What Every Enterprise Architect Needs to Know about Workflow and BPM

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1 What Every Enterprise Architect Needs to Know about Workflow and BPM Michael zur Muehlen, Ph.D. Center of Excellence in Business Process Innovation Howe School of Technology Management Stevens Institute of Technology Hoboken NJ 1

2 2

3 BPM is NOT about Technology 2

4 3

5 BPM is NOT about Creating Diagrams 3

6 4

7 BPM is NOT about Architecture 4

8 5

9 BPM is about Improving Business 5

10 BPM, BAM, BI, ESB, SOA, BLI, BLA, BLUBB... BPM: The Business Value Question 6

11 All IT is Initially an Expense Information Technology Business Value 7

12 All IT is Initially an Expense Information X Business Technology Value enables creates Process Change 7

13 What is BPM? 8

14 What is BPM? Let s start with the process definition: A Business Process is the temporal and logical sequence of those activities that are necessary to manipulate an economically relevant object toward an overarching goal, creating value for a customer 8

15 What is BPM? Business Process Management is the collection of methods and tools that allow us to answer questions such as: What are our processes? How do we ensure their performance? How do we maintain their compliance? 8

16 How do you make a Cup of Coffee? 9

17 Coffee Lover Thirsty Boil Water Put Coffee in Cup Put Boiling Water in Cup Coffee is Ready The Nescafè Process 10

18 Water is cold no Kettle empty? Boil Water yes Coffee Lover Thirsty Fill Kettle Put Boiling Water in Cup Coffee is Ready No Cup dirty? Put Coffee in Cup Dishwasher Yes Clean Cup The Espresso Machine Process 11

19 The Starbucks Process Make Coffee Hand Coffee To Customer Done Barrista Order cancelled Discard Coffee Coffee Shop Insufficient Payment Cashier Store Open Take Order + Collect Payment Done Coffee Order Payment Household Thirsty Go To Coffee Shop Order Coffee Pay for Coffee Take Coffee Done > 5 min wait Leave 12

20 BPM Questions 13

21 BPM Questions How do we design and communicate this process? 13

22 BPM Questions How do we design and communicate this process? How do we perform this process well? 13

23 BPM Questions How do we design and communicate this process? How do we perform this process well? How do we manage this process well? 13

24 BPM Questions How do we design and communicate this process? How do we perform this process well? How do we manage this process well? How do we maintain compliance to rules and regulations? 13

25 BPM Questions How do we design and communicate this process? How do we perform this process well? How do we manage this process well? How do we maintain compliance to rules and regulations? How should technology support this process? 13

26 Types of BPM Projects Source: Palmer (2007) 14

27 Types of BPM Projects Source: Palmer (2007) 14

28 Scheduled Project Time during First BPM Project Business Case Project Team Selection Process Discovery Documentation Functional and Technical Specification Tools Evaluation and Selection Implementation Testing and Debugging Deployment and Training Source: BPTrends (2006) 15

29 Business Process Innovation Business Process Management Business Process Monitoring Business Process Automation 16

30 Business Process Innovation Business Process Management Manage Change Manage Execution Business Process Monitoring Business Process Automation 17

31 Business Process Innovation Business Process Management Business Process Monitoring Business Process Automation 18

32 Business Process Innovation Business Process Management Notation Standard Business Process Monitoring Business Process Automation 18

33 Business Process Innovation Business Process Management Notation Standard Integration Standards Business Process Monitoring Business Process Automation 18

34 Business Process Innovation Business Process Management Notation Standard Integration Standards Interaction Standards Business Process Monitoring Business Process Automation 18

35 Business Process Innovation Business Process Management Notation Standard Integration Standards Standard Metrics Business Process Monitoring Interaction Standards Business Process Automation 18

36 Business Process Innovation Business Process Management Notation Standard Integration Standards Audit Standards Standard Metrics Business Process Monitoring Interaction Standards Business Process Automation 18

37 Enterprise Process Frameworks 19

38 BT Process Hierarchy Level A Business Activities Level B Process Groupings Business Activities Process Groupings Objectives Ownership Scorecard Services Strategic Process Description Level C Core Processes Level D Business Process Flows Level E Operational Process Flows Level F Detailed Process Flows Core processes Delivery Units Products Processes Delivery Teams Systems Sub Processes Roles System Functions Detailed Processes Detailed Roles Transactions Tactical Process Description Operational Process Description Source: British Telecommunications plc

39 BT Process Hierarchy Level A Business Activities Level B Process Groupings Level C Core Processes Level D Business Process Flows Level E Operational Process Flows Level F Detailed Process Flows Business Activities Objectives Scorecard Process Groupings WHAT Ownership Services Core processes Delivery Units Products Processes Delivery Teams Systems Sub Processes Roles System Functions Detailed Processes Detailed Roles Transactions Strategic Process Description Tactical Process Description Operational Process Description Source: British Telecommunications plc

40 BT Process Hierarchy Level A Business Activities Level B Process Groupings Level C Core Processes Level D Business Process Flows Level E Operational Process Flows Level F Detailed Process Flows Business Activities Objectives Scorecard Process Groupings WHAT Ownership Services Core processes Delivery Units Products Processes Delivery Teams Systems HOW Sub Processes Roles System Functions Detailed Processes Detailed Roles Transactions Strategic Process Description Tactical Process Description Operational Process Description Source: British Telecommunications plc

41 Top-Down Strategy Level A Business Activities Level B Process Groupings Level C Core Processes Level D Business Process Flows Level E Operational Process Flows Level F Detailed Process Flows Business Activities Objectives Scorecard Process Groupings Core processes Processes Strategy Top-Down Project Ownership Delivery Units Delivery Teams Services Products Systems Sub Processes Roles System Functions BPM Application Detailed Processes Detailed Roles Transactions Strategic Processes/ Rule Description Tactical Processes/ Rule Description Operational Processes/ Rule Description 21

42 Process Architecture: Benefits Allow to short-circuit process identification phase Provide neutral map for navigation along processes Standardize terminology across the enterprise Enable benchmarking across organizations Designed based on industry best practices 22

43 Process Architecture: Fortune 100 Methods Enterprise Process Architecture Organization Level concept Convention handbook Modeling handbook Corporate Modeling Service Roles & Responsibilities Process Owners Process Managers 23

44 Architecture Contents Glossary and Data Structures Common terminology that Business & Systems Analysts can refer to Business Capabilities and Process Definitions What capabilities do you have, and what processes do you support Senior managers and business users have a common vocabulary of processes Software purchases or outsourcing agreements are simplified Consistency across business partners Library of Cross-Organizational Messages 24

45 Example: ACORD Insurance Business is assemblage of standard process building blocks Use for Internal integration Integration across distribution channels Integration with third-party providers We are about the business content that goes into the process 25

46 Process Framework Benefits Frameworks save time Coloring a picture vs. drawing a picture Frameworks reduce risk Incorporate best practices Frameworks enable business agility Provide business context Frameworks reduce costs Enterprise overview helps identify areas in need of improvement Frameworks enable incremental development 26

47 BPM - Technical Evolution 27

48 The Role of BPM Technology The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency. 28

49 No BPM = Monolithic Enterprise Application Built as a unit, Internals not visible User Interface built in for all functions In order to extend to a new function, need to call in a programmer... User Interface Program and Logic Internal Protocols are Proprietary list Accts new Acct update Acct Enterprise Application Account Management delete Acct C, C++, Visual Basic, Etc.

50 BPM 1990: Workflow in the Brain UI Screens Application Logic in Monolithic Program Background Check Conformance Guidelines list Accts new Acct update Acct Enterprise Application Account Management delete Acct

51 BPM 1993: Task Management Human BPM/Workflow: background check check guidelines create account UI Screens Application Logic in Monolithic Program Launches UI Background Check Conformance Guidelines list Accts new Acct User accesses original UI directly update Acct Enterprise Application Account Management delete Acct

52 BPM 1996: Workflow Routing Human BPM/Workflow: background check check guidelines create account UI Screens Application Logic in Monolithic Program Launches UI Background Check Conformance Guidelines list Accts new Acct User accesses original UI directly update Acct Enterprise Application Account Management delete Acct

53 BPM 2002: Services Integration UI connects user to BPMS, not the back-end applications Enter Information backgr. check rules check Review create account Services Interfaces Application Logic and SOA Background Check Conformance Rules list Accts new Acct update Acct Enterprise Application Account Management delete Acct

54 BPM 2007: Composite Services Enter Information Check Review Create account Composite Service ESB/BPEL list Accts new Acct update Acct delete Acct Application Logic and SOA Background Check Rules Enterprise Application Account Management

55 BPM 2007: Composite Services Enter Information Check Review Create account Composite Services ESB/BPEL Application Logic and SOA Background Check Rules list Accts new Acct update Acct Enterprise Application Account Management delete Acct

56 BPM 2007: Composite Services Enter Information Check Review Create account Composite Services ESB/BPEL Application Logic and SOA Background Check New Rules list Accts new Acct update Acct Enterprise Application Account Management delete Acct

57 BPM 2007: Composite Services Enter Information Check Review Create account Composite Services ESB/BPEL Application Logic and SOA Background Check New Rules list Accts new Acct update Acct Enterprise Application Account Management delete Acct

58 BPM 2007: Composite Services Enter Information Check Review Extra Audit Create account Composite Services ESB/BPEL Application Logic and SOA Background Check New Rules list Accts new Acct update Acct Enterprise Application Account Management delete Acct

59 Separation of Responsibility Business Retains Control of Assignment of Responsibility Groups, Roles, Skills Deadlines Alerts, Reminders, Escalations Order of Tasks Addition of Manual Tasks User Interface Enter Information Check Review Create account IT Retains Control of Computational Logic Data Representations Scalability / Performance Interoperability Master Data Management ESB/BPEL Background Check New Rules list Accts new Acct update Acct Enterprise Application Account Management delete Acct 36

60 BPM Governance 37

61 Product Line 1 Product Line 2 Product Line 3 Product Line 4 Product Line 5 Process Group 1 Process Manager Process Group 2 Process Manager Process Group 3 Process Manager Process Group 4 Process Manager Process Group 5 Process Manager Leveraging Vertical and Horizontal Expertise Compare Sainsbury (2006) 38

62 Source: Sainsbury (2006) Process Ownership 39

63 Focus Role Objective Level Corp. Region Division Strategic Process Sponsor Process Framework Executive Process Executive Facilitate & Drive Method & Compatibility Standardize & Optimize Operational Process Owner Process Manager (recommended) Process Performance Management Implement & Optimize Shared Service Process DB Manager Process Modeler Responsible for ARIS Modeling Processes BPM Roles - Example 40

64 The BPM Maturity Model Business Process Management Maturity Strategic Alignment Governance Method IT People Culture Process Improvement Plan Process Roles and Responsibilities Process Design & Modeling Process Design & Modeling Process Skills & Expertise Process Values & Beliefs Strategy & Process Capability Linkage Decision Making Processes Process Implementation & Executions Process Implementation & Executions Process Education & Learning Process Attitudes & Behaviors Process Architecture Process Metrics & Performance Linkage Process Control & Measurement Process Control & Measurement Process Collaboration & Communication Responsiveness to Process Change Process Output Measurement Process Management Standards Process Improvement & Innovation Process Improvement & Innovation Process Knowledge Leadership Attention to Process Process Customers & Stakeholders Process Management Controls Process Project & Program Management Process Project & Program Management Process Management Leaders Process Social Networks Source: Rosemann & DeBruin 2006

65 Agile BPM Maturity Satisfying all 30 facets of the BPM Maturity Model takes a long time A subset of the BPM Maturity model is needed to guide an organization toward a rapid deployment of BPM technology Example: Staged Deployment of Maturity Initiatives Modeling Tool Extended use of Tool 42

66 Choosing the Right Strategy There is no single right pathway for all organizations If command-and-control infrastructure: Methods come first, culture comes later If participatory organization: Culture and people need to be nurtured earlier in the process If centralized organization: Building a central repository can be undertaken early in the process If decentralized organization: Leveraging individual projects to facilitate quick wins is important, but an integration strategy for the project results later on needs to be instituted early on 43

67 3 Challenges Ahead 44

68 45

69 50 Years of IT Lock-Down 45

70 Management by Magazine 45

71 Business People Acquiring IT Skills 45

72 Thank You Questions? Process Thought Leadership Michael zur Muehlen, Ph.D. Howe School of Technology Management Stevens Institute of Technology Castle Point on the Hudson Hoboken, NJ Phone: +1 (201) Fax: +1 (201) Web: 46

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