Enterprise Transformation & the Evolution of BPM Paul Harmon - PowerPoint PPT Presentation

Enterprise Transformation & the Evolution of BPM Paul Harmon Executive Editor Business Process Trends

Business Process Management (BPM) • A comprehensive, strategic approach to organizing company change • At the high-level, a management philosophy that emphasizes focusing on processes and process performance • At the lower-level, a set of new tools and technologies that can facilitate better processes and more agile change

We Have Lots of Technologies to Use 1980s 1990's 2000s Porter's Value Balanced BPO Management Chains Scorecard Business Business Process SCOR VCOR Process Reengineering Redesign Performance Activity Based Rummler-Brache Improvement Costing Performance Improvement Six Sigma Quality Control Total Quality Lean Management SEI's CMM for IT Workflow BPM Business Rule EAI Information Management Systems Technology Packaged Software (ERP, CRM) Software Modeling Tools and Methodologies (CASE, UML, MDA)

Today: Horizontal & Vertical Alignment Executive Management Strategy Committee Sales Department Vertically Integrated Horizonally Integrated Measures, Processes Managers, and From Suppliers to Customers Resources Employees & IT Applications and Infrastructure

An Aside on the Meaning of Process Value Chain Architecture SCOR Framework Business Process Business Process Business Process Process Process Process Process Redesign Projects Business Rule Projects Sub-Process Sub-Process Sub-Process Six Sigma Projects Sub-Sub-Process Sub-Sub-Process IT Automation Projects SAP Process Models Activity Activity

A Process-Centric Model Strategy Level Plans & Goals Business Process Value Chain Level Specific Process Implementation Level Process Automated Process Performed by IT Systems by Employees Physical Plant and Hardware Used.

Three Critical Areas Strategy Level Organization Performance Strategy and Goals BP Management Business Mangement and Process Measurement Issues BP Architecture Involved in Level Executing Actual Business Process Business Processes and Activities BP Analysis & Redesign Specific Lean Six Activity IT Sigma Human Resource Architecture IT Architecture Implementation Level Activity Human-IT Activity Job Application Data Network Logical Measurement Interface Management Design Architecture Architecture Architecture Level Plan Model Plan Job Aids, Plans, Budgets, Activity/ Screens Application Database Technology Physical Training Hiring, Resource Performance and Designs Designs and Architecture Level Programs, Allocation, Monitoring Reports and Code Data Knowledge Feedback, System Management Consequences Management Hardware Architecture Systems System Physical Plant and Hardware Used.

The Process Management Alignment Process Ongoing Business Strategic Process Business Process Architecture Business Managem ent Perform ance Process Management Model Plan Measures Hierarchy Hierarchy CEO Value Chain Line Managers Bus Process Bus Process Organizational Alignment Process Process See that m odels, m easures and m anagem ent plans are Middle aligned with those above and below Managers SubProcess SubProcess SubSubProcess Supervisors Activities Activities

BP Management • The Senior Management BP Team • A Business Process Architecture • Process-Based Performance Measures • Managers Trained to Use the Tools • A Management System that Rewards Managers for Using the Tools

The Business Process Architecture Strategy Level Organization Performance Strategy BP Management and Goals Business Mangement and Process Measurement Issues BP Architecture Involved in Level Executing Actual Business Process Business Processes and Activities BP Analysis & Redesign Specific Activity Human Resource Architecture IT IT Architecture Implementation Lean SIx Sigma Level Human-IT Activity Activity Job Application Data Network Logical Management Measurement Interface Design Architecture Architecture Architecture Level Plan Model Plan Job Aids, Plans, Budgets, Activity/ Screens Application Database Technology Physical Training Hiring, Resource Performance and Designs Designs and Architecture Level Programs, Allocation, Monitoring Reports and Code Data Feedback, System Knowledge Management Consequences Management Hardware Architecture Systems System Physical Plant and Hardware Used.

The Business Process Architecture • A key tool for process management • A high-level overview of the value chains and key processes that make up the organization • An alignment of strategic goals, value chains and key processes • A clear-cut way to monitor the performance of the value chains and processes (KPIs) • A BP Architecture is NOT an IT EA Architecture

BP Frameworks • A BP Framework is a template for a BP Architecture • It includes an process vocabulary, domain process models for at least 2-3 layers of processes, measures for processes, and best practices. • BP Frameworks are set to revolutionize BP Architecture Development

The Supply Chain Council’s SCOR • The best example of the good horizontal BP architecture is provided by the Supply Chain Council’s SCOR framework • Created in past 5 years by consortium of some 700 companies • Defines a top-down approach to organizing the BP architecture of a corporate supply chain process

SCOR MODEL: Level 1 Supply Chain Plan Source Make Deliver Return

One Value Chain Framework Organization Level 0. Enabling Processes Organization Divided into 4 Major Domains Design Business Customer Chain Development Chain Resources Customers Supply Chain Process Level 1 Processes Plan Plan Plan Plan Integrate Deliver Market Contact Sell Design Make Develop Amend Return Revise Assist Research Analyze Relate Source Level 2 Level 2 Processes: Level 2 Processes: Made to Level 2 Processes: Level 2 Processes: Relate to New Technology, New Stock, Made to Order, Expansion, Extension, and Intermediary, Relate to Grouped Variations Product, Product Engineered to Order Creation Account, Relate to Named Account Revision Level 3 Subprocesses in Relate to Named Account R3.1 R3.2 R3.3 R3.4 R3.5 R3.6 R3.7 Level 3 Subprocesses Receive, Assign Define Obtain Establish Publish Release Validate & Account Engagement Customer Customer Business to Sell Approve Team Model Needs Profile Rules Level 4 Activities Specific to Particular Tables for Each Process and process and company Subprocess Information on specific metrics Metrics and Best Practices for and best practices to implement this subprocess Subprocesses

OR Frameworks and 6 Sigma • There are already efforts aimed at aligning SCOR and Lean Six Sigma • They fit very naturally, since both are very oriented towards measurement and SCOR provides an ideal way to help Lean Six Sigma teams identify areas to focus on • Several consulting companies are focusing on this effort

Another Aside: Frameworks and BP Maturity Organizations with an mature mastery of their processes. 5. Optimizing Combining a Framework with Six Continuous process improvement is enabled by Sigma is a good way to deal with 5. quantitative feedback for the process and from piloting innovative new ideals and 4. Managed technologies. A Framework Detailed measures of the Provides all of the process and product quality are collected. Both the basic structure and process and products are quantitatively understood and documentation to 3. Defined controlled. move an organization The process for both management and from 2.5 to 4.5 engineering is documented, Extending a Framework standardized and integrated by an organization 2. Repeatable to support Packaged methodology Applications, BPMS, or Basic project management processes are established to BAM will provide even track cost, schedule, and functionality. The necessary discipline is in place to stronger packages. 1. Initial repeat earlier successes The process is ad hoc. Few activities are explicitly defined and success depends on individual effort and heroics. Organizations with an immature mastery of their processes.

The Process-Centric Company Today • Most companies want to move toward a more process-centric organization, but • They are overwhelmed with changes • With technologies that don’t integrate • With management and measurement systems that aren’t designed for process • They simply don’t have the time and people to achieve a process-centric company if they approach it with first generation methods

What Is Needed? • We need to move faster - Otherwise we get lost in the day-to-day details • We need a comprehensive approach – Otherwise we don’t achieve enough alignment between the different technologies • We need an approach that can appeal to both business and IT managers

Enterprise Transformation • The challenge is the manage the enterprise using processes • To do that we need to have an architecture that provides a complete picture of the enterprise and enterprise performance measures • And we need a new methodology for Enterprise Transformation that combines all the tools we have into a new, more powerful approach.

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