Business Process Management (BPM)

Business Process Management (BPM) How to get beyond ERP and move into the 21st Century Kewal Dhariwal, PhD, CCP, I.S.P. Manager, ICCP & Supply Chain Research Athabasca University Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

What is ICCP creating for a BPM Exam? 1.0. BPM Concepts and Roles 1.1 Definitions 1.2 Organizational Roles & Responsibilities 2.0. Business Management Perspective 2.1. Business Concepts, Principles and Guidelines 2.2. Performance Management 2.3. Ongoing Monitoring and Controlling Execution 3.0. BPM Methodology Approaches and Techniques 3.1. Enterprise Process Planning 3.2. Process Analysis and Design 3.3. Process Management Improvement 4.0. BPM Technology 4.1. BPMS Implementation 4.2. BPMS Technology Types Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

Why BPM? • “BPM is going to be the dominant management discipline in the 21st Century and is already the way that leading companies manage their businesses as a management discipline.” • “The convergence of BPM and the continually increasing capabilities of BPM software enable organizations to manage and execute change in an increasingly hypercompetitive environment – to adapt, thrive and survive.” • Brett Champlin, CCP, CDMP, President - ABPMP Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

Why BPM? • “Enterprises are seeking to transform themselves into customer-focused, process-centric organizations and consider this transformation critical to their business success.” • “A key part of that transformation is to reorganize information resources as substantially independent reusable services.” • “A service oriented architecture (SOA) embraces this concept of reusable services and represents the next major step in the evolution of IT strategies.” • Tom Dwyer, V.P. Research, Brainstorm Group • Mike Rosen, Editor SOA Magazine, Brainstorm Group Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

What is happening in BPM?Results from a survey of 1200 companies (2007) Carilu Deitrich, BEA BPM Product Manager • Market consolidation and technical convergence • 150 vendors providing small to large enterprise-class vendors with powerful solutions and modeling tools. Consolidation occurring to reduce that number to 25 for enterprise wide solutions. • Spanning multiple packages • BPM increasingly being used to manage processes that bridge multiple packaged applications. Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

What is happening in BPM? • People process problems • Organizational challenges such as internal politics and change management outweigh technical challenges in deploying BPM. • Continuous process improvement is the key to fostering BPM as an imperative business strategy • BPM, Collaboration with Competitors • Companies are seeking ways to better support ad-hoc, collaboration • BPM today does not support this well enough, but BPM companies are moving towards this direction. Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

What is happening in BPM? • BPM adoption mostly departmental • Some leading-edge companies are tackling enterprise-wide processes (more the exception than the rule). • 1200 companies surveyed – 18% currently employing enterprise wide BPM • 50% of surveyed group are focusing on departmental process problems • BPM rapid growth attributable to bringing business strategists and technologists together to solve process problems Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

What is BPM?Let’s explore it in detail • BPM goals are to efficiently align the organization with the customers’ wants and needs • BPM attempts to continuously improve processes – seeking process optimization by • Defining • Measuring • Improving your process Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

What is BPM? • “Executives need to organize and manage, not only the cost chain, but also everything else – including strategy and product planning – as one economic whole, regardless of the legal boundaries of individual companies.” • “This is a shift from cost-led pricing to pricing-led costing.” • Peter Drucker – Management Challenges of the 21st Century. • This change is from forecast-driven inventory style systems to responsive, flexible and demand-driven mass customization, globally. Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

What is BPM? • People • Customer facing staff are best suited to understand customer needs and must be empowered to make improvements. • Many improvements can be done without involving technology • Business –Technology Divide • Business processes are managed by business people. • Information moves between software packages with requires a service oriented architecture (SOA) often driven or governed by IT. Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

What is BPM? • Modeling • Modeling a business process is a business domain • Perfecting a business process is a staff domain. • Business modeling is Business Process Management (BPM). • Business –Technology Connection • The size and complexity of tasks often requires the use of technology to model efficiently. • Business people, especially customer facing staff must control and do the modeling. Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

What is BPM? • Bridging IT and Business • Bringing the power of technology to business staff and reducing their work should be the BPM group credo. • BPM is the bridge between Business and IT. • BPM systems will develop to be industry specific. • A cyclical BPM life-cycle exists: • Design • Modeling • Execution • Monitoring • Optimization Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

What is BPM? • Process Design • Identify existing processes • Design the “to-be” processes • Key Terms • Representations of process flow • Actors within a process • Alerts & Notifications • Escalations • Standard Operating Procedures • Service Level Agreements • Task hand-over mechanisms Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

What is BPM? • Process Design • Techniques & notations • IDEF0 – IDEF nn (U.S. Air Force- public domain) • IDEF0 – Function Modeling • IDEF1 – Information Modeling • IDEF1X – Data Modeling • IDEF3 – Process Description Capture • Event Driven Process Chains (originally inside SAP/R3), now also through IDS Scheer, MS Visio, other tools. • BPMN (simple diagrams with a small set of graphical elements) – developed by BPM Institute handed over to Object Management Group (OMG – maintained). • Flow Objects • Connecting Objects • Swimlanes • Artifacts Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

What is BPM? • Modeling • Starting with the Design (theoretical) introduce variables – such as cost of materials, introduction of more people, etc. to determine how the processes might operate differently. • What if analysis • What if only 90% of the people had to do the work? • What if only 50% were available (baby-boomers retiring) Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

What is BPM? • Execution • Off-the-shelf BPM tools are available: • http://bpm-directory.omg.org/vendor/list.htm • BEA, ID Scheer, Borland, etc. • Enterprise-wide tools include all of the following and more: • Graphical tools • Text language based modeling tools • Visual programming using metaphors • Business Rules – definitions governing system behavior- leading to a business rule engine Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

What is BPM? • Monitoring • Individual process tracking (state and statistics) • State of a customer order, state of a delivery, how many delivered on-time, right-quantity, right-place, etc. • Identify problems and correct • Work with customers…once the problem is identified, fix the connectivity issues (information rollups, data exchange, people communications, etc.) • Measures: Cycle time, defect rate, productivity • Business Activity Monitoring (BAM) • Real –time or Ad-hoc • Process Mining • Compare event logs with “a-priori model” to analyze bottlenecks, breakdowns in process, etc. Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

What is BPM? • Optimizing • Identifying process failures, bottlenecks, under performance issues • Cause-effect analysis • Redesign or modification of process to • Reduce Cost • Improve Quality • Increase Responsiveness Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

Where does SOA fit in? • Service Oriented Architecture (SOA) is a way of executing BPM more efficienty and effectively • SOA provides the architecture to provision how processes exchange data in a flexible manner across business processes, both in the company and between collaborating companies (supply chains)…following the value chain more closely. • SOA unifies business processes by structuring large applications as an ad-hoc collection of smaller modules called services. Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

Where does SOA fit in? • XML has been used extensively in SOA to create data which is wrapped in neat descriptive containers. • The services are described by Web Service Description Language (WSDL) and SOAP a protocol for exchanging XML based messages over the internet using HTTP/HTTPS. • The goal of SOA is to allow programs or applications to be strung together to form new ad-hoc applications which are built almost entirely from existing software services. • WS-BEL – Web Services Business Execution Language (serialized XML) – processes in WS-BEL exclusively import and export functionality by using web interfaces. • Software reuse is one goal without reconfiguring the existing application – So this is systems integration in a totally different manner than the 1980s and 1990s ERP methods which often required the company to change its processes to fit in with the ERP environments. Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

Future for BPM? • Move from mechanistic systems to more complex environments where Human Intuition and Judgment are allowed for in the work flow. • Better capture and adhere to business rules – Business Rules driven systems. • Intelligent software agents will be used to replicate business rules behavior and model optimizing responses. Institute for Certification of Computing Professionals Kewal Dhariwal © 2008

Business Process Management (BPM)