A BPM Framework for KPI-Driven Performance Management

1. A BPM Framework for KPI-Driven Performance Management Robert Osborne Business Breakthroughs Inc.

2. A BPM Framework for KPI-Driven Performance Management • Overview of the Enterprise Business Model and the Governance Layer • Performance and Change Management as the Link Between Governance and Operations • KPIs – the Strategic Gap Measure for BPM • Performance Management – from Discovery to Assignment • Change Management – from Assignment to Resolution • Quick Hits vs the BPM Portfolio – How to Choose the Path • Success Factors for Management Adoption

3. The Goal of BPM Identify Goals, Gaps And Projects • Identify the Changes • Confirm Strategic Goals • Establish Change Office • Build Enterprise Business Process Architecture • Choose KPIs – Cash, Employees, Customers, Suppliers • Identify BPM & Change Projects • Implement Changes through Projects • Operate the Change Management Office • Facilitate Communication • Facilitate Change Projects • Support BPM Project Teams • Enable the teams to be successful • Communicate Vision, Strategy and KPIs • Maintain Progress • Promote communication across the people at every level • Monitor KPIs and close performance gaps • Build teams and capabilities for change Prioritize, Guide and Execute Change Monitor, Measure & Celebrate

4. From Vision to Change Build Enterprise Business and Process Models Complete Strategic Analysis and Build Meta-Architecture Build KPI Model Models Validate Architecture (Process, Function, KPI) • Identity • Vision • Strategic Objectives • Existing documentation • Subject matter expert input • Value Reference Model (VRM) Input to Models KPI Model KPIModel Strategic Workshops & Prioritization Strategic Initiatives, Gaps, and Quick Win Opportunities Change Project Portfolio Manage Change

6. Enterprise Process Architecture and Value Chains Ensure Compliance Company Governance Plan Company Business Strategy Define Standards of Operation Manage Company Performance Key Performance Indicators Manage Ongoing Company Operations Execute Company Operational Changes Company Operations Manage Client Relationships Manage Business Partner Relationships • Market Mgmt • Brand to Market Segments • Lead Generation • Offering to Opportunity Sales Opportunity to Order Product & Service Delivery Order to Cash Post-Sale Services Cash to Satisfied Customer • Brand Mgmt • Strategy to • Brand • Product Mgmt • Market Segment to Offering • Product Research • Segments to Innovative Practices • Product Development • Offering Concept to Design • Product Creation • Design to Product / Service Manage Product and Service Relationship Manage Supply Chain Company Infrastructure Services Provide & Manage Operational Finances Provide & Manage Infrastructure Provide & Manage Technology Services Provide & Manage Transformation Services Provide & Manage HR

7. Enterprise Process Architecture and Value Chains Ensure Compliance Company Governance Plan Company Business Strategy Define Standards of Operation Manage Company Performance Key Performance Indicators Manage Ongoing Company Operations Execute Company Operational Changes Company Operations Manage Client Relationships • KPIs are the “missing link” between strategies and operations • Using KPIs to identify and prioritize performance gaps makes sure you’re fixing the most important things first • The more immediate the feedback from operations to management via KPI reports and dashboards, the more agile the organization becomes • KPIs come in four classes: • Financial (Cash) • Service Delivery (Customers) • Supply Chain (Suppliers) • People (Employees) • Fewer is better! Manage Business Partner Relationships • Market Mgmt • Brand to Market Segments • Lead Generation • Offering to Opportunity Sales Opportunity to Order Product & Service Delivery Order to Cash Post-Sale Services Cash to Satisfied Customer • Brand Mgmt • Strategy to • Brand • Product Mgmt • Market Segment to Offering • Product Research • Segments to Innovative Practices • Product Development • Offering Concept to Design • Product Creation • Design to Product / Service Manage Product and Service Relationship Manage Supply Chain Company Infrastructure Services Provide & Manage Operational Finances Provide & Manage Infrastructure Provide & Manage Technology Services Provide & Manage Transformation Services Provide & Manage HR

8. Performance Management: Using KPIs to Identify Gaps Manage Performance • Operational performance is reported via KPIs • If there is a performance issue, the GM or Process Owner is informed • The Performance Gap is confirmed and rapid analysis performed • The Change Office team is available to help with the analysis and provide recommendations • Based on priority, action is taken; The higher the urgency, the more immediate the action • Ownership of the Performance Gap is assigned to individuals or projects • The performance managers monitor the KPIs to determine if and when the corrective action is successful GM Process Owner KPI Operations Prioritize Performance Gap Assign Performance Gap Ownership Analyze Performance Gap Change Management Office GM Enterprise Process Architect Change OfficeTeam Change Program Manager Quality Performance Manager

9. Manage Change Change Management: Using KPIs to Prioritize & Drive the Change • The Performance Gap Owner reviews the issue and determines, with help from Operations, if this is a “Quick Fix” that can be handled by Ops. If so: • Ops team is assembled, and a short project is conducted • Solution is implemented and activated • KPI is checked by the team and assessed • If the Ops team determines it is outside their scope of competency or ownership, a Performance Gap Project is defined, and added to the Change Portfolio • Portfolio is evaluated regularly or upon request by the Steering committee and Change Office • Using KPIs and Strategic Targets, the committee prioritizes, funds and assigns resources to projects • Active projects require teams, and the teams execute projects, implement the solutions and monitor KPI impacts GM Change Office Team Steering Committee Identify Potential Solutions Prioritize Project Portfolio Execute Project Prioritize Proposed Solution Portfolio Change Project Team Project Champion Team Leader Activate Solution Across Group Project Business Leader Ops Fixit Teams Ops Team Members Project Team Business Experts Execute Quick Fix

10. When does it go to the Portfolio? What is a Quick Fix? • Driven to resolving a specific problem or achieving a specific goal. • The solution can be identified quickly • Implementation authority exists on the team or can be confirmed within one or two business days • All the people required are immediately available • A short burst of activity & effort (can range in hours to few days) • Emphasis on action over extensive analysis • Initiative to resolve a more complex issue • Cross-department issue, where all the people required are not immediately available • May require IT/MIS participation • The required level of activity & effort is uncertain • More detailed analysis is needed to understand and completely identify the problem • Impacts multiple departments or multiple companies • Requires sponsorship or executive approval

11. Informed Action Kolb’s Learning Cycle Over-Reaction Action Awareness Action Awareness Understanding Knowledge Understanding Knowledge Analysis Paralysis • This circle shows the risk of moving from Awareness to Action without Understanding the consequences and impact of those Actions • Equally there is a risk of failing to act quickly enough through too much analysis. • This circle represents the correct cycle of progression • When undertaking a new initiative, teams must worked round sequentially, beginning with Awareness • Ensures that the action is within the correct context

12. The Flow of Improvement Start Here Move on to Next Issue DocumentSituation Celebrate Success Identify Gaps & Problems Make thisthe Standard Improvement Lifecycle DesignSolution MeasureKPI Results Confirm Feasibility Monitor and VerifyChange MakeChanges 12

13. Manage Change Performance & Change Management A KPI-Driven Performance Management Architecture Manage Performance GM GM Change Office Team Process Owner Steering Committee KPI Operations Identify Potential Solutions Prioritize Performance Gap Assign Performance Gap Ownership Analyze Performance Gap Prioritize Portfolio Execute BPM Project Prioritize Proposed Solution Portfolio BPM Project Team Change Management Office GM BPM Proj Champion Team Leader Enterprise Process Architect Activate Solution Across Group BPM Project Business Leader Change OfficeTeam Ops Fixit Teams Ops Team Members BPM Project Team Change Program Manager Business Experts Quality Performance Manager Execute Quick Fix Continuous Process Improvement

14. Change Office Organizational Structure Change Office Manager Steering Committee KPIs Drive Project Priorities for the Teams & Measure Success Portfolio Financial Controller IT (MIS) Enterprise Process Architect Quality Performance Manager Change Program Manager Change Project Sponsor Team Leader Project Team Business Experts Change Project Team Structure IT Lead

15. KPIs – the Driver for BPM Vision KPI • Strategies must contribute to Vision KPI • Operational KPIs must contribute to Strategies • Setup a KPI Dashboard team that is 100% committed to building the executive dashboards • Implement the KPI model in one value chain at a time • Start small, get some successes, prove that the entire cycle works Strategic KPIs Report Results Set Targets Value Chain KPIs Activity / Workflow Performance Metrics Task Performance Metrics KPIModel

16. Success Factors for KPI-Driven Performance Management • Use KPIs to maintain alignment throughout the organization • The more current the KPI measure, the more agile the organization can be • A formal and fulltime Change/BPM office is needed; Change/BPM is not a part-time job • Dedicate team to build KPI Dashboards • Define a clear process for how to react to KPI variations

17. A BPM Framework for KPI-Driven Performance Management Robert Osborne Business Breakthroughs Inc.