BPM-S2-2021-Lecture 2-BISM2203-Business Process Modelling PDF

Preview

Summary

Improving organisational efficiency and effectiveness is a top priority for senior management. To enable such improvements it is crucial that the organisation be viewed from a process perspective. This course provides students with an introduction to Business Process Management and enables them to d...

Description

Business Process Management Lecture 2: BPM History and Enterprise Capability

Who am I?

Brian Lorigan

Course Coordinator & Lecturer UQ Business School Course contact details

Email: [email protected] Subject line: [BPM]…. Consultation times

Mondays 10.30am to 12 midday | Meeting ID: 884 0270 5395 Tuesdays 10.15am to 10.45am | Meeting ID: 881 4373 5506 during semester teaching weeks. Password for all my tutes and consultations: BPM

Lecture details: Tuesdays 8am: Zoom ID: 881 3349 3781 2

Where to find course information

course site on Blackboard is the key place to go. Key items to note in the purple menu: 1. Announcements – where I will post updates, most also sent by email 2. Course Profile – details on assessment, learning objectives and much more 3. Learning Resources – this is the big one: a) Lecture and Tutorial recordings – i. lecture link uploaded soon after lecture; ii. tutorial link uploaded after last tute. b) Weekly lecture notes (in advance, and any additions / updates) c) Reminder of weekly reading: required and recommended d) Weekly tutorial materials 4. Assessment – overview of what, when and how much + details later 5. Discussion board – first place to go for Q&A on course materials 6. Library links – to download your free copy of the core text 7. Online teaching (LIVE) – links to each of our live classes.

Course readings

☹

😀👍 👍

eBooks available FREE via UQ Library – no excuses! 

4

Who are your tutors?

Also available under Course Staff in Blackboard

Topics for today

• BPM History: Key ideas that have influenced Business Process Management

• Business Value: a deeper dive into business value

• Enterprise Capability: BPM maturity & principles 6

BPM History

Three Process “Traditions”

•

The Quality Control Tradition

•

The Management Tradition

•

The Information Technology Tradition

8

Work Simplification

1856-1915 Mechanical Engineer Observed work practices & aimed to improve productivity 1911 – Taylorism – management theory focused on improving flow of work. Scientific Management – management theory focused on productivity of individual worker that introduces “management”. Based on a) time & motion studies, and b) division of labour.

Ford & Taylorism

9

Work Simplification

Core concepts 1. There is one best way to perform a task 2. Employees should be scientifically selected & trained 3. Cooperation between management & workers to ensure methods are followed 4. Managers plan the work, workers enact it.

10

Quality Control Tradition



Total Quality Management



Six Sigma



Lean

Kaizen: Continuous improvement Customer satisfaction

11

Quality Control Tradition

Total Quality Management 

Views organisation as a set of processes



Emphasises continuous improvement



“Do the right things, right the first time, every time.”

12

Quality Control Tradition

1980s and 1990s 

Lean

Maximising customer value Minimising waste



Six Sigma •

Practice of continuous improvement

•

Methods developed at Motorola

•

Based on the notion that no more than 3.4 defects per million are acceptable

•

Increase accuracy of processes

13

Management Tradition



Porter’s Value Chain



Balanced Scorecard



Business Process Reengineering

14

Management Tradition: Porter

Porter’s Five Forces driving industry competition Competitive Strategy

Porter’s Value Chains

15

Management Tradition: Balanced scorecard

16

Management / IT Tradition: BPR



Business Process Reengineering (BPR)



Business Process Redesign Don’t Automate, Obliterate Michael Hammer

17

Management / IT Tradition

 BPR •

No as-is modelling: ”clean slate” approach

•

Project based

•

Drastic change, therefore high risk but also potentially high benefit

•

Requires big change in mindset from involved stakeholders 18

Information Technology Tradition



Business Process Reengineering



ERP systems



CASE & Modelling tools



Expert systems & business rules

19

Business Process Management

20

BPM Now

 Continuous approach  Based on analysis of existing processes  Incremental improvements  Limited organisational change  Risk?

Poll

21

Business Value

Business value - RECAP

 

Porter’s Value Chain: Core and Support Processes Value proposition – value that a product or service provides to customers

..”a process is a collection of events, activities and decisions that collectively lead to an outcome that brings value to an organisation’s Customers”.. “BPM is about managing entire chains of events, activities and decisions that ultimately add value to the organisation and its customers”..

23

Management vs Core vs Support Process

Management processes provide direction, rules and practices

Sign Contracts

Establish Sourcing Procedure

Core processes generate value as they are directly linked to external customers

Plan Vendors Process

Evaluate Vendors

Fill Order Process

Receive Order

Support processes provide resources to be used by other processes

Harmon, 2007

Approve Order

Stock Supplies

Fill Order

Reorder Supplies Process

Deliver Order

Order Supplies

Receive Supplies 24

Business value



Purpose of introducing a BPM initiative is to ensure that the business processes covered by the BPM initiative lead to consistently positive outcomes and deliver maximum value to the organisation in servicing its clients.



Measuring the value delivered by a process is a crucial step in BPM.

“You can’t control what you can’t measure”.



It is important to clearly define the process performance measures (also called process performance metrics) that will be used to determine whether a process is in “good shape” or in “bad shape”.



For Toyota , a main principles is the elimination of waste (Lean), i.e. activities that do not add value to the customer.

25

Business value

26

Business value



Value is different for different stakeholders

When value is misaligned



Different stakeholders perceive value differently

28

Business value



What can we learn from Porter’s Five Forces model and Value Chains? •

Processes and strategy are tightly related

•

Processes should be composed of value adding activities

•

Value chains are the key to maintaining competitive advantage

•

Understand what the value proposition is to the various stakeholders

•

Executives should think in process terms - create value chains that are unique, provide competitive advantage that is hard to imitate

Business value

Improve, Maximise, Optimise, Enhance, Ensure: 

Efficiency



Effectiveness



Competitiveness



Productivity



Business performance



Process performance



Organisational performance



Communication



Standards



Benefits, profit



Customer Satisfaction, service quality……… Reputation Environmental performance



30

Business value

Detect, Record, Analyse, Resolve, Minimise, Eliminate: 

Inefficiencies



Ineffectiveness



Incompetency



Defects



Variation



Cost (time, $, etc.)



Complexity



Risks



Complaints



Waste

31

Enterprise Capability

When BPM initiatives FAIL



A sole focus on BPM methods and tools, not on business goals,



The belief that BPM is the single source of truth,



BPM projects that are managed as isolated silos, and



An overall inability to change.

33

BPM Maturity Models

Processes

34

Maturity Models

Processes: Part of Organisational Performance

Process Performance?

3

Maturity Models

“Organisational performance needs to improve” “Process performance needs improvement” BUT   

How do we know where we are? How do we know where we should be? What steps should we take to get there?

36

Maturity Models

BPM Maturity assessment – a collection of techniques to identify the overall level of systematic process thinking in the organisation

Where We Should Be

How do we Improve

Where We Are Now

37

Maturity Models – A History

Capability Maturity Model (CMM)  Developed by Software Engineering Institute (SEI) 1995  Used for understanding and predicting success and failure of Software processes Capability Maturity Model Integrated (CMMI)  Developed by Crissis et al. 2003, generalised by SEI  Used for other organisational areas e.g. development, acquisition, services  Certifications based on audit

38

Success factors of BPM Maturity: the BPM Maturity Model

Success factors of BPM Maturity: the BPM Maturity Model

Success factors of BPM Maturity: Strategic Alignment

1. Strategy-driven BPM project planning: How aligned are the methods and tools we choose in each phase of the BPM lifecycle to the particular business goals we want to achieve? 2. Strategy and process capability linkage: Does the business strategy directly influence the business processes and vice versa? 3. Enterprise process architecture: How well is the enterprise process architecture specified? 4. Process performance measures: How well are process outcomes and related process performance measures defined? 5. Process customers and stakeholders: How well is the view of customers and other process stakeholders incorporated in BPM projects? Slide 41

Success factors of BPM Maturity: Governance

1. BPM decision making: What BPM decisions can be taken and when, to handle both expected and unexpected circumstances? 2. BPM roles and responsibilities: Why does / can do what? Is there a clear definition of BPM roles and associated responsibilities? 3. Process performance measurement system: What mechanisms are in place to measure process performance and how appropriate are these mechanisms based on the chosen performance measures? 4. BPM standards, conventions, and guidelines: How well are BPM standards, conventions, and guidelines defined? 5. BPM quality controls: What control measures are in place to review and guarantee quality in all phases of a BPM project?

Slide 42

Success factors of BPM Maturity: People

1. Process knowledge: To what level do process participants and related process stakeholders know the processes they participate in? 2. BPM knowledge: How much do the people in BPM roles, such as process analysts, know about BPM methods and tools? 3. BPM and process training: How developed is the corporate training in BPM and business processes? 4. Process collaboration and communication: How do process stakeholders collaborate and communicate with each other for the achievement of process objectives? 5. Propensity to lead BPM: How willing is a company’s management team to lead BPM projects? Slide 43

Success factors of BPM Maturity: Culture

1. Responsiveness to process change: To what extent does the organisation embrace and respond to continuous process change? 2. Embedding of process values and beliefs: How deep is process-thinking ingrained in the corporate values and beliefs? 3. Adherence to process design: To what degree do process participants adhere to process designs? 4. Leadership attention to BPM: How much support do leaders exhibit for BPM? 5. BPM social networks: Are people networks in place to shape and disseminate BPM in the organisation? Slide 44

BPM Maturity Levels 1 - 5

Five levels of Capability Maturity Model (CMM)

45

BPM Maturity Levels explained

Level 1 (Initial): BPM is non-existing or rarely used. BPM projects are carried out in an ad hoc fashion within individual divisions. Initiatives are uncoordinated, limited in scope and minimal in employee involvement. Slide 46

BPM Maturity Levels explained

Level 3 (Defined): The organisation reaps the benefits of the first BPM projects, though the focus is still on the early stages of the BPM lifecycle. The use of methods and tools becomes more sophisticated.

In-house BPM training is offered to reduce dependence on external experts. Process collaboration /communication forums are set up to facilitate dissemination of BPM experiences (e.g., using intranets

Level 1 (Initial): BPM is non-existing or rarely used. BPM projects are carried out in an ad hoc fashion within individual divisions. Initiatives are uncoordinated, limited in scope and minimal in employee involvement. Slide 47

BPM Maturity Levels explained

Level 4 (Managed): Focus of BPM projects shifts towards last phases of the lifecycle: change management accompanies BPM projects to improve acceptance of the redesigned processes; systematic performance monitoring ensures that BPM projects deliver strategic benefits. A BPM Centre of Excellence is established with welldefined roles to coordinate all BPM efforts. There is process orientation in every project (not only in BPM-specific ones) and the company minimally relies on external expertise. Slide 48

BPM Maturity Levels explained

Level 5 (Optimising): BPM is fully-established on both the operational level and the strategic level, where it has become an integral part of any manager’s activities, accountabilities, and performance measurements. BPM methods and tools are widely accepted and a standardised, company-wide approach to BPM is in place. As BPM becomes the way business is done, the BPM Centre of Excellence reduces in size. Level 4 (Managed): Focus of BPM projects shifts towards last phases of the lifecycle: change management accompanies BPM projects to improve acceptance of the redesigned processes; systematic performance monitoring ensures that BPM projects deliver strategic benefits. A BPM Centre of Excellence is established with welldefined roles to coordinate all BPM efforts. There is process orientation in every project (not only in BPM-specific ones) and the company minimally relies on external expertise. Slide 49

BPM Maturity Levels 1 - 5

Five levels of Capability Maturity Model (CMM) 50

BPM Maturity Levels explained

Level 1 (Initial): BPM is non-existing or rarely used. BPM experts. projects are carried out in an ad hoc fashion within individual divisions. Initiatives are uncoordinated, limited in scope and minimal in employee involvement. Slide 51

BPM Maturity Levels explained

Level 3 (Defined): The organisation reaps the benefits of the first BPM projects, though the focus is still on the early stages of the BPM lifecycle. The use of methods and tools becomes more

In-house BPM training is offered to reduce dependence on external experts. Process collaboration /communication forums are set up to facilitate dissemination of BPM experiences (e.g., using intranets

Level 1 (Initial): BPM is non-existing or rarely used. BPM projects are carried out in an ad hoc fashion within individual divisions. Initiatives are uncoordinated, limited in scope and minimal in employee involvement. Slide 52

BPM Maturity Levels explained

Level 4 (Managed): Focus of BPM projects shifts towards last phases of the lifecycle: change management accompanies BPM projects to improve acceptance of the redesigned processes; systematic performance monitoring ensures that BPM projects deliver strategic benefits. A BPM Centre of Excellence is established with welldefined roles to coordinate all BPM efforts. There is process orientation in every project (not only in BPM-specific ones) and the company minimally relies on external expertise. Slide 53

BPM Maturity Levels explained

Level 5 (Optimising): BPM is fully-established on both the operational level and the strategic level, where it has become an integral part of any manager’s activities, accountabilities, and performance measurements. BPM methods and tools are widely accepted and a standardised, company-wide approach to BPM is in place. As BPM becomes the way business is done, the BPM Centre of Excellence reduces in size. Level 4 (Managed): Focus of BPM projects shifts towards last phases of the lifecycle: change management accompanies BPM projects to improve acceptance of the redesigned processes; systematic performance monitoring ensures that BPM projects deliver strategic benefits. A BPM Centre of Excellence is established with welldefined roles to coordinate all BPM efforts. There is process orientation in every project (not only in BPM-specific ones) and the company minimally relies on external expertise. Slide 54

Patterns of BPM maturity

Blue pattern: High maturity in strategic alignment and governance, low elsewhere. Typical of organisations where BPM is driven from top, e.g., sponsored by the CFO or CEO. Strong executive support for BPM, often because of a sense of urgency. Orange pattern: High maturity in methods and IT, low elsewhere Typical of organisations where BPM is driven under the sponsorship of CIO. Strong emphasis on BPM methods and software solutions. Green pattern: medium maturity in people and culture, low elsewhere Typical in organisations that are affected by rule-based governance and heavy unionisation, where everyone’s buy-in is sought for any redesign decision. Slide 55

Patterns of BPM maturity

Example – an insurance company

The assessment is framed in the context of a BPM roadmap, which describes desired levels of maturity over time. The company in this example follows the orange pattern: The driver for BPM is methods and...