencyGrowing a Center of ExcellenceMichael zur Muehlen, Ph.D.Stevens Institute of TechnologyHowe School of Technology ManagementCenter for Business Process InnovationHoboken, New 1
  2. 2. Agenda Background What is your challenge? How good are you? How good do you want to become? Components Mechanics Tools Skills Governance Culture 2
  3. 3. “They have done process innovation very well,” says Nelson Fraiman, a professor at Columbia Business School [...] “Product innovation? No. But tell me one Chinese company that has done product innovation very well. They are brilliant at process. I think you should give a cheer for process innovation.”Source: New York Times, November 9, 2012 3
  4. 4. What’s your Challenge? Increase Transparency Standardize Operations Manage Risk Increase Performance Create Innovation Often: All of the above 4
  5. 5. Why BPM? 0 75 150 225 300 216 146 Cost/Productivity Responsiveness Customer Satisfaction 117 Innovation Improve IT Risk Management 106 68 50Source: BPTrends Number of Responses 5
  6. 6. Do Process Managers Exist? Value Chain Manager Process Manager for Major Processes 32% Process Manager for Specific Processes All Managers are Process Managers Other 19% 27% 10% 13%Source: BPTrends 6
  7. 7. Visibility 7
  8. 8. Industrial BPM Paper Process 1 Business Phone Process Process 2 Management Fax = Work ... Management E-mail Process n Web White collar production management Input Transparent work pipeline ProcessChannels Automation, but only if not Types too complex / rare regulatory requirements lack of economies of scale 8
  9. 9. Search processes using ‣technical and ‣business criteria Display shows ‣status ‣start time ‣end time ‣instance dataIndustrial Back-Office 9
  10. 10. Task Management 10
  11. 11. How Good Are You? Business Process Management Maturity Model Strategic Governance Method IT Support People Culture Alignment Process Improvement Process Roles and Process Design & Process Design & Process Skills & Process Values & Plan Responsibilities Modeling Modeling Expertise Beliefs Strategy & Process Decision-making Process Process Process Education & Process Attitudes & Capability Linkage Processes Implementation & Implementation & Training Behaviors Execution Execution Process Output Process Metrics & Process Control & Process Control & Process Collaboration Responsiveness to Measurement Performance Linkage Measurement Measurement & Communication Process Change Process / Business Process Management Process Improvement Process Improvement Process Knowledge Leadership Attention Architecture Standards & Innovation & Innovation Management to Process Process Customers & Process Management Process Project & Process Project & Process Management Process Social Stakeholders Controls Program Program Leaders Networks Management Management largely$true$ somewhat$ largely$ true$ untrue$ P"1 P"2 P"3& P"4& The$process$has$not$been$designed$on$an$end1to1end$ The$process$has$been$designed$to$fit$with$other$enterprise$ The$process$has$been$designed$to$fit$with$customer$and$ The$process$has$been$redesigned$from$end$to$end$in$ Design Purpose basis.$Functional$managers$use$the$legacy$design$primarily$ processes$and$with$the$enterprise’s$IT$systems$in$order$to$ supplier$processes$in$order$to$optimize$inter1enterprise$ order$to$optimize$its$performance.$ as$a$context$for$functional$performance$improvement.$ optimize$the$enterprise’s$performance.$ performance.$ The$process$owner$and$the$owners$of$the$other$processes$ The$process$owner$and$the$owners$of$customer$and$ The$process’s$inputs,$outputs,$suppliers,$and$customers$ The$needs$of$the$process’s$customers$are$known$and$ Context with$which$the$process$interfaces$have$established$ supplier$processes$with$which$the$process$interfaces$have$ have$been$identified.$ agreed$upon.$ mutual$performance$expectations.$ estab1lished$mutual$performance$expectations.$ The$process$documentation$describes$the$process’s$ An$electronic$representation$of$the$process$design$ The$documentation$of$the$process$is$primarily$functional,$ inter1faces$with,$and$expectations$of,$other$processes$and$ supports$its$performance$and$management$and$allows$ Documentation but$it$identifies$the$interconnections$among$the$ There$is$end1to1end$documentation$of$the$process$design.$ links$the$process$to$the$enterprise’s$system$and$data$ analysis$of$environmental$changes$and$process$ organiza1tions$involved$in$executing$the$process.$ architecture.$ reconfigurations.$ Performers$can$describe$the$process’s$overall$flow;$how$ Performers$are$familiar$both$with$fundamental$business$ Performers$are$familiar$with$the$enterprise’s$industry$and$ Performers$can$name$the$process$they$execute$and$ their$work$affects$customers,$other$employees$in$the$ concepts$and$with$the$drivers$of$enterprise$performance$ Performers Knowledge its$trends$and$can$describe$how$their$work$affects$inter1 identify$the$key$metrics$of$its$performance.$ pro1cess,$and$the$process’s$performance;$and$the$ and$can$describe$how$their$work$affects$other$processes$ enterprise$performance.$ required$and$actual$performance$levels.$ and$the$enterprise’s$performance.$ Performers$are$skilled$in$problem$solving$and$process$ Performers$are$skilled$at$change$management$and$change$ Skills Performers$are$skilled$in$teamwork$and$self1management.$ Performers$are$skilled$at$business$decision$making.$ improvement$techniques.$ implementation.$ Performers$try$to$follow$the$process$design,$perform$it$ Performers$have$some$allegiance$to$the$process,$but$owe$ Performers$strive$to$ensure$that$the$process$delivers$the$ Performers$look$for$signs$that$the$process$should$change,$ Behavior cor1rectly,$and$work$in$ways$that$will$enable$other$people$ primary$allegiance$to$their$function.$ results$needed$to$achieve$the$enterprise’s$goals.$ and$they$propose$improvements$to$the$process.$ who$execute$the$process$to$do$their$work$effectively.$ Enterprise$leadership$has$created$an$official$process$ The$process$owner$is$an$individual$or$a$group$informally$ The$process$comes$first$for$the$owner$in$terms$of$time$ The$process$owner$is$a$member$of$the$enterprise’s$most$ Owner Identity owner$role$and$has$filled$the$position$with$a$senior$ charged$with$improving$the$process’s$performance.$ allo1cation,$mind$share,$and$personal$goals.$ senior$decision1making$body.$ manager$who$has$clout$and$credibility.$ The$process$owner$develops$a$rolling$strategic$plan$for$ The$process$owner$articulates$the$process’s$performance$ The$process$owner$identifies$and$documents$the$process,$ the$process,$participates$in$enterprise1level$strategic$ goals$and$a$vision$of$its$future;$sponsors$redesign$and$ The$process$owner$works$with$other$process$owners$to$ Activities communicates$it$to$all$the$performers,$and$sponsors$small1 planning,$and$collaborates$with$his$or$her$counterparts$ im1provement$efforts;$plans$their$implementation;$and$ integrate$processes$to$achieve$the$enterprise’s$goals.$ scale$change$projects.$ working$for$customers$and$suppliers$to$sponsor$inter1 ensures$compliance$with$the$process$design.$ enterprise$process1redesign$initiatives.$ The$process$owner$controls$the$IT$systems$that$support$ The$process$owner$can$convene$a$process$redesign$team$ The$process$owner$controls$the$process’s$budget$and$ The$process$owner$lobbies$for$the$process$but$can$only$ the$process$and$any$projects$that$change$the$process$and$ Authority and$implement$the$new$design$and$has$some$control$over$ exerts$strong$influence$over$personnel$assignments$and$ encourage$functional$managers$to$make$changes.$ has$some$influence$over$personnel$assignments$and$ the$technology$budget$for$the$process.$ evaluations.$ evaluations$as$well$as$the$process’s$budget.$ An$integrated$IT$system,$designed$with$the$process$in$ An$IT$system$with$a$modular$architecture$that$adheres$to$ An$IT$system$constructed$from$functional$components$ Infrastructure Information Systems Fragmented$legacy$IT$systems$support$the$process.$ mind$and$adhering$to$enterprise$standards,$supports$the$ industry$standards$for$interenterprise$communication$ sup1ports$the$process.$ process.$ sup1ports$the$process.$ Hiring,$development,$reward,$and$recognition$systems$ Functional$managers$reward$the$attainment$of$functional$ The$process’s$design$drives$role$definitions,$job$ Hiring,$development,$reward,$and$recognition$systems$ rein1force$the$importance$of$intra1$and$interenterprise$ Human Resource Systems excellence$and$the$resolution$of$functional$problems$in$a$ descrip1tions,$and$competency$profiles.$Job$training$is$ em1phasize$the$process’s$needs$and$results$and$balance$ collabora1tion,$personal$learning,$and$organizational$ process$context.$ based$on$pro1cess$documentation.$ them$against$the$enterprise’s$needs.$ change.$ The$process$has$end1to1end$process$metrics$derived$from$ The$process’s$metrics$as$well$as$cross1process$metrics$ The$process’s$metrics$have$been$derived$from$ Metrics Definition The$process$has$some$basic$cost$and$quality$metrics.$ 11 customer$requirements.$ have$been$derived$from$the$enterprise’s$strategic$goals.$ interenter1prise$goals.$ Managers$use$the$process’s$metrics$to$track$its$ Managers$use$the$process’s$metrics$to$compare$its$ Managers$present$the$metrics$to$process$performers$for$ Managers$regularly$review$and$refresh$the$process’s$ Uses perfor1mance,$identify$root$causes$of$faulty$performance,$ perfor1mance$to$benchmarks,$best1in1class$performance,$ awareness$and$motivation.$They$use$dashboards$based$on$ met1rics$and$targets$and$use$them$in$strategic$planning.$ and$drive$functional$improvements.$ and$cus1tomer$needs$and$to$set$performance$targets.$ the$metrics$for$day1to1day$management$of$the$process.$
  12. 12. Organization of BPM Initiatives Did not identify or define specific Process Team Identified and defined Internal Process Team Plan to create BPM COE Successfully implemented BPM COE 15% 23% 16% 46%Source: Palmer (2007) 12
  13. 13. Organization of BPM Initiatives 18% 36% 16% No formal BPM Group BPM Group at Executive Level BPM Group at Departmental Level BPM Group in IT 15% BPM Group within HR 6% 5% 4% BPM Group within Finance 1% BPM Group within Quality Control OtherSource: BPTrends 13
  14. 14. BPM Capability GrowthSource: Forrester (2009) 14
  15. 15. Mechanics 15
  16. 16. “Vision without execution is hallucination” Thomas Alva Edison 16
  17. 17. Scheduled 5% 3%Project Time 8% 7%during First BPMProject 12% 41% Business Case Project Team Selection Process Discovery 11% Documentation Functional and Technical Specification Tools Evaluation and Selection 9% Implementation 4% Testing and Debugging Deployment and Training 17 Source: BPTrends (2006)
  18. 18. Normal Flow Task End Event Start Event / Event Pool Data-Based XOR Start Message Text Annotation Message Flow Parallel Fork/Join Lanes Gateway Sub-Process (Collapsed) Association Data Object Intermediate Timer Intermediate Message End Terminate Sub-Process (Expanded) End Link Default Flow Inclusive Decision/Merge Activity Looping Exception Task Start Link End Message End Exception Complex Decision/Merge Event-Based XOR Multiple Instance Group Transaction Intermediate Event End Cancel CompensationIntermediate Compensation Conditional Flow Exception Flow Intermediate Link Start Timer Off-page connector Start Rule Intermediate Rule Intermediate Multiple End Compensation Start Multiple Intermediate Exception source: zur Muehlen, Recker (2007) Intermediate Cancel End Multiple Compensation Association 18
  19. 19. Process Description Levels Level A Business Activities Scorecard Business Activities Objectives Level B Process Groupings What Process Groupings Ownership Services Level C Core Processes Core processes Delivery Units Products Level D Business Process Flows Processes Delivery Teams Systems Level E Operational Process Flows Level F Sub Processes How Roles System Functions Detailed Process Flows Detailed Processes Detailed Roles TransactionsSource: British Telecommunications plc 2006
  20. 20. Tools 20
  21. 21. “All models are wrong, some are useful”George P.E. Box 21
  22. 22. Collaboration 22
  23. 23. Tools Use Cases User Groups Documentation Line of Business Modeling Software Engineers Analysis Business Analyst Simulation Enterprise Architect Execution Executives Prediction 23
  24. 24. Skills 24
  25. 25. BPM Project Issues Commitment to Change Value Proposition Governance Project Management Setup Design Maintenance Info. Tools Modelers Users Providers and Lang. 25
  26. 26. Strategy-related Issues Top Economic Value Management Governance (economics) Support Lack of value Commit- End-goal Focus on ROI metrics (i.e., Lack of Corporate Ownership ment to Sponsorship Incentives Costs Politics perceptions Initiatives Justification Balanced Benchmarks standards of modelslong term Scorecard) Costs Lack of New tool associated with Lack of Training coordination acquisition updating the control point models Strategy-related Issues 26
  27. 27. Process Modeling Life Cycle Issues Setup Design Maintenance Lack of Lack of Lack of Consoli- Model quality Variantmodeling standards common Infrastructure Rework Timeliness dation and assurance managementobjectives for reuse methodology Integration Corporate Level of Model Modeling modeling abstraction maintenance guidelines standard Modeling-related Issues 27
  28. 28. Resource-related Issues Process Information Tool and Model User Modeler Provider Language Level of Hierarchical Lack of Integration Lack of Limited expertise Capability BPM Level of decompo- using full with other adequate access to and to abstract education complexity sition of toolset modeling toolset repositoryexperience models features tools Resistance Lack of good Lack of Lack of efficient Cost Turnaround to change / Knowledge Integration graphical model repository search efficiency time adoption of sharing of activities process utilization engine BPM mapping Lack of Lack of Loss of Intellectual transfer communication knowledge property Resource-related Issues 28
  29. 29. Different Perspectives What happens Who is in next? charge? What are the possible What’s the outcomes? overall status? 29
  30. 30. BPM Project/Program Process Analyst Process Modeler Systems Analyst Process Owner Manager Oversee individual Process process, staffing, Process identification, documentation, Process Project/program monitoring of key performance analysis, architecture implementation, planning, scheduling, Responsibility performance redesign, monitoring, development, high- systems integration, oversight, staffing, indicators, sponsorship continual improvement level workflow interface design reporting of process implementation improvement efforts Process modeling Workflow automation, Process dashboard, toolset, Simulation tool, Process modeling Project management Tools Used application integration, Business Intelligence Business Intelligence toolset toolset software development tools tools Domain of the Process application Process individual process, area (eg. procurement), implementation Project management, Process documentation process performance Domain Expertise Data analytics, Quality platform (eg. BPMS), Process improvement technique (eg. BPMN) measurement (eg. management, Systems Integration methodology linkage to balanced Reengineering (eg. SOA) scorecard) Business MBA, MS in IS, ME in BS in IS, BE in MS in IS, CS or related Typical Degree Administration MBA Industrial Engineering Industrial Engineering discipline background Business Information Systems; Administration; Information Systems; Business BusinessTypical Background Operations Research; Industrial Engineering Computer Science; Administration Administration Systems Engineering Industrial Engineering Business Analyst Body Project Management of Knowledge (BABOK), OMG Certified Expert in External OMG Certified UML Institute (PMI) Certified Lean Six Sigma Green BPM, Lean Six Sigma n/a Certification(s) Professional Project Management Belt / Black Belt / Black Belt Professional (PMP) Master Black Belt 30
  31. 31. Governance 31
  32. 32. Goal Specification, Strategy DefinitionBusiness Process Innovation Organizational Business Process Management Analysis Strategy Revision Process Design Process Modeling and Models Specification Improvement Measures for Process Process Evaluation Implementation Target Metrics Process Mining / Build Time / Warehousing Integration Implemented Processes Process Enactment Export for other Process reporting purpose Metrics Run Time / Task and Resource Allocation Measure- ments Process Monitoring Process Metrics Business ActivityBusiness Process Monitoring Monitoring Business Process Automation 32
  33. 33. Goal Specification, Strategy DefinitionBusiness Process Innovation Organizational Business Process Management Analysis Manage Change Strategy Revision Process Design Process Modeling and Models Specification Improvement Measures for Process Process Evaluation Implementation Target Metrics Process Mining / Build Time / Warehousing Integration Implemented Processes Process Enactment Manage Execution Export for other Process reporting purpose Metrics Run Time / Task and Resource Allocation Measure- ments Process Monitoring Process Metrics Business ActivityBusiness Process Monitoring Monitoring Business Process Automation 33
  34. 34. Goal Specification,Business Process Innovation Strategy Definition Business Process Management Organizational Analysis Strategy Revision Process Design Anticipatory Process Models Reactive Modeling and Specification Improvement Measures for Problem Problem Process Process Evaluation Implementation Target Metrics Process Mining / Build Time / Warehousing Integration Solving Solving Implemented Processes Process Enactment Export for other Process reporting purpose Metrics Run Time / Task and Resource Allocation Measure- ments Process Monitoring Process Metrics Business ActivityBusiness Process Monitoring Monitoring Business Process Automation 34
  35. 35. Product Product Product Product Product Line 1 Line 2 Line 3 Line 4 Line 5 Core Process 1 Process Manager Core Process 2 Process Manager Core Process 3 Process Manager Core Process 4 Process Manager Core Process 5 Process ManagerCompare: Sainsbury (2006) Who Owns the Process? 35
  36. 36. Source: Sainsbury (2006) Process Ownership 36
  37. 37. Enterprise Process Map: Fortune 500 Level concept Roles & Responsi-Convention bilitieshandbook ProcessModeling OwnershandbookCorporate ProcessModeling Managers ServiceMethods Organization 37
  38. 38. Focus Role Objective Level Corporate Regional Process Sponsor Facilitate & Drive Process Framework Method & Compatibility Strategic Executive Process Executive Standardize & Optimize Process Performance Process Owner ManagementOperational Process Manager Implement & Optimize Process DB Manager Responsible for ARIS Shared Service Process Modeler Modeling Processes BPM Roles - Example 38
  39. 39. Culture 39
  40. 40. “If it doesn’t makethree people angry, it is not a process” Beyond Reengineering (Michael Hammer, 1996) 40
  41. 41. Process Improvementvs. Established Practice 41
  42. 42. Does your BPM specialist look like this? 42
  43. 43. Or like this? 43
  44. 44. “You know, the cultural change takes time,” Mr. Smisek said. “And people resist change. People are sort of set in their ways.” [...] “And there are people who don’t like that,” he said. “I understand that. What I want is those people to either change or leave.”Source: New York Times, November 29, 2012 44
  45. 45. Takeaways Define your challenge Assess your skills Determine how you will learn Match the mechanics to your needs Invest in tools, but not too much Grow skills, and spread them Be clear about your culture, and how it will change 45
  46. 46. Thank You - Questions? Ph.D. ion Mu ehlen, ess Innovat zur oc ment M ichael Business Pr gy Manage for nolo Center hool of Tech hnology Sc ec Howe Institute of T dson s u Steven int on the H Po Castle , NJ 07030 3 n 6-829 H oboke +1 (201) 21 5385 Phone : 216- +1 (201) @steve /bpm Fax: uehlen du : mzurm w.stevens.e urmuehlen E-mail ww http:// mz Web: www.s lid slide s: 46