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BUSINESS PROCESS MANAGEMENT Chapter 3 BPM IMPLEMENTATION
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BPM Implementation The first step of BPM implementation is to clearly define the “GOAL” and main objectives of doing the BPM. The first question that the business should be asked at the commencement of any BPM project is, ‘what objectives and goals do you have for your processes?’
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BPM Implementation Organization strategy BPM Technology Process architecture
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Organization Strategy 1.There is no explicit strategy available. In most cases an implicit organization or business strategy exists, and it has the potential of causing a conflict with any available explicit information. Another way of approaching this is to look at the organization’s objectives and how it proposes to implement or achieve them. In order to ensure that business processes are effectively and efficiently contributing to the organization’s strategy, it is essential that the objectives, and an outline of the strategy, are explicitly specified. Without agreed upfront process goals, it is impossible to improve the processes while ensuring that they add value and contribute to the organization’s strategy and objectives. How does the project team know it is ‘heading in the right direction’? The best thing to do in this situation is to delay the process improvements project(s) until the main objectives and strategic choices have been made. 2.Obtaining the strategic information will take too long. In this case, the strategic information is not either communicated or scattered throughout the organization. It is important to spend adequate time upfront in understanding and obtaining this information rather than starting to look at processes only to find at the end of the project that the assumptions made at the start were incorrect. One method is to use project meetings with major stakeholders to elicit the strategic information and promote the benefits of the project. 3.People involved are not capable of strategic thinking. Some believe that operational personnel should not be bothered with, or confused by, the strategic issues, on the basis that such personnel should be focused only on operational issues. This is not the case, as it is important for operational personnel and managers to understand the strategic choices and their consequences. If this is not clear, then workshops are a useful method of imparting this information and demonstrating how the strategic issues affect their work and how they can contribute in making a strategy successful. Operational participants start to highlight operational issues that they know are at odds with the strategic direction. Without operational managers and personnel being informed of and committed to the strategic direction, it is very challenging to have a successful and effective business operation. 4.We have already prepared a list of wishes; we do not need to involve strategy. Many projects start with a predefined ‘wish list’ of improvements. Most of these proposals are very operational and actually take the current processes and settings for granted. Often the biggest impact and success comes when strategic considerations are included in the analysis. This provides an opportunity to question and challenge some of the stubborn and ignored tacit assumptions and constraints. ‘Wish lists’ tend to be very operationally and short-term focused, whilst most organizations are faced with fundamental changes which have substantial impact at the strategic level.
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What should be included within organization strategy and process architecture in order to have the right context for process review and process improvement? Sometimes discussions regarding a process review or process improvement can take an unnecessarily long period of time, as people within the same organization don’t always have the same mindset when reviewing the processes because the information is tacit (in people’s heads). After providing everyone with the same context, most process issues can be resolved in a fraction of the time it would have taken via the traditional method of discussion. Unless there is a clear structure, all the various issues will be mixed up (e.g. objectives, strategy, constraints, principles and guidelines). An explicitly formulated context ensures that every new argument can be placed within the agreed context to determine the impact on the processes. At a minimum, the issues that should be considered are the objectives of the organization (the Balanced Score Card (BSC) is a good method to specify and measure these objectives), the strategic choice (e.g. customer intimacy, operational excellence or product leadership strategy), the business model (the relationship with the customers, partners, competitors and the community at large) and the main guiding principles of the organization (this includes the values of the organization). In addition, there should also be principles specifically for processes. We refer to all these elements together as ‘process architecture’. Process architecture ensures that all the relevant information, which consists of the foundation and guidelines for the process review and improvement, are made explicit and can be referred to. The impact of any internal and external change can easily be determined.
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Process Architecture 1.We already have process models. Many people confuse process models with a fully-fledged architecture. We have seen people who proudly show their elaborate process models, which have been published in color on a poster. However, they become very quiet when asked when it was last updated and how it is continually maintained. Process architecture is much more than a process model; it also includes the objectives, principles, strategies and guidelines that are the foundation of the models. A process model is just a snapshot of the current thinking, and does not provide sufficient guidance for reviewing existing or creating new processes. In fact, the process the organization goes through to create a commonly agreed process architecture is more important than the eventual documented architecture itself. It is during the process of creation that all the important decisions are made, and the business gains an understanding and appreciation of the importance of the process architecture. 2.Creating the process architecture is more effort than the benefits to be derived from it are worth. If management and the business are, in general, negative about the need for process architecture, then this usually indicates that they do not understand the importance of setting rules and guidelines for process models and process structure. They may not have been through the workshops and decision- making process associated with the creation of a process architecture. A good process architecture will ensure that more time and effort is saved by its use. It will also provide a means of communicating, specifying and agreeing the process objectives and principles in a way that it is clear for everyone. Where process architecture already exists, it will be much easier to identify the impact of the suggested changes against the agreed standard. 3.We have process architecture, but no one is using it. Many architects get carried away with the creation of the organization’s process architecture, making it more elaborate than it needs to be and forgetting that its success is measured by the level of its use and the benefits it provides to the organization. A common mistake made by architects is that when the business and management are not involved with the creation of the process architecture, they run the risk of it becoming more complex and elaborate than it needs to be. The first step is the involvement of all the relevant stakeholders, if buy-in, agreement and usage are to occur. The most successful architectures (that is, those actually being used to support decision-making processes) are relatively short and simple. 4.We have agreed on a common process architecture, but no one sticks to it. A common process architecture has been agreed, and before the ink has dried there are already all kinds of drivers to deviate from it – new legislation, new products, a customer request and so forth. Initially the process architecture may be successful in suppressing these exceptions, but it will not be able to withstand the pressure from the business and management. The moment the first exception is granted, exceptions will increase at an alarming rate and within no time the process architecture will become irrelevant. The more projects deviate, the more the project risk increases. It must be recognized that there will need to be deviations from the agreed process architecture sometimes. The process architecture will need to adjust to business requirements and thus it will need to be dynamic, rather than the static architectures of the past. Therefore, rather than suppressing exceptions it is better actively to manage them, ensuring that there is a valid reason for the deviation, that the deviation is limited (thus remaining within a certain bandwidth of the agreed process architecture), and that measures are being taken to bring it eventually into alignment and compliance with the process architecture.
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How do you sell BPM technology to the organization? “Even though many internal BPM practitioners have identified substantial business benefits from the use of an automated BPM solution, they have often struggled to convince the rest of the organization, especially the decision-makers and holders of the budgets, to gain funding. Frits Bussemaker, Chairman of the Dutch BPM Forum, describes how an automated BPM solution can be positioned to gain acceptance. The main message is: there are multiple stakeholders, and it is crucial to focus on the business benefits rather than technology.”
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Business processes are all around us, independent of the market, organization, department or function – whether a telecom operator providing an ASDL connection, a bank processing a loan application, an insurance company handling a claim, or a local government organization processing a request for a new passport. It could be argued that any organization is the sum of its business processes. At least, the business process should be considered as a fundamental part of any organization’s infrastructure. In all the above examples, the volume of work and the complexity of the business process demand that organizations look for possible IT applications to support and automate their processes. Throughout the years, many companies have invested millions in all sorts of IT solutions. The marketing department has its Enterprise Content Management (ECM) system, used to inform the consumer of the organization’s products or services. The sales department has a Customer Relation Management (CRM) system to allow the company to up- and cross-sell, and finally the delivery department has an Enterprise Resource Planning (ERP) system to process the order and send an invoice. The reality with most organizations today is that these departments operate as independent functions “silos” The consumer is often confronted with poor customer service due to broken processes, inefficient processes and manual processes – that is, the customer is often confronted with the silos of the organization. However, the same consumer is becoming more and more demanding with respect to delivery time – where customers used to expect and accept days or weeks for delivery, over recent years they have moved to ever more real-time expectations. At the same time, the consumer is demanding higher quality of the products or services. Finally, the product or service is becoming more and more personalized (and thus more complex), supported by increased customer services – ‘This is what I want, and I want it now’.
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How can any organization cope with these increased demands in an environment where, at the same time: the number of interfaces with the customers is growing (e.g. phone, fax, email, sms, pda) the product, service and price options have increased the complexity of the business most organizations have a whole suite of ‘build and buy’ systems and applications, often each with its own data format budgets are being cut.
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Organizations must start realizing that all the organization’s assets, systems, departments and people are interlinked. There are numerous internal processes that form an internal supply chain, which relate to the end-to-end process of the organization. Basically, one simple interface with the organization would be preferable: Marketing – what product or service do you have to offer? Sales – please treat me as one single client Delivery – please provide the product or service as quickly as possible.
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BPM = organization + people + technology Realizing that an organization could be seen as a sum of its business processes is the key element in selling BPM – that is, BPM automation is not about implementing technology, it is about automating the business processes in the right circumstances. Existing applications can be linked to each other by an independent process layer. BPM automation is also about a new way of working, monitoring and managing the organization, which often results in a new organizational structure. As presented conceptually in Figure 7.2, BPM technology can complement existing (and future) investments in applications. BPM provides a process layer linking the various independent applications needed to execute a single end-to-end business process. BPM technology can then manage the flow of activities along different applications, and the people involved. BPM technology can also reduce execution time. By tracking the business process, an organization can monitor its performance and at the same time audit for compliance. Analyzing this information will also help to improve the business processes further. All this can increasingly be completed in real time; management can make instant changes and validate if the changes are having the desired effect. As the business process may cover different people working in different departments, the organization must consider allocating issues such as process owners, process managers, and the method of measuring the effectiveness and efficiency of a business process. This also implies that, with most organizations, the business and IT must be aligned. Experience shows that organizations which are successful in exploiting BPM technology start by solving a specific business problem with a clear, short-term return on investment (ROI). Thus, anybody selling BPM, both internal and external to an organization, should consider all parts of the equation:
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The end-to-end customer process crosses the functional silos
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Thank You
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