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Session 2: Business Process Management Six Sigma (BPSM & SS) - Focus BPM Governance. Ann Rosenberg 2 nd February 2012. Agenda Business Process Management Six Sigma (BPSM & SS) - Session 2: Focus BPM Governance. Company Presentation: SAP (12:00 – 12:45) Introduction to the overall topic

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session 2 business process management six sigma bpsm ss focus bpm governance

Session 2: Business Process Management Six Sigma (BPSM & SS) - Focus BPM Governance

Ann Rosenberg

2nd February 2012

agenda business process management six sigma bpsm ss session 2 focus bpm governance
AgendaBusiness Process Management Six Sigma (BPSM & SS) - Session 2: Focus BPM Governance
  • Company Presentation: SAP (12:00 – 12:45)
    • Introduction to the overall topic
    • Assignment 1
    • Assignment 2
  • BPM Governance (13:00 – 13:50)
    • Small Recap
    • Major Issues in Business Process Management: An Expert Perspective
    • BPM Governance (the Framework)
    • Classification Frameworks, RACI, PPIS, Modeling Tools
  • Exercise (14:00 – 14:30)
  • Present result of Exercise (14:30 – 15:00)
  • Next time: Session 3: Soft. System Method and Company presentation
a six stage system
A Six-Stage System

Source: Integrating Strategy Planning and Operational Execution: A Six-Stage System by Rover S. Kaplan and David P. Norton

linking the strategy model to the operation model
Linking the Strategy Model to the Operation Model

Source: Linking Strategy to Operations: Process Models and Innovation by David P. Norton and Randall H. Russell

stage 4 plan operations
Stage 4: Plan Operations
  • Plan operations using tools such as quality and process management, reengineering, process dashboards, rolling forecasts, activity-based costing, resource capacity planning, and dynamic budgeting.
  • Questions:
  • Which business process improvements are most critical for executing the strategy?
  • How do we link strategy with operating plans and budgets?
      • Sales forcast, Resource capacity plan Dynamic operating and capital budgets
major issues in business process management an expert perspective1
Major Issues in Business Process Management: An Expert Perspective

RESEARCH FINDINGS

Source: Bandara, Wasana and Indulska “Major issues in Business Process Management”: An expert perspective” Publication date: 2007, In Proceedings ECIS 2007 - The 15th European Conference on Information Systems, pages pp. 1240-1251, St Gallen, Switzerland.

slide13

Process-Based Application

Continuous Process Improvement

Redesign for a Process-Based SOA

Business Transformation

    • Business buyer (supported by IT)
  • Rapid time to solution for new application
  • Extension to existing applications
  • Goal is broader, and better coordination of mission-critical process
  • Budget Trend: typically single project
  • Business and IT as buyer
  • BPM is a program, consisting of multiple projects
  • Goal is business agility for key processes
  • Budget Trend: Level or increasing investment
  • IT and business buyer
  • Improve visibility and change management
  • Goal is application rationalization and modernization
  • Budget Trend: Level funding, increasing investment if combined with CPI or shared services
  • Senior business executive as buyer
  • Rethink entire business process
  • Goal is make a "game-changing" play
  • Iterative versus “big bang” approach to achieving transformation
  • Budget Trend: Level or increasing budget

WHAT DRIVES THE CHANGED – 4 BPM USE CASES

Select the use case which support your Business Model

Source: Gartner Q4 2008 – Market Trends

having understood the strategy several building blocks need to be analyzed
Having understood the strategy, severalbuilding blocks need to be analyzed

Once the link between business process management and the corporate strategy is understood, the company needs to analyze its current process management maturity and determine what factors, or building blocks, need to

be introduced or improved in the BPM implementation

People

Processes

Structures

Technology

Personnel

Development

Strategy

Business

Process

Operations

Organization

Guidelines &

Standards

IT Operations

BPM

Enablement

BPM Methods

Skill Profiles

Process

oriented Strat.

Planning

Process

Maturity Plan

Organizational

Structure

System

Architecture

Management

BPM Tool

Landscape

Training

Project Portfolio

Management

Process

Projects

Decision

Making Bodies

Process

Terminology

IT Service

Execution

Process-based Rewards

Service

Management

Buiness

Process

Execution

Roles and

Tasks

Tool

Conventions

IT Support

Process Map

Communication

Process

Performance

Measurement

Organizational

Interaction

Change Mgt.

Corporate

Process

Reporting

Budget and

Cost Allocation

Auditing

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

the implementation approach depends on the organizational maturity and culture
The implementation approach depends onthe organizational maturity and culture

In addition to defining the appropriate building blocks required for implementing BPM, an appropriate path for the Transition should be developed. The strategy as a whole should cover all of the steps in the BPM Roadmap: the Set-up, the Transition, and Continuous Improvement

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

bpm governance1
BPM Governance

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

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

Process Scanning

As-Is

Analysis

To-Be

Design

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)

slide28

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

30 min