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PROCESS RENEWAL GROUPPRG-BPF 1-1
Business Process Architecture
The Eye of the Hurricane
IRMAC – Toronto: December 7 2005
Roger T. BurltonThe Process Renewal Consulting Group Inc.
www.processrenewal.comwww.adaptive.com
PROCESS RENEWAL GROUPPRG-BPF 1-2
Copyright
Business Process Management:
This seminar contains proprietary methods and materials developedby The Process Renewal Consulting Group Inc. of Coquitlam BC Canada.
They may not be copied, recorded, transmitted or reused without theexpressed permission of the author. All rights reserved.
PROCESS RENEWAL GROUPPRG-BPF 1-4
1. Introduction
2. Process Management
3. Stakeholder Perspective
4. Process Architecture
5. Process Architecture Alignment
6. Program Management
7. Process Projects
8. Example
9. Conclusion
Business Process Architecture Agenda
PROCESS RENEWAL GROUPPRG-BPF 1-7
Mass Customization Invention
Mass Production
ContinuousImprovement
Stable Dynamic
Dynamic
Stable
What we provide
How we do it
Business Driver: Speed of ChangeVersatility = Being able to many things with your capabilitiesAdaptability = Being able to renew your capabilities quickly
New Age Invention => Develop environments that assume & enable variation and change
PROCESS RENEWAL GROUPPRG-BPF 1-8
HumanCompetency
BusinessEnvironment
Understanding
ProcessAbility
Info/KnowledgeAccessibility
StakeholderRelationshipIntelligence
TechnologyEnablers
As business product cycles are changing more and more rapidly and each organization is required to form an individual and unique relationship with each of its customers and other stakeholders, only flexible processes and maneuverable technologies can enable knowledgeable staff to make the commitments required to continuously adapt.
Adaptability Requires Alignment of Critical Capabilities
PROCESS RENEWAL GROUPPRG-BPF 1-9
Business Strategy
Business Drivers
Business Stakeholder
Strategy
Current Results
Alignment
Alignment Method: The Basis for Traceability
Business Architecture
Business Process
Architecture
Technology Architecture
Information Architecture
Org/HR Strategy
OtherStrategies
Program Management
Migration Strategy
Project Portfolio
Traceability
PROCESS RENEWAL GROUPPRG-BPF 1-11
You already have all your Processes – But you may not know WHAT they are
ProcessSteward
Customer
Supplier
Yourco
The complex Stakeholder Relationships and the Knowledge required to satisfy them can only be
managed through Business Processes working at optimum performance.
PROCESS RENEWAL GROUPPRG-BPF 1-12
Scoping (Event) View:
Is activity initiated and terminated by one or more business events of importance to the stakeholders of the ‘Organization-in-Focus’.
Relationship View:
Is completed only when all of the business outcomes of importance to all relevant stakeholders of the process have been provided.
Processing View:
Transforms inputs of all types into outputs, according to guidance(policies, standards, procedures, rules etc.), employingreusable resources of all types.
Performance View:
Has performance indicators for which measurable objectives can be set and actual performance evaluated.
Functional / Organizational View:
Contains logical steps requiring a set of functional capabilities often found in disparate organizational units.
A process is a complete set of activities conducted to achieve a specific business
result for one or more stakeholders.
Perspectives of a Real Business Process
Strict Naming Convention:
A Process isdescribed by an
active verb-noun
The name should unambiguously
communicate the intent of the
process
PROCESS RENEWAL GROUPPRG-BPF 1-13
BPM: the discipline that improves measurable businessperformance for stakeholders, through ongoing optimization and synchronization of enterprise-wide process capabilities.
whole processes for stakeholders
their guiding factors
their enablers
Local Resturant
Finance & Administration
Marketing & Sales
Purchasing
Transporation
CateringBanquet Services
Accounts Payable
Accounts Receivable
Legal Sevices
Faciliticies Management
Human Resources
Customer Service Information Systems
Operations
Food Preparation
Logistics
Credit
Delivery
Technology
Hum
anRe
sour
ces
Polic
ies
& Ru
les
OrganizationalStructure
BusinessPerformance
Processes
Business
Roles & Jobs
Facilities
What is Business Process Management ?
PROCESS RENEWAL GROUPPRG-BPF 1-15
A BPMS automatically manages the navigation of the execution of ALL instances of work from the initial triggering event through to the attainment of its last closing status of the defined process.
What is a Business Process Management System?
Invokes the rules and navigation for each role in the entire process
Roles can be:technological (through any technology enabler in any location)human (through links to work portals)organizational (through any defined internal or external entity)
Each process instance can have its own unique path
Can monitor, measure and report status and performance
BPMS is NOT BPM but enables it
Technology
Hum
anRe
sour
ces
Polic
ies
& Ru
les
OrganizationalStructure
BusinessPerformance
Processes
Business
Roles & Jobs
Facilities
PROCESS RENEWAL GROUPPRG-BPF 1-16
PRG’s Business Process Management Framework
Understandthe
Enterprise
Architect&
Align
DefineProcessProject
Understandthe
Process
Renewthe
Process
DevelopCapabilities
Roll-out&
Nurture
ContinuouslyImprove
HumanChange
ManagementAwareness
PerceptionsUnderstanding
MotivationCommunications
Commitments
BP GovernanceProgram and Project ManagementOpportunity CostResource CommitmentGating CheckpointsQuality AssuranceRisk / Reward
PROCESS RENEWAL GROUPPRG-BPF 1-18
Validate Strategic Intent Concepts
Organization in Focus
Mission
Vis ion
Goals
Business Drivers
Objectives
Strategies
Bus iness Stakeholder Groups
Business StakeholderRelationship Criteria
St rengths
Opportunities
Threats
W eaknessesPrinciples and Values
Stakeholder RelationshipExpectations
Business Stakeholder RelationshipKPIs & Targets
Stakeholder Relationship CSFsProducts and Services of the
Relationship
Scoreca rd for Organization inFocus
Drivers *
Capabilities * Raison D'Etre * Business StakeholderRelationship Criteria !
Strategic Intent *En terprise *
Process Perform ance Observations
PROCESS RENEWAL GROUPPRG-BPF 1-19
All GSI Stakeholders
Small Direct Customers
All Customers
Stockholders
OutsourcedProfessional Services
Facil ity Support
Channel Partners
Government andRegulatory
Stakeholders
Large Direct Customers
All Suppliers
Banking
Telcom
Others
Humongeous Inc.
Minority Shareholders
Channel Partner'sCustomers
Stakeholder Segmentation and Types: Examples *
* Note: Partial Set Only Join the dots
be aware
analyze
PROCESS RENEWAL GROUPPRG-BPF 1-22
Framework Concepts in The Architect and Align PhaseOrganization in F ocus
Business Stakeho lderRelationship Crit eria
Prioritized andSelected Processes
Change ProgramProjects
Process Architect ure
Renewal StrategyB i ll F i n a n c eV P F i na n ce
J i m E a g l eV P S a l es
Mark MakeI tVP MFG
Joe BigShotChairman
Roles & Organization S tructure
Program Busine ssCase
Program
Facility P lans
Technology Architec ture
Human Capabilities
Knowledge Requirem ents
Business StakeholderRelationship Criteria *
Aligned Enterprise AssetArchitectu res !
Program M anagementGuidance !
Business Stakeholder Groups
PROCESS RENEWAL GROUPPRG-BPF 1-23
The complex Stakeholder Relationships can only be managed through Business Processes working at optimum performance across your ‘Organization-in-Focus’.
Stakeholder Relationships Define Business Processes
Customer Type 1
Customer Type 2
Customer Type 3
Supplier Type 1
Supplier Type 2
Staff
OwnersCommunity Start with
these
Then do the rest
Then these
Everything which flows must link to at least one process
PROCESS RENEWAL GROUPPRG-BPF 1-24
CORE business processes are linked directly to external customers
.
GUIDING business processes provide direction, rules and practices.
ENABLING business processes provide reusable resources to be used by other processes
Process Architecture Map
Objects of Process Transformation :
Physical Materials
Data / Information
Commitments
Knowledge
Classification will help Define the Right Processes
PROCESS RENEWAL GROUPPRG-BPF 1-25
Some Process Architecture Principles
• Every Architecture is built with a clear “Organization in Focus”
• Every interaction with an external stakeholder triggers the start of a process or some activity in it
• Every incoming exchange-item from the business context diagram must come from an external stakeholder and be received by at least one process
• Every outgoing exchange-item from the business context diagram must be produced by at least one process and go to an external stakeholder
• Every external stakeholder relationship proceeds through a lifecycle enacted by relevant processes – from unawareness through termination
PROCESS RENEWAL GROUPPRG-BPF 1-26
Some More Process Architecture Principles
• Every asset of the enterprise proceeds through a lifecycle enacted by relevant processes–from conception through retirement
• Always start with the ‘Raison d’etre’ of the enterprise –the customer, supply chain and product cycles. These will reveal the core processes.
• After the core ,move to the processes that plan and direct the business and ensure appropriate governance against the plans. These are the guiding processes.
• Finish with the processes that provide the reusable capabilities and enabling physical assets that are used to run the business. These are the enabling processes.
PROCESS RENEWAL GROUPPRG-BPF 1-27
Types of Stakeholder Interactions (Exchanges)
The interactions between each stakeholder type and the “Organization in Focus” is documented or modeled showing all current and future interactions or exchanges including:
– Products delivered or received– Services provided or received– Information exchanged– Knowledge shared – Commitments (formal and informal) made– State changes
Look for and expect in and out pairings
PROCESS RENEWAL GROUPPRG-BPF 1-28
B il l Fi nanc eV P Fi nanc e
J im E agleV P S ale s
Mark MakeItVP MFG
Joe BigShotChairman
Global SW Inc.
All Customers
Requests forInformation
Product and ServiceCatalogs
Stockholders
Government andRegulatory
Stakeholders
Channel Partners
Proposals
Contracts
Governing LegislationCompliance ReportsTarget ROE Financial Results
Software for Resale
Working Software
Services
Payment
Invoices
All GSI Stakeholders
Information
Market Knowledge
Product Strategies
Marketing and Salescapab ility
Royalties and Payments
Terms and Conditionsof Partnership
Partnership Contracts
Packaged Services
Often later than promised but quality is good
Rarely well-defined . Channels re-invent their own.
Sometimes out of date
We are good at thisWe commit to changes
in scope too easily
Outside-In: External Stakeholder flows connect to Internal Processes
Identify prospects Qualify prospectsSell products and
servicesDeliver client business
solutionTerminate client
contractProvide services
Determine productdirection
Develop\maintainstandards & methods
Monitor and assurequality
Develop Global SWbusiness strategy
Control financial assets
Provide ITinfrastructure
Provide tools
Plan, assess andmitigate risk
Develop marketingstrategy
Promote products andservices
Develop core products
Arrange facilities
Report results
Establish projectmanagement guidelines
Provide humanresources
Develop Partnerships
PROCESS RENEWAL GROUPPRG-BPF 1-29
Sample 1 Process Architecture Map DiagramLevel 1
Identify prospects Qualify prospectsSell products and
servicesDeliver c lient business
solutionTerminate client
contractProvide services
Determine productdirection
Develop\maintainstandards & methods
Monitor and assurequality
Develop Global SWbusiness strategy
Control financial assets
Provide ITinfrastructure
Provide tools
Plan, assess andmitigate risk
Develop marketingstrategy
Promote products andservices
Develop core products
Arrange facilities
Report results
Estimate ofLost Business
Volume
Annual SalesVolume
Total Cost ofNon-Conformance
Establish projectmanagement guidelines
Provide humanresources
Develop Partnerships
Note:
Lines represent major dependencies only !
Note:
Lines represent major dependencies only !
PROCESS RENEWAL GROUPPRG-BPF 1-30
Deliver clientbusiness solution
Install modif iedsoftw are
Migrate data
GatherBusiness
Requirements
Design clientsolution
Build clientsolution
Providetraining
Test Solution
Ins tall basesof tw are
Evaluatesolutiondelivery
ManageProjects
Supports allProcesses
Sample 1 Process Architecture Diagram Level 2
PROCESS RENEWAL GROUPPRG-BPF 1-31
Some Frameworks (Operations Reference Models) as an Architecture Productivity Aid
Audit of IT processesCOBIT (Control Objectives for Information and related Technology )
IT Governance Institute
Cross-Industry processesPCF (Process Classification Framework)
American Productivity Quality Center (APQC)
Government Services Patterns and Lifecycles
GSRM (Governments Strategic Reference Model)
Treasury Board Secretariat (Government of Canada)
IT Service Management (IT service support and delivery)
ITIL (IT Infrastructure Library)UK Office of Government Commerce & itSMF
Telecommunications IndustryeTOM (enhanced TelecomOperations Map)
Telemanagement Forum
Internal and Inter-company Value Chains
VCOR (Value Chain Operations Reference Framework)
Value Chain Group
Inter-company Supply Chain Management
SCOR (Supply Chain Operations Reference Framework)
Supply Chain Council
FocusFrameworkSponsoring Body
For a comprehensive treatment of Reference Models and Frameworks visit www.BPTrends.com and search for “frameworks”
PROCESS RENEWAL GROUPPRG-BPF 1-32
Supply Chain Council: SCOR FrameworkSCOR is a management tool. It is a process reference model for supply-chain management, spanning from the supplier's supplier to the customer's customer.
Cus
tom
ers
Cus
tom
ers
Supp
liers
Supp
liers
P1 Plan Supply ChainP1 Plan Supply ChainPlanPlan
P2 Plan SourceP2 Plan Source P3 Plan MakeP3 Plan Make P4 Plan DeliverP4 Plan Deliver
SourceSource MakeMake DeliverDeliverS1 Source Stocked ProductsS1 Source Stocked Products M1 MakeM1 Make--toto--StockStock
M2 MakeM2 Make--toto--OrderOrder
M3 EngineerM3 Engineer--toto--OrderOrder
D1 Deliver Stocked ProductsD1 Deliver Stocked Products
D2 Deliver MTO ProductsD2 Deliver MTO Products
D3 Deliver ETO ProductsD3 Deliver ETO Products
S2 Source MTO ProductsS2 Source MTO Products
S3 Source ETO ProductsS3 Source ETO Products
Return Return SourceSource
P5 Plan ReturnsP5 Plan Returns
Return Return DeliverDeliver
EnableEnable
D4 Deliver Retail ProductsD4 Deliver Retail Products
PROCESS RENEWAL GROUPPRG-BPF 1-33
Sample from the APQC PCF (Process Classification Framework)
2.0 Design and Develop Products and Services2.1 Design products and services
2.1.1 Develop strategy and concepts for new products and services
2.1.1.1 Research customer and market needs2.1.1.2 Plan and develop cost and quality targets2.1.1.3 Develop product life cycle and development timing targets2.1.1.4 Research leading technology components and development
requirements2.1.1.5 Integrate leading technology into product/service concept and
components
Interpreting the PCFCategory: The highest level within the PCF indicated by whole numbers (e.g., 8.0).Process Groups: All PCF items with one decimal numbering (e.g., 8.1) are considered a process area.Process: All PCF items with two decimal numbering (e.g., 8.1.1) are considered processes.Activity: Items with three decimals (e.g., 8.3.1.1) are considered activities within a process.
PROCESS RENEWAL GROUPPRG-BPF 1-34
GSRM Approach:• Each service type is associated with a pattern of processes (called its
service process pattern) to produce and deliver its corresponding service output type, and a pattern of metrics (called its service metrics pattern) that describe the performance of its service output type. These two patterns together are called a service pattern.
Planning processes:– establishing how the service will respond to demands
Provisioning processes: – preparing the service to respond to demands in accordance with plans
Service delivery processes:– operate repeatedly according to the service’s “value chain” when each request for
a service output is received.Deregister/decommission processes:
– recognize the closing of the lifecycles of resources, suppliers, service outputs, or service recipients
Governments of Canada Strategic Reference Model (GSRM)
PROCESS RENEWAL GROUPPRG-BPF 1-35
Some Process Architecture Principles: Core Processes
`
CORE = Customer + Product/Services
Lifecycles
OwnersRegulatory Community
KnowledgeSources
Raw MaterialSuppliers
Human Resources
IT Providers
Facility & Equipment Suppliers
Distributors
Customers &Consumers
PROCESS RENEWAL GROUPPRG-BPF 1-36
Some Generic Core Processes with boring but well-formed names
Customer Lifecycle– Make Customers Aware– Qualify Prospective Customers– Sell to Prospects– Fulfill Orders– Evaluate and Enhance Customer Relationship– Terminate Customer Relationship
Core Supplier Lifecycle– Select Suppliers– Supply Raw Materials– Optimize Inventory – Terminate Supplier Relationship
Product / Service Lifecycle– Research Ideas– Develop Products and Services– Rollout Products and Services– Optimize Products and Services– Retire / Replace Products and Services
PROCESS RENEWAL GROUPPRG-BPF 1-37
Some Process Architecture Principles: Guiding
`
CORE = Customer + Product/Services Lifecycles
Owners Regulatory Community
KnowledgeSources
Raw MaterialSuppliers
Human Resources
IT Providers
Facility & Equipment Suppliers
Distributors
Customers &Consumers
Guiding = Plan / Policy + Governance Lifecycles
PROCESS RENEWAL GROUPPRG-BPF 1-38
Planning Lifecycle– Monitor Business Performance – Understand Markets– Develop Strategic Plan– Develop Market Strategy– Budget Resources– Improve Process Performance
Governance Lifecycle– Understand Governance Requirements– Assess Compliance– Mitigate Risk – Develop Polices and Procedures– Control Finances– Provide Legal Advice– Report to External Stakeholders
Some Generic Guiding Processes with boring but well-formed names
PROCESS RENEWAL GROUPPRG-BPF 1-39
Some Process Architecture Principles: Enabling
CORE = Customer + Product/Services Lifecycles
Owners Regulatory Community
KnowledgeSources
Raw MaterialSuppliers
Human Resources
IT Providers
Facility & Equipment Suppliers
Distributors
Customers &Consumers
Guiding = Plan / Policy + Governance Lifecycles
Enabling = Core Enabling + Infrastructure Lifecycles
PROCESS RENEWAL GROUPPRG-BPF 1-40
IT Asset Lifecycle : Provide Information Technology Capability– Determine Solution requirements– Develop IT Solution– Develop Infrastructure– Maintain Infrastructure– Support Users
HR Lifecycle: Provide Capable Staff– Recruit & employ– Provide work environment – Evaluate employee– Develop employee– Reward & motivate employee– Provide HR service for employees– Terminate Employment
Some Generic Enabling Processes with boring but well-formed names
PROCESS RENEWAL GROUPPRG-BPF 1-41
Facility Lifecycle: Provide Working Facilities– Determine Facility and Equipment Requirements– Design Facilities– Build / Acquire facilities and equipment– Provide Working Physical Assets– Retire Physical Assets
Goods and Service Lifecycle: Purchase Goods and Services– Find Prospective Suppliers– Create Contracts– Order Goods and Services– Pay Accounts
Some More Generic Enabling Processes with boring but well-formed names
PROCESS RENEWAL GROUPPRG-BPF 1-42
From Internal Process in Architecture or External Stakeholder
From Internal Process in Architecture or External Stakeholder
To Internal Process
in Architecture
or
External Stakeholder
From Internal Processin Architecture
or
External Stakeholder
Inputs
Outputs
Guides
Enablers
Do Something
Inputs are processed into Outputs according to Guides using Enablers when Events occur
Processes Interface Requirements: Look at IGOEs
Materials to be transformed
Information to be processed
States to be changed
Results of processing
Information to be referenced while
processing
Methods and Rules to guide the processing
Technologies to be applied
Facilities to be used
People to be assigned
PROCESS RENEWAL GROUPPRG-BPF 1-44
Principles
ValuesStrengths
Products
Opportunities
Vision
Strategy
GoalsObjectives
RequirementsThreats
Constraints
StakeholdersValue Chains
Events
Responsibilities
Triggers Functions
Business Rules
Skills
Processes
Workflow
Procedures
Jobs
Roles
Information
Legal
Facilities
Knowledge
Financial Assets
DataTax
Objects Time
LocationsCost
Budget
Hardware Networks
Databases
Applications
Middleware
Systems
Methodologies
Tools
Weaknesses
Mission
Organizations
Models
Use Cases
Services
People ProjectsRisks
Why
Arc
hite
ctur
e an
d W
hy O
bjec
t Rep
osito
ries
Than
k s to
Ad a
p tiv
e, In
c . w
ww
. ad a
ptiv
e.co
m
PROCESS RENEWAL GROUPPRG-BPF 1-45
e.g. DATA
Builder
SCOPE(CONTEXTUAL)
MODEL(CONCEPTUAL)
ENTERPRISE
Designer
SYSTEMMODEL(LOGICAL)
TECHNOLOGYMODEL(PHYSICAL)
DETAILEDREPRESEN- TATIONS(OUT-OF- CONTEXT)
Sub-Contractor
FUNCTIONINGENTERPRISE
DATA FUNCTION NETWORK
e.g. Data Definition
Ent = FieldReln = Address
e.g. Physical Data Model
Ent = Segment/Table/etc.Reln = Pointer/Key/etc.
e.g. Logical Data Model
Ent = Data EntityReln = Data Relationship
e.g. Semantic Model
Ent = Business EntityReln = Business Relationship
List of Things Importantto the Business
ENTITY = Class ofBusiness Thing
List of Processes theBusiness Performs
Function = Class ofBusiness Process
e.g. Application Architecture
I/O = User ViewsProc .= Application Function
e.g. System Design
I/O = Data Elements/SetsProc.= Computer Function
e.g. Program
I/O = Control BlockProc.= Language Stmt
e.g. FUNCTION
e.g. Business Process Model
Proc. = Business ProcessI/O = Business Resources
List of Locations in which the Business Operates
Node = Major BusinessLocation
e.g. Business Logistics System
Node = Business LocationLink = Business Linkage
e.g. Distributed System
Node = I/S Function(Processor, Storage, etc)Link = Line Characteristics
e.g. Technology Architecture
Node = Hardware/SystemSoftware
Link = Line Specifications
e.g. Network Architecture
Node = AddressesLink = Protocols
e.g. NETWORK
Architecture
Planner
Owner
Builder
ENTERPRISEMODEL
(CONCEPTUAL)
Designer
SYSTEMMODEL
(LOGICAL)
TECHNOLOGYMODEL
(PHYSICAL)
DETAILEDREPRESEN-
TATIONS (OUT-OF
CONTEXT)
Sub-Contractor
FUNCTIONING
MOTIVATIONTIMEPEOPLE
e.g. Rule Specification
End = Sub-conditionMeans = Step
e.g. Rule Design
End = ConditionMeans = Action
e.g., Business Rule Model
End = Structural AssertionMeans =Action Assertion
End = Business ObjectiveMeans = Business Strategy
List of Business Goals/Strat
Ends/Means=Major Bus. Goal/Critical Success Factor
List of Events Significant
Time = Major Business Event
e.g. Processing Structure
Cycle = Processing CycleTime = System Event
e.g. Control Structure
Cycle = Component CycleTime = Execute
e.g. Timing Definition
Cycle = Machine CycleTime = Interrupt
e.g. SCHEDULE
e.g. Master Schedule
Time = Business EventCycle = Business Cycle
List of Organizations
People = Major Organizations
e.g. Work Flow Model
People = Organization UnitWork = Work Product
e.g. Human Interface
People = RoleWork = Deliverable
e.g. Presentation Architecture
People = UserWork = Screen Formate.g. Security Architecture
People = IdentityWork = Job
e.g. ORGANIZATION
Planner
Owner
to the BusinessImportant to the Business
What How Where Who When Why
John A. Zachman, Zachman International (810) 231-0531
SCOPE(CONTEXTUAL)
Architecture
e.g. STRATEGYENTERPRISE
e.g. Business Plan
The Zachman Framework for IS Architecture
Range of Process Management: Design
The Process Domain
Range of Process Management: Performance
PROCESS RENEWAL GROUPPRG-BPF 1-46
Sub-contractor
Builder
Designer
Owner
Planner
Operating Enterprise
• In a Row, there are interactions among ‘Primitives’ that define the integrated requirements of the row perspective (Integrity)
• Cells are windows on the business
• Depth of design to ‘Excruciating Levels of Detail’ exists in all cells. (Specification)
• A Bill of Materials is not helpful without Assembly Instructions and Configuration Knowledge
The Three Dimensional Zachman Framework (3-D-Z™)
For a download of the rotatable hex go to www.adaptive.com
PROCESS RENEWAL GROUPPRG-BPF 1-47
Adaptive Enterprise Model: A Model Shows a Thousand Pictures
CriticalSuccessFactor =Robust
Scalable Repository not just a Modeling
Tool
www.adaptive.com
‘Zachman Inside’
PROCESS RENEWAL GROUPPRG-BPF 1-48
From Internal Process in Architecture or External Stakeholder
To Internal Process
in Architecture
or
External Stakeholder
From Internal Processin Architecture
or
External Stakeholder
Inputs
Outputs
Guides
Enablers
Do Something
Inputs are processed into Outputs according to Guides using Enablers when Events occur
Information Requirements: Look at Architecture I / O / Gs
Information to be processed
Information produced by processing
Information to be referenced while
processing
PROCESS RENEWAL GROUPPRG-BPF 1-49
From Internal Process in Architecture or External Stakeholder
Inputs
Outputs
Guides
Enablers
Do Something
Inputs are processed into Outputs according to Guides using Enablers when Events occur
Policies and Core Rules are Types of Process Guides
Internal policiesBusiness rules
External Legislation, Regulations & Interpretations
Standards
PrinciplesStrategiesExperience
Best practices
PROCESS RENEWAL GROUPPRG-BPF 1-50
From Internal Process in Architecture or External Stakeholder
Inputs
Outputs
Guides
Enablers
Do Something
Inputs are processed into Outputs according to Guides using Enablers when Events occur
Enterprise Capabilities as Types of Enablers
Information SystemsTechnologies
EquipmentHuman Resources Physical Infrastructure
Locations
PROCESS RENEWAL GROUPPRG-BPF 1-51
Define Technology Principles First: Examples
“Without Big Rules it is impossible to coordinate the IT platform”Peter Keen
“Our Technology Strategy mustbe consistent with ourBusiness Strategy and Culture: We will design for adaptability.”
“Data will be captured once and only onceat the point of entry into the company and shared as broadly as possible”
“All published information will be provided in .PDF”
“All core customer and risk management data mustconform to the company’s enterprise data model”
Standards-based decision making at appropriate level of
detail
PROCESS RENEWAL GROUPPRG-BPF 1-52
interactioncoordination/information execution
multiplefront-offices
multipleback-offices
front-offices
mid-office *
back-offices
“Interface Channels will be linked to processing capability through a common interface standard”
“All functional components will be designed as reusable software components linkable to BPMS orchestration and a Service Oriented Architecture”
“All models will be compliant with industry standards”
Sample Technology Principles for Process Adaptability
* www.mid-office.com
PROCESS RENEWAL GROUPPRG-BPF 1-54
process steward
process manager
process lead
capability manager
specific business
requirement
specific business solution
performance & improvement
feedback
resource effectiveness
feedback
design & improve process
conduct instance of
process
process capabilities
process approach & guidance
specific customer
specific customer
Operations
Management
Many Roles: How many organizations are needed?Governanceprocess executive
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• Overall results responsibility rests with the process manager for all instances of the process in their domain
• Process steward assures health of the process in all domains• Specific instance responsibility rests with process lead• Function manager is also the resource manager and the source of expertise and
resources• Functional resources are allocated to process instances and report to the process lead
Product Management Resources:Defining Potential Customer problem,Business Case for new product,Product Specifications,Pricing,User Manual,Product Profitability.
Software Engineering Resources:Software DesignSoftware BuildSoftware TestSoftware DocumentationSoftware Acceptance
Marketing Resources:Market Research,MarketSegmentation,Marketing Materials,Marketing Mechanisms.
Customer Support Resources:Product Knowledge
Define and Develop Offerings
Strategy Resources:Company Strategy,Market Segmentation,Product Roadmap.
= process= function
Create Awareness and Promote Business
Define and Develop Offerings
Create Awareness and Promote Business
Full Process-managed with Function as a Resource Provider “In-sourced Resources”
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• Process lead provides cross-functional coordination that links sub processes across functions at the instance level
• Function manager’s role is to ensure performance of sub processes within terms and conditions of their SLA and to act as resource manager for the sub process
• Functional Resources report to the function manager
• Overall results responsibility still rests with the process manager for all instances of the process in their domain
• Process steward assures health of the process
Product Management:Defining Potential Customer problem,Business Case for new product,Product Specifications,Pricing,User Manual,Product Profitability.
Software Engineering:Software DesignSoftware BuildSoftware TestSoftware DocumentationSoftware Acceptance
Marketing:Market Research,MarketSegmentation,Marketing Materials,Marketing Mechanisms.
Customer Support:Product Knowledge
Define and Develop Offerings
Strategy:Company Strategy,Market Segmentation,Product Roadmap.
= process
= function
Create Awareness and Promote Business
Full Process-managed with Function as a Sub-process Service Provider: “Outsourced Resources”
Define and Develop Offerings
Create Awareness and Promote Business
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Derive the Process Measurement and Governance Model
Measure and manage the distribution in all domains where this activity applies (same KPI)
Measure and manage the contribution of the component activities all the way down (different KPIs)
Sales activity-steps KPIs
AlignmentTraceability
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Sample 2 Process Architecture Map Diagram
Note:
Lines represent major dependencies only !
Note:
Lines represent major dependencies only !
9. Develop StrategicPlan
10. InterpretRegulations
11. Monitor and EnsureCompliance
13. A cquire Customers
14. Develop Produc ts
3. Make CustomersAw are
1. Fulf ill Orders 8. Provide Post-SalesService
4. Manuf actureProducts
5. Develop andMaintain Facilities
16. Purchas e Supplies
6. Communicate w ithStakeholders
7. Supply HumanResources
11. Provide FinancialServices
12. Provide ITCapability
2. Deliver ProcessChange
ABC WIdget Company Top Level Process Architecture
Enables A ll Others Guides All Others
Legend:
PROCESS RENEWAL GROUPPRG-BPF 1-60
Process / Stakeholder Value-Delivery Matrix
Version 1: Degree of Potential Process Leverage / Value ContributionLow (1) Medium (2) High (3) Blank=Marginal or No Relationship (0)
Pro
c 1
RankingP
roc
2
Pro
c 3
Pro
c 4
Summary
Pro
c 5
Pro
c 6
Pro
c 7
Pro
c 8
2
3
21
+11
2
1
3
...
3
13
+8
1
9
12
2
17
+10
1
3
23
1
19
+11
2
2
21
2
16
+7
3
6
33
13
+6
3
9
11
1
16
+9
2
6
33
3
17
+10
3
1
...
Conduct for all Stakeholder typesat the chosen level of decomposition
Stakeholder Criteria *
Stakeholder 1Stakeholder 2Stakeholder 3Stakeholder 4Stakeholder 5
How much could the process
potentially affect what is important to
the stakeholder
relationship?
gain
Value Creation Goals
& KPI Objectives W
eigh
t
1
1
1
1
1
PROCESS RENEWAL GROUPPRG-BPF 1-61
Process / Stakeholder Performance-Gap Matrix
Version 2: Health of Existing Process / OpportunitySmall Gap (1) Moderate Gap (2) Significant Gap (3)
Pro
c 1
RankingP
roc
2
Pro
c 3
Pro
c 4
Summary
Stakeholder 1Stakeholder 2Stakeholder 3Stakeholder 4
Pro
c 5
Pro
c 6
Pro
c 7
Pro
c 8
3
3
59
+47
1
3
...
1
21
+17
1
12
2
56
+46
1
2
33
2
52
+43
2
3
1
2
46
+38
3
5
3
40
+34
9
21
30
+24
1
11
23
49
+40
4
1
...
Stakeholder 5
1
13
2
3
3 2 2 2 1 2
* Health of Current Process
for the Stakeholder
How well does the current
process meet the future
stakeholder performance
criteria?
Process * Performance
pain
Wei
ght
1
1
1
1
1
Conduct for all Stakeholder typesat the chosen level of decomposition
PROCESS RENEWAL GROUPPRG-BPF 1-62
pain
3
Process Migration Strategy (Boston Grid)
Process Number
2
11 12 33 44 85 56 137 168 149 6
10 1511 712 1213 214 915 1016 11
16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1
Plus other considerations such as: Cost, dependency, politics, culture, …
gainGreatest Value Potential to Business Strategy and Performance
Biggest
Gap
Ranking
PROCESS RENEWAL GROUPPRG-BPF 1-63
determine constraints in any policy, capability, or organization that will hinder changes in the priority processesfind problems with the connection among processes and alignment with required capabilitiesdiscover unexploited knowledge, skills, capabilities or capacity within the organizationproduce funding criteria for continuation or freezing of existing projects and initiation of new onesrecommend approval or freezing of current and planned projectsproduce a proposed program of change
Create Program for Change
P
PROCESS RENEWAL GROUPPRG-BPF 1-64
Enterprise BPM Alignment: Real Repository TechnologiesFeatures:
• Meta-model based• Model Integration from many data sources
•Modeling tools, Visio, Excel, etc• Generation of diagrams and views • Multiple Perspectives
• Impact analysis• Change Notification and Collaboration• Registered Interest and Discussion Groups
• Web accessible and updatable (thin client)• Views and Security (Role-based)• Link to BPMS• Link to operational systems performance feedback (BAM)• OO engine on top of scaleable platform (real DBMS)• Standards-based / open
PROCESS RENEWAL GROUPPRG-BPF 1-66
Develop Stakeholder Relationship Criteria for an ‘Organization-in-Focus’ (eg “They always meet my needs”)
Derive contributing Stakeholder Relationship Criteria for the ‘Process-in-Focus’ (eg “They always deliver the right product in the right quantity to the right place on time”)
Traceability
SelectedProcess
Process Stakeholder Value Expectations
Formulate Process Vision and Stakeholder Goals
Enterprise
PROCESS RENEWAL GROUPPRG-BPF 1-67
Start with Stakeholder Relationship KPI’s for the ‘Organization-in-Focus’ (eg Customer Satisfaction)
Derive Contributing Process KPI’s for the ‘Process-in-Focus’ (eg Percentage of orders delivered on time)
Determine required target results to be deliveredby process transformation project (eg 80% in one year and 99% in two years)
Traceability
SelectedProcess
Process Performance Objectives
Identify Process and Project Performance Improvements Targets
Enterprise
PROCESS RENEWAL GROUPPRG-BPF 1-68
Inputs
Outputs
Guides
Enablers
Assign Human
Resources
Inputs are processed into Outputs according to Guiding Factors using Enablers when Events occur
Decomposing an IGOE Diagram
PROCESS RENEWAL GROUPPRG-BPF 1-69
Assign HumanResources
Review Request Analyze Priorities AnalyzeAvailaibity
Determine Match \Gap
Assign Resources
Sample 1 Lower Process Model DiagramsLevel 3 Decomposition
Provide humanresources
PROCESS RENEWAL GROUPPRG-BPF 1-70
RejectedRequest
Request Details forSkilled Resources
Resource
AllocationInfo.
Skills Inventory
Personal Info
Project Priorities
MBO's
Resource Manager
StaffAvailability
StaffAvailability
Requestor
Requested Resource
Manage Projects
Understand ExistingCommitments
Understand ExistingProjects
Determine Preferences
Review Request
Analyze Priorities
AnalyzeAvailaibity
Determine Match \Gap
Assign
ValidatedRequest
Adjusted AllocationPriorities
ProposedAllocation
Unrealistic
Decisionsoften
political
Goodinfo
Resource Manager
Skills Systems
Resource Manager
Requestor LineManager
Skills Systems
not
WrongSkills
Useless
Biased
Opinionated
Ignored
NotCurrent
Useless
OK
Goodformatbut notcurrent
Too easily swayed by boss
Everthing seems to be a priority
Receivedtoo late
Know what they want
Biased with no consequences
Resource Manager
Sample 1 Lower Process Model DiagramsLevel 3 Partial Process Flow and Analysis
Provide humanresources
PROCESS RENEWAL GROUPPRG-BPF 1-71
Documenting Each Architectural ProcessModel Attributes (each Process and IGOE flow)
Process Characteristics• Process Number/Name(s)• Description(Component Steps/Sub
Processes)• Triggering and Closing Events• Possible Outcomes• Stakeholders Involved & Affected• Organization Unit Performing
Process Value-Added• Business / Stakeholder Value
Contribution• Objectives / CSF’s supported• Key Performance Indicators• Current and Target Measurements
IGOE Information• Flow Number / Name(s)• Description• Source / Destination Processes• Interface Method / Media Type• Frequency / Distribution• Constraints / Problems• Data Attributes (optional)
Process Assessment• What Works Well• What Doesn’t Work Well• Issues / Constraints / Concerns• Root Causes• Opportunities• Quick Wins• Solution Requirements
Note: Some but not all attributes can be graphically depicted in a
notationNo notation can graphically depict
all attributesThink about the purpose of your
communication
PROCESS RENEWAL GROUPPRG-BPF 1-72
Inputs
Outputs
Guiding Factors
Enabling Factors
Inputs Outputs
Enablers
Guides
Business Rules
• Along with process models, event triggers, data definitions and performance specs, Business Rules ( guides to a process) should be documented as part of IT Requirements.
– Define events with possible input conditions for processes and then ask what must and must not happen when that occurs.
• Processes deliver results or status depending on the invoked rule’s action.
– This is often a new event to trigger another process
• Processes invoke a series of rules (constraints or guidelines) for business decisions and process navigation
Business Rules As Process Guides and IT Requirements
This means that the exact path of a
process instance may not be predictable
PROCESS RENEWAL GROUPPRG-BPF 1-73
A path through the process model
From the perspective of the stakeholders external and then internal to the process
Each stakeholder type has available a set of events to trigger the process
Each event may bring varying conditionsthat trigger the affected rules to produce differing results
Each set of events, rules and conditions may initiate actions in different process paths until completed by the accomplishment of the appropriate outcome associated with each path.
Often conveyed as a story with role play.
Can be used as test cases in user acceptance testing and other enabler validation
Describe main scenarios (most likely) and then alternatives or
exceptions (most risky or troublesome)
Business Process Scenario Analysis
PROCESS RENEWAL GROUPPRG-BPF 1-75
ABC (Banking Services) Drivers and Intent
Fictitious banking operations group (ABC) within a large bank (XYZ) that is growing quickly largely through acquisition.
Deals with banking customers directly and serves the banking group’s businesses.
Essentially a wholly owned subsidiary
Planning horizon is 2009
By 2009 Strategic Performance Objectives:– Reduce the cost of servicing a customer account
by 30%– Improve Customer Satisfaction by 30% over
the current 70%
30 X 30 / 09
PROCESS RENEWAL GROUPPRG-BPF 1-76
ABC (Banking Services) Stakeholder Map: Core
Fee-paying Account HoldersRetail ConsumersSmall Business CustomersCommercial CustomersGovernment CustomersCorrespondent Banks
Account Holder Payees
XYZ Business LinesXYZ Credit Card CoPhone BankingXYZ TrustXYZ BranchesIn-store Branchese-bankCommercial BankConsumer FinanceTreasuryXYZ Mortgage CoGovernment Bank
PROCESS RENEWAL GROUPPRG-BPF 1-77
OwnersXYZMinority Shareholders
Governance StakeholdersXYZ Corporate
AuditFinanceHR
Standards OrganizationsProfessional AssociationsRegulatory
Financial ComplianceOperational Risk
Community
StaffEmployeesContractors/Consultants
SuppliersExternal XYZ Suppliers
Consumables VendorsCourierTelecommunications ServicesExternal HRHardware VendorsSoftware VendorsOutsourced ServicesCorrespondent BanksFederal Reserve
Internal XYZ SuppliersXYZ HRXYZ Professional ServicesXYZ Realty Management
Other XYZ corporate servicesXYZ FinanceXYZ MarketingXYZ Legal
ABC (Banking Services) Stakeholder Map: Support to Core
PROCESS RENEWAL GROUPPRG-BPF 1-78
ABC Banking Services: An XYZ Group MemberPlan the ABCBusiness
Govern the ABCBusiness
Manage End-Customer Lifecycle
Handle Transactions
Support non-ABCOperations
Manage AcquisitionConversion Lifecycle
Manage Product /Solution Lifecycle
Provide BankingInfrastructure
Provide Enabling Capability for ABC
PROCESS RENEWAL GROUPPRG-BPF 1-79
An ABC Process for the Staff Lifecycle
Higher level relevant Process
PROCESS RENEWAL GROUPPRG-BPF 1-80
Update Account
Information
Calculate Fees,
Interest, etc.
Determine Product
Business Requirements
Develop -Acquire
Capabilities
Develop –Implement Technology
Infrastructure
Develop ABC Strategies &
Initiatives
Monitor ABC Business & Financial
Performance
Allocate Capable Human
Resources
Establish ABC Methods
and Standards
Monitor Financial
PerformancePrevent Losses
Track Branch and Business
Lines Performance
Design Product Solution
Provide Product
Support to Users
Provide ABC Tools
Process Financial
Transactions
Maintain & Support
Technology
Maintain XYZ Branch and
Business Lines Relationships
Plan for Acquisition Conversion
Procure ABC Goods and Services
Develop Conversion Capability
Establish Resource
Requirementsand Budget
Understand XYZ Group & ABC Markets
Develop non-ABC Policies
and Procedures
Distribute –Communicate Policies and Procesdures
Determine Governance
Requirements
Develop ABC Policies and Guidelines
Monitor ABC Compliance
Develop Financial & Operational Risk Policies
Establish & Maintain
Distribution & Supply Capability
Settle and Resolve
Branches and Channels etc
Terminate Account
Win Customers
Establish Customer
Relationship
Identify Need for Product
Communicate with
Conversion Stakeholders
Report to Stakeholders
Provide Customer
Information
Process Claims
Provide Facilities for
ABC
Deliver Capabilities
Establish & Maintain
Contingency Capability
Convert Customers
Assess Conversion
ABC Banking Services: An XYZ Group MemberProcess Pain – Gain Grid
PROCESS RENEWAL GROUPPRG-BPF 1-81
Inputs
Outputs
Guides
Enablers
Update Account
Information
• Account management policies and rules
• Banking operations guidelines
• Branch and ABC staff
• Bank Products
• Technology applications and infrastructureUpdate Account
Information
Establish Customer
Relationship
XYZ Business
Lines
Fee-paying Account Holders
Process Financial Transactions
Update Account Information
Prevent Losses
Process Claims
Calculate Fees, Interest, etc.
Terminate Account
Develop non-ABC Policies and Procedures
Deliver Capabilities
Provide Product Support to Users
Develop –Implement Technology
Infrastructure
Maintain & Support Technology
Allocate Capable Human Resources
Develop ABC Policies and Guidelines
Develop Financial & Operational Risk
Policies
Monitor ABC Compliance
XYZ Business
Lines
Fee-paying Account Holders
Correspondent Banks
• Product rules, practices and guides
• Governance requirements
Project Scope
• Customer Information (new and changes)
• Account Information (new and changes)
• Customer & Account Records
• Customer Information
(new and changes)
• Account Information
(new and changes)
• Customer & Account Records
• Compliance Reports
PROCESS RENEWAL GROUPPRG-BPF 1-83
Detail
Simplistic
Complicated
Elegant
Complex
Understanding
Lots
Little
Little
Lots
Implicit Challenges in BPM: In Search of Elegance *
Appropriate levels and communication: get the basics right
“A model should be as simple as it can be,
BUT no simpler’”Albert Einstein
"A designer knows he has achieved perfection not
when there is nothing left to add, but when there is
nothingleft to take away."
Antoine de
Saint-Exup'ery
* Burlton elegance model
PROCESS RENEWAL GROUPPRG-BPF 1-84
1. Business change must be performance driven.2. Business change must be stakeholder based.3. Business change decisions must be traceable to the stakeholder criteria.4. The business must be segmented along business process lines to synchronize change.5. Business processes must be managed holistically.6. Process renewal initiatives must inspire shared insight.7. Process renewal initiatives must be conducted from the outside in.8. Process renewal initiatives must be conducted in an iterative, time-boxed approach.9. Business change is all about people.10.Business change is a journey, not a destination
Principles of Process Management