Introduction to the BPM Life Cycle

Maturing BPM Efforts

Dr. Michael zur Muehlen
Stevens Institute of Technology
Center for Business Process Innovation
April 16, 2011
 “If it doesn’t make
three people angry,
it is not a process”
Beyond Reengineering (Michael Hammer, 1996)

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 Key Takeaways

§  Analysis Frameworks provide context

§  Transactions perform work, Analytics manage work
§  The diagram isn’t everything
§  Improve your capabilities in 3 areas:
§  Process Maturity
§  Process Management Maturity
§  Organizational Maturity

3
Analyze
“Most businesses have just
3 core processes:
1.  sell stuff
2.  deliver stuff, and
3.  making sure you have stuff to sell and deliver”
Geary Rummler

5
 Enterprise As A System

Enterprise
Management System

Management
Planning and Mgt. Information Information
Control System
System

Custo-

Reporting
Suppliers
Directive

mers
Operational System
Operational Information System

Goods and Services

Money
 Organizing Content: Framework

Strategy & Governance

Contracting Marketing

Purchasing Sales

Receiving Warehousing Shipping

Invoice
Billing
Auditing

Accounts Accounts
Payable Receivable

Support Processes (Accounting, HR, IT etc.)

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Design
 The Process Problem

Source: 9
WW Grainger
 Process Abstraction Levels

Level A
Business Activities Business
Objectives Scorecard
Activities

Level B
Process Groupings

Level C
Process Groupings
What Ownership Services

Core Processes
Core processes Delivery Units Products

Level D
Business Process
Flows System
Processes Delivery Teams
s

How
Level E
Operational Process Flows
Sub Processes Roles System Functions

Level F
Detailed Process
Flows
Detailed Processes Detailed Roles Transactions

Source: British Telecommunications plc 2006

Implement
 “Vision without execution is hallucination”
Thomas Alva Edison

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12
 The Developer’s Perspective

13
 The Architect’s Perspective

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 What the Customer Wants

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Manage
 “All models are wrong,
some are useful”George P.E. Box
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 Process Analytics

Business Process Analytics

Process Business Process

Controlling Activity Monitoring Intelligence

Processing of Event Detection & Dashboards Simulation

Context Events Correlation Historical
Analytics Rule-based Data Mining
Notification
Optimization

Event Bus

External Event EAI

ERP ECM BPM
Sources
Legacy Custom

Enterprise IT Infrastructure
Improve
 Targets

•  Improve your Process Performance

•  Improve your Process Management Performance
•  Improve your Organizational Performance
 Theory of Constraints

1.  Define the goal - performance or compliance?

2.  Define key metrics – cycle time, wait time, resource utilization
3.  Identify the constraint – find the bottleneck activity/resource
4.  Exploit the constraint – maximize use of the bottleneck
5.  Subordinate to the constraint – limit upstream throughput
6.  Elevate the constraint – invest and improve
7.  Avoid inertia – start the process again
 Process Management Maturity

Business Process Management
Maturity

Strategic
Governance Method IT People Culture
Alignment

Process Process Roles and Process Design & Process Design & Process Skills & Process Values &
Improvement Plan Responsibilities Modeling Modeling Expertise Beliefs

Process Process
Strategy & Process Decision Making Process Education Process Attitudes &
Implementation & Implementation &
Capability Linkage Processes & Learning Behaviors
Executions Executions

Process Metrics & Process

Process Process Control & Process Control & Responsiveness to
Performance Collaboration &
Architecture Measurement Measurement Process Change
Linkage Communication

Process Process Process Leadership

Process Output
Management Improvement & Improvement & Process Knowledge Attention to
Measurement
Standards Innovation Innovation Process

Process Process Project & Process Project & Process

Process Customers Process Social
Management Program Program Management
& Stakeholders Networks
Controls Management Management Leaders

Source: Rosemann & De Bruin 2008

 Organizational Performance

Value Generates FINANCIAL

Cash Flow Primary Objectives

CUSTOMER
Processes Enable
Value Value Proposition

PROCESS
BPM Coordinates
Processes Regulatory
Operations Customer Innovation
/ Social

BPM shapes and is Strategic

shaped by Strategic Change
Job
organizational IT Agenda
Families
maturity

LEARNING & GROWTH

Maturity is
determined by Human Information Organization
People and Capital Capital Capital
Technology
 Organizational Performance

MISSION
Organizational
Mission is Mandated Objectives
Paramount

FINANCIAL CUSTOMER
Value and Fiscal
Responsibility are Fiscal Constraints Value Proposition
in balance

PROCESS
BPM Coordinates
Processes Regulatory
Operations Customer Innovation
/ Social

BPM shapes and is Strategic

shaped by Strategic Change
Job
organizational IT Agenda
Families
maturity

LEARNING & GROWTH

Maturity is
determined by Human Information Organization
People and Capital Capital Capital
Technology
 Goal Specification,
Strategy Definition

BPM Life Cycle

Organizational
Analysis

Strategy
Revision
Process
Design
Process
Modeling and Models
Specification

Improvement
Measures for
Process Process
Evaluation Implementation

Target Metrics
Process Mining / Build Time /
Warehousing Integration

Implemented
Processes
Process
Enactment
Export for other Process
reporting purpose Metrics Run Time / Task
and Resource
Allocation
Measure-
ments

Process
Monitoring
Process
Metrics
Business Activity
Monitoring
Key Takeaways

§  Analysis Frameworks provide context

§  Transactions perform work, Analytics manage work
§  The diagram isn’t everything
§  Improve your capabilities in 3 areas:
§  Process Maturity
§  Process Management Maturity
§  Organizational Maturity
Thank You!