STRATEGY AND BUSINESS PROCESS MANAGEMENT

Transcription

1 STRATEGY AND BUSINESS PROCESS MANAGEMENT Techniques for Improving Execution, Adaptability, and Consistency CARL F. LEHMANN Foreword by Dale Kutnick CRC Press Taylor & Francis Group Boca Raton London New York CRC Press is an imprint of the Taylor & Francis Croup, an Informs business AN AUERBACH BOOK

2 Contents Foreword Preface Introduction About the Author xi xv xxiii xxvii SECTION I Best Practices Used in Strategic Planning Prologue: The Management Team Is Summoned 5 The CEO Speaks 5 Running a Business versus Running a Business Well 8 Using Best Practices to Align Strategy and Resources 9 Overview of the Best Practices of Industry Leaders 10 Using Best Practices to Innovate and Compete 11 Chapter 1 How to Compete: Competitive Strategy 13 Competitive Strategy: The Classic Approach 14 Five Forces Model of Industry Competition 16 New Entrants 17 Intensity of Rivalry 18 Pressure from Substitute Products 19 Bargaining Power of Buyers (Customers) 19 Bargaining Power of Suppliers 19 Determining a Defensible Position 20 Competitor Analysis 22 Building on Porter's Best Practices 23 Chapter 2 How to Focus Operations: The Discipline of Market Leaders 27 New Rules of Competition 28 Operating Models 30 Operational Excellence Operating Model 31

3 vi Contents Product Leadership Operating Model 32 Customer Intimacy Operating Model 32 Defining Value 33 Building on Treacy and Wiersema's Best Practices 34 Chapter 3 How to Manage Performance: The Balanced Scorecard 37 Performance Measures from a Financial Perspective 40 Performance Measures from a Customer Perspective 42 Performance Measures from an Internal Business Process Perspective 44 Performance Measures from a Learning and Growth Perspective 46 Strategy Maps 49 Summarizing Kaplan and Norton's Best Practices 54 Building on Kaplan and Norton's Best Practices 55 Chapter 4 How to Adapt: Adaptive Enterprise 59 Sense-and-Respond Organization 60 Adaptive Loop 61 Modular Organization 63 Commitment Management Protocol 64 Building on Haeckel's Best Practices 66 Section I Conclusion: Strategic Planning A Process, Not An Event 67 SECTION II Execution Best Practice Use of Strategic Resources Chapter 5 How to Structure Organizational Behavior for Strategic Execution 73 Empower and Motivate 73 Workforce Collaboration 75 Collaborative Objectives 76 Managing Responsibility and Accountability 79

4 Contents vii Chapter 6 How to Structure Business Processes for Strategic Execution 81 Defining Processes 82 Operating, Support, and Management Processes 82 Operating Processes 82 Support Processes 83 Management Processes 83 Control Processes and Competitive Advantage 86 Business Rules and Process Controls 88 Core and Noncore Processes 90 Preparing to Organize Processes as Assets 91 Managing Processes as a Portfolio of Assets 92 Business Process Portfolio Management 93 Business Process Portfolio 94 Business Process Inventory 94 Introducing Business Process Reference Models 95 Evaluation Dimensions 97 Next Steps 102 Analyzing Inventoried Processes 103 Managing Process Execution 107 Performance Measurement 108 Selecting Key Performance Indicators 110 General Rules about Selecting and Crafting KPIs... Ill Measuring Variance 114 Using Trend Analysis 116 Using Benchmarking 118 Performance Control via Event Management 120 Exception Management and Resolution Management 121 Enabling Event Management 123 Improving Execution through Process Modeling, Analysis, and Simulation 127 Selecting Processes for Improvement 132 Symptomatic versus Strategic Process Improvement Symptomatic Processes 133 Strategic Processes 135 Continuous Process Improvement Program 136 Dealing with Complexity 137

5 viii Contents Simple versus Complex Processes 137 Assessing Process Complexity 140 Chapter 7 How to Structure Technology for Strategic Execution 141 Preparing for Process Improvement 143 IT Trends That Influence IT Strategy 144 Applications and APIs 144 Workflow and EDI 144 ERP 145 ETL 145 EAI 146 Business Process Modeling and Analysis 146 Business Rules Management 146 Internet 147 Open Source 147 SOA 147 SaaS and Cloud 148 BPMS 149 BAM and BI 149 Assessing IT Readiness 150 IT Capabilities Enabling Process Change 150 Overall IT Readiness 152 Crafting a Process-Centric IT Strategy 153 Petitioning for Process-Centric IT Strategy 160 Investing in Process-Centric IT Architecture 161 IT Portfolio Management 161 Objective Evaluation and Financial Analysis 165 Objective Evaluation 165 Financial Analysis 166 Competing for IT Budget 167 IT Portfolio Budget Structure 168 Funding Availability 169 Funding Sources and Accounting Methods 169 IT Budget Management: Resource Perspective 170 IT Budget Management: Domain Perspective 171 IT Budget Management: Purpose Perspective 172 IT Budget Management: Asset Class Perspective 173

6 Contents ix IT Investment Practices of Industry Leaders 174 Making an IT Investment Request 175 Section II Conclusion: Resources Structured for Execution 176 SECTION III How to Align Strategy and Resources to Improve Execution, Adaptability, and Consistency Chapter 8 Derivative Analysis Technique for Business Strategy and Resource Alignment 181 Derivative Analysis Defined 182 Using Derivative Analysis to Align Strategy and Resources: A Self-Assessment 185 A Generic Derivative Analysis 187 Section I: Best Practices Used in Strategic Planning 187 Progress Report Section I: Best Practices Used in Strategic Planning 193 Section II: Execution Best Practice Use of Strategic Resources 193 Progress Report: Execution Best Practice Use of Strategic Resources 201 Final Report: Derivative Analysis 201 Section III Conclusion: Strategy and Resources Aligned 203 Epilogue: The Management Team Reconvenes 205 The Chairman Speaks 205 Some Practical Success Factors for Improving Execution, Adaptability, and Consistency 208 Start Where Common Sense Tells You 208 Avoid Complexity at First 209 Assign Ownership 209 Address Misconceptions 210 Communicate 212

7 x Contents Check Reversion 212 Proceed Diligently 213 SECTION IV Summary Conclusion Summary of Key Guidance 217 Prologue: Management Team Is Summoned 217 Section I: Best Practices Used in Strategic Planning 218 Section II: Execution Best Practice Use of Strategic Resources 220 Section III: How to Align Strategy and Resources to Improve Execution, Adaptability, and Consistency 221 Epilogue: Management Team Reconvenes 222 Appendix A: Important Terminology 223 Appendix B: How to Evaluate Business Process Analysis Software 235 Works Cited 253 Index 255