Business Process Frameworks

Transcription

1 SPOTLIGHT Volume 3, Number 1 March 23, 2010 March Sponsor Business Process Frameworks The whole area of "Business Process Frameworks" is vague because the word "framework" is used in so many different ways. For awhile it seemed that everyone would agree to use the phrase "Operation Reference Framework," but that has gone out of vogue. So, we are left with "Business Process Framework" and the need to be very clear about our meaning. We use the term "Business Process Framework," or BPF, to refer to a standard or template that defines a generic business process architecture. In essence, such an architecture provides a user with a description of the processes making up the architecture usually defined to about three levels of depth and a set of metrics that can be used to measure those processes. A BPF may, in addition, include descriptions of best practices for implementing the processes in the framework and may also include a standard approach to implementing the framework in one or more software technologies. Most BPFs have been created by a consortium of user companies that define the framework to 1) assure that they have a common way of talking about their processes, and 2) to provide members with support as they create their own specific business process architectures. The best known example of a BPF is the Supply Chain Council's SCOR (Supply Chain Operation Reference) framework.

2 Almost equally as well known are the TeleManagement Forum's etom framework and the UK government/itil Foundation's IT Infrastructure Library (ITIL) framework. Many would also add the APQC's Business Process Framework to this list. Let's consider each to provide an idea of the range of things that might be included under the general umbrella of a BPF. The overall argument for the use of Business Process Frameworks says a lot about the overall state of business today. A supply chain is not usually confined within the boundaries of a single organization. It is usually made up of a network of companies that are working together to move raw materials to one location, to move parts to another, to assemble, to move assemblies to warehouses and to ultimately deliver products to customers. A common network may involve anywhere form 5 to 50 companies. Understanding what can go wrong with such a network isn't a simple matter. We aren't just talking about value chains that cut across departmental silos anymore. To understand a worldwide supply chain process that cuts across many different companies requires a whole new level of process analysis. It's hard enough to agree on a common vocabulary when everyone is working for a single company. It is a real challenge to do so when we are talking about ten different companies located in different counties. A business process framework provides a common language that all of the participants can use to describe the basic elements of the process in question. Moreover, as companies increasingly outsource subprocesses, it is more important then ever that someone maintains an overview. It isn't enough to pay a company in another country to

3 manufacture a key part and forget it. If that company fails to deliver the part, your processes come to a halt and your customers begin to complain. You can outsource a subprocess but if you are closer to the customer, you had better have someone working for your company who is the process manager for the entire supply chain and who knows as soon as a bottleneck occurs and can plan accordingly. A common process modeling framework provides everyone involved in a worldwide supply chain with a common way of understanding and monitoring the flow of goods and services through a supply chain. In a similar way, if the outsourcer is providing software services, a common way to talk about IT services and the processes being supported is of considerable value. And, of course, the problem isn't limited to supply chains. A phone call from the US to India may get routed through switching units owned by 5-10 different companies. Each will want a bit of the fee to compensate for their effort. In other words, even though some of the companies involved in the supply chain may be competitors, on a day-to-day basis they must also cooperate to deliver service to their customers. Thus, all telecom companies need a common way to talk about their processes and to identify problems when they occur. Today's process architecture group is as likely to be working with other process people from other companies as they are to be working with people within their own organization. Or, in the case of a merger or acquisition, they may be working to quickly agree on new, common processes. In other words, being able to describe your own process architecture in a way that makes sense to your key business partners is important and will become more so in the near future.

4 This trend has led a growing number of companies to join consortiums that provide business process frameworks or to work with other companies to create a common business process framework. Some of the frameworks, like SCOR, are very mature and others are new or still being developed. We see this trend as an important advance in business process development, and we have published quite a number of articles on Business Process Frameworks. Here are some of the articles we have published on some of the leading business process frameworks. Supply Chain Council's SCOR The Supply Chain Council is a consortium of some 900 companies that joined together to try to improve supply chain operations. Supply chains frequently involve multiple companies and it is common to find several companies working together with SCOR to define and improve an international supply chain. SCOR provides three levels of processes, a SCORcard, and best practices for each process in the framework. An Introduction to the Supply Chain Council's SCOR Methodology -- Paul Harmon - January 01, 2003 Here is a detailed description of how one uses the Supply Chain Council's SCOR Framework to analyze and design a new supply chain process. I wrote this article just after taking a SCC class in SCOR. Several of the best things we've published on frameworks and SCOR were written by Joe Francis, who wrote our Managing BPM Column for several years and who is currently the Executive Director of the Supply Chain Council. Here are a couple of Joe's best Columns, along with several Articles written by supply chain practitioners.

5 Managing BPM: Bootstrapping -- Joe Francis - December 02, 2003 This month we launch a new Column by Joe Francis, a senior BP manager at HP and the Chair of the Supply Chain Council. In his first Column, Joe Francis talks about how his group at HP decided to extend the SCOR framework-based approach and use frameworks on a wide variety of HP projects. Managing BPM: The IT Supply-Chain SCORcard -- Joe Francis - March 06, 2007 This is the third in a series of four Columns on applying SCOR-based BPM techniques to the IT Supply Chain. In this Column, Joe demonstrates how to set up an IT SCORcard for benchmarking, and for aligning performance with corporate strategy. Managing BPM: The IT Supply-Chain Material Flow -- Joe Francis - June 05, 2007 This is the fourth in a series of informative Columns on applying SCORbased techniques to the IT Supply Chain. In it, Joe Francis demonstrates how to create a mapping technique to manage the IT infrastructure around field automation and how to implement SCOR Processes to identify the sources of the gap between a company's actual performance and its performance potential. Managing BPM: The Normal Modeler -- Joe Francis - February 07, 2006 One of the big mistakes BPM teams make when they use reference frameworks is to try to force business process experts to use the vocabulary of the reference model to describe their processes. Joe Francis discusses this problem and others and suggests more appropriate ways to use frameworks. Managing BPM: Gestures and Recipes --

6 Joe Francis - March 01, 2005 This month, Joe Francis considers the recent evolution of process thinking, from primitive gestures where new workers do what older workers do, to recipes and languages that allow us to encode rules in frameworks. Why Working With Reference Models Increases Process Innovation -- Albrecht Ricken - February 07, 2006 Albrecht Ricken and Ansgar Steinhorst have both spent the past 15 years working with global companies on ERP and Supply Chain systems. In this Article they consider how a business framework like SCOR can lead to dramatic improvements. Using Lean, Six Sigma, and SCOR To Improve Competitiveness -- Dan Swartwood - October 07, 2003 Dan Swartwood, a senior consultant for PRAGMATEK, describes how Lean, Six Sigma, and SCOR are evolving toward an integrated framework for tackling supply chain redesign. Book Review: Supply Chain Excellence by Peter Bolstorff -- review by Paul Harmon, July 01, 2003 This is the first book to provide a detailed description of the Supply Chain Council's SCOR framework. It walks supply chain managers through all the steps involved in analyzing and designing an improved supply chain. Effective Supply Chain Strategy: Take This Strategy Test to Check How Your Company SCORes -- Peter Bolstorff - July 11, 2006 Peter Bolstorff is the author of the leading book on the SCOR methodology. In this insightful article on supply chain strategy, he offers a test that you can take to determine how well your organization has mastered an effective supply chain

7 strategy. ProSCOR: ProVision Supply-Chain Operations Reference Models -- ProForma, February 04, 2003 This White Paper, by ProForma, describes how companies can use ProVision to support the SCC's SCOR model. The Value Chain Group's VRM The Value Chain Group is a consortium of companies working to establish a complete framework for the entire value chain. We plan to publish more on their efforts in the near future. Meanwhile here is one Article that one of their principle contributors wrote. Value Chains, Value Streams, Value Nets, and Value Delivery Chains -- George Brown - April 07, 2009 Recognizing that there has been a considerable amount of discussion about value chains and related concepts by those involved in business process change, George Brown thinks it's time for clarification of the terminology resulting from those discussions. In this Article, he discusses the evolution and current use of these concepts and provides a clear understanding of the Value Chain Group's framework. The TeleManagement Forum's etom etom is a nice example of an Industry framework. It doesn't focus on a single process, but, instead, describes all the processes a telecom company might need to create a process architecture. It provides metrics and an underlying IT infrastructure for the processes. The TeleManagement Forum's etom Framework - Paul Harmon - April 22, 2003

8 This April BPTrends Advisor discusses the TeleManagement Forum, a consortium of Telecommunication companies working together to share information about business and IT developments in telecommunications, including etom, their industry specific business process framework. TMF White Paper on NGOSS and MDA - John Strassner - April 06, 2004 The TeleManagement Forum has been working on a business process framework, etom, and an associated enterprise framework, NGOSS. In this paper, John Strassner, Joel Fleck, Jenny Huang, Cliff Faurer and Tony Richardson describe the similarities between the TMF's NGOSS program and the OMG's MDA initiative. etom and ITIL -- Jenny Huang - January 04, 2005 Jenny Huang, an OSS Architect and Standards Strategist at AT&T Labs, describes how AT&T is using the best of the TeleManagment Forum's etom and NGOSS standards and combining that framework with the IT Infrastructure Library (ITIL), a British IT service delivery and support standard that is rapidly becoming a de facto international standard. BPM in Greece -- Paul Harmon - July 28, 2009 Finally, here's an Advisor I wrote after attending a conference in Greece in the Spring of Skim and then read the section on Cosmote, a Greek mobile phone company that used etom to quickly define their own process architecture and then to unify their processes with those of a variety of phone companies they acquired in recent years. ITIL

9 ITIL is an example of a narrow standard for a specific set of processes the processes that IT uses to support IT services within organizations. We hope to publish more on ITIL in the near future. ITIL -- Celia Wolf - October 05, 2004 Celia Wolf has been looking at a number of business process frameworks. In this short technical brief, she describes how a UK standard, the IT Infrastructure Library (ITIL) is rapidly becoming an international, de facto standard for companies that want to define and improve IT Service Management processes. etom and ITIL -- Jenny Huang - January 04, 2005 Jenny Huang, an OSS Architect and Standards Strategist at AT&T Labs, describes how AT&T is using the best of the TeleManagment Forum's etom and NGOSS standards and combining that framework with the IT Infrastructure Library (ITIL), a British IT service delivery and support standard that is rapidly becoming a de facto international standard. Government Frameworks An exciting new evolution in frameworks is represented by governments that are increasingly developing frameworks for units under their control. This coming month we will publish a Case Study describing a municipal framework developed by the state of Denmark. We know of others in Canada, Australia and the US and we hope to publish more on them in the future. The American Productivity Quality Council's APQC Process Framework We have not published anything on the APQC Process Framework, but would

10 welcome an Article from someone who has used it to create a framework for their organization. Our impression is that the APQC model was not initially set up as a way of defining a process architecture, in the sense that it was to be used to actually define the way processes flowed within an organization. It seems more like a generic checklist of processes that companies might have. On the other hand, the APQC has recently been working with the SCC and others and has modified their framework to make their supply chain section match SCOR, so they may, in fact, be transitioning to something more operational. In any case, the APQC framework is widely known and popular, and APQC uses it to organize their benchmark information, so if you do have a process that matches one of the processes in their framework, you can get benchmark information on that process. Til next time, Paul Harmon :: us :: Visit BPTrends Business Process Trends 88 Waban Park Newton MA 02458