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
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BPM,
BAM, BI, ESB,
SOA, BLI, BLA,
BLUBB...
BPM: The Business Value Question
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2. Relationship
between Financial FINANCIAL
Objectives are Primary Objectives
Paramount
BPM CUSTOMER
Customers
and
Seek Value Value Proposition
and Pay for it
Strategy PROCESS
Processes
Enable Value Regulatory /
Innovation
Operations Customer 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
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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
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3. Motivation
Drivers for
Business Process Management (BPM)
Compliance
Performance
Mandated compliance (e.g. SOX)
Business Process Improvement
Desired compliance (e.g. ISO, ITIL)
Engineering of Process-aware IS
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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
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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
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All IT is Initially an Expense
X
Information Business
Technology Value
en
ab
les
s
te
ea
cr
Process
Change
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5. How do you make a Cup of Coffee?
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Coffee Lover
Put Boiling Water
Boil Water Put Coffee in Cup
in Cup
Thirsty Coffee is Ready
The Nescafè Process
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6. 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
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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
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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?
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Types of BPM Projects
100
75
50
0 25
75
Improving Existing Processes
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)
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8. Scheduled Project Time during
First BPM Project 41%
3%
5%
Business Case
8%
Project Team Selection
Process Discovery
4%
Documentation
Functional and Technical Specification 7%
Tools Evaluation and Selection
9%
Implementation
Testing and Debugging
12%
Deployment and Training
11%
Source: BPTrends (2006)
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Manage Change
Manage Execution
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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
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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
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Notation
Standard
Integration
Standards
Audit
Standards
Interaction
Standard
Standards
Metrics
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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
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