Measuring Process Maturity: The Business Process Maturity Model

1 May 22-24, 2007

Washington Dulles HiltonThe Business Transformation Conference

Dr. John W. AldenManaging PartnerCapability Measurement, LLC

Measuring Process Maturity: The Business Process Maturity Model

WelcomeWelcome

to Transformation and Innovation 2007 The Business Transformation Conference

2 May 22-24, 2007


Topics Covered:– Transformation: Core Performance Challenges

– Origins of the BPMM and its OMG status

– How are organizational maturity and organizational performance linked

– Structure of the BPMM

– What is the impact of the BPMM on measurement and analytics capability

– How is the BPMM used as a framework for improvement

– Discussion

3 May 22-24, 2007


Open Standards Frameworks Focus

© Capability Measurement 2006,2007 All Rights Reserved

4 May 22-24, 2007


Executive “Process Health” Workforce Workforce

Talent: currentTalent: current

Baseline: ? Target: ?

CustomersCustomers

NPS? currentNPS? current

Process ability: currentProcess ability: current

Baseline: ? Target ?

Renewal rate: currentRenewal rate: current




5 May 22-24, 2007


Management Visibility

In OutLevel 1

In OutLevel 2

In OutLevel 3

In OutLevel 4

In OutLevel 5


6 May 22-24, 2007


Customer claims

Work Unit 1

Claims investigationWork Unit 1

Damage assessmentWork Unit 1

Claims payment

Work Unit 1

Customer claims

Work Unit 1



Claims payment

Work Unit 1

Customer claims

Work Unit 1



Claims payment

Work Unit 1

Procedure 1Procedure 1• Do this

• Do that

Procedure 4aProcedure 4aProcedure 3Procedure 31. Do this first2. Do this next3. Do this last

Procedure 2Procedure 2

Business Processes Are Immature

Customer claims

Work unit 1

Claims investigationWork unit 1

Damage assessmentWork unit 1

Claims payment

Work unit 1

Workgroups performing the same task in the business process workflow have different ways of doing it!

Banking example: credit card operations

185 credit card processes

18 ways to open an account

51 credit card processes

Process tailoring guidelines

3 ways to open an account

ProcessProcess

synthesissynthesis


7 May 22-24, 2007


Evidence of Low maturity-Configuration

The tools thatsupport work

must be consistent

with each other

≠ ≠ ≠Training Process maps Forms Systems

Tools whosecurrent states aretightly linked must

be controlled


8 May 22-24, 2007


Unmeasured, Snowballing Rework

Items left offbill of sale

Sales

Bill of sale

Incompleteinformation

Legal

Contract

reworkvalue

addingwork

UnspecifiedRequirements

Provisioning

Specification

valueaddingwork

rework

Finance

Invoice

Incorrectinvoices

valueaddingwork

rework

BPM focuses on the enterprise: Create seamless workflow Integrate functional silos End snowballing rework Roadmap for automation


9 May 22-24, 2007


Absence of end to end capability

In Out

TechnologySolutions

Sales

AD and SI

ClientServices

TechnologyServices

Immature Products

Fixed Date, Budget

Vague Requirements

Defects

Deferred Items

Ineffective Execution of Product Strategy

Customer Dissatisfaction

Liquidated Damages

Increased Service Calls

Increased Rework

The hidden costs grow from project to project


10 May 22-24, 2007


Leads to Huge Costs

In Out

TechnologySolutions

Sales

SystemsIntegration

ClientServices

TechnologyServices

Immature Products

Fixed Date, Budget

Vague Requirements

Defects

Deferred Items

Ineffective Execution of Product Strategy

Customer Dissatisfaction

Liquidated Damages

Increased Service Calls

Increased ReworkScope Containment

Enterprise Cost Model Corporate Product Strategy


11 May 22-24, 2007


The Five Maturity LevelsThe Five Maturity Levels

Level 1Initial

InconsistentInconsistentmanagementmanagement

Repeatablepractices

Level 2Managed

Work unitWork unitmanagementmanagement

Standardized

best practices

Level 3Standardized

Business lineBusiness linemanagementmanagement

Quantitativelymanaged

practices

Level 4Predictable

CapabilityCapabilitymanagementmanagement

Level 5Innovating

ChangeChangemanagementmanagement

Continuously

improvingpractices


12 May 22-24, 2007


How the BPMM WorksLevel 5

Innovating

Implement continual proactive improvements to achieve business targets

Capable processesPerpetual innovationChange management

Level 4Predictable

Manage process and results quantitatively and exploit benefits of standardization

Predictable resultsReuse/knowledge mgt.Reduced variation

Level 3Standardized

Develop standard processes, measures, and training for product & service offerings

Productivity growthEffective automationEconomies of scale

Level 2Managed

Build disciplined work unit management to stabilize work and control commitments

Reduced rework Repeatable practicesSatisfied schedules

Level 1Initial

Motivate people to overcome problems and just “get the job done”

Mistakes, bottlenecksAd hoc methodsHero worship


13 May 22-24, 2007


Structure of the BPMM

Level 5

Level 4

Level 3

Level 2—

Managed

Level 1

MaturityLevels

Organizational Business

Governance

Organizational Process Leadership

Work Unit Requirements Mgt.

Work Unit Planning and Commitment

Work Unit Monitoring & Control

Work Unit Performance

Sourcing Management

Work Unit Change Management

Process and Product Assurance

Level 2Process Areas

SG1: Requirements are identified and evaluated

SG2: Requirements baseline is maintained

InG: Process is institutionalized

Work UnitRequirements

Mgt. Goals

SP1: Identify requirements

SP 2: Clarify requirements

SP 3: Evaluate requirements for implementation

SP 4: Negotiate requirements

SP 5; Maintain agreed to requirements

SP 6: Conduct regular requirements review

In 1: Describe the process

In 2: Plan the process

In 3: Provide knowledge and skills

In 4: Control the process

In 5: Objectively assure adherence

Work UnitRequirementsMgt. Practices


14 May 22-24, 2007


Institutionalizing Practices“The practices for [process_area]

are institutionalized.”

Process Area

SpecificPractices

(Implementation)

Monitoring& Control

ProcessAssurance

Process Planning

Skills & Training

Process Description


15 May 22-24, 2007


People

Work unitmembers

Executives

Ma

na

ge

rs

Level 2 Process Areas

Work UnitRequirementsManagement

Work UnitPlanning andCommitment

Work UnitMonitoringand Control

Work UnitPerformance

SourcingManagement

Process andProduct Assurance

Work UnitChange

Management

Org

an

iza

tio

na

l Pro

ce

ss L

ead

ers

hip

Org

an

iza

tio

na

l Bu

sin

ess

Go

vern

an

ce


16 May 22-24, 2007


StandardProcess

This is a process description derived from the local method of doing itLevel 3

Levels 2 to 3 Transition

TailoredProcess

This is a process description derived from the local method of doing it

WorkUnit 1

WorkUnit 2

WorkUnit 3

WorkUnit 4

WorkUnit 5

Enterprise-wide end-to-end, integrated business process

WorkUnit 5

Procedures

WorkUnit 5

Procedures

WorkUnit 5

Procedures

WorkUnit 4

• Do this

• Do that

Procedures

WorkUnit 2

1. Do this first2. Do this next3. Do this last

Procedures

WorkUnit 2


Procedures

Confederatedwork units

WorkUnit 1

Procedures

WorkUnit 2a


Procedures

WorkUnit 3

Procedures

WorkUnit 4a

• Do this

• Do that

Procedures

WorkUnit 5a

Procedures

Level 2 © Capability Measurement 2006,2007 All Rights Reserved

17 May 22-24, 2007


Managers

PeopleLevel 3 Process Areas

Product andService

Preparation

Product andService

Deployment

Product andService

Operation

Product andServiceSupport

Product andService

Management

OrganizationalProcess

Management

OrganizationalCompetencyManagement

OrganizationalResource

Management

ConfigurationManagement


Work unit members

18 May 22-24, 2007


BPMM integration with core processes

Line of Business

Workunit

Workunit

Workunit

Value-adding core work processesSupplierprocess

Customerprocess

Product & Service

Preparation

Product & Service

Deployment

Product & Service

Operations

Product & Service Support

Product & Service Work Management

Organizational Process

Management

Organizational Competency Development

Organizational Resource

Management

Process areas directly affecting

the core work processes

Process areas directly supporting multiple products and services in a line of business

Configuration Management

Product & Service Business

Management

Figure 1. Relationships of BPMM Level 3 process areas to core work processes Source: BPTrends.com (search for “Alden”)

19 May 22-24, 2007


Process Performance Management

Issue raised inAIMS or CRID

Manufacturing

Issue raised inAIMS or CRID

ManufacturingManufacturing

General E-mail to CAD Designer

Engineering

General E-mail to CAD Designer

EngineeringEngineering

Raise Concern

Engineering

Raise Concern


Populate the “D”Screen

Engineering

Populate the “D”Screen


Populate the “B”Screen. One screen per part

Engineering

Populate the “B”Screen. One screen per part


ProcessesProcesses

End to End

BPMM KPIs

Business KPIs

Appraisal, Survey & Tracking

Process Capability

BP

MI E

xecutive

Go

vern

ance &

S

trateg

y Tea

m

Date

Indiv

idual Valu

e

11/3/20069/28/20068/23/20067/18/20066/9/20065/3/20063/27/20062/20/20061/19/200612/9/200511/1/2005

400

300

200

100

0

_X=277.6

UCL=417.2

LCL=138.0

11/1/2005 9/5/2006

Date

Movin

g R

ange

11/3/20069/28/20068/23/20067/18/20066/9/20065/3/20063/27/20062/20/20061/19/200612/9/200511/1/2005

400

300

200

100

0

__MR=52.5

UCL=171.5

LCL=0

11/1/2005 9/5/2006

1

1

111111

1

1

11

1

1

1

1

1

1

1

11111

Daily Beelines, Count, NORTH Only


TrackingEnablement

20 May 22-24, 2007


Status

Level 2: Descriptive measurement

WorkUnit 1B

WorkUnit 1B

WorkUnit 2B

WorkUnit 3B

ProceduresThis is a process description

derived from the local method of doing it





WorkUnit 1A

WorkUnit 2A

WorkUnit 3A

WorkUnit 4A

WorkUnit 5A

• Do this

• Do that

Procedures

Procedures Procedures

Here is what I would do. First I would try to getSomeone else to do it. IfThat fails I would try toProcrastinate for days.


Procedures

Region ‘A’ workflow

Region ‘B’ workflow



Outcomes

Outcomes


21 May 22-24, 2007


Level 3: Predictive measurement

WorkUnit 1B

WorkUnit 2B

WorkUnit 3B

WorkUnit 4B

WorkUnit 5B

WorkUnit 1A

WorkUnit 2A

WorkUnit 3A

WorkUnit 4A

WorkUnit 5A

Workflow A

Workflow B

Ou

tcom

es

StandardProcess

This is a process description derived from the local method of

doing itProcessAsset

Library

Tailoring

Guidelines

for

Standard

Processes

Defined Defined processprocess

Offering Offering AA

Defined Defined processprocess

Offering Offering BB


22 May 22-24, 2007


Dramatic Improvements with standards

BenefitLevel 1Baseline

Level 2 Level 3 Level 4 Level 5

Rework 40% 20% 10% 6% 3%

Estimating accuracy

+30% to >100%

+10% to +20%

+5% +3% +1%

Delivered defects

X ½ X 1/4 X 1/10 X 1/100 X

Pretest defect detection

<30% 60% 80% 90+% 99%

Productivity X 1.5X 2X 3-4X >4X

Component reuse

negligible negligible occasional >30% >50%

*Based on Bill Curtis extrapolations of SEI certified and other published research


23 May 22-24, 2007


What are the top BPMM benefits?1. The BPMM was designed to compliment the CMMI and PCMM:

• Both are domain centric, e.g. software and people• Neither support for enterprise improvement programs concerned with end to

end business processes and workflow

2. The Business Process Maturity Model (BPMM) enables greater fidelity between the actual performance of business processes and their model-based representations

3. Organizations which do not have standards based process maturity have elevated risk in SOA implementations.

• The immaturity of business processes strictly limits the value and success of component reuse.

• Reaching a particular level of capability is a proven means of unlocking the value of investments in technology enabled processes.

4. BPMM compliments existing diagnostic tools and improvement frameworks.

Improving organizational readiness for technology deployment is the motivation for making the BPMM available as a specification

from OMG.

24 May 22-24, 2007


Thank YouThank YDr. John W. AldenManaging PartnerCapability Measurement, LLC

[email protected]

ou

Measuring Process Maturity: The Business Process Maturity Model

Business

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