Michael zur Muehlen, Ph.D.Stevens Institute of TechnologyHowe School of Technology ManagementCenter for Business Process InnovationHoboken, New [email protected]
Building BPM CompetencyGrowing a Center of Excellence
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Agenda
Background
What is your challenge?
How good are you?
How good do you want to become?
Components
Mechanics
Tools
Skills
Governance
Culture
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“They have done process innovation very well,” says Nelson Fraiman, a professor at Columbia Business School [...] “Product innovation? No. But tell me one Chinese company that has done product innovation very well. They are brilliant at process. I think you should give a cheer for process innovation.”
Source: New York Times, November 9, 2012
What’s your Challenge?
Increase Transparency
Standardize Operations
Manage Risk
Increase Performance
Create Innovation
Often: All of the above
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Why BPM?
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0 75 150 225 300
Number of Responses
216
146
117
106
68
50
Cost/ProductivityResponsivenessCustomer SatisfactionInnovationImprove ITRisk Management
Source: BPTrends
Do Process Managers Exist?
6
19%
32%
27%
13%
10%
Value Chain ManagerProcess Manager for Major ProcessesProcess Manager for Speci!c ProcessesAll Managers are Process ManagersOther
Source: BPTrends
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Visibility
Paper
8
Industrial BPM
Input Channels
BusinessProcess
Management= Work
Management
Process Types
White collar production managementTransparent work pipelineAutomation, but only if not
too complex / rareregulatory requirementslack of economies of scale
Phone
Fax
Process 1
Process 2
...
Process n
Web
9
Search processes using‣technical and‣business criteria
Display shows ‣status‣start time‣end time‣instance data
Industrial Back-Of!ce
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Task Management
How Good Are You?
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Governance Method IT Support People CultureStrategic Alignment
Process Roles and Responsibilities
Process Design & Modeling
Process Skills & Expertise
Process Values & Beliefs
Process Improvement Plan
Decision-making Processes
Process Implementation &
Execution
Process Education & Training
Process Attitudes & Behaviors
Strategy & Process Capability Linkage
Process Management Standards
Process Improvement & Innovation
Process Knowledge Management
Leadership Attention to Process
Process Output Measurement
Process Metrics & Performance Linkage
Process Control & Measurement
Process Collaboration & Communication
Responsiveness to Process Change
Process / Business Architecture
Process Management Controls
Process Project & Program
Management
Process Management Leaders
Process Social Networks
Process Customers & Stakeholders
Business Process Management Maturity Model
Process Design & Modeling
Process Implementation &
Execution
Process Improvement & Innovation
Process Control & Measurement
Process Project & Program
Management
P"1 P"2 P"3& P"4&
Design Purpose The$process$has$not$been$designed$on$an$end1to1end$basis.$Functional$managers$use$the$legacy$design$primarily$as$a$context$for$functional$performance$improvement.$
The$process$has$been$redesigned$from$end$to$end$in$order$to$optimize$its$performance.$
The$process$has$been$designed$to$fit$with$other$enterprise$processes$and$with$the$enterprise’s$IT$systems$in$order$to$optimize$the$enterprise’s$performance.$
The$process$has$been$designed$to$fit$with$customer$and$supplier$processes$in$order$to$optimize$inter1enterprise$performance.$
Context The$process’s$inputs,$outputs,$suppliers,$and$customers$have$been$identified.$
The$needs$of$the$process’s$customers$are$known$and$agreed$upon.$
The$process$owner$and$the$owners$of$the$other$processes$with$which$the$process$interfaces$have$established$mutual$performance$expectations.$
The$process$owner$and$the$owners$of$customer$and$supplier$processes$with$which$the$process$interfaces$have$estab1lished$mutual$performance$expectations.$
Documentation The$documentation$of$the$process$is$primarily$functional,$but$it$identifies$the$interconnections$among$the$organiza1tions$involved$in$executing$the$process.$
There$is$end1to1end$documentation$of$the$process$design.$
The$process$documentation$describes$the$process’s$inter1faces$with,$and$expectations$of,$other$processes$and$links$the$process$to$the$enterprise’s$system$and$data$architecture.$
An$electronic$representation$of$the$process$design$supports$its$performance$and$management$and$allows$analysis$of$environmental$changes$and$process$reconfigurations.$
Performers Knowledge Performers$can$name$the$process$they$execute$and$identify$the$key$metrics$of$its$performance.$
Performers$can$describe$the$process’s$overall$flow;$how$their$work$affects$customers,$other$employees$in$the$pro1cess,$and$the$process’s$performance;$and$the$required$and$actual$performance$levels.$
Performers$are$familiar$both$with$fundamental$business$concepts$and$with$the$drivers$of$enterprise$performance$and$can$describe$how$their$work$affects$other$processes$and$the$enterprise’s$performance.$
Performers$are$familiar$with$the$enterprise’s$industry$and$its$trends$and$can$describe$how$their$work$affects$inter1enterprise$performance.$
Skills Performers$are$skilled$in$problem$solving$and$process$improvement$techniques.$ Performers$are$skilled$in$teamwork$and$self1management.$ Performers$are$skilled$at$business$decision$making.$ Performers$are$skilled$at$change$management$and$change$
implementation.$
Behavior Performers$have$some$allegiance$to$the$process,$but$owe$primary$allegiance$to$their$function.$
Performers$try$to$follow$the$process$design,$perform$it$cor1rectly,$and$work$in$ways$that$will$enable$other$people$who$execute$the$process$to$do$their$work$effectively.$
Performers$strive$to$ensure$that$the$process$delivers$the$results$needed$to$achieve$the$enterprise’s$goals.$
Performers$look$for$signs$that$the$process$should$change,$and$they$propose$improvements$to$the$process.$
Owner Identity The$process$owner$is$an$individual$or$a$group$informally$charged$with$improving$the$process’s$performance.$
Enterprise$leadership$has$created$an$official$process$owner$role$and$has$filled$the$position$with$a$senior$manager$who$has$clout$and$credibility.$
The$process$comes$first$for$the$owner$in$terms$of$time$allo1cation,$mind$share,$and$personal$goals.$
The$process$owner$is$a$member$of$the$enterprise’s$most$senior$decision1making$body.$
Activities The$process$owner$identifies$and$documents$the$process,$communicates$it$to$all$the$performers,$and$sponsors$small1scale$change$projects.$
The$process$owner$articulates$the$process’s$performance$goals$and$a$vision$of$its$future;$sponsors$redesign$and$im1provement$efforts;$plans$their$implementation;$and$ensures$compliance$with$the$process$design.$
The$process$owner$works$with$other$process$owners$to$integrate$processes$to$achieve$the$enterprise’s$goals.$
The$process$owner$develops$a$rolling$strategic$plan$for$the$process,$participates$in$enterprise1level$strategic$planning,$and$collaborates$with$his$or$her$counterparts$working$for$customers$and$suppliers$to$sponsor$inter1enterprise$process1redesign$initiatives.$
Authority The$process$owner$lobbies$for$the$process$but$can$only$encourage$functional$managers$to$make$changes.$
The$process$owner$can$convene$a$process$redesign$team$and$implement$the$new$design$and$has$some$control$over$the$technology$budget$for$the$process.$
The$process$owner$controls$the$IT$systems$that$support$the$process$and$any$projects$that$change$the$process$and$has$some$influence$over$personnel$assignments$and$evaluations$as$well$as$the$process’s$budget.$
The$process$owner$controls$the$process’s$budget$and$exerts$strong$influence$over$personnel$assignments$and$evaluations.$
Infrastructure Information Systems Fragmented$legacy$IT$systems$support$the$process.$ An$IT$system$constructed$from$functional$components$sup1ports$the$process.$
An$integrated$IT$system,$designed$with$the$process$in$mind$and$adhering$to$enterprise$standards,$supports$the$process.$
An$IT$system$with$a$modular$architecture$that$adheres$to$industry$standards$for$interenterprise$communication$sup1ports$the$process.$
Human Resource Systems Functional$managers$reward$the$attainment$of$functional$excellence$and$the$resolution$of$functional$problems$in$a$process$context.$
The$process’s$design$drives$role$definitions,$job$descrip1tions,$and$competency$profiles.$Job$training$is$based$on$pro1cess$documentation.$
Hiring,$development,$reward,$and$recognition$systems$em1phasize$the$process’s$needs$and$results$and$balance$them$against$the$enterprise’s$needs.$
Hiring,$development,$reward,$and$recognition$systems$rein1force$the$importance$of$intra1$and$interenterprise$collabora1tion,$personal$learning,$and$organizational$change.$
Metrics Definition The$process$has$some$basic$cost$and$quality$metrics.$ The$process$has$end1to1end$process$metrics$derived$from$customer$requirements.$
The$process’s$metrics$as$well$as$cross1process$metrics$have$been$derived$from$the$enterprise’s$strategic$goals.$
The$process’s$metrics$have$been$derived$from$interenter1prise$goals.$
Uses Managers$use$the$process’s$metrics$to$track$its$perfor1mance,$identify$root$causes$of$faulty$performance,$and$drive$functional$improvements.$
Managers$use$the$process’s$metrics$to$compare$its$perfor1mance$to$benchmarks,$best1in1class$performance,$and$cus1tomer$needs$and$to$set$performance$targets.$
Managers$present$the$metrics$to$process$performers$for$awareness$and$motivation.$They$use$dashboards$based$on$the$metrics$for$day1to1day$management$of$the$process.$
Managers$regularly$review$and$refresh$the$process’s$met1rics$and$targets$and$use$them$in$strategic$planning.$
largely$true$ somewhat$true$
largely$untrue$
Organization of BPM Initiatives
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23%
46%
16%
15%
Did not identify or de!ne speci!c Process TeamIdenti!ed and de!ned Internal Process TeamPlan to create BPM COESuccessfully implemented BPM COE
Source: Palmer (2007)
Organization of BPM Initiatives
13
36%
18%
16%
15%
1%4%5%
6%
No formal BPM GroupBPM Group at Executive LevelBPM Group at Departmental LevelBPM Group in ITBPM Group within HRBPM Group within FinanceBPM Group within Quality ControlOther
Source: BPTrends
14
BPM Capability GrowthSource: Forrester (2009)
Mechanics
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16
“Vision without execution is hallucination” Thomas Alva Edison
Scheduled Project Time during First BPM Project
5% 3%
41%
4%9%
11%
12%
7%
8%
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Business CaseProject Team SelectionProcess DiscoveryDocumentationFunctional and Technical Speci!cationTools Evaluation and SelectionImplementationTesting and DebuggingDeployment and Training
Source: BPTrends (2006)
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Normal FlowTask
End EventStart Event / Event
PoolData-Based XOR
Start MessageText Annotation
Message FlowParallel Fork/Join
LanesGateway
Sub-Process (Collapsed)AssociationData Object
Intermediate TimerIntermediate Message
End TerminateSub-Process (Expanded)
End LinkDefault Flow
Inclusive Decision/MergeActivity LoopingException Task
Start LinkEnd Message
End ExceptionComplex Decision/Merge
Event-Based XORMultiple Instance
GroupTransaction
Intermediate EventEnd Cancel
CompensationIntermediate Compensation
Conditional FlowException Flow
Intermediate LinkStart Timer
Off-page connectorStart Rule
Intermediate RuleIntermediate Multiple
End CompensationStart Multiple
Intermediate ExceptionIntermediate Cancel
End MultipleCompensation Association
source: zur Muehlen, Recker (2007)
Process Description Levels
Process Groupings
Business Activities
Core Processes
Business Process Flows
Detailed Process Flows
Level A
Level B
Level C
Level D
Level E
Level F
ObjectivesBusiness Activities
Delivery Units Products
Processes Systems
Scorecard
Sub Processes Roles System Functions
Operational Process Flows
Detailed Processes TransactionsDetailed Roles
Delivery Teams
Ownership ServicesProcess Groupings
Core processes
Source: British Telecommunications plc 2006
What
How
Tools
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21
“All models are wrong, some are useful”George P.E. Box
Collaboration
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Tools
Use Cases
Documentation
Modeling
Analysis
Simulation
Execution
Prediction
User Groups
Line of Business
Software Engineers
Business Analyst
Enterprise Architect
Executives
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Skills24
BPM Project Issues
25
Project Management
MaintenanceDesignSetup
Modelers Users Info. Providers
Tools and Lang.
Commitment to Change
Value Proposition Governance
Strategy-related Issues
Top Management
Support
End-goal perceptions
Economic Value (economics)
PoliticsCommit-ment to
long term
ROI Justification
Sponsorship
Lack of value metrics (i.e.,
Balanced Scorecard)
Corporate standards
Focus on Initiatives
Incentives
Governance
Lack of Benchmarks
Costs
New tool acquisition
Training
Costs associated with
updating the models
Ownership of models
Lack of control
Lack of coordination
point
Strategy-related Issues26
Process Modeling Life Cycle Issues
Setup
Lack of common
methodology
Design
Consoli-dation and Integration
Lack of modeling objectives
Lack of standards for reuse
Variant management
InfrastructureModel quality
assuranceRework Timeliness
Corporate modeling standard
Level of abstraction
Modeling guidelines
Maintenance
Model maintenance
Modeling-related Issues27
Resource-related Issues
Process Modeler
BPM education
Model User
Integration of activities
Level of expertise
and experience
Cost efficiency
Capability to abstract
Turnaround time
Knowledge sharing
Level of complexity
Hierarchical decompo-sition of models
Tool and Language
Lack of model
utilization
Resistance to change / adoption of
BPM
Lack of transfer
Lack of communication
Lack of using full toolset
features
Intellectual property
Limited access to repository
Information Provider
Loss of knowledge
Lack of adequate
toolset
Integration with other modeling
tools
Lack of good graphical process mapping
Lack of efficient repository search
engine
Resource-related Issues28
Different Perspectives
Who is in charge?
What are the possible
outcomes?What’s the
overall status?
What happens
next?
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30
Process Analyst Process Modeler Systems AnalystBPM Project/Program
ManagerProcess Owner
Responsibility
Process identi!cation, performance analysis, redesign, monitoring, continual improvement
Process documentation, architecture development, high-level work"ow implementation
Process implementation, systems integration, interface design
Project/program planning, scheduling, oversight, staf!ng, reporting
Oversee individual process, staf!ng, monitoring of key performance indicators, sponsorship of process improvement efforts
Tools Used
Process modeling toolset, Simulation tool, Business Intelligence tools
Process modeling toolset
Work"ow automation, application integration, software development
Project management toolset
Process dashboard, Business Intelligence tools
Domain Expertise
Process application area (eg. procurement), Data analytics, Quality management, Reengineering
Process documentation technique (eg. BPMN)
Process implementation platform (eg. BPMS), Systems Integration (eg. SOA)
Project management, Process improvement methodology
Domain of the individual process, process performance measurement (eg. linkage to balanced scorecard)
Typical DegreeMBA, MS in IS, ME in Industrial Engineering
BS in IS, BE in Industrial Engineering
MS in IS, CS or related discipline
Business Administration background
MBA
Typical Background
Business Administration; Operations Research; Industrial Engineering
Information Systems; Industrial Engineering
Information Systems; Computer Science; Systems Engineering
Business Administration
Business Administration
External Certi!cation(s)
Business Analyst Body of Knowledge (BABOK), Lean Six Sigma Green Belt / Black Belt / Master Black Belt
OMG Certi!ed Expert in BPM, Lean Six Sigma Black Belt
OMG Certi!ed UML Professional
Project Management Institute (PMI) Certi!ed Project Management Professional (PMP)
n/a
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Governance
Stra
tegy
Re
visi
on
Process Metrics
Export for other reporting purpose
ProcessImplementation
ProcessDesign
Process Enactment
Process Evaluation
Process Models
Impl
emen
ted
Proc
esse
s
Mea
sure
s fo
r Im
prov
emen
t
Process Metrics
Mea
sure
-m
ents
Process Monitoring
Goal Specification,Strategy Definition
Targ
et M
etri
cs
Modeling and Specification
Build Time / Integration
Run Time / Task and Resource
Allocation
Business Activity Monitoring
Process Mining / Warehousing
OrganizationalAnalysis
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Business Process Management
Business Process Automation
Business Process Innovation
Business Process Monitoring
Stra
tegy
Re
visi
on
Process Metrics
Export for other reporting purpose
ProcessImplementation
ProcessDesign
Process Enactment
Process Evaluation
Process Models
Impl
emen
ted
Proc
esse
s
Mea
sure
s fo
r Im
prov
emen
t
Process Metrics
Mea
sure
-m
ents
Process Monitoring
Goal Specification,Strategy Definition
Targ
et M
etri
cs
Modeling and Specification
Build Time / Integration
Run Time / Task and Resource
Allocation
Business Activity Monitoring
Process Mining / Warehousing
OrganizationalAnalysis
33
Business Process Management
Business Process Automation
Business Process Innovation
Business Process Monitoring
Manage Change
Manage Execution
Stra
tegy
Re
visi
on
Process Metrics
Export for other reporting purpose
ProcessImplementation
ProcessDesign
Process Enactment
Process Evaluation
Process Models
Impl
emen
ted
Proc
esse
s
Mea
sure
s fo
r Im
prov
emen
t
Process Metrics
Mea
sure
-m
ents
Process Monitoring
Goal Specification,Strategy Definition
Targ
et M
etri
cs
Modeling and Specification
Build Time / Integration
Run Time / Task and Resource
Allocation
Business Activity Monitoring
Process Mining / Warehousing
OrganizationalAnalysis
34
Business Process Management
Business Process Automation
Business Process Innovation
Business Process Monitoring
ReactiveProblemSolving
Anticipatory Problem Solving
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Who Owns the Process?
CoreProcess 2
CoreProcess 4
Core Process 3
Core Process 1
CoreProcess 5
Product Line 1
Product Line 2
Product Line 3
Product Line 4
Product Line 5
Process Manager
Process Manager
Process Manager
Process Manager
Process Manager
Compare: Sainsbury (2006)
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Process Ownership
Source: Sainsbury (2006)
Roles &Responsi-
bilities
Process Owners
ProcessManagers
37
Enterprise Process Map: Fortune 500
Methods Organization
Levelconcept
Conventionhandbook
Modelinghandbook
CorporateModelingService
38
BPM Roles - Example
Focus Role Objective
Process Sponsor
Process Framework Executive
Process Executive
Process Owner
Process Manager
Process DB Manager
Process Modeler
Strategic
Operational
SharedService
Responsible for ARIS
Modeling Processes
Implement & Optimize
Process Performance Management
Standardize & Optimize
Facilitate & Drive
Method & Compatibility
LevelCorporate Regional
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Culture
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“If it doesn’t make three people angry, it is not a process”
Beyond Reengineering (Michael Hammer, 1996)
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Process Improvement vs. Established Practice
Does your BPM specialist look like this?
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Or like this? 43
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“You know, the cultural change takes time,” Mr. Smisek said. “And people resist change. People are sort of set in their ways.” [...]“And there are people who don’t like that,” he said. “I understand that. What I want is those people to either change or leave.”
Source: New York Times, November 29, 2012
Takeaways
De!ne your challenge
Assess your skills
Determine how you will learn
Match the mechanics to your needs
Invest in tools, but not too much
Grow skills, and spread them
Be clear about your culture, and how it will change
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Thank You - Questions?
Michael zur Muehlen, Ph.D.
Center for Business Process Innovation
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: [email protected]
Web: http://www.stevens.edu/bpm
slides: www.slideshare.net/mzurmuehlen
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