Business Process Management Position BPM in organization. Marek Zborowski PhD.

Transcription

1 Business Process Management Position BPM in organization Marek Zborowski PhD.

2 Content Where to position BPM in your organization Five elements realated to BPM: Business Strategy, Business Architecture, Business Process Management, Lean management, Six Sigma. OMG and BPMN XML standard Incorrect location of BPM in organisation Correct location of BPM in organisation 2

3 Where to position BPM in your organization BPM initiative will be doomed if not situated in the right area, and with the right stakeholders. It is essential to develop a BPM center of excellence. It s important where to position it first. According to globalisation, and within business circles, BPM is considered a change management function. BPM is used by organizations to change existing work practices with the ultimate goal to promote business growth. 3

4 Where to position BPM in your organization BPM facilitates this by allowing managers to conduct a deep dive into their existing processes and look for opportunities for improvement. Process analysts usually have significant experience in identifying poorly performing processes as well as expertise in running projects that help managers migrate their business from their existing state to the optimized version. 4

5 Where to position BPM in your organization BPM must be placed in an area of the organization where its processes can be managed and governed from the top down. Likewise, BPM is a business discipline because it solely focuses on how the business manages its day-to-day processes. 5

6 Where to position BPM in your organization It s also important to note that BPM teams (BPM center of excellence) are not effective unless they collaborate with other teams that also have a change management focus. This is because BPM practitioners need to be familiar with the plans of an organization before they can help to change it. For example, if an organization decides to expand its services into a new geographic market, it s important that this plan is conveyed to the BPM team so they take this into consideration before making changes to business processes. 6

7 Where to position BPM in your organization Five elements realated to BPM: Business Strategy, Business Architecture, Business Process Management, Lean management, Six Sigma. 7

8 Business Strategy This is the team that s responsible for helping the CEO determine where the organization is headed long term. People that work in these teams usually come from management consulting backgrounds and have the expertise to assess how to engage competitors, identify growth areas, and predict changes to the economy. Typically, the CEO or board will direct the business strategy team to investigate the best way the organization can carry out long-term planning (strategy). For example, the CEO may decide that the organization should buy out a competitor that holds assets that can be leveraged by the existing business. Or, the board may assess that, due to a downturn in the economy, it s important for the organization to diversify its product offering instead of focusing on one core business. The key here is that the business strategy team looks long term (usually five years out or more) and articulates their plans through blueprints or road maps that are then disseminated to the rest of the organization on behalf of the CEO. 8

9 Business Architecture Once the business strategy team develops the long term plans of the organization, it s then up to the business architecture team to work out what the organization should look like so that it can achieve those plans. For example, if an organization decides to send its operations offshore, then it s the business architects that determine the optimum organizational structure needed for those teams to run efficiently. In this instance, the business architecture team will look at staffing numbers, IT capabilities, senior management responsibilities, governance, compliance and, of course, team roles and responsibilities. 9

10 Business Process Management It s important that the business architecture team and the BPM team are physically located together because once the business architects have developed their plans (known in the industry as views ), then it s up to the process analysts to develop process models that show how the business will run day to day. The BPM team will do this by developing process models that illustrate endto-end processes that start with the customer and end with the customer. For example, the business architect may develop a view that represents the sale of toys to customers. The process analyst will then take this view and model each step it takes to receive the order, process it, and then ship the toy to the customer. While doing this, it s also up to the process analyst to determine the most efficient and cost effective way of completing the process so that products and services are turned around in minimum time and at a low cost to the organization. 10

11 Lean and Six Sigma In a perfect world, an organization will have all parts of its business running smoothly and efficiently. Obviously this is rarely the case which is why organizations employ specialists that continuously improve operations regardless of changes to the economic environment, competitor behavior, or integration of new IT platforms. In the change management hierarchy, the Lean and Six Sigma practitioners need to work closely with the BPM team because they are responsible for analyzing those models developed by the process analysts. 11

12 Lean management In a manufacturing or service organization, the Lean practitioners will usually be responsible for optimizing visual management processes. Imagine you work on a floor with eighty staff members, and there are only two printers located on the other side of the floor. In order for you to print out a document, you need to walk across the room, take your document off the printer, and return to your desk. The Lean team will assess the time taken to complete that task, and, if necessary, move that printer closer to you and your colleagues to minimize the wasted time spent walking across the room. This ekample may seem trivial to many people who work in low tempo environments, but it s highly applicable to teams that work in call centers, processing hubs, or anywhere where speed and time is critical to the work. Therefore, the Lean team needs the process models to identify where visual obstacles occur and determine opportunities for improvement. 12

13 Six Sigma Six Sigma practitioners also need process models to measure the cost and time involved in completing a process from end to end (one that starts with the customer and ends with the customer). Six Sigma practitioners will usually take a process model and add in the time and cost associated with completing a single process in an end-to-end model. They are then able to use statistical analysis to determine cycle times as well as chokepoints that slow down a process from running at optimum efficiency. their teams in IT for reasons that stem back to the origin of BPM in the late 1980s and early 1990s. 13

14 OMG and BPMN In the late 1980s, a number of IT firms collaborated to form an international consortium known as the Object Management Group (OMG). Essentially, this group became responsible for developing the international standard for process modeling that became known as Business Process Model and Notation (BPMN). The reason why it was so important to have a standard was because, up until this time, organizations were using a variety of colorful methods to develop their models. This meant software vendors had a hard time selling their wares to clients and there was no common language across the community for visually describing an end-to-end process. 14

15 XML Soon enough, many software vendors incorporated BPMN into their modeling tools, but they also needed to apply an underlying code called Extensible Markup Language (XML) that helped organizations integrate these BPM tools with their existing technology for automation purposes. Because of its complexity, XML was only understood by software engineers and very few other people. The use of XML facilitates access to business models via web browsers. 15

16 Incorrect location of BPM in organisation Because IT firms developed BPM tools, they naturally became responsible for evolving the BPM industry. However, when these IT firms started selling their software to clients, they sold it as though it was an IT solution and not a business solution. IT sales people also tended to use a lot of complex IT jargon which confused senior business executives. This led to an organization s IT division being responsible for BPM. Also, BPM was a relatively new concept in the early 1990s. Many senior executives didn t understand the benefits of the discipline, and BPM became largely confused with Lean and Six Sigma mainly due to their much publicized, and successful, adoption by General Electric and Motorola during the 1980s. BPM is a business-led initiative, not IT. 16

17 Correct location of BPM in organisation Therefore, in terms of where a BPM team (BPM center of excellence) should be located, the consensus is that it should be placed in direct line to the Chief Operations Officer (COO). 17

18 Correct location of BPM in organisation BPM should ideally sit under the COO, because he or she is usually responsible for running the core businesses of the organization. COOs are typically responsible for sales, services, manufacturing, warehousing and distribution, and most activities where the organization faces the client (for example, call centers). As a result, it s imperative that BPM sits as closely to the business as possible in order to observe, model and optimize its processes. By placing BPM in the line of the COO, the team will also have a chief sponsor as well as feel as though they re a part of running the business. Experience shows that staff from external divisions (such as IT) tends to be treated as outsiders and are afforded less priority when sent requests for work or to attend meetings. 18