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- 1. Overcoming The ObstaclesOf Transformation Derek Miers – Principal Analyst April 18, 2012 Twitter – @bpmfocus 1 © 2012 Forrester Research, Inc. Reproduction Prohibited Research, Inc. Reproduction Prohibited © 2009 Forrester
- 2. Agenda Understand thetransformational journey. Engage the business—board room to front line. Translate strategic intent into effective processes. Design compelling customer experiences. Weave your own organizational change fabric. 2 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 3. The age ofthe customer requires transformation. 3 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 4. ―Band-Aid‖ approach or―Wellness Program‖ 4 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 5. BP Maturity Model Change Level 5 Management Optimized Capability Culture of Level 4 Management Optimization Managed Process Business Level 3 Measurement Management Defined Standardized Work Unit Level 2 Processes Management Repeatable Inconsistent Basic Mgt Level 1 Control Results Initial 5 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 6. Political challenges abound Silo’d Functions supported Processes supported Functional by processes by functions From Traditional To Processes & Line Management Services Management 6 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 7. Assess BP maturity Management Immature Aspiring Mature Area Strategy Governance Structure Waste Value elimination innovation Performance Culture 7 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 8. Mature firms achievea balanced approach "What are the primary goals of your business improvement program?" Maturity level 1-2 (n = 77) Maturity level 2-3 (n = 136) Waste elimination 43% Waste elimination 35% Cost reduction 74% Cost reduction 60% Customer experience Customer experience 39% 68% improvement improvement Value innovation 42% Value innovation 36% Maturity level 3-4 (n = 88) Maturity level 4-5 (n = 24) Waste elimination 32% Waste elimination 46% Cost reduction 45% Cost reduction 46% Customer experience 59% Customer experience 50% improvement improvement Value innovation 60% Value innovation 58% Base: 325 business process professionals Source: Q2 2011 Global Forrester/IQPC Business Process Maturity Online Survey 8 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 9. Very few companiesdeliver an outstanding customer experience Percentage of companies OK Good Poor Very poor Excellent 11% 18% 35% 29% 7% Base: 154 large North American brands score in Forrester’s Customer Experience Index, 2010 9 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 10. Improving customer experienceis worth many millions Wireless Hotels Service Providers Airlines Insurance $1,364 $1,297 $590 $452 10 © 2012 Forrester Research, Inc. Reproduction Prohibited Source: Q4, 2011, ―The Business Impact Of Customer Experience, 2012‖ Forrester report
- 11. High-emotion firms out-performthe major indices 11x 11 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 12. Fill your toolboxwisely Different tools at different levels 12 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 13. Develop vision beforethe ―To-Be‖ processes Business Business services Business Executive services Prioritize (Capability set)area services Business engagement (Capability set) (Capability set) (Capability set) Outline processes Outcome metrics Baseline Roles and skills (As-Is) Process definitions Process definitions (To-Be) Establish (To-Be) customer experience vision A322 A322+ A322 + + Operational Business process engagement architecture 13 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 14. Capabilities/services provide theglue Assess impact/ Business Capabilities performance Executive Target Business Capabilities Business vs. maturity Prioritize engagement Business Capabilities operating services 1 ... model (Capability set) 5 2 3 4 Outline processes Outcome metrics Baseline Roles and skills Process definitions Holistic (To-Be) service vision A322 A322+ A322 + + Operational Business process engagement architecture 14 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 15. Capabilities/services provide theglue Assess impact/ Business Capabilities performance Executive Target Business Capabilities Business vs. maturity Prioritize engagement Business Capabilities operating services 1 ... model (Capability set) 5 2 3 4 Outline processes Outcome metrics Baseline Roles and skills Process definitions Holistic (To-Be) service vision A322 A322+ A322 + + Operational Business process engagement architecture 15 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 16. Business strategy andcustomer experience drives the Target Operating Model Strategy Operating Model WHAT we do WHERE to play HOW it’s done HOW to win WHO does what Capabilities Enablers Accountability Products People Governance Customers Process Metrics Markets Technology Culture Page 16
- 17. Business Model Canvas Key Key Value Customer Customer Partnerships Activities Proposition Relationships Segments Key Channels Resources ####### Cost Structure Revenue Streams 17 © 2012 Forrester Research, Inc. Reproduction Prohibited Source: Osterwalder & Pigneur Business Model Generation
- 18. The company nowfocuses on business transformation Building the Transformation Plan What are we How can trying to Where are we What should What should today? we get Implement the Plan achieve? we look like? we do? there? Project Capability Capability/ Analysis Design Scope Process Priority Design & Priority Policy Design Policy Design Customer Project Product Systems Business Plan Kickoff Business Case Metrics Build Technology Technology Architecture Strategy/ Business Risk Resources Plan Resources Roll-out Goals Metrics Governance Location Structure Clarify Vision, Current State Future State Business Design & Strategy & Roadmap Assessment Design Case Implementation Objectives Stakeholder Engagement / Change Management Page 18
- 19. Mature organizations havea target operating model “Is your organization working on designing its future operating model (target operating model) independently of the current organizational structure?” Maturity Level 4-5 75% Maturity Level 3-4 53% Large Maturity Level 2-3 46% organizations need a target Maturity Level 1-2 44% operating model effort to move ahead. Base: 325 business process professionals (percentage answering “yes”) 19 © 2012 Forrester Research, Inc. Reproduction Prohibited Source: Q2 2011 Global Forrester/IQPC Business Process Maturity Online Survey
- 20. For business transformation,focus on outcomes Business Business Services Processes Mortgage Co Home Loans Risk management Partner Build Personal Loans Customers Insurance relationships Provider White Label Asset Home Insurance Insurance Service protection Sell products Product Support Independent and services Advisors Business Capabilities Manage portfolio Reporting Regulator 20 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 21. Capabilities leveraged bymany services and implemented through processes Build relationships Develop Main Concepts Edit Outline Text Home Loans Concepts Text Completed Edited Develop Develop Partner Offering Outline Sell products Concepts Completed Engagement Plan Partner Offering Completed and services Personal Loans Text Edited Engage Partners Partner Offering Complete Manage portfolio No Receive Receive Cancel Notification Payment Customer Claim? Send Claim Insurance Yes Send Cancellation Receive Confirmation Provider Order Request Notification Asset Payment Confirmation White Label Confirmation Cancellation Home Insurance Insurance Srvc protection Process Insurance Provider Receive Send Make Claim Confirmation Claim Payment Send Confirmation 21 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 22. A pragmatic startpoint Based on a value chain breakdown – Modified artifacts to reflect strategic objectives Establish the organizational roadmap for the initiative – Executives own the decision making – Provides a way of tracking improvements over time – Sets the scope for the initial set of projects Bypasses the organizational politics – Explicitly avoid existing functional structures and reporting lines 22 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 23. Capabilities/services provide theglue Assess impact/ Business Capabilities performance Executive Business Capabilities Business Prioritize Business Capabilities vs. maturity engagement services ... (Capability set) 1 2 5 3 4 Outline processes Outcome metrics Baseline Roles and skills Process definitions Holistic (To-Be) service vision A322 A322+ A322 + + Operational Business process engagement architecture 23 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 24. So how canwe get everyone engaged? Start off with the corporate brand. Think about the services you will deliver to different customer segments. Design the customer experience. Align your processes and systems to support that experience. 24 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 25. Guiderails for servicedefinition (part of change DNA) Engage those involved in service delivery to articulate a holistic vision of the experience delivered from the service consumer’s point of view Customer outcomes Happy Growth and customers adoption Performance Market measurement knowledge and learning Customer Relationship Set of Performance Success experience Governance management Capabilities design Improvement Communication Services marketing and resourcing sales Business Competitive Experience sustainability advantage 25 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 26. 26 © 2012 Forrester Research, Inc. Reproduction Prohibited Source: Alex Osterwalder
- 27. Capabilities/services provide theglue Assess impact/ Business Capabilities performance Executive Business Capabilities Business Prioritize Business Capabilities vs. maturity engagement services ... (Capability set) 1 2 5 3 4 Outline processes Outcome metrics Baseline Roles and skills Process definitions Holistic (To-Be) service vision A322 A322+ A322 + + Operational Business process engagement architecture 27 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 28. Executives have anongoing role Launch Baseline Vision Development Implementation Program Roll out monitoring Initiation Commission Roll out planning and monitoring office Measuring benefits Steering group Engage Visible leadership, constantly review progress, overcome political obstacles, etc. Architecture Overall Consult on individual Monitoring and team architecture process & service architectures improvement Service Business Briefing team 1 Exec Briefing Validation Decisions Service team 2 Process Behavioral team 3 change; …Process Customer team N engagement Technology Technology Componentize New app New app team implications legacy apps design development Iteration Change Engage, communicate, listen, empower, create, convince, and reinforce management Executive Control Points 28 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 29. Aligning corporate changeinitiatives Vision Govern’ce Incentives Culture Structure Change (Strategy) & Plans Perform’ce (Behavior) Governance Structure Incentives Culture Confusion False Vision Structure Incentives Culture Starts Vision Governance Incentives Culture Chaos Gradual Vision Governance Structure Culture Change Better Vision Governance Structure Incentives Sameness 29 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 30. Develop your ownchange management fabric The Journey Of BPM Structure, Methods And Tools BPM From Project Business Building BPM Methods & Basics To Program Transformation Capabilities Tools • BPM’s context • Build an • Long term • BPM Center of • BPM fits with: • Executive appetite for competitive Excellence (CoE) • Value Chain change advantage engagement • Evolving program • Business • Business case • Establish the • Outside-in structure Capabilities foundation approach • Business • Project • Developing roles • Dealing with • Align with Services selection and skills the demand customer • Lean, Six • Project roles • Multi-disciplinary Sigma • Portfolio needs • Project teams • Balanced approach • Culture of framework • Practices, tools, Scorecard • Building customer and • Baseline knowledge and performance and methods • Modeling • Innovation experience improvement • Structures for a approaches • Managing risk process-driven • Deriving org processes from • Overcome resistance business needs 30 © 2012 Forrester Research, Inc. Reproduction Prohibited
- 31. Thank you DerekMiers dmiers@forrester.com www.forrester.com Twitter - @bpmfocus 31 © 2012 Forrester Research, Inc. Reproduction Prohibited Research, Inc. Reproduction Prohibited © 2009 Forrester
Editor's Notes
- #4 Image Source: iStockPhotoSPEAKER: DerekThis age of the customer power requires a top to bottom transformation. That’s not limited to new servers, or killer applications or even highly efficient processes … For many organizations … it means a change to the way the organization thinks about itself. It means getting at the heart of the brand and working that throughout your business.
- #5 Most companiesYou think you are running vibvrant org …. Something goes wrong and you put a bandaid on it. Band aids don’t work on plants … the pressure of blood flow
- #8 Our research shows that while the initial focus is on efficiency and cost containment (waste elimination), the longer term opportunity is to use BPM to deliver better and more consistent customer outcomes (value innovation). Eureka Moment – If I improve my customer experience, taking out what the customer doesn’t want … then that will gives me cost reduction. But then I discover that by focusing more on the customer experience, I learn new things that the customer wants, that I wouldn’t have discovered anywhere else. It allows me to innovate that experience and deliver more value, distinguishing my offering from that of the competitors. And hey presto, I realize that the balanced approach is what works. The theme behind it is the learning process – competitive advantage comes from focusing on the needs of the customer. Therefore – the ability to design and deliver compelling customer experience becomes a key objective.
- #9 Source: North American Technographics® Customer Experience Online Survey, Q4 2010 (US)
- #10 If a $10B company, makes a 10% improvement in their customer experience index … the net result is the additional revenue from Referrals, repeat business and cross selling additional products
- #12 Derek – 1 minuteSource: “Built To Love” - Peter Boatwright and Jonathan Cagan, Professors at Carnegie Mellon UniversityA couple of Professors at Carnegie Mellon selected 40 firms that provide high emotion experiences … and looked at how they performed - over a 10 year period, they outperformed the S&P by more than 10 times. And if you subtracted Google and Apple – it’s still 8 times. That’s powerful evidence for why this sort of transformation is necessary (and an important part of the business case).
- #13 Image source:istockphoto
- #18 Point is that if we took away the small organizations from the higher maturity levels (less than 1000 employees), then this top line becomes 100%
- #19 It’s all about the customer and the services you provide to them. Even if you make products, think of it as a service from the customers point of view. At the other end, capabilities are about the things that the business just cannot escape from. Capabilities represent something that the business entity does — describing an outcome — that creates value for other participants. A business capability usually abstracts and encapsulates the people, processes, technology, and information required to create that value. Capability is an encapsulation of purpose. Processes then become how capabilities are packaged to deliver services. TOMs can inform organizational design efforts, process architectures and related governance policies, and the definition of customer engagement strategies to support service offerings; they can also influence financial planning and project phasing. The challenge is to communicate the TOM in a meaningful form that business leaders can understand and use to support their decision-making.
- #25 Examples - Medco 2.0, Business Transformation Practices, What is the brand vision all about?Does the current customer experience reinforce the brand?What are organizational skills need to change to deliver the desired experience?How will you envision that experience? How will this service reinforce the corporate brand?What sort of behaviors do employees need to exhibit?What is it about the new experience that customers will really love?How will you deliver that experience every time?How will you measure that delivery?