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Myron Bennett Page 1 of 10 October 11
BPM Analysis Table of Contents
Abstract ...................................................................................................................... 2
Purpose .................................................................................................................. 2
Methodology ........................................................................................................... 2
Limitations .............................................................................................................. 2
Findings .................................................................................................................. 2
Introduction ................................................................................................................ 2
Case Study ................................................................................................................. 3
Steps Taken ........................................................................................................... 3
Benefits ................................................................................................................... 4
Recommendations .................................................................................................. 4
References ................................................................................................................. 5
Bibliography ............................................................................................................... 5
Appendix A ................................................................................................................. 6
Pulte Mortgage ....................................................................................................... 6
Loral Skynet ............................................................................................................ 7
District of Columbia Municipal Government ............................................................ 8
John Colbert, VP of research and analysis, BPM Partners In. ................................ 9
Appendix B ............................................................................................................... 10
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Abstract
Purpose
The purpose of this paper is to gain an appreciation for what is required to implement
BPM. It should be understood how BPM has previously been implemented by
companies in the past. Concurrently, it should be learnt what mistakes have been
made. Finally, a proposal will be put together of how best to implement BPM by both;
applying common success factors and avoiding mistakes made in the past, from the
research conducted.
Methodology
Case studies and journals were examined that it was believed would give an insight
into BPM implementation. Diagrams were produced to represent the steps taken by
the business mentioned in each case. A comparison was done on the most relevant
material with a view to extracting the most common success factors.
Limitations
This paper cannot be considered to be comprehensive of exploring all the necessary
stages to carry out a successful (or otherwise) BPM implementation. It discusses key
success factors and identifies problematic areas but does not claim to explain the full
lifecycle. The suggestions in this paper may be used to supplement a BPM
implementation but it cannot be used alone.
Findings
The most prevalent success factor to come out of this was that of necessarymanagement buy-in. Whilst it is difficult to be confident of the sequence of actions
that are taken to implement BPM, a good understanding has been gained of what is
required.
Introduction
BPM has been reported to have failure rates of up to 60-80%. “Several papers [have]
tried to identify critical success factors („CSF‟) of BPM” (Trkman 2009). Although
there may be some sense in looking at previous BPM projects, it‟s not advisable to
“apply a blanket rule to BPM implementation” states John Colbert for Insurance
Networking News journal (Violino 2011) because "you have to look at each
opportunity separately, evaluate the existing processes and then determine where
the opportunities for improvement exist." “Jim Sinur, vice president at Gartner, notes
that…there are no…best practices for BPM” and that “training, incentives, and
methodologies, are increasingly what make or break BPM projects.” (Margulius
2005). That said, there are broad contributors that are usually considered
fundamental to BPM. The most prevalent of these is endorsement from top
management.
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Case Study
Cases were looked at from three companies implementing BPM: Pulte Mortgage,
Loral Skynet, District of Colombia Mucipial Government (referred to as Colombia
Gov. hereafter), Meadowbrook Insurance Group and Farmers Insurance Group. The
latter two are taken from a journal which concentrates on the business areas andpositive successes of implementation (Violino 2011). Flowcharts have been drawn
up from descriptions of the first three as a speculation into the steps that were taken
prior to and as a part of implementation. (Margulius 2005). These can be found in
Appendix A.
Steps Taken
“Buy-in from top management” is one of the first steps reported in the case of Pulte
and this is backed up by the claim that “top management is often considered to be
the most important” (Trkman 2009). A BPM specialist (regardless of whether they
are from within the business or are contracted) will struggle to achieve uptakewithout strong support from top management. Decisions about funding will invariably
come from them but more importantly, staff directly involved in the processes will not
be enthused until direction is witnessed coming from the top. With this in place,
uptake will be easier to encourage. “BPM-systems…should preferably be initiated by
top management” adds strength to this point (Ravesteyn and Batenburg 2010).
The current business process were identified and documented. This is not usually
something that would be done by management as their perception of real activities is
rarely detailed. Also it will be a time-intensive process requiring detailed analysis. A
systems analyst may be able to direct the process but the best people to document
the core and detailed business processes are the operational members (employees).
Not only is it they who know the processes best but it involves the whole enterprise
from the outset. Ultimately when changes come in they will be more meaningful to
those that had a hand in the process that led to those changes. "We don't force
processes on people from the top down – everybody needs to feel like they're a co-
creator of the process." (Charles Bihler, process manager, Loral Skynet). It‟s this
active involvement of anyone whom subsequent changes are likely to affect which
seems fundamental to raising confidence levels as Trkman confirms. “BPM
challenges span from organizational, managerial, information systems and evensocial problems.” (Trkman 2009). Sanford Lazar, director of ERP at Colombia Gov. is
also reported to have said “It‟s about overcoming the scepticism” (Margulius 2005).
Once comprehensively mapped, the business area(s) in need of efficiency changes
are highlighted. There is then a subsequent selection of small area on which to begin
with implementation. “The primary challenge with any BPM effort is determining the
right functional area on which to focus and, within that area, picking the right project
to start with.” (Violino 2011). "Typically, you want to start small and build up from
there," says James Lee, IT manager at Southfield, Mich.-based Meadowbrook
Insurance Group. However it isn‟t always possible to follow a set of rules.
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"Unfortunately, due to business needs, we had to tackle a fairly large project early on
in our BPM efforts" James continued. This goes back to John Colbert‟s statement
about not applying a “blanket rule” in that it is more important to tailor the methods of
analysis and implementation to the strategic stance of the organisation at the time.
There has been mention about the strategy of implementation and again this
appears to be subjective to the state of the business. “How can they best implement
BPM so that they gain the maximum payback? Additionally, when and where should
they apply BPM?” (Violino 2011). “effective organisations … not only have a proper
„fit‟ with the environment but also between its subsystems” (Ivari 1992). This is
perhaps why Paul Burger, director of commercial IT at Farmers, is reported to have
claimed that it‟s better to apply BPM technology “in tandem with a core system
refresh” despite actually applying it to existing processes (Violino 2011).
BenefitsProminent benefits of BPM can come in the form of increased sales, reduced
processing time, reduced staff time and more efficient data accessibility.
An online retailer is reported to have “45 percent in conversions, 20 percent in
revenue per visit, 50 percent in orders per visit and 100 percent in units bought per
visit” as a result of Mercado Software (KM world 2007).
Apparently Farmers Insurance have been able to “reduce the time agents and
underwriters spend processing commercial lines from 14 days to just 14 minutes”
according to a quote of Paul Burger. An agent “also can provide an umbrella quote.
This has resulted in increased sales” continues Burger (Violino 2011).
Recommendations
Extracting common factors from the cases studied and taking note of where
difficulties came about has resulted in the development of a suggested approach that
Special Metal Stamps should take to BPM. This can be found in Appendix B.
Specifically, BPM should not be treated as a set of rules by which to improve a
business‟s processes. Similarly, “many problems are related to the evolution of
business processes and their variability. This means that BPM is not a one-time
project but should be a continuous effort.” (Violino 2011).
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References
AL-MUDIMIGH, Abdullah S. (2007). The role and impact of business process
management in enterprise systems implementation. Business Process Management ,
13 (6), 866.
IVARI, J. (1992). The organizational fit of information systems. Information Systems
Journal , 2 (1), 3-29.
KM WORLD (2007). Online retailer reaps results. KM world , 16 (1), 6.
MARGULIUS, David L (2005). Real-Worid BPM Formulas. InfoWorld , 27 (26), 41.
RAVESTEYN, Pascal and BATENBURG, Ronald (2010). Surveying the critical
success factors of BPM-systems implementation. Business Process Management
Journal , 13 (6), 492.
TRKMAN, Peter (2009). The critical success factors of business process
management. International Journal of Information Management , 30, 125-134.
VIOLINO, Bob (2011). BPM- Where When & How: Business process management is
helping insurers transform new and existing operations for the better. What's the trick?
Insurance Networking News , 14 (1), 12.
BibliographyABDOLVAND, N, ALBADVI, N and FERDOWSI, Z (2008). Assessing readiness for
business process reengineering. Business Process Management Journal , 14 (4),
497 –511.
KARIM, J., SOMERS, T.M. and BHATTACHERJEE, A. (2007). The impact of ERP
implementation on business process outcomes: A factor-based study. Journal of
Management Information Systems , 24 (1), 101-134.
KASSA, Kelley (2009). Interview with John Colbert of BPM Partners on Business
Intelligence Projects. [online]. Last accessed 02 11 2009 at:http://spotfireblog.tibco.com/?p=930
MACINTOSH, R. and MACLEAN, D. (1999). Conditioned emergence: A dissipative
structures approach to transformation. Strategic Management Journal , 20 (4), 297-
316.
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Appendix A
Pulte Mortgage
Figure 1 - Pulte Mortgage - BPM Implementation
(Margulius 2005)
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Loral Skynet
Figure 2 - Loral Skynet - BPM Implementation
(Margulius 2005)
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District of Columbia Municipal Government
Figure 3 - District of Columbia Municipal Government - BPM Implementation
(Margulius 2005)
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John Colbert, VP of research and analysis, BPM Partners In.
Figure 4 - John Colbert - BPM Implementation
(Violino 2011)
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Appendix B
Figure 5 Suggested BPM Implementation Strategy