What exactly is Business Process Management? Is it a process, technology, or management discipline?

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1 What exactly is Business Process Management? Is it a process, technology, or management discipline? LiveCycle ES Introduction to Adobe s entry into the BPM product market Gil Meier Senior Solution Architect

2 Introduction What exactly is Business Process Management (BPM)? Is it a: Management discipline; Methodology for managing your business processes; or, Technology or set of technologies. We will also introduce Adobe s entry into the BPM product market: LiveCycle ES.

3 Outline Business Drivers BPM is a Management Philosophy What is a BPM Ready Organization? Business Process Analysis and Design BPM as a Technology Adobe LiveCycle ES

4 Business Drivers In the current business climate, executives are under real pressure.

5 Business Drivers - Avoid Commoditization The path of innovation inevitably seems to end up in the commoditized business graveyard. Time and again smart, nimble companies invent new technologies or manufacturing processes: Just to standardize them, inspire knock-offs and direct competitors; Find that their unique differentiator in the marketplace has evolved into a commodity; and, That customers make their selection based on price or availability, not manufacturer, brand or logo. Dave Taylor

6 Business Drivers - Seek Enhanced Performance Do More With Less

7 Business Drivers - More Agile & Easier to do Business with Two global economic drivers today are globalization and commoditization Globalization: Information about products and prices are available instantly and globally; Trade barriers are dismantled; and, Change has become the only certainly. Companies have sought joint ventures and outsourcing as new avenues to achieve competitive vitality. An alliance is an effective way of acquiring new skills, assets, and processes needed to complete

8 Business Drivers - More Agile & Easier to do Business with To succeed with such a strategy, business units must make itself appealing to potential partners: What will it be like to work with you? Can you demonstrate the you are dependable? Is your way of doing business compatible and comfortable for my customers? Will we be able to easily integrate and collaborate? Will your processes add value to ours or merely duplicate our own capability?

9 Business Drivers - Customer is King Companies have long touted the importance of the customer ; Future profits will come from providing customers with rich, rewarding experiences that keep them coming back; An enhanced customer experience doesn't mean better customer service; it means a major shift in the way organizations engage with customers; Total Customer Experience The total customer experience is the sum of every interaction the customer has; Total customer experience = customer's product experience + customer's transaction experience + customer's interaction experience,

10 Business Drivers - CIO/CTO challenges How do you support the ever evolving needs of the business, enabling the firm to turn on a dime, yet keep technological complexity, development costs, and time to market down to a minimum? How can we best drive operational efficiency and yet enable rapid value innovation? How can we capture, store, and access the context of decisions to support the slew of new compliance regulations?

11 Business Drivers - Summary In the current business climate, executives are under real pressure: Avoid commoditization & differentiate the firm s offerings; Seek enhanced performance throughout the organization; Make the firm more agile & easier to do business with; Customer is King; and, Still ensure compliance and reduce operational risk

12 Next Section Business Drivers - Why Should I Consider BPM BPM is a Management Philosophy BPM Ready Organizations - 5 Styles of Work Management Business Process Analysis and Design BPM as a Technology So What Are The Essential Components?

13 BPM is a philosophy Business Process Management (BPM) plays a big part in achieving these goals. BPM is primarily a management philosophy Business processes and how they are managed are the key mechanisms that allow the firm to deliver value to its customers It is a way of thinking that governs the structure of the business and drives its overall performance.

14 Business Process Defined Its about people, the way they work together, the technology they use, and the performance objectives that these processes underpin. Processes are: People Processes Group of activities that lead to some result; The means by which work gets done; and, Mechanism to create and deliver value to a customer. Dan Madison Control Mechanisms Structure

15 BPM is a Management Philosophy what it s not Some see BPM purely as a way of standardizing business operations in the belief that reducing variation is a viable strategy. Others understand it as a way of squeezing cost out, following the Business Process Re-engineering theories made popular during the 90s. But making either of these the center of attention misses the vital need for the firm to adapt and evolve.

16 BPM is a Management philosophy The heart of BPM is about achieving the delicate and harmonious balance of: ruthless efficiency; effective service; and, organizational agility. It requires thinking at the level of: business design (its business and operational models); and, the related key business performance objectives and the processes that support them.

17 Enterprise Business Process Macro level

18 BPM is a Management Philosophy - Summary In summary: The philosophy of BPM is a core managerial discipline that ensures the process architecture of the firm (its business architecture) and enables the achievement of its key business performance objectives. Inevitably it will involve: A review of corporate governance; Significant cultural change; and, A reassessment of the reward mechanisms of the firm. Clearly, achieving these sorts of goals requires the endorsement and active participation of the executive team.

19 Next Section Business Drivers - Why Should I Consider BPM BPM is a Management Philosophy BPM Ready Organizations - 5 Styles of Work Management Business Process Analysis and Design BPM as a Technology People Processes Control Mechanisms Structure

20 BPM Ready Organizations - Traditional Organization Authority is hierarchal Brains are represented in management position; arms and legs are workers Manager and supervisors believe they have all the answers Creates lack of buy-in & trust Creating a solution for one area and cause problems in others Most problems are attributed to people

21 BPM Ready Organizations - Involvement Organization Senior management starts to believe some works have good ideas Suggestion boxes and quality circles Ideas were not acted upon Most problems are still attributed to people Again - creating a solution for one area and cause problems in others Creates silos with poor integration between departments

22 BPM Ready Organizations - Process Organization This style of work management required a major shift Management now believes the root cause of most problems is in the process Edward Deming TQM; Toyota Manufacturing Lean; Motorola Six- Sigma Issues with turf wars, lack of senior management commitment

23 BPM Ready Organizations - Process Organization Evolution Across organization business process focus; Business process ownership evolves from: process consultant process owners senior management Ultimately the authority to make business process changes sits with senior management

24 BPM Gone mainstream

25 BPM Ready Organizations - Work Management & Effectiveness Each style serves as the foundation for the next As organizations move through the 5 types, they becomes more effective

26 History of Business Processes Business processes are the heart of several management theories Edward Deming father of quality movement (Japan became super power based on it after WWI) Six Sigma & Motorola Lean and Toyota Manufacturing Other examples of process management theories Value chain analysis ((Porter 1980) Excellence (Peters 1982) Re-engineering (Hammer 1990) (BPR) Innovation (Davenport 1990 (BPR) Customer driven business (Whitely 1991) Knowledge management (Drucker 1993) Supply chain management (Schonenberger (1998)

27 Next Section Business Drivers - Why Should I Consider BPM BPM is a Management Philosophy BPM Ready Organizations - 5 Styles of Work Management Business Process Analysis and Design BPM as a Technology

28 Process Redesign Methodology Obtain Management Sponsorship Identify target business processes Team formation and education Current Process Analysis As-Is Process Mapping 4 lenses of Analysis Frustration / Time (Lean) / Cost (Activity Based Costing) / Quality (Six Sigma) Identify requirements Customer surveys what do they what? Bench marking against the industries best Process re-design Deployment / change management Ongoing monitoring & continuous improvement

29 Next Section Business Drivers - Why Should I Consider BPM BPM is a Management Philosophy BPM Ready Organizations - 5 Styles of Work Management Business Process Analysis and Design BPM as a Technology

30 BPM As a Technology What are the common set of tools BPM vendors are providing?

31 BPM As a Technology - Process Modeling The ability to model the process and reflect the way in which work needs to move around the business. The system should also facilitate the re-use of those models. Process models can then be used to coordinate and choreograph the actions of employees, customers, suppliers, and software systems. But most importantly, they can provide the basis for the firm to change the way it does things. The model drives the process engine. Change the model and you change the way work happens. Watch out for the hype

32 Business Process Orchestration Example - einvoicing Billing System Search Screen Billing Web Service Deliver Monthly Invoices Start Get einvoices to Deliver Documentum Content Management I/F Billing Database Web Service Get Recipients based on Account Billing System SQL Create einvoice Bundles to Deliver LC Output Send einvoice Bundle to Customer Billing User Customer End

33 BPM As a Technology - Process Engine A software server that manages the state of individual work items, moving them along to the next task. Tasks are assigned to humans or software systems, all performing their part in accordance to the process model guiding the case. Requires a TTD WorkSpace for human interaction.

34 BPM As a Technology - Business Rules Engine Most BPM environments have also included some form of business rules to support complex decisions. But the use of business rules can also simplify process development, allowing apparently different problems to share common processes (with the business rules component handling the variation).

35 BPM As a Technology - Business Activity Monitoring In order for the business to adapt and evolve it is imperative that managers have the ability to optimize their business processes. Having visibility into the real-time operations of the business is a good start, Managers also need the ability to analyze performance against the key objectives and metrics of the firm. When making changes, the ability to assess their impact and efficacy is another component that is needed to complete the round-trip optimization picture.

36 BPM As a Technology Content Repository Fully integrated set of enterprise content management services including; Comply with regulations through change management control and detailed audit trails Hierarchical content categorization and powerful search capabilities

37 Data Capture Provide data capture tools to facilitate business process execution Create an engaging user experience addressing usability Data capture inside and outside the firewall

38 BPM As a Technology - Enterprise Application Integration The process engine needs to support the integration of third party applications. Firms want to re-use existing IT assets without a lot of custom programs through the use of: Adapters and Component-style interfaces; Leveraging Web Services protocols (SOA); and, Watched folders, remote programming interface (RMI), SQL.

39 BPM & Service Oriented Architecture BPM is a continuous performance improvement methodology. A management discipline based around the iterative improvement of business processes. Underpinning that objective is a technology infrastructure that drives work through the firm, enabling a regime of monitoring, optimization and traceability. SOA is an approach to systems development that delivers applications through the composition of discrete, independent components, or services. The design philosophy driving SOA is process-oriented, businesscentered, architecture-driven and set-up to support change from the outset.

40 Service Oriented Architecture SOA is a software engineering best practice for any technology that requires integration. The core concept loosely coupled components that help insulate the overall system from change. At its heart, the approach relies on standardizing the communication interfaces between components (or layers). Based on the widespread adoption of extensible Markup Language (XML) Web Services as the latest method of remotely invoking application functionality.

41 BPM-SOA Benefits Reduce the time to market, and enhance the ability of the firm to respond quickly and efficiently to business change. Over time, they offer the ability to reduce cost massively; The need to coordinate business processes and improve productivity does not end at the firewall Insulation changes made to processes need not affect the underlying services and the line-of-business applications with which they interact

42 BPM As a Technology The Role of Standards Process Improvement Object Management Group (OMG) Business Process Maturity Model (BPMM) Process Modeling OMG Business Process Modeling Notation (BPMN) Task Management OMG Workflow Management Coalition (WFMC) Organization for the Advancement of Structured Information Standards (OASIS) Business Process Definition Meta-Model (BPDM) XML Process Definition Language (XPDL) WS-Human Task Process Execution OASIS Business Process Execution Language (WS- BPEL 2.0) BPEL Extension for People

43 Gartner Magic Quadrant

44 BPM As a Technology Summary BPM is therefore the convergence of management theory; and, General systems thinking with modern technologies Data Capture Business Process Modeling Work Space Process Engine Enterprise Application Integration Connector Web Service Business Activity Monitoring Optional Rules Engine Content Repository

45 Summary When we examine why firms are adopting BPM, it comes down to a few core objectives: Ensuring better customer service and interaction; Reducing costs, focusing on the achievement of business efficiency and the effective use of all available resources; Unbundling and distributing the process, allowing the firm to focus on its core capabilities and outsourcing the rest (even to customers); Fixing broken processes through the effective integration of disparate application systems, reducing complexity and rationalizing the supporting skills required; and, Enabling better, and more effective compliance, yet still providing a basis for a more nimble and adaptable organization.

46 References Derek Myers, Dan Madison, Process Mapping, Process Improvement and Process Management Howard Smith & Peter Finger, Business Process Management, the Third Wave,

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