Business Process Management Today and Tomorrow

Transcription

1 BPM 2008 Business Process Management Today and Tomorrow Paul Harmon Executive Editor Business Process Trends 2008 BPTrends Associates. All Rights Reserved.

2 Agenda Yesterday Independent process traditions, each with their own theories and practices Today Tomorrow 2

3 Business Process Traditions Business Management Business Process Management Work Simplification Quality Control, Six Sigma, Lean Information Technology BPMS Ford Contentious Production Line WW II 1900 First Computers Outsourcing Internet 2000 Taylor Scientific Management Production

4 The Simplification/Quality Tradition Main Focus: Continuous Process Improvement Gurus: Shewhart, Demings, Juran, Ohno, Womack Organizations: ASQ, ISSSP 4

5 Six Sigma at the Process Level: DMAIC 5

6 LEAN Flow Kaizen: Value-Stream Mapping Start /End An Enterprise Level LEAN Modeling Technique 6

7 Capability Maturity Model Integrated (CMMI) 7

8 The Process Management Tradition Main Focus: Improvement of Organization Performance Gurus: Rummler, Porter, Heskett, Kaplan & Norton Organizations: HBR, ISPI, SCC 8

9 The Organization and the Value Chain Management new need identified Engineering Product Value Chain Research & Create New Product Production Finance new product design product available Marketing Sales & Support Promote & Sell Product order promotions order Customers Make & Deliver Products materials product delivered Suppliers 9

10 Rummler s Performance Model 10

11 Rummler s Process Management Model 11

12 Michael Porter s Value Chain Model From Michael Porter, Competitive Advantage, Harvard,

13 Kaplan and Norton s Balanced Scorecard 13

14 Aligning Balanced Scorecards 14

15 Dividing Up the Scorecard Between Function and Process Balanced Business Scorecard Financial Perspective Innovation & Learning Perspective Goals Measures Goals Measures Survive Succeed Prosper Cash flow Quarterly sales growth & operating income by division Increased market share and ROE Technology leadership Manufacturing learning Product focus Time to market Time to develop next generation Process time to maturity Percent of products that equal 80% sales New product interdiction vs. competition Internal - Process Perspective Customer Perspective Goals Measures Goals Measures Technology capability Manufacturing experience Design productivity New product introduction Manufacturing geometry vs. competition Cycle time, Unit cost, Yield Silicon efficiency, Engineering efficiency Actual introduction schedule vs. plan New products Response supply Preferred supplier Customer partnership Percent of sales from new products, Percent of sales from proprietary products On-time delivery (defined by customer) Share of key accounts' purchases, Ranking by key accounts Number of cooperative engineering efforts Goal Measure most likely assigned to Process Manager Goal Measure most likely assigned to Functional Manager 15

16 Functional vs. Process Measures 16

17 Information Technology Tradition Main Focus: Process Automation Gurus: Martin, Scheer, Hammer, Smith & Fingar... Organizations: ISO, WfMC, IEEE, OMG, IIBA, Gartner 17

18 Agenda Yesterday Today Some Interesting Developments Frameworks Value Chains vs Networks ERP and BPMS The Uses of BPMS BPMN and Business Rules Modeling Customer Processes Tomorrow 18

19 Business Process Traditions 19

20 SCOR s Business Process Framework 20

21 SCOR Benchmarks Provide Instant ROI Supply Chain SCORcard Industry Benchmarks Overview Metrics SCOR Level 1 Metrics Actual Parity Advantage Superior Value from Improvements Delivery Performance to Commit Date 50% 85% 90% 95% Supply Chain Reliability Fill Rates 63% 94% 96% 98% EXTERNAL Responsiveness Perfect Order Fulfillment Order Fulfillment Lead Times 0% 35 days 80% 85% 90% 7 days 5 days 3 days $30M Revenue $30M Revenue Flexibility Supply Chain Response Time 97 days 82 days 55 days 13 days Production Flexibility 45 days 30 days 25 days 20 days Key enabler to cost and asset improvements Total SCM Management Cost 19% 13% 8% 3% $30M Indirect Cost Cost Warranty Cost NA NA NA NA NA INTERNAL Value Added Employee Productivity Inventory Days of Supply NA $156K $306K $460K NA 119 days 55 days 38 days 22 days NA Assets Cash-to-Cash Cycle Time 196 days 80 days 46 days 28 days $7 M Capital Charge Net Asset Turns (Working Capital) 2.2 turns 8 turns 12 turns 19 turns NA 21

22 Value Chain vs. Level 1 Processes (Value Nets) 22

23 Value Chains or Common Processes 23

24 Value Chains vs. Common Processes 24

25 ERP Reality: Multiple, Customized ERP Instances 25

26 Standardizing Processes to Standardize Instances 26

27 The Future Promise: ERP Modules Managed by BPMS 27

28 Computing Domains VP CEO SVP SVP SVP VP VP Mang. e.g. Spreadsheets, , Groupware, Decision Support Systems VP Software for Various Special Projects Project Planning Process Modeling Software Development e.g. ERP, Tailored Applications 28

29 Two Ways of Thinking About BPMS CEO Mang. e.g. Spreadsheets, , Groupware, Decision Support Systems SVP SVP BPMS SVP II A BPMS Application created to help a business manager manage VP VP VP a processvp Software for Various Special Projects Project Planning Process Modeling BPMS I A BPMS Application created to automate a process Software Development e.g. ERP, Tailored Applications 29

30 BPMN Diagrams Fulfill Online Book Order Customer Place Order Revise Order Recieve Books Company Web Portal Receive Order order incomplete: Ask customer for more information order rejected Order System Review Order order requires special processing order accepted Send workorder to shipping Close Order Exceptions Clerk Re-Review Order Packaging Fill Order books Shipping credit card approval Ship Order Credit Card Approval Center Review-Approve Charge 30

31 The Tax Return Solution Customer Submit Tax Return Tax Agency Evaluate Tax Return Process Tax Return Rule 1 If the received date of the tax return is less than 6 months in the past, and A claims a payment not received, or A credit elect for a tax return from the same taxpayer for a previous year has not been posted, Then the tax return for a given year must be held. 31

32 Modeling Customer Processes 32

33 Agenda Yesterday Today Tomorrow A continued interest in processes, and, perhaps an integrated process management practice at the heart of the organization 33

34 Why Process? Process describes how we do work in our organizations Change forces organizations to change how they do work The near future will be unrelenting change New technologies New customer demands New markets throughout the world Overcapacity, intense global competition, acquisitions Outsourcing and specialization Greening of Process 34

35 Product/Technology Lifecycles 35

36 What s Involved in BPM? 36

37 Trying to Find a Common Language 37

38 Some Major Types of Process Problems 38

39 Another View of the Three Perspectives G Rummler M Porter FW Taylor HBS, ISPI, SCC Capability Maturity Model Haskett QUALITY Lean Six Sigma Emphasis on E Deming product quality and consistency, on J Juran continuous process S Shingo improvement, and on creating a T Ohno culture that cares about process J Womack ASQ, ISSSP MANAGEMENT Emphasis on performance, on measurement, process ownership, alignment with strategy, with customer satisfaction, shareholders, and competitive advantage Kaplan & Norton Emphasis on using computer systems to automate processes, on reengineering to make the best use of new computing techniques and on analytics Balanced Scorecard OR Frameworks (SCOR) M. Hammer ReEngineering T Davenport Business Rules IDS Scheer WfMC, IIBA, OMG, BPMI, Gartner 39

40 Slides Available Later This Week Go to Search for BPM2008HarmonKeynote 40