© 2004 teraquest overview of the business process maturity model (bpmm) · · 2005-01-23business...
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© 2004
TeraQuestBPMM Overview
Bill CurtisCo-Founder & Chief Scientist
Overview of the Overview of the Business Process Business Process
Maturity Model Maturity Model (BPMM)(BPMM)
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TeraQuestBPMM Overview The Business IT DivideThe Business IT Divide
ProcessConsistency
ProcessDiscipline
Accuracy ofEstimates
Quality ofRequirements
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TeraQuestBPMM Overview On the Way to Level 3On the Way to Level 3
1 “You’re not a reliable partner” “We know”
Level The Business IT
2 “Non-responsive” “No, it will take longer!”
3 “We’re now the problem” “We know”
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© 2004
TeraQuestBPMM Overview
VP VP VP VP
1) Functional Fractures1) Functional Fractures
Sales
Bill of sale
Product
System
Finance
Invoice
Legal
Contract
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TeraQuestBPMM Overview 2) Best 2) Best PractitisPractitis
Business Process 2
Business Process 1
Business Process 2
Best practice 1Best practice 3
Best practice 4Best Practice 2
Best practices are notalways integrated intoa seamless process
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TeraQuestBPMM Overview 3) Process Obesity3) Process Obesity
WorkUnit 1
WorkUnit 2
WorkUnit 3
WorkUnit 4
WorkUnit 5
Level 2—Local Processes
Processdescription
This is a process description derived from
the local method of doing it
Processdescription
This is a process description derived from
the local method of doing it
Processdescription
This is a process description derived from
the local method of doing it
Processdescription
This is a process description derived from
the local method of doing it
Processdescription
This is a process description derived from
the local method of doing it
Level 3—Standard Process
StandardProcess
This is a process description derived from
the local method of doing it
WorkUnit 1
WorkUnit 2
WorkUnit 3
WorkUnit 4
WorkUnit 5
DefinedProcess
This is a process description derived from
the local method of doing it
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TeraQuestBPMM Overview 4) Technology Envy4) Technology Envy
Level 1
Level 2Process
descriptionThis is a process
description derived from the local method of doing it
Processdescription
This is a process description derived from
the local method of doing it
Processdescription
This is a process description derived from
the local method of doing it
Processdescription
This is a process description derived from
the local method of doing it
Processdescription
This is a process description derived from
the local method of doing it
Processdescription
This is a process description derived from
the local method of doing it
Processdescription
This is a process description derived from
the local method of doing it
Processdescription
This is a process description derived from
the local method of doing it
Level 3StandardProcess
This is a process description derived from
the local method of doing it
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TeraQuestBPMM Overview 5) Configuration Conflagration5) Configuration Conflagration
The materials thatsupport your workmust be consistent
with each other
= = =Training Process maps Forms Systems
Materials whosecurrent states aretightly linked must
be controlled
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TeraQuestBPMM Overview 6) 6) ********flowflow
Items left offbill of sale
Sales
Bill of sale
Incompleteinformation
Legal
Contract
reworkvalue
addingwork
UnspecifiedRequirements
Provisioning
Specification
valueaddingwork
rework
Finance
Invoice
Incorrectinvoices
valueaddingwork
rework
BPM focuses on the enterprise:• Create seamless workflow• Integrate functional silos• End snowballing rework• Roadmap for automation
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TeraQuestBPMM Overview Reasons for AdoptingReasons for Adopting11
Barriers:• Overload, rework• Multiple ways to do similar things• Disappointing automation results
Objectives:• Achieve cost reductions• Recognition for efficiency
Client 1: International Bank
Barriers:• Workflow bottlenecks, errors• Difficulty selecting 6σ projects• Disappointing end-to-end
solutions
Objectives:• Reduce billing errors• Provide framework for 6σ and
business process reengineering
Client 2: Health Care Services Company
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TeraQuestBPMM Overview Reasons for AdoptingReasons for Adopting22
Barriers:• Multiple improvement frameworks• Best practices rather than
processes
Objectives:• Integrate improvement framework• Extend process maturity benefits
to every business process
Client 3: Semiconductor Equipment Supplier
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TeraQuestBPMM Overview Process Maturity FoundationsProcess Maturity Foundations
Business ProcessBusiness ProcessManagementManagement
• process domain• best practices• goals & benefits
Total QualityTotal QualityManagementManagement
• Deming, Juran, Crosby• quantitative management• continuous improvement
Organizational Change Organizational Change and Developmentand Development
• cultural evolution• organizational learning• change management
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TeraQuestBPMM Overview BegattingBegatting of Maturity Modelsof Maturity Models
AcquisitionCMM
PeopleCMM
SystemEng. CMM
CMMIBusinessProcess
MM
CMM forSoftware
Humphrey’sProcessMaturity
Framework
Crosby’sQuality
MaturityGrid
Shewart,DemingSPC &PDCA
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TeraQuestBPMM Overview
Business Sector BPMM
ISOMBNQA
Business Process MMBuilt on CMM foundationEarly and continuing ROIAids business-IT fusion
IT Maturity ModelIT Operations needs a CMMITIL/COBIT provide contentCMM provides roadmap
IT Organization IT MM
ITILCOBIT
CMM/CMMIProject-based modelsUnderstood principlesProven successes
ApplicationDevelopment
SW-CMMCMMI
Process Maturity Framework
Evolution of Maturity ModelsEvolution of Maturity Models
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TeraQuestBPMM Overview A Family of A Family of BPMMsBPMMs
BusinessProcess
MM
ServiceOperations
MaturityModel
Transaction-based service
businesses
BPMM-InformationTechnology
Informationtechnology operationsITIL, COBIT
BPMMMarketing
BPMMManufacturing
BPMM<your businessprocess here>
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TeraQuestBPMM Overview Business Process Maturity ModelBusiness Process Maturity Model
(1) Initial Hero worshipMotivate people to overcome problems and just “get the job done.”
(2) ManagedReduced reworkReduced overloadStable local procedures
Create disciplined management within work units and stabilize work
(3) StandardizedProductivity growthEffective automationPlatform for growth
Establish standard end-to-end, integrated business process
(4) PredictablePredictable resultsReuseReal-time corrections
Manage process and performance quantitatively
(5) OptimizingAchieve targetsFlatten organizationBusiness agility
Continuous proactive
improvement
Level Objectives Benefits
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TeraQuestBPMM Overview Process Maturity FrameworkProcess Maturity Framework
Level 1Level 1InitialInitial
InconsistentInconsistentmanagementmanagement
Repeatablepractices
Level 2Level 2ManagedManaged
Work unitWork unitmanagementmanagement
Standardized
best practices
Level 3Level 3StandardizedStandardized
Business lineBusiness linemanagementmanagement
Quantitativelymanaged
practices
Level 4Level 4PredictablePredictable
CapabilityCapabilitymanagementmanagement
Level 5Level 5OptimizingOptimizing
ChangeChangemanagementmanagement
Continuouslyimproving
practices
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TeraQuestBPMM Overview Initial OrganizationsInitial Organizations
IndividualisticIndividualistic People rely on personal methodsfor accomplishing work
InconsistentInconsistent Little preparation for managing a work unit
InefficientInefficient Few measures for analyzingeffectiveness of practices
StagnantStagnant No foundation or commitmentfor improvement
UndisciplinedUndisciplined Few repeatable processes, oftensacrificed under pressure
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TeraQuestBPMM Overview Initial OrganizationsInitial Organizations
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TeraQuestBPMM Overview Managed OrganizationsManaged Organizations
RepeatableRepeatable Work units use locally-defined practices that have proven effective
CommittedCommitted Executives commit organization to improving operations
ManagedManaged Commitments are balanced with resources
ProactiveProactive Managers take responsibility forwork unit operations & performance
ResponsibleResponsible Work units are capable of meetingtheir commitments
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TeraQuestBPMM Overview Level 2 Process AreasLevel 2 Process Areas
Work UnitChange
Management
Processand ProductAssurance
Work UnitRequirementsManagement
Work UnitPlanning andCommitment
Work UnitMonitoringand Control
SourcingManagement
Work UnitPerformance
Org
aniz
atio
nal P
roce
ssLe
ader
ship
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TeraQuestBPMM Overview
StandardProcess
This is a process description derived from the local method of
doing itLevel 3
Levels 2 to 3 TransitionLevels 2 to 3 Transition
TailoredProcess
This is a process description derived from the local method of
doing it
WorkUnit 1
WorkUnit 2
WorkUnit 3
WorkUnit 4
WorkUnit 5
Enterprise-wide end-to-end, integrated business process
WorkUnit 5
Procedures
WorkUnit 5
Procedures
WorkUnit 5
Procedures
WorkUnit 4
• Do this• Do that
Procedures
WorkUnit 2
1. Do this first2. Do this next3. Do this last
Procedures
WorkUnit 2
1. Do this first2. Do this next3. Do this last
Procedures
Confederatedunits
WorkUnit 1
Procedures
WorkUnit 2a
1. Do this first2. Do this next3. Do this last
Procedures
WorkUnit 3
Procedures
WorkUnit 4a
• Do this• Do that
Procedures
WorkUnit 5a
Procedures
Level 2
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TeraQuestBPMM Overview Standardized OrganizationsStandardized Organizations
TailoredTailored Processes defined for use tailoredfrom standard processes
StrategicStrategic Focuses on end-to-end integrationof business processes
OrganizationalOrganizational Integrate best practices from workunits into standard processes
LeveragedLeveraged Common measures and processespromote organizational learning
ProfessionalProfessional Organizational culture emerges from common practices
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TeraQuestBPMM Overview Level 3 RelationshipsLevel 3 Relationships
Product andService
Preparation
Product andOperation
Product andServiceSupport
Product andService
Deployment
OrganizationalProcess
Management
OrganizationalCompetencyManagement
OrganizationalResource
Management
Product andService
Management
ConfigurationManagement
Domain
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TeraQuestBPMM Overview Predictable OrganizationsPredictable Organizations
QuantitativeQuantitative Process variation, performance, and capability understood quantitatively
IntegratedIntegrated Processes integrated acrossparticipating disciplines
PredictablePredictable Outcomes predictable from sub-process capability & performance
StableStable Variation reduced through reuse,mentoring, & statistical mgt.
EmpoweredEmpowered Corrective action taken at thepoint of performance
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TeraQuestBPMM Overview Level 4 Process AreasLevel 4 Process Areas
OrganizationalCommon AssetManagement
Business Process
Integration
OrganizationalCapability
Management
Quantitative Business
Management
Quantitative Process
Management
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© 2004
TeraQuestBPMM Overview
StrategicStrategic Improvements planned to achievebusiness strategies & objectives
SystematicSystematic Improvements evaluated and deployed using orderly methods
PreventativePreventative Defects and problem causes systematically eliminated
AlignedAligned Performance aligned across the organization
DedicatedDedicated Individuals and workgroups continuously improve capability
Optimizing OrganizationsOptimizing Organizations
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TeraQuestBPMM Overview Level 5 Process AreasLevel 5 Process Areas
Organizational Improvement
Planning
OrganizationalPerformance
Alignment
OrganizationalImprovementDeployment
Defect and Problem
Prevention
OrganizationalProcess and
Product Innovation
Continuous Capability
Improvement
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TeraQuestBPMM Overview Changing the OrganizationChanging the Organization
Organization
Project
Individual
1 2 3 4 5Maturity levels
Organizationestablishes
processframework
Managementestablishes
processdiscipline
Individualimprovespersonalprocess
Ad hoc,inconsistent,undisciplined
process
Discip
line
Projectreducesprocessvariation
ProactiveorganizationalImprovement
projects
Trust
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TeraQuestBPMM Overview Process Area LinkageProcess Area Linkage
Level
5
Process Areas Linked by Role Responsibilities
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3
2
OrganizationalProcess
Improvement
Org. ProcessCapability Mgt.
Org. CommonAssets Mgt.
OrganizationalProcess
Management
ServiceOperations
Management
QuantitativeService
Management
ServiceManagement
WU Reqts. Mgt.WU Plan. & Commit.
WU Monitor. & ControlSourcing Mgt.
Org. Product andProcess Innovation
Org. ImprovementDeployment
OrganizationalManagement
OrganizationalResource
Management
OrganizationalProcess
ImprovementLeadership
Org. ImprovementPlanning
Org. PerformanceAlignment
ServiceOperations Work
Performance
QuantitativeProcess Mgt.
Service ProcessIntegration
Service DevelopmentService Deployment
Service DeliveryService Maintenance
and Support
Work UnitPerformance
ContinuousCapability
Improvement
Defect & ProblemPrevention
ServiceOperations
Support
OrganizationalCompetencyManagement
ConfigurationManagement
Process &Product
Assurance
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TeraQuestBPMM Overview BPMMBPMM to to CMMICMMI MappingMapping
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Org. Process Improvement LeadershipWork Unit Requirements ManagementWork Unit Planning and CommitmentWork Unit Monitoring and ControlWork Unit PerformanceSourcing ManagementConfiguration ManagementProduct and Process Assurance
Requirements ManagementProject PlanningProject Monitoring and ControlMeasurement and AnalysisSupplier Agreement ManagementConfiguration ManagementProcess & Product Quality Assurance
4Org. Common Asset Mgt.Org. Process Capability Mgt.Service Process IntegrationQuantitative Service ManagementQuantitative Process Management
Organizational Process PerformanceQuantitative Project Performance
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Org. Improvement PlanningOrg. Performance AlignmentDefect and Problem PreventionContinuous Capability ImprovementOrg. Process & Product InnovationOrg. Improvement Deployment
Causal Analysis & ResolutionOrganizational Innovation & Deployment
BPMMBPMM CMMICMMI
Organizational Process FocusOrganizational Process DefinitionOrganizational TrainingDecision Analysis & ResolutionIntegrated Project ManagementRisk ManagementRequirements DevelopmentTechnical SolutionProduct IntegrationVerificationValidation
3
Org. Process ManagementOrg. Skills ManagementOrg. Resource ManagementProduct & Service ManagementProduct & Service DevelopmentProduct & Service DeploymentProduct & Service DeliveryProduct & Service Maint. & Support
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TeraQuestBPMM Overview BPMM and Six SigmaBPMM and Six Sigma
Level Expected benefits5 Continuous, proactive, data-
Optimizing driven improvement;Design of experiments
4 Statistical process control;Predictable Understand and control
sources of variation
3 Standardize process to enableStandardized organization-wide benefits
from Six Sigma projects
2 Stabilize process to achieveManaged meaningful data and establish
foundation for Six Sigma
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TeraQuestBPMM Overview ConclusionsConclusions
BPMM provides a framework to improve end-to-end business processes
• Improvements done when the organization is ready for them• Approach based on proven maturity model concepts (developed
by original authors of SW-CMM, CMMI and People CMM)• Leverages industry experience with maturity model-based
improvement• Targets improvements for manageable units to start• Enables effective six sigma use at all levels of maturity