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Processes and the Process Management Evolution S ession 2 Ann Rosenberg 16th Februar 2012. Agenda. Process and process parameter - definition Classical process management frameworks: TQM, Lean, Six Sigma, BPR etc. Process Management Evolution Process management modeling notations

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agenda
Agenda
  • Process and process parameter - definition
  • Classical process management frameworks: TQM, Lean, Six Sigma, BPR etc.
    • Process Management Evolution
    • Process management modeling notations
    • Process Management Technology (BPM Technology)
  • The Evolution of Enterprise Systems
  • Process Classification Frameworks
  • RACI framework
  • BPM Technology (business to model and modeling to execution)
  • Group Exercise
  • Final Exercise types
  • Session 3
purpose of the session
Purpose of the session

I denne session vil vi gennemgå, hvad en process er og den historiske udvikling, der er sket indenfor process management. Vi vil gennemgå nogle af de mest klassiske process management frameworks såsom Total Quality Management (TQM), Lean Manufacturing, Six Sigma, Business Process Reengineering (BPR), Business Process Engineering (BPE) mv. Sessionen vil illustrerer hvor, hvordan og hvorfor denne udvikling har været nødvendig. Den studerende vil lære at skeldnemellem de forskellige process management frameworks inklusive hvorfor denne udvikling er fundet sted og dernæst hvordan man definerer og arbejder med processer inklusive de parameter der understøtter en process. I sessionen vil vi ligeledes se på nogle af de forskellige process modeling værktøjer som anvendes i dag og hvorfor der er en stigende brug af disse værktøjer (Business to model and modeling to execution).

definition of a business process 1 2
Definition of a Business Process 1/2

A business process begins with a mission objective and ends with achievement of the business objective. Process-oriented organizations break down the barriers of structural departments and try to avoid functional silos.

A business process can be decomposed into several sub-processes, which have their own attributes, but also contribute to achieving the goal of the super-process. The analysis of business processes typically includes the mapping of processes and sub-processes down to activity level.

Business Processes are designed to add value for the customer and should not include unnecessary activities. The outcome of a well designed business process is increased effectiveness (value for the customer) and increased efficiency (less costs for the company).

definition of a business process 2 2
Definition of a Business Process 2/2

There are three types of business processes:

Management processes, the processes that govern the operation of a system. Typical management processes include "Corporate Governance" and "Strategic Management".

Operational processes, processes that constitute the core business and create the primary value stream. Typical operational processes are Purchasing, Manufacturing, Advertising and Marketing, and Sales.

Supporting processes, which support the core processes. Examples include Accounting, Recruitment, Call center, Technical support.

asap methodology including bpm technology bpm aml soa and value perspective the 4 lifecycles
ASAP Methodology including BPM Technology – BPM, AML, SOA and Value perspectiveThe 4 lifecycles

To BeDesign

Process Owner

Process Architect

Business Architect

CIO

Enterprise Architect

Application Consultant

Project Manager

Program/Portfolio Manager

Business Unit Owner

Business Architect

Business Analyst

Process Management

Performance Management

Value Management

Process/Performance Gov. IT Gov. Project/Program Gov. Business Governance

slide10

Event 1

Entity

Application

Role

Process Step 1

Entity

Information Carrier

Document

Event 2

  • Process and process parameters - Definitions
slide28

Classical process management frameworks: TQM, Lean, Six Sigma, BPR etc. Process Management EvolutionProcess management modeling notations

why process modeling matters1
Why Process Modeling matters?

Thank you, I did see this myself

If you know and see everything better, why don‘t you drive?

Thank you

It‘s green

aligning sender and receiver
Aligning Sender and Receiver

It‘s green

Pure Information

+ Personal Experience

+ Personal Mood

+ Personal Education

+ Personal Interpretation

+ …

Pure Information

+ Undertone

+ Wording

+ Language

+ …

CommunicationChannel

Receiver

Sender

modeling only generates more efforts how to become model minded
“Modeling only generates more efforts“How to become Model minded?

Informationabouta Process

Asfd dsaasdf adf ds fas fd wf wf fyads fy sxd f ew f asd fy sf dw sdw fa sd

Ads wf e sd f dsf ad sf a df we s fd fa sd fa sfweedf asd f asd vcfy sdfdwew f sad

Adsf asdf adsfasdfasd dsfasdfwd fycvx dgfasdf ysdv yds fgqadf ysfydfdsfa

?

Visio

Visio

Sender

Receiver

aligning sender and receiver1
Aligning Sender and Receiver

Process Model

Sender

Receiver

modeling convention vs modeling tool
Modeling Convention vs. Modeling Tool

Modeling Tool

Graphical ProcessDescription

Textual ProcessDescription

Visio

+

=

Powerpoint

Modeling Notation / Convention

Aris

...

slide35

PROCESS HIERARCHY

ProcessArea

Extend

enterprise map

Level 1

MainProcess

Level 2

Process

Level 3

Activity

Level 4

what is a model why model processes

“The RealThing“

What is a Model? Why model processes?

Analyze, design, and optimize business processes.

MANAGERS, BUSINESS PEOPLE

Represen-tation

Derive requirements on IT landscape and software.

IT EXPERTS

At a point in time

Demonstrate compliance (e.g. SOX) or get certification (e.g. ISO).

The Model

AUDITORS

Viewpoint

!

The Reason

MODELER

Models are not what happens – they are a representation of what happens or happened or should happen!

!

  • … a representation of the real thing
  • … built to a certain scale and level of detail for a specific purpose
  • … built to show a viewpoint (here: process focus)
  • … representation of a snapshot in a point of time
what makes a good model
What Makes A Good Model?

CONTENT QUALITY

FAITHFUL TO BUSINESS REALITY

COMPLETE

SUSTAINABLE

CONTENT-WISE CONSISTENT

FOSTER HIGH QUALITY PROCESS MODELS

UN-AMBIGUOUS / CLEAR

EASY-TO-READ

UNIFORM

STRUCTURAL QUALITY

COMPARABLE

The Model

FORMALLY CONSISTENT

Goal

Attributes

guiding principles for good modeling
Guiding Principles for Good Modeling
  • Models must contain only relevant elements,i.e. only aspects that are important with respect to
    • the selected space of business reality
    • the project goals
  • shall be modeled in order to keep model complexity manageable.
  • Models must be efficiently built, i.e.
    • modeling effort must be kept low,
    • modeling must be prioritized according to most relevant aspects,
    • models must be reusable, flexible, adaptable and sustainable for future use.
  • Models must be correct and consistent.
  • Models must be comparable.
  • Models must be well-structured, intuitively understandable, transparent, and easy-to-read.
  • !
slide39

Classical process management frameworks: TQM, Lean, Six Sigma, BPR etc. Process Management EvolutionProcess management modeling notations

the evolution of architecture why do we need a new implementation approach
The Evolution of ArchitectureWhy do we need a new implementation approach

Architecture Maturity Have Change To Business Modularity and Dynamic Venturing

Source: Ross et. al, 2006

changing business needs drive it architecture evolution of enterprise systems

Mainframe Client-Server Internet SaaSCloud

Changing Business Needs drive IT ArchitectureEvolution of Enterprise Systems

EAI

SCM

Model

Simulate

Deploy

Discover

Deploy

Discover

Model

Simulate

Execute

Monitor

Execute

Monitor

Purchasing

Sales

SRM

CRM

ProcessModels

ProcessModels

ITArchitecture

ERP

Database

B2B

B2C

PLM

CPM

Manu-facturing

Finance

HRM

Heterogeneous Landscape (SAP, non SAP)

Semantic Integration

B2E

OnPremise

On Demand

Applicationlifecycle

On Device

Database-centric

EAI-centric

SOA-centric

Orchestrated

Business Agility

Business Needs

Operational Excellence

OngoingTransformation of Processes and Business Networks

Global Rollouts &Integration of Business Partners

Integration ofCore Processes

Source:: Møller (2008)

slide44

Processes remain the Linchpin of Biz/IT Alignment Why do we need a new implementation approach

Value Chains

  • Business Domain
    • Vision, Strategy
    • Business Model
    • Value Chains

Procure to Pay

Plan to Fulfill

Order to Cash

Budget to Report

Hire to Retire

Processes are the linchpin between your Value Chain and our Solution World

Technology Domain

  • Solutions
  • Applications
  • Technology Components

BI

Business Suiteapplications

Technology Components

SaaS

ByD

Third Party

Information Technology

apqc process classification framework
APQC – Process Classification Framework
  • PCF:
  • Process Classification Framework developed by APQC (American Productivity & Quality Center)
  • Source: http://www.apqc.org/portal/apqc/site
apqc process measures
APQC – Process Measures

As the world’s No. 1 most used management tool*, benchmarking is a must for organizations that want to survive—and thrive—in an increasingly competitive marketplace. Knowing where you stand is the first step in getting better.

Source: http://www.apqc.org/benchmarking

bpm methodology at a glance

4

3

2

1

BPM Methodology at a Glance

To-Be

Design

Process Scanning

As-Is

Analysis

Solution

Transformation

1.1 Understand high-level business vision and strategy

1.2 Identify business success factors

1.3 Calibrate IT topics

1.4 Define high-level process landscape

1.5 Prioritize processes

2.1 Assess reference content

2.2 Identify relevant process parameters and classification

2.3 Document as-is processes and process flow

2.4 Analyze processes and identify weaknesses

2.5 Identify interdependencies and cluster weaknesses

2.6 Assess and prioritize weakness clusters

2.7 Analyze as-is IT architecture

2.8 Consolidate roles, systems, information carrier etc.

3.1 Design to-be IT architecture

3.2 Develop weakness cause elimination approach for all relevant weakness clusters

3.3 Create to-be process definition and map solutions

3.4 Detail process description on activity level

3.5 Consolidate roles, systems, information carrier etc.

3.6 Derive necessary adoptions of the organizational structure

3.7 Develop business case

  • Activities for all Solution Tracks
  • 4.1 Elaborate solution approach per business process
  • 4.2 Develop transformation roadmap
  • 4.3 Transform IT architecture
  • 4.4 Identify requirements for master data concept
  • Solution Tracks
  • Core Configuration
  • Core enhancement
  • SOA/Composition
  • Third Party Solution
  • Clearly defined and agreed project goal
  • List of prioritized processes to be analyzed in detail
  • Identify relevant architecture topics
  • Prioritized and clustered list of weaknesses regarding process, organizational or IT technical aspects
  • Detailed to-be design for weakness elimination regarding all aspects evaluated during as-is
  • IT capabilities
  • BPM Blueprint that provides details of identified solution tracks and their relevant contents
typical weaknesses in processes can be structured by three criteria
Typical weaknesses in processes can be structured by three criteria

Typical process weaknesses

Process flow

Organizational structure

System support/data structures

  • Loops
  • Decentralized activities
  • Inputs not necessary, waiting times
  • Long lead times
  • Not enough information for process owners
  • Goal of the process not specified
  • High number of interfaces
  • Low quality of process output
  • No quality control for process results
  • No process standardization where possible
  • Big product and service portfolio which leads to complex processes
  • No outsourcing of processes which are not core to the customers business
  • Not enough process automation
  • Pure functional organizational structure (no process ownership across departments)
  • Responsibilities not clearly assigned
  • Overlapping responsibilities
  • Decision processes take too long
  • No fit of competencies andresponsibilities (governance)
  • Wrong degree of centralization and decentralization
  • Not enough transparency
  • Systems do not support the processes (degree of automation)
  • Missing functionalities
  • Redundant systems support
  • User interface not user friendly
  • Low data quality, redundant data
  • No integration
  • Slow information access for process owners
  • System support not standardized
business process description as is documentation
Business Process Description – As-Is Documentation

Businessobjects

Process steps

Business rules

Involved Business Units

R: Responsible; person who carries out the activity

A: Accountable; person who is in charge

C: Consulted; person asked before carrying out the activity or supporting the activity

I: Informed; person has to be informed

identified process weaknesses have to be clustered
Identified Process Weaknesses have to be Clustered
  • Cluster all weak-nesses due to interdependencies and similarities
  • Develop one solution concept for each different weakness cluster

Same cause for

identified weaknesses Similarities

Business

Processes

analyzed

Same cause for

identified weaknesses Similarities

Business

Processes

analyzed

definition of key performance indicators kpi and process performance indicators ppi
Definition of Key Performance Indicators (KPI) and Process Performance Indicators (PPI)
  • KEY PERFORMANCE INDICATORS
  • KPIs represent business goalsthat a company wants to achieve on a rather strategiclevel. They are qualitative or quantitativeassessments of a companies performance regarding the company goals and can either befinancial or non- financial.
  • They are used bybusiness ownersto track the strategic performance againstbusiness goals

Examples

Revenue Growth

Employee Turnover

# of New Employees

License Revenue per product in €

  • PROCESS PERFORMANCE INDICATORS
  • PPIs represent process goalsthat a company wants to achieve on arather operational level. They quantify the performance of a process along the dimension time, cost, or quality. They can be measured directly by data that is generated within a specific process flow.
  • They are used by process owners in business process management for process controlling and continuous optimization.

Examples

Cost: Engagement costs per applicant

Time: average cycle time to fill a position

Quality: Miss hire ration

Source: BPM Governance (Adapted from the book: Business Process Management – The SAP Roadmap, 2009)

slide56

Synchronize Design With Execution via Business Process Management Suites

The Model (as Metadata)

Is Used to Orchestrate the Process

BPMSs create and dynamically execute explicit process models.

Source: From Gartner, Janelle Hill – BPM Summit, London 2008

exercise
Exercise

For den udleveret virksomhedscase defineres processen ved anvendelse af et RACI framework inklusive process parameterne.

Der vil være mulighed for at modelere processen i i ARIS Express

http://www.ariscommunity.com/aris-express