What every Enterprise Architect needs to know about BPM and Workflow

What Every Enterprise Architect Needs to Know about Workﬂow and BPM Michael zur Muehlen, Ph.D. Center of Excellence in Business Process Innovation Howe School of Technology Management Stevens Institute of Technology Hoboken NJ Michael.zurMuehlen@stevens.edu 1

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BPM is NOT about Technology 2

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BPM is NOT about Creating Diagrams 3

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BPM is NOT about Architecture 4

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BPM is about Improving Business 5

BPM, BAM, BI, ESB, SOA, BLI, BLA, BLUBB... BPM: The Business Value Question 6

All IT is Initially an Expense Information Business Technology Value 7

All IT is Initially an Expense X Information Business Technology Value en ab les s te ea cr Process Change 7

What is BPM? 8

What is BPM? Let’s start with the process deﬁnition: A Business Process is the temporal and logical sequence of those activities that are necessary to manipulate an economically relevant object toward an overarching goal, creating value for a customer 8

What is BPM? Business Process Management is the collection of methods and tools that allow us to answer questions such as: What are our processes? How do we ensure their performance? How do we maintain their compliance? 8

How do you make a Cup of Coffee? 9

Coffee Lover Put Boiling Water Boil Water Put Coffee in Cup in Cup Thirsty Coffee is Ready The Nescafè Process 10

Water is cold no Kettle Boil Water empty? yes Fill Kettle Coffee Lover Put Boiling Water in Cup Thirsty Coffee is Ready No Put Coffee in Cup Cup dirty? Dishwasher Yes Clean Cup The Espresso Machine Process 11

The Starbucks Process Hand Coffee Make Coffee To Customer Done Barrista Order cancelled Discard Coffee Coffee Shop Insufﬁcient Payment Cashier + Collect Take Order Coffee Payment Done Store Open Order Payment Household Go To Coffee Order Coffee Pay for Coffee Take Coffee Shop Thirsty Done > 5 min wait Leave 12

BPM Questions 13

BPM Questions How do we design and communicate this process? 13

BPM Questions How do we design and communicate this process? How do we perform this process well? 13

BPM Questions How do we design and communicate this process? How do we perform this process well? How do we manage this process well? 13

BPM Questions How do we design and communicate this process? How do we perform this process well? How do we manage this process well? How do we maintain compliance to rules and regulations? 13

BPM Questions How do we design and communicate this process? How do we perform this process well? How do we manage this process well? How do we maintain compliance to rules and regulations? How should technology support this process? 13

Types of BPM Projects Source: Palmer (2007) 14

Scheduled Project Time during First BPM Project Business Case Project Team Selection Process Discovery Documentation Functional and Technical Speciﬁcation Tools Evaluation and Selection Implementation Testing and Debugging Deployment and Training Source: BPTrends (2006) 15

Business Process Innovation Business Process Management Business Process Automation Business Process Monitoring 16

Business Process Innovation Business Process Management Manage Change Manage Execution Business Process Automation Business Process Monitoring 17

Business Process Innovation Business Process Management Business Process Automation Business Process Monitoring 18

Business Process Innovation Business Process Management Notation Standard Business Process Automation Business Process Monitoring 18

Business Process Innovation Business Process Management Notation Standard Integration Standards Business Process Automation Business Process Monitoring 18

Business Process Innovation Business Process Management Notation Standard Integration Standards Interaction Standards Business Process Automation Business Process Monitoring 18

Business Process Innovation Business Process Management Notation Standard Integration Standards Interaction Standard Standards Metrics Business Process Automation Business Process Monitoring 18

Business Process Innovation Business Process Management Notation Standard Integration Standards Audit Standards Interaction Standard Standards Metrics Business Process Automation Business Process Monitoring 18

Enterprise Process Frameworks 19

BT Process Hierarchy Level A Strategic Business Activities Scorecard Business Activities Objectives Process Description Level B Process Groupings Process Groupings Ownership Services Level C Core Processes Tactical Core processes Products Delivery Units Process Description Level D Business Process Flows Processes Systems Delivery Teams Level E Operational Process Flows Operational System Functions Sub Processes Roles Process Description Level F Detailed Process Flows Detailed Roles Detailed Processes Transactions Source: British Telecommunications plc 2006 20

BT Process Hierarchy Level A Strategic Business Activities Scorecard Business Activities Objectives Process WHAT Description Level B Process Groupings Process Groupings Ownership Services Level C Core Processes Tactical Core processes Products Delivery Units Process Description Level D Business Process Flows Processes Systems Delivery Teams Level E Operational Process Flows Operational System Functions Sub Processes Roles Process Description Level F Detailed Process Flows Detailed Roles Detailed Processes Transactions Source: British Telecommunications plc 2006 20

BT Process Hierarchy Level A Strategic Business Activities Scorecard Business Activities Objectives Process WHAT Description Level B Process Groupings Process Groupings Ownership Services Level C Core Processes Tactical Core processes Products Delivery Units Process Description Level D Business Process Flows Processes Systems Delivery Teams Level E HOW Operational Process Flows Operational System Functions Sub Processes Roles Process Description Level F Detailed Process Flows Detailed Roles Detailed Processes Transactions Source: British Telecommunications plc 2006 20

Top-Down Strategy Level A Strategic Strategy Business Activities Processes/ Scorecard Business Activities Objectives Rule Level B Description Top-Down Project Process Groupings Process Groupings Ownership Services Level C Tactical Core Processes Processes/ Core processes Products Delivery Units Rule Level D Description Business Process Flows Processes Systems Delivery Teams Level E Operational Operational Process Processes/ Flows System Functions Sub Processes Roles Rule Level F Description BPM Application Detailed Process Detailed Roles Detailed Processes Transactions Flows 21

Process Architecture: Beneﬁts Allow to short-circuit process identiﬁcation phase Provide neutral map for navigation along processes Standardize terminology across the enterprise Enable benchmarking across organizations Designed based on industry best practices 22

Process Architecture: Fortune 100 Methods Enterprise Process Architecture Organization Level concept Roles & Responsi- Convention bilities handbook Process Modeling Owners handbook Process Corporate Managers Modeling Service 23

Architecture Contents Glossary and Data Structures Common terminology that Business & Systems Analysts can refer to Business Capabilities and Process Deﬁnitions What capabilities do you have, and what processes do you support Senior managers and business users have a common vocabulary of processes Software purchases or outsourcing agreements are simpliﬁed Consistency across business partners Library of Cross-Organizational Messages 24

Example: ACORD Insurance Business is assemblage of standard process building blocks Use for Internal integration Integration across distribution channels Integration with third-party providers “We are about the business content that goes into the process” 25

Process Framework Beneﬁts Frameworks save time Coloring a picture vs. drawing a picture Frameworks reduce risk Incorporate best practices Frameworks enable business agility Provide business context Frameworks reduce costs Enterprise overview helps identify areas in need of improvement Frameworks enable incremental development 26

BPM - Technical Evolution 27

The Role of BPM Technology “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.” 28

No BPM = Monolithic Enterprise Application Built as a unit, Internals not visible User Interface built in for all functions In order to “extend” to a new function, need to call in a programmer... User Interface list new update delete Accts Acct Acct Acct Program and Logic Enterprise Application “Account Management” Internal Protocols are Proprietary C, C++, Visual Basic, Etc.

BPM 1990: Workﬂow in the Brain UI “Screens” list new update delete Conformance Guidelines Accts Acct Acct Acct Background Check Application Enterprise Application Logic in “Account Management” Monolithic Program

BPM 1993: Task Management Human BPM/Workﬂow: check background create guidelines check account User accesses Launches original UI directly UI UI “Screens” list new update delete Conformance Guidelines Accts Acct Acct Acct Background Check Application Enterprise Application Logic in “Account Management” Monolithic Program

BPM 1996: Workﬂow Routing Human BPM/Workﬂow: check background create guidelines check account Launches User accesses UI original UI directly UI “Screens” list new update delete Conformance Guidelines Accts Acct Acct Acct Background Check Application Enterprise Application Logic in “Account Management” Monolithic Program

BPM 2002: Services Integration UI connects user to BPMS, not the back-end applications backgr. rules Enter create Review check check Information account Services Interfaces list new update delete Conformance Rules Background Check Accts Acct Acct Acct Application Enterprise Application Logic and “Account Management” SOA

BPM 2007: Composite Services Enter Create Check Review Information account Composite ESB/BPEL Service list new update delete Accts Acct Acct Acct Enterprise Application Background Application “Account Management” Check Rules Logic and SOA

BPM 2007: Composite Services Enter Create Check Review Information account Composite ESB/BPEL Services list new update delete Background Accts Acct Acct Acct Application Check Rules Logic and SOA Enterprise Application “Account Management”

BPM 2007: Composite Services Enter Create Check Review Information account Composite ESB/BPEL Services list new update delete Background New Rules Accts Acct Acct Acct Application Check Logic and SOA Enterprise Application “Account Management”

BPM 2007: Composite Services Enter Extra Create Check Review Information Audit account Composite ESB/BPEL Services list new update delete Background New Rules Accts Acct Acct Acct Application Check Logic and SOA Enterprise Application “Account Management”

Separation of Responsibility Business Retains Control of Assignment of Responsibility Groups, Roles, Skills Deadlines Alerts, Reminders, Escalations Order of Tasks Addition of Manual Tasks User Interface Create Enter Check Review Information account IT Retains Control of ESB/BPEL Computational Logic list new update delete Data Representations Accts Acct Acct Acct Scalability / Performance Enterprise Application Interoperability Background New Rules “Account Management” Check Master Data Management 36

BPM Governance 37

Product Product Product Product Product Line 1 Line 2 Line 3 Line 4 Line 5 Process Group 1 Process Manager Process Group 2 Process Manager Process Group 3 Process Manager Process Group 4 Process Manager Process Group 5 Process Manager Leveraging Vertical and Horizontal Expertise 38 Compare Sainsbury (2006)

Process Ownership Source: Sainsbury (2006) 39

Focus Role Objective Level Corp. Region Division Process Sponsor Facilitate & Drive Process Framework Strategic Method & Compatibility Executive Process Executive Standardize & Optimize Process Performance Process Owner Management Operational Process Manager Implement & Optimize (recommended) Process DB Manager Responsible for ARIS Shared Service Process Modeler Modeling Processes BPM Roles - Example 40

The BPM Maturity Model Business Process Management Maturity Strategic Governance Method IT People Culture Alignment Process Roles and Process Design & Process Design & Process Skills & Process Values & Process Improvement Plan Responsibilities Modeling Modeling Expertise Beliefs Process Process Decision Making Process Education Process Attitudes & Strategy & Process Implementation & Implementation & Capability Linkage Processes & Learning Behaviors Executions Executions Process Metrics & Process Process Control & Process Control & Responsiveness to Process Performance Collaboration & Architecture Measurement Measurement Process Change Linkage Communication Process Process Process Leadership Process Process Output Management Improvement & Improvement & Attention to Measurement Knowledge Standards Innovation Innovation Process Process Process Project & Process Project & Process Process Customers Process Social Management Program Program Management & Stakeholders Networks Controls Management Management Leaders Source: Rosemann & DeBruin 2006

Agile BPM Maturity Satisfying all 30 facets of the BPM Maturity Model takes a long time A subset of the BPM Maturity model is needed to guide an organization toward a rapid deployment of BPM technology Example: Staged Deployment of Maturity Initiatives Modeling Tool Extended use of Tool 42

Choosing the Right Strategy There is no single right pathway for all organizations If command-and-control infrastructure: Methods come ﬁrst, culture comes later If participatory organization: Culture and people need to be nurtured earlier in the process If centralized organization: Building a central repository can be undertaken early in the process If decentralized organization: Leveraging individual projects to facilitate quick wins is important, but an integration strategy for the project results later on needs to be instituted early on 43

3 Challenges Ahead 44

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50 Years of IT Lock-Down 45

Management by Magazine 45

Business People Acquiring IT Skills 45

Thank You – Questions? Michael zur Muehlen, Ph.D. Howe School of Technology Management Stevens Institute of Technology Castle Point on the Hudson Hoboken, NJ 07030 Phone: +1 (201) 216-8293 Fax: +1 (201) 216-5385 E-mail: mzurmuehlen@stevens.edu Web: http://www.cebpi.org Process Thought Leadership 46

What every Enterprise Architect needs to know about BPM and Workflow

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