Business Process Management (BPM) for BAs
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1 Business Process Management (BPM) for BAs Sponsored by: RG Freeman Group Mark A. Monteleone Independent Consultant and Author
2 Sponsor: RG Freeman Group Why Choose the RGF Group? We specialize in training and consulting services Agile Transformation Business Analysis Project Management IT Service Management World Class Instructors Professional certifications combined with real-world experience New Courses Updates reflecting latest versions of PMI and IIBA Body of Knowledge guides For attendees of today s webinar download free templates and whitepapers at: Practical Workshops - Real Projects Real Templates Real Results! Great offerings Many on-line courses - Guaranteed to run info@rgfgroup.com 2
3 Business Process Management (BPM) for BAs Free copy of this presentation can be obtained via 3
4 Introduction Business Process Management 4
5 Speaker Biography Mark A. Monteleone, PMP, CBAP, CSM/CSPO Mark Monteleone is an independent consultant and author of The 20 Minute Business Analyst: a collection of short articles, humorous stories and quick reference cards for the busy analyst. He has also written several articles in BA Times, BA Connection, International Association of Facilitators (IAF) Global Flipchart and Modern Analyst. With more than 40 years of experience, he has conducted strategic enterprise analysis and consulted on business applications and project management in more than 35 countries. Mr. Monteleone holds a B.S. in physics and an M.S. in computing science from Texas A&M University. He is certified as a Project Management Professional (PMP ) by the Project Management Institute (PMI ), a Certified Business Analysis Professional (CBAP ) by the International Institute of Business Analysis (IIBA ) and a Certified Scrum Master (CSM TM ) and Scrum Product Owner (CSPO TM ) by the Scrum Alliance. 5
6 Agenda Pose and Answer Six BPM Questions 1. As a business analyst, what do you need to ask for when joining a business? 2. What is the difference between managing a business by function vs. process? 3. Why would you redesign rather than incrementally improve a process? 4. Why should your process analysis cover a value chain rather than a sub process? 5. Why should you establish leading and lagging metrics to control a process? 6. What is the most challenging part of business process management, improving the process or managing the resistance? 6
7 Question/Answer One As a business analyst, what do you need to ask for when joining a business? Process Models how are products and services produced? Process Owners who is responsible for the process and approves changes? Metrics how are processes evaluated? 7
8 Flowchart of an Oil Change Process (Single Viewpoint of the Customer) Drive car to shop Wait for service(s) to be complete Consider oil change options Cloud Select oil change only Select oil change and car wash Pay for services(s) Drive car from shop Give selection to service tech 8
9 Oil Change Process with swim lanes (Multiple Viewpoints) CUSTOMER Drive car to shop Consider oil change options CUSTOMER SERVICE REPRESENTIVE Offer oil change options to customer AUTO MACHANIC Drain oil from car VALET Drive car into service bay Wash and Wax Car [customer selected wash and wax option] Select oil change only Select oil change and car wash and wax Accept customer selection and provide to service tech Change oil filter Put new oil into car Vacuum interior Fill window washer fluid Drive car to parking lot Pay for service(s) Alert customer that service is complete Alert customer service rep that service is complete 9
10 Business Process Modeling and Notation (BPMN) (Multiple pools with swim lanes) 10
11 Business Process Modeling and Notation (BPMN) Decision Model Notation (DMN) 11
12 Question/Answer Two What is the difference between managing a business by function vs. process? Traditionally, management assigned process problems/opportunities in a top-down fashion (i.e., following the org. chart). Processes, however, cut across the organization rather than follow an org. chart. Business Process Management is running the business via its processes. 12
13 Business Process Management Business Process Management (BPM): is a systematic approach to managing a business by ensuring its products and services (customer value) are effective and that its processes are efficient in producing those products and services. Effective in terms of producing a product or service is needed by the customer (voice of the customer). Efficient in terms of process time, cost, resources, flexibility, and controls (voice of the process). The key is that the BA ensures both voices are aligned. Business Process Management Life Cycle: a four stage iterative process that could be motivated by a problem/opportunity or a periodic review Define Analyze Implement Control 13
14 Question/Answer Three Why would you redesign rather than incrementally improve a process? Redesign: an approach to dramatically improve a process (reengineer). Typically, the BA uses Product-Based Design where the BA ignores the current process (AS-IS) to ensure creativity. Instead, the BA designs a process that produces the current product and/or service assuming it represents the voice of the customer. Incremental Improvement: a method of making a process more effective or efficient through small changes (continuous improvement). 14
15 Question/Answer Four Why should your process analysis cover a value chain rather than a sub process? Sub Process: a part of a value chain. A common error in BPM is when the BA only makes improvements to a sub process without regard to the value chain. The risk is a less effective and/or efficient process. Value Chain: an end-to-end process that produces a product and/or service for a customer. It is composed of sub processes. It starts with an event that triggers the process and ends with a customer delivery. 15
16 BPM Define Stage Example Functions: source Organization Model SUBPROCESSES: source AS-IS model if available G O A L : Reduce Time to Invoice the Clients from 6 to 1 week Consulting Invoicing Submit Expense Report Mail Receipts Match Receipts Approve Expense Report Transfer Expense Data Collect Seminar Fee Generate Invoice Mail Invoice V a l u e C h a i n 16
17 Question/Answer Five Why should you establish leading and lagging metrics to control a process? Lagging Indicator: a historical metric of a value chain. Shows the result in terms of performance (time, cost, etc.). Used in dashboard trend reports. Leading Indicator: an on-going metric of a value chain. The process owner uses this indicator to predict if the lagging indicator will meet the process owner s expectation. Provides evidence where in the value chain a problem exists, but unclear why. The BA needs to conduct a root cause/5 why analysis to determine why. Used in dashboard control reports. 17
18 Baseball Analogy Pitch Count - Leading Indicator Scoreboard - Lagging Indicator Change Pitcher - Root Cause / 5 Why Analysis 18
19 Process Owner Dashboard Process Control Reports on current activity Process Trend Reports over the long term 19
20 Root Cause Fishbone Format Why does the problem occur? 20
21 Apply the Five Whys to Each Aspect of the Fishbone Diagram Problem 1 Process Inefficiency Problem 2 Cause B Root Cause Aspect Cause D Root Cause 21
22 Question/Answer Six What is the most challenging part of business process management, improving the process or managing the resistance? Resistance: a common reaction (opposition) to change due to being comfortable with the current environment. Motivation for opposition varies and includes: fear of failure, lack of trust, perceived impact, etc. Risk Tolerance: an amount of change uncertainty that a process owner is willing to accept (risk prone vs. risk adverse). To manage risk tolerance, propose solution in layers of risk. 22
23 Kotter s Eight-Steps for Resistance Prevention 1. Create Urgency 2. Form a Powerful Coalition 3. Create a Vision for Change 4. Communicate the Vision 5. Remove Obstacles resistance corrective action 6. Create Short-term Wins 7. Build on the Change 8. Anchor the Changes in Corporate Culture 23
24 Emery s Resistance Corrective Action What are the expectations of change? Can the communication be interpreted different ways? Is the resistance due to a relationship? Is the resistance due to outside influences? 24
25 Principles of Change Most people will drop all resistance and evolve to accepting change when they believe they are at a precipice Where the change originates constitutes the level of resistance Lower when change originates with the affected individuals Higher when change is imposed on the affected individuals Resistance grows as change approaches the proximity of the affected individuals 25
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28 BPM Webinar Summary Business Process Management (BPM) Managing Business by process rather than function Projects specific problem/opportunity process or periodic process review Approach redesign or incremental improvement is determined by metric goal Success alignment of process and customer voices Thorough Analysis value chains, lagging and leading indicators, root cause/five whys Biggest Challenge managing resistance BPM Life Cycle Define identify value chains per a metric goal Analysis model and measure AS-IS processes Implement model and propose TO-BE processes Control establish process owner dashboard 28
29 Access the website below for a free copy of this presentation plus access to other quick reference checklist cards. 29
30 References for Further Insight Business Process Management Making a Case for BPM: A Benefits Checklist by Jim Rudden, Why & How: Business Process Modelling by Guy Beauchamp, Redesigning Business Processes using Product-Based Design by Mark Monteleone, A Baseball Analogy Monitoring Processes through Leading and Lagging Metrics by Mark Monteleone, Follow-up on processes: When money is not enough - a public sector example, by Mark Monteleone, The MicroGuide to Process and Decision Modeling in BPMN/DMN by Debevoise, T., Taylor, J., (2014): The Decision Model: A Business Logic Framework Linking Business and Technology by Von Halle, Barbara, Goldberg, Larry (2009), (IT Management), Auerbach Publications Product-Based Design of Business Processes Applied within Financial Services, by Reijers, H. A., (2005), Eindhoven University of Technology, Department of Technology Management Managing Change Resistance Leading Change by John P. Kotter, January 1996 Resistance as a Resource by Dale H. Emery, Cutter IT Journal Vol. 14 No. 10, October 2001 Managing Stakeholders: an integrated system of actions, tasks, and methods by Mark Monteleone, Resistance as a Major Source for Requirements Risk b y Mark Monteleone, 30
31 Explanation of BPM Terms Business Process Management (BPM): is a systematic approach to managing a business by ensuring its products and services (customer value) are effective and that its processes are efficient in producing those products and services. Effective in terms of producing a product or service that is needed by the customer (voice of the customer). Efficient in terms of process time, cost, resources, flexibility, and controls (voice of the process). Customer Value: product and/or service needed by the customer Voice of the Customer: what the customer needs and is measured by effectiveness. Voice of the Process: what the value chain produces and is measured by efficiency. 31
32 Explanation of BPM Terms Metric: a qualitative or quantitative measure of the voice of a process. Qualitative measures can be drawn from interviews of a process worker. Quantitative measures are numerics drawn from surveys or from actual processes. Lagging Indicator: a historical metric of a value chain. Shows the result in terms of performance (time, cost, etc.). Used in trend reports. Leading Indicator: a on-going metric of a value chain. Is used to determine if the lagging indicator of a value chain will meet the process owner s expectation. Provides evidence where in the value chain a problem exists, but not why. Root cause analysis is needed to determine why. Used in control reports. Root Cause: the actual cause of an event rather than a symptom of the cause. Typically, the BA determines the root cause via cause/effect or fishbone/5 why analysis. 32
33 Explanation of BPM Terms Incremental Improvement: a method of making a process more effective or efficient through small changes (continuous improvement). Redesign: an approach to dramatically improve a process (reengineer). Typically, Product-Based Design is used where the current process (AS- IS) is ignored to ensure creativity. Instead the BA designs a process that produces the current product and/or service assuming it represents the voice of the customer. Product-Based Design: a method for redesigning a process where the current process (AS-IS) is ignored to ensure creativity. Instead the BA designs a process that produces the current product and/or service assuming it represents the voice of the customer. 33
34 Explanation of BPM Terms Functional Management: a business strategy of running a business top-down per an organization chart. Process Management: a business strategy of running a business across an organization chart following value chains. Process: a series of interrelated tasks that, when executed, accomplishes a goal. Process Model: a representation of a value chain or sub process of a business consisting of graphics (diagram), text, and metrics. May be linked to other models such as Decision Model Notation (DMN). Flowcharting used to represent one point of view Activity Pool with swim lanes used to represent an orchestration with multiple points of view Business Process Modeling and Notation (BPMN) used to represent multiple pools with intra-message collaboration and choreography (graphic use case) 34
35 Explanation of BPM Terms Process Owner: an individual or group of individuals that is responsible for a value chain or sub process and has the authority to change the value chain or sub process. Dashboard: a group of control and trend reports that assist a process owner in measuring the effectiveness and efficiency of a value chain. Typically compares actual results with an expectation. Sub Process: a part of a value chain. A common error in BPM is when the BA only makes improvements to a sub process without regard to the value chain. Result could be less effective and/or efficient process Value Chain: an end-to-end process that produces a product and/or service for a customer. It is composed of sub processes. It starts with an event that triggers the process and ends with a customer delivery. 35
36 Explanation of BPM Terms Business Process Management Life Cycle: a four stage iterative process that could be motivated by a problem/opportunity or a periodic review. Define identifying process(es), process owner(s) from the organization s process architecture and establishing a metric goal Analyze constructing an AS-IS process model, determining its performance via qualitative and quantitative metrics, and identifying root causes Implement constructing a TO-BE process model and proposing improvements or redesign based on risk Control establishing a dashboard for the process owner(s) consisting of leading and lagging metrics in the form of control and trend reports Resistance: a common reaction (opposition) to change due to being comfortable with the current environment. Motivation for opposition varies and includes: fear of failure, lack of trust, perceived impact, etc. Risk Tolerance: an amount of change uncertainty a process owner is willing to accept (risk prone to risk adverse). 36
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