Business Process Management Practical Advice & Methodology - Climbing Your First Steps on the BPM Maturity Ladder
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1 Business Process Management Practical Advice & Methodology - Climbing Your First Steps on the BPM Maturity Ladder Tom Einar Nyberg Head of BPM Managing Consultant - Capgemini Norway ten@capgemini.com 2013
2 Contents Business Process Management The strategic objectives and process services that delivers them Process mapping and documentation Communicating effectively and laying the foundation Process analysis and improvement Analysing and improving processes to make them more effective and effecient Process performance measurement Measuring performance against targeted levels Processs governance and continuous improvement Aligning peformance with strategic priorities and taking actions for improvement 2
3 Firstly - the purpose of BPM is to help you achieve your goals typically related to four main strategic areas the four Cs Customer experience Cost and effectiveness Manage Critical Business Processes Change Compliance 3
4 Critical processes must be treated as assets in the organisation they need to be managed in order to contribute to deliver strategic results Governance and continous improvement Mapping and documentation Act Check Manage Critical Processes Label Plan Do Performance measurement Analysis and improvement 4
5 The BPM services that the organisation must deliver are necessary to manage the critical processes in a structured way Element Overview Methdology Goal Governance and continuous improvement Aligning strategic goals and initiatives with operational performance improvement. Making strategic targets parts of organisational processes Governance and maturity model Balanced Scorecarding Management system BPM Center of Excellence Making BPM a part of Corporate Performance Management Connect strategi target achievement and governance process with execution of process improvment initiatives Performance measurement Setting up a proactive system of monitoring and analysing performance gaps and target results from processes Six Sigma statistical process control KPI/PPI breakdown Performance benchmarking Systematic improvement regime Monitor and analyse performance results from processes integrate this into an integrated system for performance management Analysis and improvement Analyse existing performmance problems Redesign processes in order to close gaps in performance Support implementation of redesigned processes LEAN design and business analysis Industry reference models and best practises Functional process change mgmt support Eliminate existing performance problems and pains Redesigned processes to make them more effective and effecient Implement process improvement Mapping and documentation Facilitate process workshops and modell process documentation Identify quick-wins and improvement targets Fascilitation techniques Communication format Modelling tools (ARIS/QLM/VISIO/PPT) Modelling notations (BPMN/IDEF0/EPC) From Chaos-to-controll Effective process communication and training Foundation for doing further process improvement 5
6 Contents Business Process Management The strategic objectives and process services that delivers them Process mapping and documentation Communicating effectively and laying the foundation Process analysis and improvement Analysing and improving processes to make them more effective and efficient Process performance measurement Measuring performance against targeted levels Processs governance and continuous improvement Aligning peformance with strategic priorities and taking actions for improvement 6
7 Documenting business processes its about COMMUNICATION: The right LEVEL & FORMAT for the right AUDIENCE at the right TIME Business Process Modelling The documentation and modelling of business processes is essential in order to support the BPM lifecycle Modelling is always done to achieve a goal and has a specific purpose. It needs to be governened by business priorities A typical problem is forcing the agenda for process modelling that deliveres little value Process documentation should be SICC: Simple, Intuitive, & Communicate Clearly Modell with caution: One can always modell too much, adjust the method to achieve your objective. Standard format: A process modell is NOT ART it needs to be understood equally by anyone in the organisation, Level Level Process description Simple activity overview Activity flow and procedures Type Type Short description of the process Required needed for all processes- Overview of activities & description Can be used in order to provide an overview of activities Detailed activity flow and descriptions Used only where required to describe detailed execution and guidance for activities 7
8 The different types of processes and models are linked together in a hierarchy to make it easey to find process related information Nivå Modelltype Objekter Type symboler representert og objekter i modell Level 0 Value chai diagram Value chain, phases and streams Delivery Level 1 Process landscape Value chain Megaprocess (Manage, Core, Support) Sales Level 2 Process overview Mega-process Main-process Sub-process Conduct sales meeting Level 3 Process workflow Goals Activities Resources Roles Risk Create sales order Level 4 Procedures Activities and instructions 8
9 Process modelling and tool support: It is important to find the right tool for the right job Drawing tools Example: Microsoft VISIO, Powerpoint Benefits Purchase cost is low Existing user familiarity Freedoms of drawing Drawbacks Information usage: No common modelling conventions, industry references or standards Maintenance: No common repository, process hiearki, navigation structure, task relationships, No support for analyis, simulation, governance, monitoring, reporting No effective publishing solution, Modelling tools Example: ARIS, Mega, Metastorm Benefits Information usage: Common modelling repository, process hierarki, object relationships Supporting business analyis, model comparison, reporting based on process repository Maintenance: Easy to update information, approve and publish updates Established modelling conventions, standards, filter and automatic templates Drawbacks License costs of tool Training to achieve familiarity by users Dedicated modelling tools based on a common repository are best suited to support the organisations in long term/enterprise adoption of BPM practices. 9
10 Contents Business Process Management The strategic objectives and process services that delivers them Process mapping and documentation Communicating effectively and laying the foundation Process analysis and improvement Analysing and improving processes to make them more effective and efficient Process performance measurement Measuring performance against targeted levels Processs governance and continuous improvement Aligning peformance with strategic priorities and taking actions for improvement 10
11 Documenting and analysing processes lays the groundwork for further process improvement Status, capability and maturity Process mapping Process analysis and improvement Migration and deployment actions Determine need for process work and backgroun, root-cause, context, expectations, performance gaps, goals Collect and validate existing documentation Identify referencemodels and bestpractise Initial recommendations Understand and document As-Is processes Identify missing information, deficiency and improvement opportunities Identify roles and responsibilities across functions and units Map IT systems and applications Determine new performance requirements Design To-Be processes Analysis of processes and improvement (Lean, SixSigma etc. Define KPIs and metrics GAP analysis between As-Is and To-Be Design implementation plan, including training and communication Establish framework, responsibility and procedures for measurement, follow-up and continous improvement 11
12 The methodology for process improvement will depend on the current performance and the degree of improvement required Limited Degree of performance improvement required Radical Incremental process improvement Implement changes within the context of existing business processes Defined as part of a proactive program of continuous incremental improvement Often oriented towards solving performance issues or quality defects Metaphor: Fixing a leaking roof Business process redesign Larger impact redesign of business processes Influences how business and management processes, new working procedures and governance/responsibility/roles Major improvement targets through changing existing practises and execution model Metaphor: Putting down a new roof Business process reengineering Re-engineering is a radical restructuring of business processes from scratch often involves a change in the entire operational business model Design typically breaches with current thinking and status Radical changes in process execution often leads to organisational restructuring Metaphor: Building a new house 12
13 Often missed during process analysis: to manage and execute processes on target they need to have governance and support in place Management processes provde governing elements in order to set targets and requirements for execution Governingelements Organization Policy and guidelines Goal and target Core process Technology Competence Infrastructure Enablers Support processes deliver critical enablers in order to execute processes 13
14 Contents Business Process Management The strategic objectives and process services that delivers them Process mapping and documentation Communicating effectively and laying the foundation Process analysis and improvement Analysing and improving processes to make them more effective and efficient Process performance measurement Measuring performance against targeted levels Processs governance and continuous improvement Aligning peformance with strategic priorities and taking actions for improvement 14
15 Performance measurement needs to be considered in an crossfunctional context that drives enterprise performance Typically each department will initate improvement without considering the complete picture Enterprise level Activity level Process level It s a problem with the order forms I am going to create a new IT system It s a problem with the order cycle variation I am starting a SixSigma initiative There is a marketing problem I am going to hire som consultants Sales director Head of of Supply Chain Vice President of Marketing Sales department view Problem: Inaccurate & late order forms Desired reesults: Zero incomplete order forms 100% acccurate order forms Orders submitted daily Current results Between 1-10 incomplet order forms 83% accurate orders Orders submitted weekly Manufacturing department view Problem: Drop in customer satisfactions Desired results Order cycle time of 1 day Current results Order cycle time of 9 days Order fulfillment process Marketing department view Problem: Loss of market share Desired results Market share of 80%+ Current results Market share of 66% Adopted Copyright from 2009 Gaery Capgemini. Rumler All rights - reserved. 15
16 Strategic Impact Process Performance Management Performance gaps have to been in context with strategic importance Evaluation of process performance Process Performance Evaluation Performance data for processes must be seen in the context of delivering on strategic goals, KPIs and operational execution The strategic impact rates how important the outcome of the process is in relation to strategic operationalisation The process performance gap in delivering business outcome rates how effective the process is in delivering its product and services its hit-rate for customer needs Process effeciency relates to the amount of resources consumed to deliver this outcome. The strategic impact and outcome gap needs to evaluated together in order to priortise processes for business process improvement The priority will determine which processes will receive support and allocated resources, time, and money Low High P1 P2 P5 Target quadrant P3 P1 Performance - Process 1 P4 P2 Performance - Process 1 P3 P4 Performance - Process 3 Performance - Process 4 Low Business outcome gap High P5 Performance - Process 5 16
17 Contents Business Process Management The strategic objectives and process services that delivers them Process mapping and documentation Communicating effectively and laying the foundation Process analysis and improvement Analysing and improving processes to make them more effective and efficient Process performance measurement Measuring performance against targeted levels Processs governance and continuous improvement Aligning performance with strategic priorities and taking actions for improvement 17
18 Typical benefits with initial increase in process maturity: Clear control, accountability and responsibility through process Describe key activities as processes and reduce the amount of written procedures Ensure compliance with laws, regulations and other goals and requirements through their relations with processes Clarify the employees responsibility, roles and activities through their relationship with the process Connect deliverables, risk, reliability, safety and targets to processes enable further process improvement, standardization and follow-up 18
19 As BPM maturity increases in the organisation the processes are consistently managed and improved in order to drive business value Best-in-class reference Level 5: Optimised Proactive and continuous improvement provides innovative solutions to achieve strategic targets Systematic performance improvement Nivå 4: Managed Process performance is measured proactively -. target achievement is analysed and controlled Standard processes are extensively used across locations and benchmarked with external sources Standardise execution Level 3: Defined Best-practises processes are actively used as sources of learning to standardise processes across locations Initial use of measurement and control to ensure that deliverable requirement are being met Strengthen control Level 2: Managed Processes are defined, understood and described in standards, procedures and tools Execution of processes have different controls across locations Process adherence is controlled on an ad-hoc basis and information rarely shared Level1: Initial Processes are executed inconsistently and sometimes ad-hoc The organisationdoes not offer stable support for the processes Services often function but they og beyond the planned time and budget Tendency to promice more that the organisation can deliver and deviates from process during crisis Source: Modenhetsmodell - OCEB 19
20 Effective business management and governance requires both a clear strategy, organization, processes and a management system BUSINESS Business MANAGEMENT management NEXT LEVEL MATURITY STRATEGY ORGANISATION PROCESSES IDENTIFY, PRIORITISE AND DIRECT TOWARDS STRATEGIC AND TACTICAL GOALS GOVERNANCE MODEL WITH ORGANISATION, ROLES, AUTHORITY & RESPONSIBILITY HOW TO OPERATIONALLY EXECUTE WORK TASKS IN ORDER TO ACHIEVE GOALS supports Håndering av avvik Verktøy for avvikshåndtering Strategikart, Prosessmodeller KPI og målekort Strategi Modelleringsverktøy BI verktøy Felles inngangsportal Dokumenter og søk (statisk innhold) MinSide DMS verktøy Operasjonelle Process styrekort performance Portal/BI/ Operasjonelt Prosess BI verktøy MANAGEMENT SYSTEM SUPPORT DECISION MAKING AND MAKE THE NECESSARY INFORMATION AVAILABLE IN ORDER TO EFFECTIVELY MANAGE THE BUSINES - SUPPORTED BY EFFECTIVE TECHNOLOGY INFORMATION GOALS PERFORMANCE ORG. STRUCTURE PROCESSES REQUIRMENTS INCIDENTS AND ACTIONS DOCUMENTATION 20
21 NEXT LEVEL MATURITY BPM takes the strategic objectives and priorities and translates this to actual execution of the necessary business process improvement Linking CPM BPM BPI Translation of targets to actual improvement Corporate Performance Management (CPM) utilises BPM as a way of managing overall valuebased organizational performance Corporate Performance Management Business Process Management Business Process Improvement The BPM discipline is a tool box and represents a wide set of methods and techniques. The goal is continous process improvment of processes BPM is a gradual continous approach to improvement, where Business Process Reingeneering was a drastic reorganization and one-time redesign Six Sigma, ToC and Lean are focused techniques for Business Process Improvments (BPI) and can be used within the BPM process lifecycle to focus on improving specific processes Continous improvement towards strategic goals Strategy Tactical Operational From strategy to operational execution In order to have an effective BPM focus and priority the organisational strategy must be clearly defined and related to concrete business outcomes for customers Linking CPM to BPM can be done by clarifying strategic goals a good way is by using a Balanced Scorecard and linking strategic improvevement initiatives to releveant processes BPM will then coordinate and prioritise the process improvement initiatves that will target the strategic goals and make the strategy operational BPI initiaves will be executed in order to target specific improvement goals. These must be priortized, coordinated and seen in the context of end-to-end business processes. The BPM lifecycle of continous improvement seeks to improve business value delivered towwards strategic objectives 21
22 Management Services NEXT LEVEL MATURITY Organizing enterprise BPM service delivery on an enterprise level BPM Center of Excellence to support and deliver BPM services in the organisation MP01 Strategy Translation into Processes MP03 BPM Services Development Planning MP05 BPM Services Monitoring MP07 Culture Dissemination MP02 BPM Demands Identification & Analysis MP04 BPM Services Programming MP06 BPM Results Evaluation Main Services Complementary Services Technologies MS01 Process Architecture Maintenance MS06 Process Performance Management CS01 Lean & Six Sigma Oriented Improvement CS06 Process Auditing T01 Process Modeling & EA Tools MS02 Process Modeling (AS-IS) MS07 Process Management Training & Education CS02 Reference Models Implementation CS07 Risk and Internal Control Management T02 SOA MS03 Process Improvement (TO-BE) MS08 Process Compliance CS03 Systems Specification CS08 Competencies Management T03 BAM MS04 Process Documentation MS09 Process Maturity Management CS04 Process Automation CS09 Management of Improvement Projects T04 ECM MS05 Process Change Management MS10 Process Benchmarking & Innovation CS05 Business Rules Management CS10 Process Cost Management T05 BI Support Services SP01 Administration of Models Repository SP02 Administration of BPM Roles & Responsibilities SP03 Administration of BPM Services Portfolio SP04 Administration of BPM Human Resources SP05 Administration of BPM Budget COE organisational structure The CoE organisation can be virtual, fixed or a hybrid-mix, and will usually consist of a smaller set of core expert members, and a larger set of distributed members in the line organisations. The complete set of BPM services will then be split between the core team and distributed team. Management and support services will usually be handled by the core team, while BPI initiatives in the organisation is delivered by the distributed team members that work in the individual business units. 22
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