Linking Process to Enterprise Goals Ken Orr The Ken Orr Institute.

Linking Process to Enterprise Goals

Ken Orr

The Ken Orr Institute

copyright© 2007 BEAM-Method.org 2

EPIC Presentation

• The Challenge

• Integrating PI and EA

• Business Process Improvement

• Business Reference Models and Process Improvement

• Parting Words


The Challenge

• An Aging Workforce

• A Globalizing Economy

• Not the only game in town

• A Major Health Crisis

• A Need for Much Better (and Much More Integrated) Government at all levels


An Aging Workforce

• At all levels of US Government, Whole Departments are Old Enough to Retire

• The US is facing a Major Knowledge Drain– Key Knowledge Workers will be retiring in

droves– Key Knowledge Workers are set to retire in all

industries– If we don't document our key processes now,

we're in trouble


A Globalizing Economy

• Goods and Capital flowing into the US

• Goods and Capital flowing out of the US


US Economy is not the only game in town

• China

• India

• Russia

• Latin America


A Major Health Crisis

• Health care costs are growing faster than the economy and individual family incomes

• Fewer and fewer poor and middle class have health insurance

• Health reform is possible because it is now an international competitive disadvantage


There is a need for much better (and much more integrated) government at all levels

• Federal

• State

• Local


Integrating Process Improvement and Enterprise Architecture

• Process Improvement

• The Three Faces of EA


Process Improvement

• Big BP and little bp

• Value Chains

• Value Streams

• High Level Processes


Big BP and little bp

• Big BP– Enterprise (Inter-Enterprise) Level Processes

• little bp– Branch and Divisional Level Processes– Detail Processes


Extending the Enterprise Systems Model(Public Sector)

AgencyBusinessPartners Citizens

services(outputs)

product/service feedback

outcome feedback

outcomesresources(inputs)

Source: Rummler and Brache, modified


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Firm infrastructure

HR Management

R & D

Procurement

SupportingActivities

PrimaryActivities

Porter’s “Business Value Chain”

Products/Services

“A process can be seen as a ‘value chain’. By its contribution to the creation or delivery of a product or service, each step in a process should add value to the preceding steps.”

Rummler and Brache, Improving Performance


The Birth of the Supply ChainIn

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EnterpriseValue Chain

SupplierValue Chain

CustomerValue Chain

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•Adding Business Value Chains together creates a Supply Chain!•Supply Chains are important because they allow organizations to optimize their processes over their Suppliers and improve service to their Customers! (Inter-enterprise processes)


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EnterpriseSupplierSupplier-1 Customer Customer+1

“In the future, organizations are going to have to worry about how their processes fit within their business partners business processes”

Rose Heinz, Enterprise Architect TG

Extending the Value Chainwe are here


Transportation Dept Value Chain

Supporting (Financial, HR, IT, …) Assets

Safety

Program / Project/ Contract Management

Research and Laboratory

Transportation Infrastructure Assets

Local Support (Public Transit, Aviation, other)

TransportationPlanning

Pre-Construction

ConstructionMaintenanceReal-time

Operations

HR Management

Financial Management

IT Management

Administration Management

SupportingActivities

PrimaryActivities

CoreBusinessProcess

ProcessManagement

QualityManagement

ProductInformation

Support AssetInfo

SupportingProcesses

Customers

highways

othermodes


Inventing Developing Acquiring&

Delivering

Marketing,Selling &Servicing

Value Chain

Time to Market

Integrated Supply Chain

Market to Collection

Customer ServicesValue Streams

Xerox 2000 Value Chain


Value Chains, Value Streams and Workflow Diagrams


The Importance of Value Chains and Value Streams

• Value Chains make clear what our products are and who are customers (markets) really are

• Value Chains provide a “base map” we can use to understand all the systems/applications we may have

• Value Streams help pinpoint the “end-to-end” big BP business processes that tie everything together

• Value Streams provide a context for “doing business process remodeling”


Applications, Business Process, Data

Appl A Appl B Appl C

Applications(Services)

BusinessProcess(Workflow)

Information(Data


The 3 Faces of EA

• Technology-driven EA

• Business (process) driven EA

• Federal Enterprise Architecture (FEA)


Da

ta

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Ne

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ss

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Scope

EnterpriseModel

SystemsModel

TechnologyModel

DetailRepresentation

Business (process)-driven EA

Technology-driven EA

FEA


Examples of Great Business Processes

• Toyota Motors

• Southwest Airlines

• Dell Computers

• A Common Theme


Toyota Motors

• (Postwar) Plants destroyed by war

• Not enough demand for "mass production"

• Solution: "Just-in-time Manufacturing"

• Implementation: Drive out all kinds of waste (time, inventory, material, waste products)


Southwest Airlines

• Not enough planes

• Solution: The "10 minute turn“

• Implementation: No reserved seating, no expensive reservation system, simple fare system, encourage passengers to arrive early and board quickly


Dell Computers

• Not enough money for inventory

• Solution: Make to order process

• Implementation: On-line order taking, made-to-order configuration, minimum inventory, just-in-time delivery


A Common Theme

• Necessity is the Mother of Invention (and good business processes)

• A passion about the process and continuous process improvement

• End-to-end Processes makes everything fit together

• End-to-end Processes Makes Everything Make Sense


Business Reference Models

• The Supply Chain Operations Reference (SCOR) Model

• enhanced Telecom Operations Map (eTOM)

• The FEA Business Reference Model (BRM)


PlanPlan

SourceSource MakeMake DeliverDeliver

ReturnReturn

SupplySupplyChainChain

SCOR High Level Model(only 5 major high level processes)


M1 MakeM1 MakeBuild to StockBuild to Stock

M2 MakeM2 MakeBuild to OrderBuild to Order

M3 MakeM3 MakeEngineer to OrderEngineer to Order

..or....or.. ..or....or..

M2.01M2.01ScheduleSchedule

ProductionProductionActivitiesActivities

M2.02M2.02IssueIssue

ProductProduct

M2.03M2.03Produce &Produce &

TestTest

M2.04M2.04PackagePackage

M2.05 M2.05 Stage ProductStage Product

M2.06 M2.06 Release ProductRelease Product

to Deliverto Deliver

MakeMakeSourceSource DeliverDeliver

PlanPlan

ReturnReturn

MakeMakeSourceSource DeliverDeliver

PlanPlan

ReturnReturn

Level-1 ModelsLevel-1 ModelsSets ScopeSets Scopeand Context,and Context,Geographies,Geographies,Segments andSegments andProductsProducts

Level-2Level-2StrategiesStrategiesIdentifies MajorIdentifies MajorConfigurationsConfigurationswithinwithinGeographies,Geographies,Segments andSegments andProductsProducts

Level-3Level-3ActivitiesActivitiesIdentifies keyIdentifies keybusiness business activitiesactivitieswithin a within a configurationconfiguration

Source: Joe Francis, PCORSource: Joe Francis, PCOR


Situation-SuppliedFramework-Supplied

Specific

Terminology

Specific

Terminology

Framework

Terminology

Framework

Terminology

Framework

Terminology

Details of IT Automation

Details of Job

(Workflow)

Links Metrics, Task and Practice

Creates Detail Scope

Creates Scope

Links TransactionsSequence Steps

Names

Tasks

Differentiates

Complexity

Differentiates

Business

Use

Example

TransactionsWorkflowActivityConfiguration

(Strategy)

Scope

(Model)

Purpose

Level 5Level 4Level 3Level 2Level 1

SupplySupplyChainChain

S1 SourceS1 SourceBuild-to-StockBuild-to-Stock

S1.2S1.2Receive &Receive &

Verify MaterialVerify Material

SCOR Detail Model


CustomerCustomer

Strategy, Infrastructure &Strategy, Infrastructure &ProductProduct

OperationsOperations

Market, Product and Customer Market, Product and Customer

Service Service

ResourceResource(Application, Computing and Network)(Application, Computing and Network)

Supplier/PartnerSupplier/Partner

Suppliers/PartnersSuppliers/Partners

Enterprise ManagementEnterprise Management

ShareholdersShareholders OtherOtherStakeholdersStakeholders

EmployeesEmployees

©©TeleManagementTeleManagement Forum October, 2001Forum October, 2001

CustomerCustomer

Strategy, Infrastructure &Strategy, Infrastructure &ProductProduct

OperationsOperations

Market, Product and Customer Market, Product and Customer

Service Service

ResourceResource(Application, Computing and Network)(Application, Computing and Network)

Supplier/PartnerSupplier/Partner

Suppliers/PartnersSuppliers/Partners

Enterprise ManagementEnterprise Management

ShareholdersShareholders OtherOtherStakeholdersStakeholders

EmployeesEmployees

©©TeleManagementTeleManagement Forum October, 2001Forum October, 2001

The buildout ofThe buildout of““the Network”the Network”

The operation ofThe operation of““the Network”the Network”

The “Network”The “Network”CycleCycle

The “Service”The “Service”CycleCycle

eTOM (network utility)Business Reference Model


Co

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Affa

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Rev

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D

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Risk

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Plan

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Gen

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Fin

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ssistance

Reg

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Kn

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e creation

&

delivery-

Pu

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oo

d creatio

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& d

elivery

Cred

it & In

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Direct service to

C

itizen

Fed

eral Pass th

ru-

Fed

eral Reg

ulato

ry &

com

plian

ce repo

rting

-

Administrative Management

IT Management

Financial Assets

HR Management


IT Management

Financial Assets

HR Management


IT Management

Financial Assets

HR Management


IT Management

Financial Management

Financial Assets/Supply Chain

HR Management

Budget Financial management

Infrastructure

Health

Corrections

Judicial Legal

Education

Community and Social Services

Natural Resources

Economic

Workforce Support

Environmental

Law Enforcement

Services for Citizens(Primary Activities)

Management of Govt Resources(Support Activities)

Mode of Delivery(Delivery of Service – Primary Activities)

SupportingSupportingActivitiesActivities

PrimaryPrimaryActivitiesActivities

Le

gis

lativ

e

Rela

tion

s-

Support structure for Delivery of Services(Delivery of Services – Supporting Activities)

FEA Business Reference Model


Government Opportunity for Business Process Improvement

• Health System Opportunity Today – Patient Referral– “Currently, there are 8 key business processes that

are involved in a end-to-end patient referral, the most important is the flow of clinical data between providers. Currently the process takes a few days unless the guy is bleeding to death at the hospital. The stated goal is 15 minutes. Today, there are approximately 130 information exchanges in total to cover all possible scenarios (like a refusal and appeals process)!"


Parting Words

• Move Beyond EA as a Means of Getting you IT Budget

• Change the Rules


Move Beyond EA as a Means of Getting you IT Budget

• EA can't be just about producing documents!

• EA has to be about revolutionizing Government!

• Business Architecture has to involve Business Process Improvement!


Change the Rules

• "Think outside the moat!"

• Stop doing things that don't add value! -- remember – "Anything not worth doing, is not worth doing

early!!" Jerry Weinberg

• Start thinking about Common Government Business Process Reference Models not just Common Software Applications!

Linking Process to Enterprise Goals Ken Orr The Ken Orr Institute.

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Transcript of Linking Process to Enterprise Goals Ken Orr The Ken Orr Institute.