From Process Management to Process Innovation
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Transcript of From Process Management to Process Innovation
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www.sungard.com/energy
From Business Process Management to Business Process InnovationMichael zur Muehlen, Ph.D.Director, Center of Excellence for Business Process InnovationStevens Institute of TechnologyHoboken [email protected]
Wednesday, January 14, 2009
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Motivation
Drivers for Business Process Management (BPM)
Performance
Business Process ImprovementEngineering of Process-aware IS
Compliance
Mandated compliance (e.g. SOX)Desired compliance (e.g. ISO, ITIL)
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How do you make a Cup of Coffee?
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The Nescafé Process
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The Espresso Machine Process
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The Starbucks Process
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BPM Questions
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BPM Questions
How do we design and communicate this process?
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BPM Questions
How do we design and communicate this process? How do we know that we perform this process well?
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BPM Questions
How do we design and communicate this process? How do we know that we perform this process well? How do we know that we manage this process well?
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BPM Questions
How do we design and communicate this process? How do we know that we perform this process well? How do we know that we manage this process well? How do we know that we maintain compliance?
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BPM Questions
How do we design and communicate this process? How do we know that we perform this process well? How do we know that we manage this process well? How do we know that we maintain compliance? How should we organize and govern process
improvement efforts?
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BPM Questions
How do we design and communicate this process? How do we know that we perform this process well? How do we know that we manage this process well? How do we know that we maintain compliance? How should we organize and govern process
improvement efforts? Which standards and technology are relevant?
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Business Process Management
Business Process Automation
Business Process Innovation
Business Process Monitoring
Process Life Cycle
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“Innovation is about imposing a discipline of
value creation in an organization”
Tom Koulopoulos
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BPM and Business Value
Information Technology
Business Value
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BPM and Business Value
Information Technology X Business
Value
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crea
tes
enables
Process Change
BPM and Business Value
Information Technology X Business
Value
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Great! Now What Do We
Do With It?
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Process Innovation
Project Autograph
Usage-based Insurance Billing
New Process
New Technology
New Value Proposition
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Process Innovation
Project Failed
Lack of Standard Process
Expensive Technology
Customers not ready
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Learn from Outside
Telecom Billing Process
Free GPS
Rate depends on mileage driven
Industry-strength Billing Process
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Relationship between BPM and Strategy
FINANCIAL
Primary Objectives
Financial Objectives are Paramount
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Relationship between BPM and Strategy
FINANCIAL
Primary Objectives
Financial Objectives are Paramount
CUSTOMER
Value PropositionCustomers Seek Value and Pay for it
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Relationship between BPM and Strategy
PROCESS
Operations Customer Innovation Regulatory / Social
Processes Enable Value Creation
FINANCIAL
Primary Objectives
Financial Objectives are Paramount
CUSTOMER
Value PropositionCustomers Seek Value and Pay for it
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Relationship between BPM and Strategy
PROCESS
Operations Customer Innovation Regulatory / Social
Processes Enable Value Creation
FINANCIAL
Primary Objectives
Financial Objectives are Paramount
LEARNING & GROWTH
ChangeAgenda
Strategic IT
Strategic Job
Families
Information
Capital
Human
Capital
Organization
Capital
Processes shape and are shaped by maturity
CUSTOMER
Value PropositionCustomers Seek Value and Pay for it
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The BPM Maturity Model
Governance Method IT People CultureStrategic Alignment
Process Roles and Responsibilities
Process Design & Modeling
Process Skills & Expertise
Process Values & Beliefs
Process Improvement Plan
Decision Making Processes
Process Implementation &
ExecutionsProcess Education &
LearningProcess Attitudes &
BehaviorsStrategy & Process Capability Linkage
Process Management
Standards
Process Improvement &
InnovationProcess Knowledge Leadership
Attention to ProcessProcess Output Measurement
Process Metrics & Performance
LinkageProcess Control &
MeasurementProcess
Collaboration & Communication
Responsiveness to Process ChangeProcess Architecture
Process Management
Controls
Process Project & Program
Management
Process Management
LeadersProcess Social
NetworksProcess Customers
& Stakeholders
Business Process Management Maturity
Process Design & Modeling
Process Implementation &
Executions
Process Improvement &
Innovation
Process Control & Measurement
Process Project & Program
Management
Source: Rosemann & DeBruin 2006
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Customers don’t care about processes per se, but about
their value proposition
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Is This Value?
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Is This Value?
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This is Value!
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Underwriting On Demand
Text2Insure
Provide Travel and Car Insurance via SMS
Provides Quote within 60 seconds
Reply “BUY”
Call from agent within 10 min for payment details
Cover2go
Accidental Death Insurance
Fees taken from cell phone bill
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Process and Risk Management
Process Risk
Process-orientedRisk Management
Risk-orientedProcess Management
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Risk Management and BPM
Compare Frew (2006)
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Risk Management and BPM
BPM Risk ManagementFocus on providing value for stakeholders
Focus on ensuring value for stakeholders
Performance depends on effectiveness of business processes
Risk is an inherent property of business processes
Performance is influenced by process design
Risk is mitigated by process design
Feedback is obtained through Performance Indicators assigned to systems and processes
Feedback is obtained through Risk Indicators assigned to systems and processes
Performance objectives are achieved through optimized processes
Risk is mitigated through optimized processes
Compare Frew (2006)
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Risk Management and BPM
BPM Risk ManagementFocus on providing value for stakeholders
Focus on ensuring value for stakeholders
Performance depends on effectiveness of business processes
Risk is an inherent property of business processes
Performance is influenced by process design
Risk is mitigated by process design
Feedback is obtained through Performance Indicators assigned to systems and processes
Feedback is obtained through Risk Indicators assigned to systems and processes
Performance objectives are achieved through optimized processes
Risk is mitigated through optimized processes
Compare Frew (2006)
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From Core to Commodity: Recipe
Treat the Process as a Service Define a Standard Interface Create Value at the Front-End BPM enables OpRisk Management Compliance can be an Asset
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Takeaways
BPM means two things: Performance and Compliance
Processes define services Processes are services Core processes can become commodities Process management creates problem solvers Industrialized processes enable innovation
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www.sungard.com/energy
From Business Process Management to Business Process InnovationMichael zur Muehlen, Ph.D.Center of Excellence in Business Process InnovationHowe School of Technology ManagementStevens Institute of TechnologyCastle Point on the HudsonHoboken, NJ 07030Phone: +1 (201) 216-8293Fax: +1 (201) 216-5385E-mail: [email protected]: http://www.cebpi.org
Wednesday, January 14, 2009