processes and the process management evolution s ession 2 ann rosenberg 16th februar 2012

Processes and the Process Management EvolutionSession 2

Ann Rosenberg16th Februar 2012

© 2011 SAP AG. All rights reserved. 2MBPM/F2012/Ann Rosenberg

Agenda

Process and process parameter - definition Classical process management frameworks: TQM, Lean, Six Sigma,

BPR etc. o Process Management Evolutiono Process management modeling notationso Process Management Technology (BPM Technology)

The Evolution of Enterprise Systems Process Classification Frameworks RACI framework BPM Technology (business to model and modeling to execution) Group Exercise Final Exercise types Session 3


Overview of all sessions

Session/ uge Dato Tid Rum Tema Underviser

1/5 02/02 17-21 2A52 Introduction to Business Process Management and the overall semester Ann

6 09/02 No teaching2/ 7 16/02 17-21 2A52 Processes/ IT and the Process/ IT Evolution Ann3/ 8 23/02 17-21 2A52 Business Model 1: Focus Strategy

Guest: Danish Defense: Torben Claus DahlAnn

Claus4/9 29/02

Wed17-21 2A52 BPM Model 2: Focus Business Model

Guest: Flügger: Merete Skov KristensenAnn

Merete

10 8/03 No teaching 5/11 15/03 2A52 BPM Model 3: Linking Strategy to Operations Ann

6/12 22/03 17-21 2A52 BPM Governance 1: BPM Strategi Ann7/13 29/03 17-21 2A52 BPM Governance 2: BPM Set up phase Ann8/14 4/4

Wed- 2A52 BPM Governance 3: BPM Transition

Guest: Posten/ SAP: Morten ChristiansenAnn

Morten9/15 12/4 17-21 2A52 BPM Governance 4: BPM Continuous Improvement and Supporting BPM

Activities Ann

10/16 19/4 17-21 2A52 Processes and Game changing Technology (Cloud, Mobility, In Memory) and Value-based Architecture DesignGuest: Mariano Kristensen

AnnMariano

11/17 26/4 17-21 2A52 BPM and EAGuest: John Gøtze

John Ann

12/18 03/5 17-21 2A52 BPM and Value Management Guest: Christian Thisgaard

Ann Christian

13/19 10/5 17-21 2A52 BPM and Green Processes/ Sustainability Ann 14/20 17/5

Wed- 2A52 Process based implementations

Guest: Jens Theodor NielsenAnn

Theodor


Purpose of the session

I denne session vil vi gennemgå, hvad en process er og den historiske udvikling, der er sket indenfor process management. Vi vil gennemgå nogle af de mest klassiske process management frameworks såsom Total Quality Management (TQM), Lean Manufacturing, Six Sigma, Business Process Reengineering (BPR), Business Process Engineering (BPE) mv. Sessionen vil illustrerer hvor, hvordan og hvorfor denne udvikling har været nødvendig. Den studerende vil lære at skeldne mellem de forskellige process management frameworks inklusive hvorfor denne udvikling er fundet sted og dernæst hvordan man definerer og arbejder med processer inklusive de parameter der understøtter en process. I sessionen vil vi ligeledes se på nogle af de forskellige process modeling værktøjer som anvendes i dag og hvorfor der er en stigende brug af disse værktøjer (Business to model and modeling to execution).

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Process and process parameter - definition


Definition of a Business Process 1/2

A business process begins with a mission objective and ends with achievement of the business objective. Process-oriented organizations break down the barriers of structural departments and try to avoid functional silos.

A business process can be decomposed into several sub-processes, which have their own attributes, but also contribute to achieving the goal of the super-process. The analysis of business processes typically includes the mapping of processes and sub-processes down to activity level.

Business Processes are designed to add value for the customer and should not include unnecessary activities. The outcome of a well designed business process is increased effectiveness (value for the customer) and increased efficiency (less costs for the company).


Definition of a Business Process 2/2

There are three types of business processes:

Management processes, the processes that govern the operation of a system. Typical management processes include "Corporate Governance" and "Strategic Management".

Operational processes, processes that constitute the core business and create the primary value stream. Typical operational processes are Purchasing, Manufacturing, Advertising and Marketing, and Sales.

Supporting processes, which support the core processes. Examples include Accounting, Recruitment, Call center, Technical support.

http://en.wikipedia.org/wiki/Corporate_Governance

http://en.wikipedia.org/wiki/Strategic_Management

http://en.wikipedia.org/wiki/Core_business

http://en.wikipedia.org/wiki/Purchasing

http://en.wikipedia.org/wiki/Manufacturing

http://en.wikipedia.org/wiki/Advertising

http://en.wikipedia.org/wiki/Marketing

http://en.wikipedia.org/wiki/Sales

http://en.wikipedia.org/wiki/Accounting

http://en.wikipedia.org/wiki/Recruitment

http://en.wikipedia.org/wiki/Call_center

http://en.wikipedia.org/wiki/Technical_support


The Business Process Lifecycle


ASAP Methodology including BPM Technology – BPM, AML, SOA and Value perspective

The 4 lifecycles

To BeDesign

Process OwnerProcess ArchitectBusiness Architect

CIOEnterprise Architect

Application Consultant

Project ManagerProgram/Portfolio

Manager

Business Unit OwnerBusiness ArchitectBusiness Analyst

Process/Performance Gov. IT Gov. Project/Program Gov. Business Governance

Process Management

Performance Management

Value Management


Event 1

Process Step 1

Event 2

Entity

Role

Information Carrier

Document

Application

Entity

Process and process parameters - Definitions


Process parameters


The Evolution of Process Management


Toyota Production System


4 P´er


LEAN – fokus: Fjerne Spildtid


Six Sigma – fokus: Forbedre process kvalitet


Six Sigma - DMAIC


BPR


TQM

Classical process management frameworks: TQM, Lean, Six Sigma, BPR etc. Process Management EvolutionProcess management modeling notations


It‘s green

Why Process Modeling matters?


Thank you

Thank you, I did see this myself

If you know and see everything better, why don‘t you drive?

It‘s green

Why Process Modeling matters?


Aligning Sender and Receiver

ReceiverSender

It‘s green

Pure Information+ Undertone+ Wording+ Language+ …

Pure Information+ Personal Experience+ Personal Mood+ Personal Education+ Personal Interpretation+ …

Communication Channel


“Modeling only generates more efforts“How to become Model minded?

Information about a Process

ReceiverSender

Adsf asdf adsfasdfasd dsfasdfwd fycvx dgfasdf ysdv yds fgqadf ysfydfdsfa

Ads wf e sd f dsf ad sf a df we s fd fa sd fa sfweedf asd f asd vcfy sdfdwew f sad

Asfd dsaasdf adf ds fas fd wf wf fyads fy sxd f ew f asd fy sf dw sdw fa sd

Visio Visio ?


Process Model

ReceiverSender

Prepare DraftContract

CEM

ContractApprovals

Beschwerde mitKunde klären

Beschwerdegeklärt

Ticket erstellen

Zuständigkeitprüfen

Ticket zurBearbeitungweiterleiten

Hilfe erforderlich Klärungerforderlich

Remoteklärungerforderliche

Klärung ohneRemote

Klärung mitRemote

Aligning Sender and Receiver


Modeling Convention vs. Modeling Tool

Visio

Powerpoint

Aris

...

Modeling Notation / Convention

Textual ProcessDescription

Prepare DraftContract

CEM

ContractApprovals

Beschwerde mitKunde klären

Beschwerdegeklärt

Ticket erstellen

Zuständigkeitprüfen

Ticket zurBearbeitungweiterleiten

Hilfe erforderlich Klärungerforderlich

Remoteklärungerforderliche

Klärung ohneRemote

Klärung mitRemote

+

Graphical ProcessDescription

=

Modeling Tool

https://portal.wdf.sap.corp/irj/go/km/docs/corporate_portal/WS%20HRPP/Process%20Office/BPM/SAP_Process_Office_Conventions.pdf


PROCESS HIERARCHY

Activity

MainProcess

Process

ProcessArea

Level 1

Level 2

Level 3

Level 4

Extendenterprise map

http://www.sitesatlas.com/Atlas/PolAtlas/polnav.nvm


What is a Model? Why model processes?

“The RealThing“ Viewpoint

The Model

Represen-tation

MODELER

IT EXPERTS

AUDITORS

At a point in time

Analyze, design, and optimize business processes.

The Reason

MANAGERS, BUSINESS PEOPLE

Derive requirements on IT landscape and software.

!

Demonstrate compliance (e.g. SOX) or get certification (e.g. ISO).

… a representation of the real thingModels are not what happens – they are a representation of what happens or happened or should happen!

Models are not what happens – they are a representation of what happens or happened or should happen!

!… built to a certain scale and level of detail for a specific purpose… built to show a viewpoint (here: process focus)… representation of a snapshot in a point of time


What Makes A Good Model?

CO

NT

EN

T Q

UA

LIT

Y

EASY-TO-READ

FAITHFUL TO BUSINESS REALITY

UNIFORM

COMPARABLE

FORMALLY CONSISTENT

COMPLETE

UN-AMBIGUOUS / CLEAR

SUSTAINABLE

CONTENT-WISE CONSISTENT

FO

STER

HIG

H Q

UA

LITY

PR

OC

ESS M

OD

ELS

ST

RU

CT

UR

AL

QU

AL

ITY

The Model

AttributesGoal


Guiding Principles for Good Modeling

!

Models must contain only relevant elements,i.e. only aspects that are important with respect to the selected space of business reality the project goals

shall be modeled in order to keep model complexity manageable.

Models must be efficiently built, i.e. modeling effort must be kept low, modeling must be prioritized according to most relevant aspects, models must be reusable, flexible, adaptable and sustainable for future

use.

Models must be correct and consistent.

Models must be comparable.

Models must be well-structured, intuitively understandable, transparent, and easy-to-read.

Classical process management frameworks: TQM, Lean, Six Sigma, BPR etc. Process Management EvolutionProcess management modeling notations

The Evolution of Enterprise Systems


The Evolution of ArchitectureWhy do we need a new implementation approach

BusinessSilos

StandardizedTechnology

OptimizedCore

BusinessModularity

DynamicVenturing

IT capability

Local IT applications

Shared technical platforms

Companywide standardized processes or databases

Plug-and-play business process modules

Seamless merging with partners’ systems

Businessobjectives

ROI of local business initiatives

Reduced IT cost Cost and quality of business operations

Speed to market; strategic agility

ROI of new business ventures

Who defines applications

Local business leaders

IT and business unit leaders

Senior management and process leaders

IT, business, and industry leaders

IT, business, and industry leaders and partners

Strategic implications

Local/functional optimization

IT efficiency Business/operational efficiency

Strategic agility Organic reconfiguration

Source: Ross et. al, 2006

Architecture Maturity Have Change To Business Modularity and Dynamic Venturing


Changing Business Needs drive IT ArchitectureEvolution of Enterprise Systems

Business Needs

Business Agility

Integration ofCore Processes

Global Rollouts &Integration of Business Partners

Operational Excellence

Purchasing Sales

FinanceManu-

facturing

Database

Database-centric

SOA-centricEAI-centric

ITArchitecture

Mainframe Client-Server Internet SaaS Cloud

Source:: Møller (2008)

OngoingTransformation of Processes and Business Networks

Orchestrated

SCM

SRM

PLM

B2E

EAI

B2C

B2B ERP

CRM

CPM

HRM

Heterogeneous Landscape

(SAP, non SAP)

ProcessModels

Applicationlifecycle

Semantic Integration

ProcessModels

On DemandOnPremise

On Device


Timeless Software


Value Chains

Procure to Pay

Order to Cash

Hire to Retire

Budget to Report

Plan to Fulfill

Information Technology

Business Suiteapplications

Technology Components

Processes are the linchpin between your Value Chain and our Solution WorldSaaS

ByD…

Business Domain

Vision, Strategy

Business Model

Value Chains

Technology Domain

Solutions

Applications

Technology Components

BI

Third Party

Processes remain the Linchpin of Biz/IT Alignment Why do we need a new implementation approach

Process Classification Frameworks


APQC – Process Classification Framework

PCF:Process Classification Framework developed by APQC (American Productivity & Quality Center)

Source:

http://www.apqc.org/portal/apqc/site


APQC – Process Measures

As the world’s No. 1 most used management tool*, benchmarking is a must for organizations that want to survive—and thrive—in an increasingly competitive marketplace. Knowing where you stand is the first step in getting better.

Source: http://www.apqc.org/benchmarking

Raci framework


BPM Methodology at a Glance

As-IsAnalysis

To-Be Design

SolutionTransformation

Process Scanning

1 2 3 4

1.1 Understand high-level business vision and strategy

1.2 Identify business success factors

1.3 Calibrate IT topics

1.4 Define high-level process landscape

1.5 Prioritize processes

2.1 Assess reference content

2.2 Identify relevant process parameters and classification

2.3 Document as-is processes and process flow

2.4 Analyze processes and identify weaknesses

2.5 Identify interdependencies and cluster weaknesses

2.6 Assess and prioritize weakness clusters

2.7 Analyze as-is IT architecture

2.8 Consolidate roles, systems, information carrier etc.

3.1 Design to-be IT architecture

3.2 Develop weakness cause elimination approach for all relevant weakness clusters

3.3 Create to-be process definition and map solutions

3.4 Detail process description on activity level

3.5 Consolidate roles, systems, information carrier etc.

3.6 Derive necessary adoptions of the organizational structure

3.7 Develop business case

Activities for all Solution Tracks

4.1 Elaborate solution approach per business process

4.2 Develop transformation roadmap

4.3 Transform IT architecture

4.4 Identify requirements for master data concept

Solution Tracks Core Configuration Core enhancement SOA/Composition Third Party Solution

Detailed to-be design for weakness elimination regarding all aspects evaluated during as-is

IT capabilities

Clearly defined and agreed project goal

List of prioritized processes to be analyzed in detail

Identify relevant architecture topics

Prioritized and clustered list of weaknesses regarding process, organizational or IT technical aspects

BPM Blueprint that provides details of identified solution tracks and their relevant contents


Typical weaknesses in processes can be structured by three criteria

Typical process weaknesses

Process flow Organizational structure System support/data structures

Loops Decentralized activities Inputs not necessary, waiting times Long lead times Not enough information for process

owners Goal of the process not specified High number of interfaces Low quality of process output No quality control for process results No process standardization where

possible Big product and service portfolio

which leads to complex processes No outsourcing of processes which

are not core to the customers business

Not enough process automation …

Pure functional organizational structure (no process ownership across departments)

Responsibilities not clearly assigned Overlapping responsibilities Decision processes take too long No fit of competencies and

responsibilities (governance) Wrong degree of centralization and

decentralization Not enough transparency …

Systems do not support the processes (degree of automation)

Missing functionalities Redundant systems support User interface not user friendly Low data quality, redundant data No integration Slow information access for process

owners System support not standardized …


Business Process Description – As-Is Documentation

Process steps

Involved Business Units

Businessobjects

Business rules

R: Responsible; person who carries out the activity

A: Accountable; person who is in charge

C: Consulted; person asked before carrying out the activity or supporting the activity

I: Informed; person has to be informed


Identified Process Weaknesses have to be Clustered

Cluster all weak-nesses due to interdependencies and similarities

Develop one solution concept for each different weakness clusterSame cause for

identified weaknesses Similarities

BusinessProcessesanalyzed

Same cause for identified weaknesses Similarities

BusinessProcessesanalyzed


Definition of Key Performance Indicators (KPI) and Process Performance Indicators (PPI)

KEY PERFORMANCE INDICATORS KPIs represent business goals that a company wants to

achieve on a rather strategic level. They are qualitative or quantitative assessments of a companies performance regarding the company goals and can either be financial or non- financial.

They are used by business owners to track the strategic performance against business goals

PROCESS PERFORMANCE INDICATORS• PPIs represent process goals that a company wants to

achieve on a rather operational level. They quantify the performance of a process along the dimension time, cost, or quality. They can be measured directly by data that is generated within a specific process flow.

• They are used by process owners in business process management for process controlling and continuous optimization.

ExamplesRevenue GrowthEmployee Turnover# of New EmployeesLicense Revenue per product in €

ExamplesCost: Engagement costs per applicantTime: average cycle time to fill a position Quality: Miss hire ration

Source: BPM Governance (Adapted from the book: Business Process Management – The SAP Roadmap, 2009)

BPM technology (business to model and modeling to execution)


Modeling Activities in Process Management


Synchronize Design With Execution via Business Process Management Suites

The Model (as Metadata)Is Used to Orchestrate the Process

BPMSs create and dynamically execute explicit process models.Source: From Gartner, Janelle Hill – BPM Summit, London 2008

Group Exercise


Exercise

For den udleveret virksomhedscase defineres processen ved anvendelse af et RACI framework inklusive process parameterne.

Der vil være mulighed for at modelere processen i i ARIS Express

http://www.ariscommunity.com/aris-express

http://www.ariscommunity.com/aris-express

Final Exercise types

Session 3 BPM Framework – Metode og modellerCase: SAP


Session 3

processes and the process management evolution s ession 2 ann rosenberg 16th februar 2012

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