Business Process Architecture

Business Process Architecture The Eye of the Hurricane IRMAC Toronto: December 7 2005 Roger T. Burlton The Process Renewal Consulting Group Inc. www.processrenewal.com www.adaptive.com +1-604-945-7352 rburlton@processrenewal.com PRG-BPF 1-1

Copyright Business Process Management: This seminar contains proprietary methods and materials developed by The Process Renewal Consulting Group Inc. of Coquitlam BC Canada. They may not be copied, recorded, transmitted or reused without the expressed permission of the author. All rights reserved. PRG-BPF 1-2

Reference Materials www.amazon.com www.amazon.co.uk www.amazon.ca PRG-BPF 1-3

Business Process Architecture Agenda 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 PRG-BPF 1-4

Introduction PRG-BPF 1-5

Business Driver: Speed of Change Versatility = Being able to many things with your capabilities Adaptability = Being able to renew your capabilities quickly Dynamic What we provide Mass Customization Invention Stable Mass Production Continuous Improvement Stable Dynamic How we do it New Age Invention => Develop environments that assume & enable variation and change PRG-BPF 1-7

Adaptability Requires Alignment of Critical Capabilities 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. Process Ability Human Competency Business Environment Understanding Stakeholder Relationship Intelligence Info/Knowledge Accessibility Technology Enablers PRG-BPF 1-8

Alignment Method: The Basis for Traceability Business Drivers Current Results Business Strategy Business Stakeholder Strategy Org/HR Strategy Information Architecture Alignment Traceability Business Process Architecture Technology Architecture Business Architecture Other Strategies Migration Strategy Program Management Project Portfolio PRG-BPF 1-9

Process Management PRG-BPF 1-10

You already have all your Processes But you may not know WHAT they are Yourco Customer Process Steward Supplier The complex Stakeholder Relationships and the Knowledge required to satisfy them can only be managed through Business Processes working at optimum performance. PRG-BPF 1-11

PRG-BPF 1-12 Perspectives of a Real Business Process A process is a complete set of activities conducted to achieve a specific business result for one or more stakeholders. 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.), employing reusable resources of all types. Performance View: Has performance indicators for which measurable objectives can be set and actual performance evaluated. Functional / Organizational View: Strict Naming Convention: A Process is described by an active verb-noun The name should unambiguously communicate the intent of the process Contains logical steps requiring a set of functional capabilities often found in disparate organizational units.

Marketing & Sales Customer Service Catering Banquet Services Finance & Administration Information Systems Accounts Receivable Accounts Payable Purchasing Credit Local Resturant Operations Faciliticies Management Human Resources Food Preparation Transporation Logistics Delivery Legal Sevices What is Business Process Management? Organizational Structure BPM: the discipline that improves measurable business performance for stakeholders, through ongoing optimization and synchronization of enterprise-wide process capabilities. Policies & Rules Technology Business Business Performance Processes Facilities Roles & Jobs Human Resources whole processes for stakeholders their guiding factors PRG-BPF 1-13 their enablers

What is a Business Process Management System? 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. 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 Policies & Rules Technology Organizational Structure Business Business Performance Processes Facilities Roles & Jobs Human Resources PRG-BPF 1-15 BPMS is NOT BPM but enables it

PRG s Business Process Management Framework BP Governance Program and Project Management Opportunity Cost Resource Commitment Gating Checkpoints Quality Assurance Risk / Reward Renew the Process Develop Capabilities Roll-out & Nurture Continuously Improve Understand the Enterprise Architect & Align Define Process Project Understand the Process Human Change Management Awareness Perceptions Understanding Motivation Communications Commitments PRG-BPF 1-16

Stakeholder Perspective PRG-BPF 1-17

Validate Strategic Intent Concepts Drivers * Enterprise * Strategic Intent * Goals Business Drivers Vision Strategies Opportunities Scorecard for Organization in Focus Th reats Mission Objectives Process Perform ance Observations Organization in Focus Business Stakeholder Relationship Criteria Strengths Business Stakeholder Relationship KPIs & Targets Weaknesses Principles and Values Bus iness Stakeholder Groups Stakeholder Relationship Expectations Products and Services of the Relationship Stakeholder Relationship CSFs Capabilities * Raison D'Etre * Business Stakeholder Relationship Criteria! PRG-BPF 1-18

Stakeholder Segmentation and Types: Examples * Large Direct Customers Banking Small Direct Customers Telcom All Customers Others Channel Partners Governm ent and Regulatory Stakeholders Channel Partner's Customers analyze Stockholders Humongeous Inc. be aware Minority Shareholders All GSI Stakeholders Facility Support All Suppliers PRG-BPF 1-19 * Note: Partial Set Only Outsourced Professional Services Join the dots

Process Architecture PRG-BPF 1-21

Framework Concepts in The Architect and Align Phase Organization in Focus Process Architecture Prioritized and Selected Processes Business Stakeholder Relationship Criteria Knowledge Requirem ents Joe BigShot Business Stakeholder Groups B il Fi n a n c e VP Fina nce Chairman Jim E agle VP S ales Mark MakeI t VP MFG Renewal Strategy Roles & Organization S tructure Technology Architec ture Program Change Program Projects Facility Plans Program Business Case Human Capabilities Business Stakeholder Relationship Criteria * Aligned Enterprise Asset Architectures! Program Management Guidance! PRG-BPF 1-22

Stakeholder Relationships Define Business Processes The complex Stakeholder Relationships can only be managed through Business Processes working at optimum performance across your Organization-in-Focus. Owners Community Customer Type 1 Start with these Supplier Type 1 Customer Type 2 Then these Supplier Type 2 Staff Customer Type 3 Then do the rest Everything which flows must link to at least one process PRG-BPF 1-23

Classification will help Define the Right Processes 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 Objects of Process Transformation : Physical Materials Data / Information Commitments Knowledge Process Architecture Map PRG-BPF 1-24

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 PRG-BPF 1-25

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. PRG-BPF 1-26

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 PRG-BPF 1-27

Outside-In: External Stakeholder flows connect to Internal Processes Stockholders Government and Regulatory Stakeholders Targ et ROE Financial Results Compliance Reports Governing Legislation Terms and Conditions of Partnership Partnership Contracts Develop Global SW business strategy Plan, assess and mitigate risk Control financial assets Joe BigShot Chairman Report results Product and Service Catalogs Proposals Sometimes out of date Often later than prom ised but quality is good Channel Partners Market Knowledge Software for Resale Develop marketing strategy Promote products and services Bill Finance direction VP Finance Determine product Establish project management guidelines Develop core products Jim Eagle VP Sales Develop\maintain standards & methods Mark MakeI t Develop Partnerships quality VP MFG We commit to changes in scope too easily Monitor and assure Contracts Working Software We are good at this All Customers Rarely well-defined Packaged Services. Channels re-invent their own. Identify prospects Qualify prospects Sell products and services Deliver client business solution Provide services Terminate client contract Services Product Strategies Provide human resources Provide IT Provide tools infrastructure Global SW Inc. Arrange facilities Invoices Marketing and Sales capability Payment Royalties and Payments Information Requests for Information All GSI Stakeholders PRG-BPF 1-28

Sample 1 Process Architecture Map Diagram Level 1 Develop Global SW business strategy Plan, assess and mitigate risk Control financial assets Report results Total Cost of Non-Conformance Develop marketing strategy Determine product direction Establish project management guidelines Develop\maintain standards & methods Monitor and assure quality Develop Partnerships Promote products and services Develop core products Estimate of Lost Business Vol ume Identi fy prospects Qualify prospects Sell products and services Deliver c lient business solution Provide services Terminate client contract Provide human resources Annual Sales Volume Provide IT infrastructure Provide tools Arrange facilities Note: Note: Lines Lines represent represent major major dependencies dependencies only only!! PRG-BPF 1-29

Sample 1 Process Architecture Diagram Level 2 Deliver client business solution Supports all Processes Manage Pr ojects Provide training Gather Business Requir ements Design client solution Build client solution Test Solution Install modified softw are Evaluate solution delivery Ins tall base sof tw are Migrate data PRG-BPF 1-30

Some Frameworks (Operations Reference Models) as an Architecture Productivity Aid Sponsoring Body Supply Chain Council Value Chain Group American Productivity Quality Center (APQC) Telemanagement Forum UK Office of Government Commerce & itsmf IT Governance Institute Treasury Board Secretariat (Government of Canada) Framework SCOR (Supply Chain Operations Reference Framework) VCOR (Value Chain Operations Reference Framework) PCF (Process Classification Framework) etom (enhanced Telecom Operations Map) ITIL (IT Infrastructure Library) COBIT (Control Objectives for Information and related Technology ) GSRM (Governments Strategic Reference Model) Focus Inter-company Supply Chain Management Internal and Inter-company Value Chains Cross-Industry processes Telecommunications Industry IT Service Management (IT service support and delivery) Audit of IT processes Government Services Patterns and Lifecycles For a comprehensive treatment of Reference Models and Frameworks visit www.bptrends.com and search for frameworks PRG-BPF 1-31

Supply Chain Council: SCOR Framework SCOR 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. Plan P1 Plan Supply Chain P2 Plan Source P3 Plan Make P4 Plan Deliver P5 Plan Returns Suppliers Source S1 Source Stocked Products S2 Source MTO Products S3 Source ETO Products Make M1 Make-to to-stock M2 Make-to to-order M3 Engineer-to to-order Deliver D1 Deliver Stocked Products D2 Deliver MTO Products D3 Deliver ETO Products D4 Deliver Retail Products Customers Return Source Return Deliver Enable PRG-BPF 1-32

Sample from the APQC PCF (Process Classification Framework) 2.0 Design and Develop Products and Services 2.1 Design products and services 2.1.1 Develop strategy and concepts for new products and services 2.1.1.1 Research customer and market needs 2.1.1.2 Plan and develop cost and quality targets 2.1.1.3 Develop product life cycle and development timing targets 2.1.1.4 Research leading technology components and development requirements 2.1.1.5 Integrate leading technology into product/service concept and components Interpreting the PCF Category: 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. PRG-BPF 1-33

Governments of Canada Strategic Reference Model (GSRM) 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 PRG-BPF 1-34

Some Process Architecture Principles: Core Processes Knowledge Sources Owners Regulatory ` Community CORE = Customer + Product/Services Lifecycles Distributors Raw Material Suppliers Customers & Consumers Human Resources IT Providers Facility & Equipment Suppliers PRG-BPF 1-35

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 PRG-BPF 1-36

Some Process Architecture Principles: Guiding Owners Regulatory Community Guiding = Plan / Policy + Governance Lifecycles Knowledge Sources CORE = Customer + Product/Services Lifecycles Distributors Raw Material Suppliers ` Customers & Consumers PRG-BPF 1-37 Human Resources IT Providers Facility & Equipment Suppliers

Some Generic Guiding Processes with boring but wellformed names 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 PRG-BPF 1-38

Some Process Architecture Principles: Enabling Owners Regulatory Community Knowledge Sources Guiding = Plan / Policy + Governance Lifecycles CORE = Customer + Product/Services Lifecycles Distributors Raw Material Suppliers Customers & Consumers Enabling = Core Enabling + Infrastructure Lifecycles PRG-BPF 1-39 Human Resources IT Providers Facility & Equipment Suppliers

Some Generic Enabling Processes with boring but wellformed names 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 PRG-BPF 1-40

Some More Generic Enabling Processes with boring but well-formed names 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 PRG-BPF 1-41

Processes Interface Requirements: Look at IGOEs From Internal Process in Architecture or External Stakeholder Information to be Methods and Rules referenced while to guide the processing processing From Internal Process in Architecture or Materials to be transformed Information to be processed I n p u t s Guides Do Something O u t p u t s Results of processing To Internal Process in Architecture or External Stakeholder States to be changed Technologies to be applied Enablers Facilities to be used People to be assigned From Internal Process in Architecture or External Stakeholder External Stakeholder PRG-BPF 1-42 Inputs are processed into Outputs according to Guides using Enablers when Events occur

Process Architecture Alignment PRG-BPF 1-43

Why Architecture and Why Object Repositories PRG-BPF 1-44 Strategy Stakeholders Opportunities Value Chains Principles Mission Goals Constraints Objectives Values Weaknesses Vision Threats Requirements Strengths Organizations Processes Products Events Services Methodologies Triggers Functions Procedures Skills Workflow Responsibilities Business Rules Roles Risks Financial Assets Jobs People Projects Budget Objects Facilities Data Information Time Tax Legal Cost Locations Knowledge Tools Models Applications Systems Databases Middleware Use Cases Hardware Networks Thanks to Adaptive, Inc. www.adaptive.com

The Zachman Framework for IS Architecture DATA What FUNCTION How NETWORK Where PEOPLE Who When MOTIVATION Why TIME SCOPE (CONTEXTUAL) List of Things Important to the Business List of Processes the Business Performs List of Locations in which the Business Operates List of Organizations Important to the Business List of Events Significant to the Business List of Business Goals/Strat SCOPE (CONTEXTUAL) Planner ENTERPRISE MODEL (CONCEPTUAL) ENTITY = Class of Business Thing e.g. Semantic Model Function = Class of Business Process e.g. Business Process Model Node = Major Business Location Ends/Means=Major Bus. Goal/ Critical Success Factor People = Major Organizations Time = Major Business Event e.g. Business Range Logistics of e.g. Work Process Flow Model Management: e.g. Master Schedule e.g. Business Design Plan System Planner ENTERPRISE MODEL (CONCEPTUAL) Owner Ent = Business Entity Reln = Business Relationship Proc. = Business Process I/O = Business Resources Node = Business Location Link = Business Linkage People = Organization Unit Work = Work Product Time = Business Event Cycle = Business Cycle End = Business Objective Means = Business Strategy Owner SYSTEM MODEL (LOGICAL) e.g. Logical Data Model e.g. Application Architecture e.g. Distributed System Architecture e.g. Human Interface Architecture e.g. Processing Structure e.g., Business Rule Model SYSTEM MODEL (LOGICAL) Designer TECHNOLOGY MODEL (PHYSICAL) Ent = Data Entity Reln = Data Relationship.= Application Function Node = I/S Function (Processor, Storage, etc) The Process I/O = User Views Domain Link = Line Characteristics e.g. Physical Data Model e.g. System Design e.g. Technology Architecture People = Role Work = Deliverable e.g. Presentation Architecture Time = System Event Cycle = Processing Cycle e.g. Control Structure End = Structural Assertion Means =Action Assertion e.g. Rule Design Designer TECHNOLOGY MODEL (PHYSICAL) Builder DETAILED REPRESEN- TATIONS (OUT-OF- CONTEXT) Ent = Segment/Table/etc. Reln = Pointer/Key/etc. e.g. Data Definition Proc.= Computer Function I/O = Data Elements/Sets e.g. Program Node = Hardware/System Software Link = Line Specifications e.g. Network Architecture People = User Work = Screen Format e.g. Security Architecture Time = Execute Cycle = Component Cycle e.g. Timing Definition End = Condition Means = Action e.g. Rule Specification Builder DETAILED REPRESEN- TATIONS (OUT-OF CONTEXT) Sub- Contractor FUNCTIONING ENTERPRISE Ent = Field Reln = Address e.g. DATA Proc.= Language Stmt I/O = Control Block e.g. FUNCTION John A. Zachman, Zachman International (810) 231-0531 Node = Addresses People = Identity Time = Interrupt End = Sub-condition Link = Protocols Work = Job Cycle = Machine Cycle Means = Step Contractor FUNCTIONING Range e.g. NETWORK of Process e.g. ORGANIZATIONManagement: e.g. SCHEDULE Performance e.g. STRATEGY ENTERPRISE Sub- PRG-BPF 1-45

The Three Dimensional Zachman Framework (3-D-Z ) 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 Planner Owner Designer Builder Sub-contractor Operating Enterprise For a download of the rotatable hex go to www.adaptive.com PRG-BPF 1-46

Adaptive Enterprise Model: A Model Shows a Thousand Pictures Zachman Inside Critical Success Factor = Robust Scalable Repository not just a Modeling Tool www.adaptive.com PRG-BPF 1-47

Information Requirements: Look at Architecture I / O / Gs From Internal Process in Architecture or External Stakeholder Information to be referenced while processing From Internal Process in Architecture or Information to be processed I n p u t s Guides Do Something O u t p u t s Information produced by processing To Internal Process in Architecture or External Stakeholder Enablers External Stakeholder PRG-BPF 1-48 Inputs are processed into Outputs according to Guides using Enablers when Events occur

Policies and Core Rules are Types of Process Guides From Internal Process in Architecture or External Stakeholder External Legislation, Regulations Strategies Principles & Interpretations Experience Internal policies Best practices Business rules Standards Guides I n p u t s Do Something O u t p u t s Enablers PRG-BPF 1-49 Inputs are processed into Outputs according to Guides using Enablers when Events occur

Enterprise Capabilities as Types of Enablers Guides I n p u t s Do Something O u t p u t s Enablers Information Systems Technologies Equipment Human Resources Physical Infrastructure Locations From Internal Process in Architecture or External Stakeholder PRG-BPF 1-50 Inputs are processed into Outputs according to Guides using Enablers when Events occur

Define Technology Principles First: Examples Our Technology Strategy must be consistent with our Business Strategy and Culture: We will design for adaptability. Standards-based decision making at appropriate level of detail Data will be captured once and only once at 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 must conform to the company s enterprise data model Without Big Rules it is impossible to coordinate the IT platform Peter Keen PRG-BPF 1-51

Sample Technology Principles for Process Adaptability 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 interaction coordination/ information execution multiple front-offices multiple back-offices frontoffices midoffice * backoffices * www.mid-office.com PRG-BPF 1-52

Many Roles: How many organizations are needed? process executive Governance process steward design & improve process Management process manager process approach & guidance performance & improvement feedback Operations specific customer specific business requirement conduct instance of process specific business solution specific customer process lead process capabilities resource effectiveness feedback capability manager PRG-BPF 1-54

Full Process-managed with Function as a Resource Provider In-sourced Resources Define and Develop Offerings Define and Develop Offerings Create Awareness and Promote Business Create Awareness and Promote Business Strategy Resources: Company Strategy, Market Segmentation, Product Roadmap. = function Product Management Resources: Defining Potential Customer problem, Business Case for new product, Product Specifications, Pricing, User Manual, Product Profitability. Software Engineering Resources: Software Design Software Build Software Test Software Documentation Software Acceptance = process Marketing Resources: Market Research, Market Segmentation, Marketing Materials, Marketing Mechanisms. Customer Support Resources: Product Knowledge 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 PRG-BPF 1-55

Full Process-managed with Function as a Sub-process Service Provider: Outsourced Resources Strategy: Company Strategy, Market Segmentation, Product Roadmap. Product Management: Defining Potential Customer problem, Business Case for new product, Product Specifications, Pricing, User Manual, Product Profitability. Software Engineering: Software Design Software Build Software Test Software Documentation Software Acceptance Define and Develop Offerings Marketing: Market Research, Market Segmentation, Marketing Materials, Marketing Mechanisms. Create Awareness and Promote Business Customer Support: Product Knowledge Define and Develop Offerings Create Awareness and Promote Business = process = function 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 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 PRG-BPF 1-56

Derive the Process Measurement and Governance Model Alignment Traceability 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 PRG-BPF 1-57

Program Management PRG-BPF 1-58

Sample 2 Process Architecture Map Diagram ABC WIdget Company Top Level Process Architecture 9. Develop Strategic Pla n 10. Interpret Regulations 11. Monitor and Ensure Compli anc e 6. Communicate w ith Stakeholders 14. Develop Produc ts 16. Purchas e Supplies 4. Manuf acture Products 13. A cquir e Customer s 3. Make Customer s Aw are 1. Fulfill Orders 8. Provide Post-Sales Service 2. Deliver Process Change 7. Supply Human Res o urc e s 5. Develop and Maintain Facilities 12. Provide IT Capability 11. Provide Financial Services PRG-BPF 1-59 Legend: Enables All Others Guides All Others Note: Note: Lines Lines represent represent major major dependencies dependencies only only!!

Process / Stakeholder Value-Delivery Matrix Value Creation Goals & KPI Objectives How much could the process potentially affect what is important to the stakeholder relationship? Stakeholder Criteria * Stakeholder 1 Stakeholder 2 Stakeholder 3 Stakeholder 4 Stakeholder 5 Summary Ranking 1Weight 1 1 1 1 Proc 1 Proc 2 Proc 3 Proc 4 Proc 5 2 3 3 2 +11 21 1 1 3 1 +8 2 2 3 2 1 3 1 2 2 1 2 3 +10 +11 +7 13 17 19 16 9 3 2 6 Proc 6 Proc 7 1 3 3 +6 13 9 1 3 1 2 +9 16 6 Proc 8 3 3 1 +10 17 3...... gain Version 1: Degree of Potential Process Leverage / Value Contribution Low (1) Medium (2) High (3) Blank=Marginal or No Relationship (0) Conduct for all Stakeholder types at the chosen level of decomposition PRG-BPF 1-60

Process / Stakeholder Performance-Gap Matrix * Health of Current Process for the Stakeholder How well does the current process meet the future stakeholder performance criteria? Process * Performance Stakeholder 1 Stakeholder 2 Stakeholder 3 Stakeholder 4 Stakeholder 5 1Weight 1 1 1 1 Proc 1 Proc 2 Proc 3 Proc 4 Proc 5 Proc 6 Proc 7 Proc 8 3 1 2 3 1 1 3 3 1 3 2 2 1 3 1 2 2 2 3 3 3 2 2 2 1 2 1 1 2 3 1 2 +47 +17 +46 +43 +38 +34 +24 +40... Summary Ranking 59 1 21 13 56 2 52 3 46 5 40 9 30 11 49 4... pain Version 2: Health of Existing Process / Opportunity Small Gap (1) Moderate Gap (2) Significant Gap (3) Conduct for all Stakeholder types at the chosen level of decomposition PRG-BPF 1-61

Process Migration Strategy (Boston Grid) pain Process Number B i g g e s t G a p R a n k i n g 1 1 2 3 3 4 4 8 5 5 6 13 7 16 8 14 9 6 10 15 11 7 12 12 13 2 14 9 15 10 16 11 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Greatest Value Potential to Business Strategy and Performance Plus other considerations such as: Cost, dependency, politics, culture, 1 2 3 gain PRG-BPF 1-62

Create Program for Change determine constraints in any policy, capability, or organization that will hinder changes in the priority processes find problems with the connection among processes and alignment with required capabilities discover unexploited knowledge, skills, capabilities or capacity within the organization produce funding criteria for continuation or freezing of existing projects and initiation of new ones recommend approval or freezing of current and planned projects produce a proposed program of change P PRG-BPF 1-63

Enterprise BPM Alignment: Real Repository Technologies Features: 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 PRG-BPF 1-64

Process Projects PRG-BPF 1-65

Formulate Process Vision and Stakeholder Goals Process Stakeholder Value Expectations Develop Stakeholder Relationship Criteria for an Organization-in-Focus (eg They always meet my needs ) Enterprise Traceability 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 ) Selected Process PRG-BPF 1-66

Identify Process and Project Performance Improvements Targets Process Performance Objectives Start with Stakeholder Relationship KPI s for the Organization-in-Focus (eg Customer Satisfaction) Enterprise Derive Contributing Process KPI s for the Process-in-Focus (eg Percentage of orders delivered on time) Traceability Determine required target results to be delivered by process transformation project (eg 80% in one year and 99% in two years) Selected Process PRG-BPF 1-67

Decomposing an IGOE Diagram Guides I n p u t s Assign Human Resources O u t p u t s Enablers PRG-BPF 1-68 Inputs are processed into Outputs according to Guiding Factors using Enablers when Events occur

Sample 1 Lower Process Model Diagrams Level 3 Decomposition Provide human resources Assign Hum an Resources Review Request Analyze Priorities An alyze Availaibity De term ine M atch \ Gap Assign Resources PRG-BPF 1-69

Sample 1 Lower Process Model Diagrams Level 3 Partial Process Flow and Analysis Provide human resources Manage Projects Received too late Understand Existing Projects Request Details for Skilled Resources Know what they want Requestor Review Request Validated Request Biased with no consequences Requestor Line Manager Good info Too easily swayed by boss Project Priorities Analyze Priorities Everthing seem s to be a priority Resource Manager Adjusted Allocation Priorities Decisions often political Useless Skills Inventory Analyze Availaibi ty OK Good format but not current Resource Manager Proposed Allocation Determine Preferences Unrealistic Opinionated Personal Info Not Current Determine Match \ Gap MBO's Ignored Useless Rejected Request Allocation Info. Staff Avai labil ity not Understand Existing Com mitments Staf f Availability Skills Systems Resource Manager Biased Skills Systems Wrong Skills Requested Resource Resource Assign Resource Manager PRG-BPF 1-70

Documenting Each Architectural Process Model 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 Process Assessment What Works Well What Doesn t Work Well Issues / Constraints / Concerns Root Causes Opportunities Quick Wins Solution Requirements IGOE Information Flow Number / Name(s) Description Source / Destination Processes Interface Method / Media Type Frequency / Distribution Constraints / Problems Data Attributes (optional) Note: Some but not all attributes can be graphically depicted in a notation No notation can graphically depict all attributes Think about the purpose of your communication PRG-BPF 1-71

Business Rules As Process Guides and IT Requirements Business Rules Guides Guiding Factors Inputs I n p u t s O u t p u t s Outputs Enabling Factors Enablers 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 This means that the exact path of a process instance may not be predictable PRG-BPF 1-72

Business Process Scenario Analysis PRG-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 conditions that 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)

Example PRG-BPF 1-74

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 30 X 30 / 09 By 2009 Strategic Performance Objectives: Reduce the cost of servicing a customer by 30% account Improve Customer Satisfaction by 30% the current 70% over PRG-BPF 1-75

ABC (Banking Services) Stakeholder Map: Core Fee-paying Account Holders Retail Consumers Small Business Customers Commercial Customers Government Customers Correspondent Banks Account Holder Payees PRG-BPF 1-76 XYZ Business Lines XYZ Credit Card Co Phone Banking XYZ Trust XYZ Branches In-store Branches e-bank Commercial Bank Consumer Finance Treasury XYZ Mortgage Co Government Bank

ABC (Banking Services) Stakeholder Map: Support to Core Owners XYZ Minority Shareholders Governance Stakeholders XYZ Corporate Audit Finance HR Standards Organizations Professional Associations Regulatory Financial Compliance Operational Risk Community Staff Employees Contractors/Consultants Suppliers External XYZ Suppliers Consumables Vendors Courier Telecommunications Services External HR Hardware Vendors Software Vendors Outsourced Services Correspondent Banks Federal Reserve Internal XYZ Suppliers XYZ HR XYZ Professional Services XYZ Realty Management Other XYZ corporate services XYZ Finance XYZ Marketing XYZ Legal PRG-BPF 1-77

ABC Banking Services: An XYZ Group Member Plan the ABC Business Govern the ABC Business Manage End- Customer Lifecycle Handle Transactions Support non-abc Operations Manage Acquisition Conversion Lifecycle Manage Product / Solution Lifecycle Provide Banking Infrastructure Provide Enabling Capability for ABC PRG-BPF 1-78

An ABC Process for the Staff Lifecycle Higher level relevant Process PRG-BPF 1-79

ABC Banking Services: An XYZ Group Member Process Pain Gain Grid Report to Stakeholders Win Customers Terminate Account Settle and Resolve Branches and Channels etc Design Product Solution Understand XYZ Group & ABC Markets Identify Need for Product Maintain XYZ Branch and Business Lines Relationships Track Branch and Business Lines Performance Provide Facilities for ABC Establish Resource Requirements and Budget Process Claims Provide Product Support to Users Develop ABC Strategies & Initiatives Monitor Financial Performance Monitor ABC Business & Financial Performance Establish ABC Methods and Standards Allocate Capable Human Resources Communicate with Conversion Stakeholders Determine Product Business Requirements Develop - Acquire Capabilities Develop Implement Technology Infrastructure Procure ABC Goods and Services Maintain & Support Technology Develop Conversion Capability Update Account Information Prevent Losses Calculate Fees, Interest, etc. Process Financial Transactions Provide Customer Information Establish Customer Relationship Develop non- ABC Policies and Procedures Develop ABC Policies and Guidelines Determine Governance Requirements Distribute Communicate Policies and Procesdures Develop Financial & Operational Risk Policies Assess Conversion Establish & Maintain Distribution & Supply Capability Monitor ABC Compliance Establish & Maintain Contingency Capability Provide ABC Tools Deliver Capabilities Convert Customers Plan for Acquisition Conversion PRG-BPF 1-80

Project Scope Develop non-abc Policies and Procedures Develop Financial & Operational Risk Policies Develop ABC Policies and Guidelines Fee-paying Account Holders XYZ Business Lines Fee-paying Account Holders Correspondent Banks Establish Customer Relationship Update Account Information Account management policies and rules Product rules, Customer Information (new and changes) Account Information (new and changes) Customer & Account Records I n p u t s Guides Update Account Information Enablers Branch and ABC staff Bank Products practices and guides Banking operations guidelines Governance requirements O u t p u t s Customer Information (new and changes) Account Information (new and changes) Customer & Account Records Compliance Technology Reports applications and infrastructure XYZ Business Lines Process Financial Transactions Prevent Losses Process Claims Calculate Fees, Interest, etc. Terminate Account Update Account Information Deliver Capabilities Provide Product Support to Users Allocate Capable Human Resources Develop Implement Technology Infrastructure Maintain & Support Technology Monitor ABC Compliance PRG-BPF 1-81

Conclusion PRG-BPF 1-82

Implicit Challenges in BPM: In Search of Elegance * Appropriate levels and communication: get the basics right "A designer knows he has achieved perfection not when there is nothing left to add, but when there is nothing left to take away." Little Detail Simplistic Elegant Antoine de Saint-Exup'ery Lots Complicated Complex A model should be as simple as it can be, BUT no simpler Albert Einstein Little Lots Understanding * Burlton elegance model PRG-BPF 1-83

Principles of Process Management 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 PRG-BPF 1-84