Business Process Management (BPM)

Discussion of Real Steps Toward Improving Processes to Strengthen Business and IT

Collaboration

SIM WorkshopFebruary 1, 2005

Prepared by: Graham Tasman

Agenda

Introductions 5 mins

Business Process Management (BPM) Overview G. Tasman 15 mins

Interactive Discussion All 25 mins

Factors of Successful BPM G. Tasman

10 minsHow to deploy BPM in your IT function & company G. Tasman

What are the people, change, and organization implications

G. Tasman

Examples of Successful BPM Projects SIM Group 20 mins

Implications of not doing BPM well G. Tasman

10 minsExamples of where BPM is emerging as mission critical

G. Tasman

Guiding Principles G. Tasman

Question…

Who in IT has faced either of the following scenarios?

IT has had a process improvement initiative thrust upon them by the business and didn’t have the means to respond effectively

IT has initiated improvements in business processes and has had difficulty in getting the business interested and engaged

Business Process Management (BPM) Overview

In today’s world, leading companies recognize that maintaining competitiveness in the marketplace requires effective management and control of key business processes.

BPM, as defined by Gartner:

“is an umbrella term describing the methodologies, metrics, processes, and systems used to monitor and manage an enterprise’s business performance.”

Business Process Management (BPM) Overview

True BPM provides both a way to effectively manage how work gets done and a framework to drive continuous process improvement.

BPM as a Strategic Enabler: In order to sustain the benefits from Process Improvement initiatives, organizations are beginning to leverage best-in-class BPM capabilities including automation software to accurately and precisely control processes in an organization

Traditional Process Improvement vs. BPM

Process Improvement Initiatives that improve an organization’s current baseline

processes to a more efficient and effective future state through evolutionary (not revolutionary) change

Size & scope can run the gamut from small informal initiatives run by ad-hoc teams to large enterprise-wide initiatives managed by dedicated process excellence teams

BPM Takes on a prominent role after process improvement has

taken place – including ongoing monitoring and management of changed processes, measuring performance, and seeking continuous improvement

BPM may or may not involve business process automation (BPA) software

BPM Example

Situation:

The “business customer” has asked IT to manage a project to streamline its procurement process and views the problem as a system issue and expects IT to deliver a system solution. Based on its past BPM initiative experience, and having done preliminary analysis of the business customer’s problem, IT has confirmed that the solution is really about changing processes and coming up with a better way for the business customer’s employees to do their work.

BPM Example

Solution: The IT function deploys an internally developed pool of process management

experts The process team maps out current state (base line), identifies gaps & designs

future state process flows Process team calculates expected payback from operational savings of the future

state process Obtain Stakeholder buy-in to proposed changes Catalog policy & procedure changes Develop / modify the consequence system Implement general purpose process automation software to coordinate process

flows Provide training Roll-out Implement performance tracking

BPM Example

Outcomes: The business achieved desired levels of productivity

increases without making a major system investment IT created real, measurable value for the business IT continues to be the go-to resource for enhancing

business performance through better Business and IT Collaboration

How does BPM Create Value for IT and for the Business?

Facilitating better relationships Businesses can gain better control of their

processes and reduce the burden on IT to deliver solutions

IT can become more efficient by leveraging the reuse of existing resources

IT can respond rapidly to deploy new business solutions

Businesses can adapt quickly to new opportunities and competitive threats, while IT can quickly change existing systems

How does BPM Create Value for IT and for the Business?

Improving IT’s Alignment and Ability to Respond, Adapt, and Drive Value Back to the business Promotes greater visibility into actual company

performance Reduces cycle times and processing costs Improves efficiency within IT and the business Enables processes and IT to adapt quickly to

changing business conditions

Discussion Questions…

1. In your IT organizations, who sees BPM as an opportunity for IT to deliver higher-level customer satisfaction for the business and IT?Why?

2. Who of you sees the opportunity to better align with your business executives through BPM solutions?

3. How do you or would you approach BPM?

4. Does the business value this? What do you think the perceived value might be?

5. Can you measure the value or the benefits you create?

More Questions…

6. For those of you who do not utilize BPM, why not?

7. Do you think it is an important IT service offering to provide?

8. What do you need to be doing in order to make this service available?

What are the factors for successful BPM?

Identify a business champion with the authority to effect change

Leverage past best-practices experience

Identify immediate / quick-hits

Limit reliance on major technology enhancements to achieve process improvements

Leverage best-in-class BPM toolsets for process automation

Leverage existing process templates

Begin with a Pilot Group

Be Exact in Specifying Elemental Process Designs (i.e., avoid broad process scope and high-level designs)

How to make BPM happen in your organization

1. Inventory existing IT skills and “Communicating with the Business” skills

2. Do a first pass mapping against available process improvement and BPM methodologies

3. Determine skill gaps

4. Develop resource strategy for closing gaps

5. Evaluate BPM workflow automation toolsets; select a best-in-class package consistent with the current IT architecture standards

6. Build a client service competency to penetrate the organization and proactively seek out BPM initiatives by “living with the client”

7. Engage in a BPM pilot and measure success in “small wins”

8. Expand into departmental solutions before taking on the enterprise

9. Develop a measurement and monitoring discipline for all BPM initiatives

What are the People, Change, and Organization Implications?

1. How do I identify the right people in my organization for this kind of work?

Skills assessment and identification of gaps is critical

Consider the IT people and the Business people

2. Is my company ready to embrace BPM? Do they understand it? How will the culture respond?

IT must be ready to communicate to, and educate the business on BPM

3. Does the business have faith that IT can execute? Consider building a BPM capability around a larger IT

Transformation initiative geared toward improved client service

Examples of Successful BPM Projects

National Tire Company Problem: Controlling the Certification Process – current

inefficiencies in new product approval process Solution: BPM reengineering with process automation Results: Accelerated time-to-market by reducing general

specification change process approval times by 80%

A National Medical Center in Washington DC Problem: Inefficient paper-based procurement process Solution: Reengineering the process for efficiency and leveraging

process automation Results: Significant reduction in processing time for requisitions

with flexibility for different approval schemes. Able to achieve results without major ERP initiative

Examples of Successful BPM Projects

A World-Leading Children’s Hospital Problem: Ineffective physician credentialing process Solution: Reengineer the process to create more individual

accountability at each process stage Results: Performance measurements and monitoring drive desired

behaviors of accountability to significantly improve credentialing cycle times

GlaxoSmithKline Presented by Chris Anstey

Implications of not doing BPM

Opportunity cost of not converting known challenges to business results (savings or revenue)

Not fully harnessing the value of IT as a Strategic Contributor to the business Continued perception by the Business that IT can

only provide technical value (versus business value)

“Same ‘ole, Same ‘ole” IT Agenda

Lack of Alignment with the Business

Examples of where BPM is emerging as mission critical

Regulatory compliance SOX, HIPPA, Patriot Act

Sarbanes Oxley – what the future holds:Section 409: Real Time Disclosure.

“Issuers must disclose information on material changes in the financial condition or operations of the issuer on a rapid and current basis.”

Guiding Principles for Successful BPM

Sponsorship - Identify a Business champion and an IT Champion with the authority to effect change and build broad sponsorship

Start Small - Start small and build wins; begin with a Pilot Group

Leverage Prior Successes - Leverage past best-practices experience

Quick-Hits - Identify immediate impact opportunities and low-hanging fruit

Process over Technology - Limit reliance on major technology enhancements to achieve process improvements

Enable Automation - Leverage best-in-class BPM toolset (including a graphical process designer, a runtime process execution engine, agility features for real-time updates and modifications, tools to manage and monitor processes, including rich reporting features)

Be Specific - Be Exact in Specifying Elemental Process Designs (i.e., avoid broad process scope and high-level designs)

Measure Success - Define metrics to monitor and determine measures of success

Manage Human Behavior - Don’t assume the control of a workflow solution will be the holy-grail: enlist behavior controls into the Human Capital consequence system

Business and IT Collaboration

“BPM: IT’s Opportunity to Partner in Business

Value Creation”