D1 1 200710 Poznan Biz Val Color 2up


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D1 1 200710 Poznan Biz Val Color 2up

  1. 1. The Business Value of 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 BPM, BAM, BI, ESB, SOA, BLI, BLA, BLUBB... BPM: The Business Value Question 2
  2. 2. Relationship between Financial Objectives are Paramount FINANCIAL Primary Objectives BPM Customers CUSTOMER and Seek Value Value Proposition and Pay for it Strategy Processes Enable Value PROCESS Operations Customer Innovation Regulatory / Social Creation Strategic Strategic Change Job IT Agenda Families Processes LEARNING & GROWTH shapes and are shaped by Human Information Organization Capital Capital Capital organizational maturity 3 Let’s start with the process definition: Business Process Management is the collection of methods and tools that allow us to answer questions such as: What is BPM? A Business Process is the temporal and logical sequence What are our processes? of those activities that are necessary to manipulate an economically relevant object toward an How do we ensure their performance?overarching goal, creating we maintain their compliance? How do value for a customer 4
  3. 3. Motivation Drivers for Business Process Management (BPM) Performance Compliance Business Process Improvement Mandated compliance (e.g. SOX) Engineering of Process-aware IS Desired compliance (e.g. ISO, ITIL) 5 Process: New Hire Integration Background Check Allocation of office space Reservation of phone, pager Creation of access rights in operational systems Problem: Lost productivity due to late provisioning of work infrastructure Automating the process coordination reduced cycle time from 2 week average to 2 days BPM Goal: Performance You’re Hired 6
  4. 4. Process: Employee Termination Removal of computer access rights Collection of company-issued phone, pager, access card Removal from employee directory Problem: Not all equipment is collected, access rights remain after an employee leaves Automating the process coordination ensures that no step is forgotten BPM Goal: Compliance You’re Fired 7 All IT is Initially an Expense Information Technology X Business Value en ab les s te ea cr Process Change 8
  5. 5. 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
  6. 6. Water is cold no Kettle empty? Boil Water yes Fill Kettle Coffee Lover Put Boiling Water in Cup Thirsty Coffee is Ready No Put Coffee in Cup dirty? Cup 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 Take Order + Collect Payment Coffee Store Open Done Order Payment Household Go To Coffee Order Coffee Pay for Coffee Take Coffee Shop Thirsty Done > 5 min wait Leave 12
  7. 7. 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 0 25 50 75 100 Improving Existing Processes 75 Redesigning a Major Business Process 56 Enterprise-wide Process Modeling 45 Measuring Organizational Performance 36 Process Automation using a BPMS 33 Delivery of Process Performance Data to Senior Executives 31 Process Automation using ERP Software 24 Monitoring Perfomance of Managers 18 Other 6 Source: Palmer (2007) 14
  8. 8. Scheduled Project Time during First BPM Project 41% 3% 5% Business Case Project Team Selection 8% Process Discovery Documentation 4% Functional and Technical Specification 7% Tools Evaluation and Selection Implementation 9% Testing and Debugging 12% Deployment and Training 11% Source: BPTrends (2006) 15 !quot;#$%&##'()*+&##'2%%*3-0$*% !quot;#$%&##'()*+&##',-%-.&/&%0 !quot;#$%&##'()*+&##',*%$0*)$%. !quot;#$%&##'()*+&##'1quot;0*/-0$*% 16
  9. 9. !quot;#$%&##'()*+&##'2%%*3-0$*% !quot;#$%&##'()*+&##',-%-.&/&%0 Manage Change Manage Execution !quot;#$%&##'()*+&##',*%$0*)$%. !quot;#$%&##'()*+&##'1quot;0*/-0$*% 17 Managing Risk with BPMS Use formal Process Models to limit process non-compliance Process Models can be scripts or maps If Scripts: Use BPMS to automate control flow, task allocation, application/service invocation If Maps: Use collaborative tools to allow execution flexibility BPMS provide risk management services Authorizations / Access Control Enforcement of routings, reviews Audit capability to document compliance 18
  10. 10. Managing Risk with BRMS Use Business Rules to limit contextual non-compliance Document process objectives to prevent business rules from turning into process rules Performance Objectives combine BAM with BRMS Decision rules allow context-dependent enforcement of oversight Use Business Rules Management System to enforce compliance Document rules limit the state changes on documents Example: Can’t go from draft to approved without review Customer rules configure case handling 19 !quot;#$%&##'()*+&##'2%%*3-0$*% !quot;#$%&##'()*+&##',-%-.&/&%0 Notation Standard Integration Standards Audit Standards Interaction Standard Standards Metrics !quot;#$%&##'()*+&##',*%$0*)$%. !quot;#$%&##'()*+&##'1quot;0*/-0$*% 20
  11. 11. 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 21