1. Business Process Management
San Francisco Public Utilities Commission

2. Agenda Process 101: What is BPM?
BPM Drivers: What can BPM do for my organization?
Interfacing Professional Services
EPC 5: Product Demonstration

3. Process 101: What is a Process?
Simplest Process Definition:
Organized group of related activities that together create a result of value to the customer
Finance:
Credit Authorization
Budgeting
Auditing
Legal:
Contracts
Human Resources:
Hiring
HR Development
Performance Evaluation
Operations/Logistics:
Purchasing
Invoicing
Shipping
Banking:
Straight Through Processing
Account Provisioning
Loan/Credit Processing
Energy:
Short Term Trading
Long Term Trading
Strategic Planning
Manufacturing:
Product R&D
Product Engineering
Quality Assurance
Production

4. Simplified Processes Input Output Preparing the breakfast
Process flow
Input
Output
Bacon Eggs
Breakfast
Preparing the breakfast
Expense Report
Expense Slips
Producing an expense report
Position Requisition
New Employee
Hiring an employee

5. Process 101: The Construct
Inputs /Outputs
Resources
Organization
Suppliers
Knowledge
Applications
Metrics
Results
Boundaries
Client
Owner
Instances
Components of a process

6. What is BPM? Business Process Management Business Process Modeling
Business Process Monitoring
Business Performance Management
Business Performance Monitoring
So many acronyms around us

7. BPM = Transformation BPM Provides Organizations with: Transparency
Agility
Compliance
Performance Management
Collaboration
Alignment
Knowledge Management
Communication
Fluidity
Process visibility – end-to-end across functions and hierarchies all the way to the client

8. The Process Maturity Model
BPM can help your organization achieve process maturity.
Process Maturity Model
Level 1
Initial
Processes are Ad-hoc and chaotic
Level 2
Repeatable
Small Scale processes Understood & repeatable
Level 3
Defined
Level 4
Managed
Level 5
Optimized
Processes
Documented
& Standardized
Across Org
are measured & controlled
Continuous Improvement via Feedback
& Collaboration
What is process maturity?
Operational Consistency
Culture of Collaboration & Knowledge Sharing
Clarity/Transparency
Distribution of Policies & Standard Procedures
Cost Avoidance
Maximize Value to Customers
Internal & External (Customer) Confidence
Accountability & Efficiency Across All Ranks

9. Analyst Predictions
Gartner -  “BPMS will grow from $1B this year to $2.6B in 2011.” (2007)  
Forrester - “…grow from approximately $1.6 billion in 2006 to $6.3 billion by 2011.” (2007)  
IDC - “…to reach $5.5 billion in 2011, a 44% five-year compound annual growth rate (CAGR).” (2007)  
WinterGreen Research  -  “…markets at $1.3 billion in 2007 are expected to reach $4.6 billion by 2014.”   
Purpose of slide: To illustrate that BPM technology is seeing rapid growth as corporations in virtually every industry adopt it
Source:  

10. Roadblocks to Successful BPM Implementation
Company culture
Silo effect
Improperly maintained processes
Unclear process ownership
Lack of process knowledge sharing
One-time product syndrome
Lack of awareness of potential gains
Roadblocks
One time product syndrome = idea that BPM is just a one time product, when in actuality it is a lifelong program for a company
With the help of the Enterprise Process Center (EPC), organizations easily overcome these obstacles.

11. Business Process Improvement = ROI Expectations: 30 – 45% Greater
BPM Drivers
Why does my organization need BPM?
Compliance / Standards / Regulations
ISO
Improve Organizational Management
Best Practice Initiatives: Quality / Performance / Productivity
ITIL
APQC’s Process Classification Framework
Business Process Improvement =
ROI Expectations: 30 – 45% Greater
Process Infrastructure:
10-15%
Total Opportunity
Process Optimization:
10-15%
Process Definition:
10-15%
source: Gartner Group Research, 2002

12. Why BPM is Critical to Compliance
Clear Process Framework
Transparency from the top
Visibility of Key Processes
Drill down, Transparency to lower levels
Clarity of Roles & system Ownership
Accountability Matrix: Who/what is Responsible for what
Visibility of Control Points, KRI
Ensure Risk Management clarity throughout the Enterprise
Visibility of Process Review State, Traceability
Be ready at any time to Internal Audits
Discussion Forums, All Users Input
Collaboration, Maturity Culture, Issues/Corrective Actions

13. Compliance: ISO
ISO compliance is often seen as being synonymous with Quality Management.
The Enterprise Process Center makes ISO compliance manageable.
ISO 9000: Quality Management
ISO 14000: Environment Management
ISO 20000: Technology Management
The EPC aids ISO initiatives by:
Mapping, distributing and maintaining key processes.
Supporting change
Automating audit process – ability to track corrective actions
Enhancing transparency
Embedding business rules within processes
Beyond achieving compliance, the EPC achieves process improvement.
ISO Quality Management
ISO 9000 is rapidly becoming the most important international standard because it ensures quality, saves money and helps your company satisfy client expectations. ISO 9000 provides a quality management system for improving and controlling the quality of your products and services. It also reduces the costs associated with inferior quality management processes, making your organization more competitive.
ISO Environmental Management
ISO ensures that a company minimizes the effect its activities have on the environment by implementing specific controls at the process level. ISO enables companies to reduce the penalties and fines conferred when environmental laws are breached. Furthermore, the adoption of ISO reduces waste, cutting down overhead, and ensuring the efficient use of materials.
ISO Technology Management
ISO is an IT governance initiative intended to standardize IT policy by adopting standard best-practice processes in IT service. IS is quickly becoming integral to modern business, as IT and business become more and more reliant on each other. By attaining compliance under ISO 20000, your company can increase efficiency in its delivery of IT services by providing a solid technology framework.

14. Royal Australian Air Force Aeronautical Information Systems (RAAF AIS)
ISO Success Story: RAAF
Royal Australian Air Force Aeronautical Information Systems (RAAF AIS)
BPM in support of ISO 9001

15. Case Overview: RAAF AIS
Mission To provide the Australian Defence Force with tailored, accurate and current aeronautical information.
Their Challenge
Obtain ISO 9001 Certification.
Starting Point
All processes were described in Word & Excel documents.
Employees would not update their processes because doing so was extremely cumbersome.
Internal Auditors had a hard time understanding the company’s processes.

16. Quality System Requirements
Document core processes & related tasks
Demonstrate process control
Document duties of personnel
Document Control Requirements
Decide who will write the procedures and when will they be reviewed
Records Control
Manage Corrective & Preventive Actions
Control Nonconforming Product(s)
Run Internal Audits
Remain flexible
Integration with other business management tools
Be transportable for use with other media, such as PDF, Word, etc
Outline the boundary of the Quality System
Document duties and roles of personnel
Document core processes & related tasks
Define process owners
Perform records management and archiving
Perform document management
Show interactions of process performers

17. Results
Obtained ISO 9001 Certification.
No corrective actions assigned by the external auditors.
Overtaken the HQ group in Adelaide and their QMS, which has been in place for over 5 years.
“The EPC allowed our people to show their processes in an easy to understand format.”
“It fit- perfectly with the ISO process approach.“
“Auditors understood the method very easily.”
Warren Harrison, Business Improvement Manager
Royal Australian Air Force
Make sure to get across the point that these results could not have been achieved without the expertise of RAAF, but that the EPC was a supporting tool

18. Best Practices: Overview
Best Practice programs help improve processes for greater efficiency and standardization.
Creates a standard for benchmarking.
Enable swift process improvement and deployment.
BPM helps increase overall project success when handling a best practice initiative.

19. Best Practice: ITIL
ITIL (the IT Infrastructure Library) is the most widely accepted approach to IT service management in the world.
ITIL provides a cohesive set of best practices, drawn from the public and private sectors internationally.
Goal: increase the integrity of corporate IT architectures and to manage the service lifecycle.
BPM aids in ITIL compliance by:
Managing the standardization of IT processes.
Performing a gap analysis.
Mapping computer assets to process activities.

20. Best Practice: APQC PCF
The American Productivity and Quality Centre (APQC) is a non-profit organization focused on best practices, benchmarking, and knowledge management
Process Classification Framework (PCF) helps organizations find ways to improve their processes
PCF includes process specific KPIs
BPM and PCF go hand in hand:
They ensure that processes are executed efficiently.
They help improve overall operational efficiency.

21. Succeeding with BPM Keep it Simple
Create Process Framework across the Enterprise, Multiple levels
Tie in Policies, Procedures, Resources and Responsibilities
Create the Culture
Ensure Compliance means Performance
Implement Active Life Cycle
Manage Change

22. Process Management What can process management do for my business?
Increases Customer & Financer Confidence
Brings Operational Consistency
Improve Knowledge Management
Creates a Culture of Knowledge Sharing
Provides Clarity (operational/strategic)
Minimizes Human Error
Reduces Costs & Increases Cost Avoidance
Ensure & Maximize Value to Customers
Overall Accountability & Efficiency

23. Process Management ROI
Knowledge Management
BPM retains company knowledge (alleviates Baby Boomer retirement stress on organizations)
Allows for easy training with existing knowledge
Time/Cut Costs
Creative/Innovative Process Changes
Timely Access to Information
Timely Executions
Talk about knowledge management – it’s important to SFPUC
Direct IMPACT on your BOTTOM LINE = Σ all ROI above

24. Interfacing Professional Services
San Francisco Public Utilities Commission

25. Interfacing Service Products
Business Process Management Framework Deployment
Quick Start Program.
Installation
Configuration
End User Training
Admin Training
Process Modeling Training
Modeling Principles
Modeling Business Processes
Process Readiness Assessment
Process Discovery
Readiness
Executive Level Commitment
Process Readiness vs. Company Goals
Framework Design
Process Orientation
Content Structure Design
Organization, Resource Library design
Accountability Structure Design
Guidelines and Good Practices
Process Framework Audit
Framework Design Review
Sample Process Audit
Deployment Program Execution Review
Audit Report & Recommendations
Solution Design
Sarbanes-Oxley
ISO 9000
ITIL
Other Regulatory Compliance
Monitoring and Improvement
Process Automation Review
Goal Review, KPI & Dashboard Design
Process Portfolio Management
Process Improvement Workshops

26. 6 Phases For Successful BPM Program

27. Process Maturity Matrix
Continuous Process Improvement via Feedback & Collaboration, In-Depth Analysis & Review, Automation & Monitoring
Risk Management
Organizational Innovation & Deployment
Causal Analysis & Resolution
Processes are Measured, Maintained & Controlled
Quantitative Process Management
Software Quality Management
Organizational Process Focus
Organizational Process Definition
Organizational Training
Implement Best Practice Frameworks/Methodology
Integrated Teaming
Integrated Supplier Management
Decision Analysis & Resolution
Processes Standardized & Reused Across Organizational Units
Requirements Managed
Process/Product Planning
Project Monitoring & Control
Measurement & Analysis
Efficient Planning & Proposals
Product & Process Quality Assurance
Small Scale Processes are Understood & Documented
Ad-hoc & Chaotic - Knowledge is Stored Only in Employee Computers
Design
Develop
Integrate
Test 27

28. Mapping & Data Gathering Workshop
Interfacing Employs a 10 Step Process Workshop Methodology:
1. Identify the process “as you know it” that will be modeled.
2. Pinpoint the corresponding process (or processes) in the Best Practice Framework (BPF).
3. Review & customize the sub-processes under this BPF process, and select which ones to model.
4. Define the SIPOC for each sub-process to set the scope.
5. Identify the process details: activities, the performer(s) and the material flow.
6. Simplify the flow by merging activities.
7. Determine whether to group activities into sub-processes.
Review the materials (inputs, outputs).
Attach relevant documentation: policies, procedures, forms and reference files.
10. Validate the processes!!!

29. Using Best Practice Frameworks & Methodologies
Process Maturity & Benchmarking Matrix
APQC’s Process Classification Framework
SIPOC
Six Sigma – DMAIC
ADKAR – Change Management
Industry Specific Best Practice Methods:
eTOM – Telecom Framework
ITIL – IT Framework
SCOR – Supply Chain
COSO & COBIT – Control Management

30. APQC – Process Classification Framework

31. APQC – Process Classification Framework
Key Performance Indicators (KPI) :
Recruit, Select, and Hire Employees
Average days to fill open positions
Average days between opening and fill
Ratio of acceptances to hires
Ratio of acceptances to offers
Ratio of qualified applicants to total applicants

32. Developing and Managing Human Capital

33. SIPOC Exam Results: [passed] Candidate: [fulfills job requirements]
Candidate: [short-listed]

34. Process Swimlane As is - to be
This slide illustrates a poor process – even though the first process is mapped properly, only having face to face interviews will clog the system with poor candidates. Instead, use a phone interview first to filter out unqualified candidates. (second picture) Even though the second process has more tasks, it is still more efficient in the end result.

35. ADKAR – Change Management Model
ADKAR is a goal-oriented change management model that allows change management teams to focus their activities on specific business results.  The model was initially used as a tool for determining if change management activities like communications and training were having the desired results during organizational change. The model has its origins in aligning traditional change management activities to a given result or goal.

36. ADKAR: Helping Your Business Manage Change

37. Process Improvement Methodology
Keys to success:
Start with a small process that can be completed in a short time frame to gain experience and confidence.
Start with non-strategic processes where you have the authority to carry out proposed changes.
Set clear and realistic timelines and expectations.
Focus on the short term payoff.
Do not spread resources thinly.
Build your team so that you have all the necessary skills within it.
Consider bringing in an outsider to gain a fresh perspective.
Management and primary stakeholders must be involved, or else even a limited implementation will fail.

38. Define an Area for Improvement
Identify the cause of the problem & how it impacts:
customer satisfaction
employee involvement
financial returns
What are the potential risks
in doing the project?
in not completing the project?
Ensure alignment across all areas of the company. Improving isolated processes leads to frustration and does not benefit customers, employees or shareholders.
Obtain the commitment and visible involvement of top management.
Create cross functional teams.

39. Measure Performance Key Performance Indicators (KPIs) must
be linked to the company’s strategy & goals
reflect what’s important to the company’s customers
be quantifiable
be specific
KPIs should include a balance of
result metrics: measure the output quality
process metrics: help in predicting the process output
Track only the most important KPIs. Keep things simple and clear.
Set realistic targets.
Roll-up KPI metrics into meaningful dashboards.
KPIs must be revisited and fine-tuned periodically.
Communicate KPIs to all employees!
Link employee performance to KPIs.

40. Analyze Cleanse your data to ensure integrity.
Look for recurring patterns.
Averages can be misleading.
Move past the symptoms to reveal the root cause of issues.
There are tremendous amounts of data within any company, some of it conflicting,” says Gavin Boyd, the Johannesburg-based head of the Balanced Scorecard Collaborative African Unit. The collaborative, a Palladium Company, has advised some 2,500 companies worldwide on implementing business information systems and technology.
Boyd uses the example of a water utility client. At the utility, each department had different ways of measuring such common values as billing, cost centers and customer service. Standardizing information into a common format will help companies better integrate and analyze the data.
That standardization process usually requires some deft mediation between departments. To do that, Corbett says companies must assign a strong executive sponsor to keep the inevitable internal conflicts to a minimum. Bringing in an outside facilitator may also help break deadlocks. “An outsider can help depersonalize conflict between different groups, help each understand their position and take conflicts to the executive sponsor for resolution,” he says.

41. Analyze & Benchmark
Collaborate: Identify, share, and leverage knowledge and best practices:
Across your organization
With other organizations
Benchmark regularly against other companies: Measure the process against a set of established benchmarks.
Build control points into a process: process owners, customers, & stakeholders should be able to decide if the process is meeting current benchmarks.

42. Improve Create To-Be processes and simulate. Automate manual tasks
Re-organize the workforce
Eliminate duplicate or unnecessary activities
When designing new processes, do not think of existing procedures – Be Creative!
Performing process improvement is a project, so all principles of project management apply.
Measure twice, but cut once: Be clear about the impact on other processes before rolling out changes that affect others.

43. ©Prosci. Used with permission under terms of license agreement.
Manage Change
Tools to manage change
Phases of change
Communications
Sponsor roadmap
Coaching
Training
Resistance Management
Awareness
Desire
Knowledge
Ability
Reinforcement
ADKAR is based on basic human truths that are present even in the absence of change.
Awareness of surroundings and self.
The need to have control over our life.
A quest for growth and knowledge.
A hope to make a meaningful contribution.
The need to be recognized and appreciated.
ADKAR consists of five phases that occur when change impacts us:
Awareness of the need for change (why).
Desire to support and participate in the change (our choice).
Knowledge about how to change (the learning process).
Ability to implement the change (turning knowledge into action).
Reinforcement to sustain the change (celebrating success, and celebrating early).
©Prosci. Used with permission under terms of license agreement.

44. Control, Review & Adapt
Establish who owns a business process. Without personal responsibility, the process will fail.
Processes are living and breathing entities, evolving over time. They should be reviewed and audited every 3 to 12 months.
Standardize similar processes: Leverage best practice processes within your own organization.

45. Benchmarking Maturity Matrix

46. The Benefits of Risk Management
Risk management allows business owners to include risks in their business strategy, allowing them to:
Achieve Compliance (SOX, ISO, Basel etc)
Easily provide audit trails
Enhance visibility and transparency
Prioritize risks - divide and conquer
Improve reliability
Decrease breakdowns and downtime
Increase product quality

47. Risk Management – A Business Imperative
Identifying Risk
Virtually Every Business Process Has Associated Risks

48. Risk Management Identify Risks.
Implement Controls to Mitigate those Risks.

49. Risk/Control Matrices
Controls
Name
Objective (point)
Owners
Description
Activity Linked To
ID#
COSO
Man/Auto
P/D
Key Control
Consult Better Business Bureau
Ensure Valid Vendor
Accounts Payable Clerk
Consult better business bureau to conduct background check and ensure vendor competency
Enter Vendor Into System
BV238 R M D Y
Require 3 References From Vendors
Request 3 reference letters to ensure business etiquette of vendor
DJ937 I P
Compare P.O. to Price List
Ensure Genuine P.O. Details
Compare P.O. to price list to ensure pricing and quantities are valid
Verify that P.O. Has Been Entered Into System
DK438
Orders >50K Require Management Approval Process
Ensure Genuine Order - Increase Accountability
Accounting Manager
Send orders >50K through management approval process to ensure maximum accountability
Approve Invoice
LC929 A
Risk
Name
Type
Impact
Likelihood
Gross Risk
Associated Control(s)
Net Impact
Net Likelihood
Net Risk
Effectiveness of Controls
Priority
Fraudulent Vendors Entered Into System
Financial 5 3 15
Reference Check/Consult Better Business Bureau 4 1
73%
Very Low
P.O. Fraud 20
Compare P.O. To Price List/Management Approval 2 17
15%
High

50. Formalize Company Policies
Business Rules
Formalize Company Policies
Key Benefits
Enforce company policy through standardized rule objects
Model operations, definitions, and constraints
Manage change more efficiently
Maintain rules separately from processes

51. Best Practice: ITIL V3 Service Delivery Service Support
ITIL V3® - Information Technology Infrastructure Library Provides Best Practice IT Service Management Processes.
Service Delivery
Service Support
Security Management
Source: iET Solutions, 2008.

52. BPM and Risk Management
BPM grants your company the ability to visualize and manage the flow of activities that comprises your company operations.
For any company there are hundreds of processes that are executed daily.
BPM eliminates inefficiencies and bottlenecks that lead to poor company performance and reduced profit.
The ability to see the as-is state of your company allows for greater versatility and understanding when planning for risk.
Risk can be found at any point in your processes.
By combining BPM and Risk Management, you gain the ability to manage risks along the dynamic process dimension.
This allows your company to implement specific context-sensitive controls.
By managing risks and controls in a process framework, you can ensure that controls are implemented effectively.

53. with clear guidelines gets results…
Set the Strategy and Involve Stakeholders
Put Pressure from the top and Get Buy-in from the bottom
Give Management Ownership
Distribute Accountability to Employees
Plan & Implement efficient & effective Workshops
Use SIPOC, lay it out as you know it
Match with Best Practice Framework
Integrate the Knowledge: Policies, Procedures
Analyze the current process and examine changes
Review with employees to bounce ideas & attain feedback on potential changes
Get the buy-in from both management & end-users to a new “to be” process
Maintain Collaboration & Open lines of Communication between all levels of the organization & across departments
Establish a Process Centric Culture & Long-term ROI effects

54. Product Demonstration
EPC 5:
Product Demonstration
San Francisco Public Utilities Commission

55. BPM Positioning & Process Maturity EPC Product Demonstration
Agenda
Company Overview
Service Products
BPM Positioning & Process Maturity
EPC Modules Overview
Clients & Industries
EPC Architecture
EPC Product Demonstration
EPC Web Portal
Employee Experience
EPC Modeler
Building a Model

56. Interfacing Technologies Corporation
Improved MS Visio Process Modeling
MS Visio Process Modeling
1997
Business Process Management
2000
2008
Process simulation and analysis
1994
Interfacing has provided BPM Software and services for over 20 years.
Established in 1983
Numerous awards
Established the FirstSTEP
Fortune 500 clients
Partnerships
Our full range of products bring key benefits to your business:
Analyze and correct process inefficiencies.
Manage risk factors.
Reduce process costs.
Improve operational efficiency.
Adapt quickly to change.
Clarify accountability and ownership.
Provide process knowledge across organizational boundaries.

57. From Chaos to Order

58. Process Maturity Model
From Chaos to Order
Optimized
Feedback For
Continuous Process
Improvement
Managed
Processes are
Measured & Controlled
Defined
Processes Documented
& Standardized
Across Organization
Repeatable
Small Scale Processes
Understood & Repeatable
Initial
Ad-hoc and chaotic
Level 1
Level 2
Level 3
Level 4
Level 5
Process Maturity Model

59. Organizational Management
EPC Management Modules
Organizational Management
Resources
Roles
Assets
Organization
Processes
Documents
Risks
Rules
Services
Master Data
Business Intelligence - Performance

60. Business Intelligence - Performance
Process Management
Order Entry
Order fulfillment
Notify failure to Client
To order fulfillment
Enter Order Request
Save Order Request
Validate Order Request
Save Validated Order
Notify Success to client
Submit Order Request
Organization
Processes
Documents
Risks
Rules
Services
Master Data
Business Intelligence - Performance

61. Business Intelligence - Performance
Document Management
Save Order Request
Enter Order Request
Validate Order Request
Notify failure to Client
Save Validated Order
Notify Success to client
Organization
Processes
Documents
Risks
Rules
Services
Meta Data
Business Intelligence - Performance

62. Risk Management Organization Processes Documents Risks Rules Services
Save Order Request
Enter Order Request
Validate Order Request
Notify failure to Client
Save Validated Order
Notify Success to client
Submit Order Request
IT Control: Ensure proper redundant systems are in place.
IT Risk: Unable to save order request due to corrupt database.
Organization
Processes
Documents
Risks
Rules
Services
Master Data
Business Intelligence - Performance

63. Business Rule Management
Notify failure to Client
Enter Order Request
Validate Order Request
Save Order Request
Save Validated Order
Notify Success to client
Submit Order Request
Organization
Processes
Documents
Risks
Rules
Services
Master Data
Business Intelligence - Performance

64. Business Intelligence - Performance
Meta Data Management
Notify failure to Client
Enter Order Request
Validate Order Request
Save Order Request
Save Validated Order
Notify Success to client
Order Request
Organization
Processes
Documents
Risks
Rules
Services
Master Data
Business Intelligence - Performance

65. Business Intelligence - Performance
Services Management
Notify failure to Client
Enter Order Request
Validate Order Request
Save Order Request
Save Validated Order
Notify Success to client
Submit Order Request
Organization
Processes
Documents
Risks
Rules
Services
Master Data
Business Intelligence - Performance

66. Business Intelligence
Organization
Processes
Documents
Risks
Rules
Services
Master Data
Business Intelligence - Performance

67. Architecture

68. Our Clients

69. Thank You!