Whilst working at my current company, I was given the responsibility of developing the To-Be Business Processes in a major Project. I had to think carefully about how I was going to approach this project because I wanted to take into account that I was entering it after a considerable amount of work had already been completed.

I wanted to try and introduce into the project a more modern approach to Business Process development. The As-Is processes had been developed in Visio but not in a conventional way, never the less, they were easy to read and detailed. The To-Be processes would be built to support a new software architecture centred on a new ERP system which utilised Workflow both to support procedures in application areas and external supporting activities. 

This was a great opportunity to introduce BPMN as the process mapping notation, as I foresaw that in the future additional services would need to be developed to support the selected ERP solution. Also the internal workflow in the selected application used a BPMN like notation. In looking for a Tool I came across Aris Express, which support BPMN diagrams but had an additional advantage as it included Process Landscaping, Organisation Charting, IT Infrastructure and produces RTF documentation. This was important as I intended to include in my design some of the tools we have previously discussed in the Blog.

I will now run through the approach I have taken to the project and hope it will help all who have taken the time to read my Blog.

The Approach

1.       Analyse the RFP and tender documents plus the response to the tender and structure the key information in a mind mapping tool. The one I use for this is Freemind it’s a really great open source mind mapping tool.

 

2.       Map the As-Is Organisation and the To-Be Organisations recommend changes along with any changes in responsibility. This exercise was carried out in Aris Express

 

3.       Map the Core Application software areas that the To-Be processes will be interacting with. The new software was very different from the old software in that the Master Data was build up in a particular sequence. Also Master Data had to be in place before the in-built workflow could be executed.

 

4.       Build the Entity Business Model, this provides an overview of the high level processes for a particular Industry and Company. It also documents the external influences on the Core Processes. I try to align this to the Value Chain.

 

5.       Next step was to build a Value Chain, this provides with the means of having a clear understanding of how value is created with an organisation. Also it provides a view of the end to end process which is often forgotten.

 

6.       Having completed the Value Chain the next step is to agree the Nomenclature which I usually base on AQPC- PCF (Process Classification Framework)

 

7.       Once the Framework is in place then I will investigate the quick win areas, and focus my attention in starting to build the processes. Obviously at this stage you need to review the As-Is processes and new application requirements.

 

8.       When building Processes with Tools that have no database I build a folder structure that represents the AQPC Nomenclature to store the processes and design documents. I also number each activity within a process; this is to manage changes that may occur through a BPI exercise.

 

9.       The next step in this case was to create a report that documents the process for signoff.  To create this document I combined the Aris RTF document with a template I created taking into account the Entity Business Model.

 

01.01 Acquisition Requirements & Property Selection 1.0 Description THE SOFTWARE provides a means of defining Business Requirements and considering Agents offers prior to entering the Acquisition Process. This enables a search to be conducted of the Properties held in the Database and Agents Offers and matched against the Business Requirements. Once a suitable property has been identified and selected it is then processed through Acquisition Management. 2.0 Objective 1.       Ensure all information pertaining to the Acquisition is entered into THE SOFTWARE 2.       Provides a means of recording Acquisition justification and selecting the most appropriate property at the best price 3.0 Critical Success Factors & Key Performance Indicators Critical Success Factors Key Performance Indicators 1.    Competent staff 2.    Responsive information system 3.    Good Agent Relations 4.    Clear Business Requirements 5.    Accurate Property Master file data   ·         No of Acquisitions within Budget ·         Accuracy of Property Portfolio Information ·         Customer Satisfaction   4.0 Inputs to Process 1.       THE SOFTWARE Owner Management 2.       THE SOFTWARE Property Management 3.       THE SOFTWARE Acquisition & Disposal Management 5.0 Process 6.0 Outputs from Process 1.       THE SOFTWARE Acquisitions 2.       THE SOFTWARE Project Management 3.       THE SOFTWARE Payables Lease Management 4.       THE SOFTWARE Accounts Payables 7.0 Systems Supporting Process THE SOFTWARE Property Management 8.0 Risks Which Threaten Objectives ·         In sufficient Properties held within  THE SOFTWARE System ·         Customer Satisfaction ·         No of incomplete Acquisitions 9.0 Management Response to Risks ·         Data input controls ·         On-site property Management ·         Segregation of duties ·         Acquisition Management 10.0 Symptoms of Poor Performance 1.       Insufficient Properties held within THE SOFTWARE 2.       Increase in Customer Service Complaints 3.       Drop in Revenue and Profit 11.0 Performance Improvement Observations 1.       Ensure the terms of the leasing contract are applied consistently and rigorously. 2.       Monitor closely the Symptoms of Poor Performance and take action quickly 3.       Assign Ownership in the Organisation to Acquisition Management 12.0 Process Objects   01.01.01 Enter Business Requirements in THE SOFTWARE Activity type Task Task type User task   01.01.02 Enter Agents Offers in THE SOFTWARE Activity type Task Task type User task 01.01.03 Enter Property in THE SOFTWARE Activity type Task Task type User task 01.01.03 Run Matching Process Activity type Task Task type User task 01.01.04 Select Property Activity type Task Task type User task 01.01.06 Enter in Acquisition Management Activity type Task Task type User task   Proceed with Acquisition Management Event definition Link   Property Portfolio Management Unit   Property Selection?   Registration Office   Request for new Acquisition Event definition Message

In Summary

The project is ongoing and will take some time yet before I get any feedback on the both the approach. There many hurdles still to overcome, but the project team I a working with have very receptive to the approach and results so far. There will be workshops with the various parts of the organisation to introduce the new approach to creating Business Processes. We have decided to focus primarily on one area of the organisation that has been identified as a quick win and will start piloting very soon. It is complex project and as such will be a good test of whether the approach I used in Asia can be accepted and adopted here in Europe. I will keep you posted as the project progresses and feed back to you the results as they come in.

I have had a number of comments regarding the use of Entity Level Business Modeling. So let me try to explain why I use this method of describing the business.

This type of model is used by accounting firms to provide a means for their audit staff to understand the characteristics of a business and assess the risks associated with none performance. We often view our business from an internal perspective and do not consider how external organisations see us as a business. It is important if we need to attract investors, appease the regulatory bodies and convince internal stakeholders to describe our business in a manner that provides a risk assessment on non-performance and the steps management will take to corrective the situation.

What I will try to do is use a Telco example shown below extracted from one of the models I have created to illustrate how the Entity Level Business Model works. After this you can make your judgment as to how usefulness of this approach might be to you.

 

The overview diagram is a succinct way of showing a typical business model illustrating clearly the external factors that impact the internal processes. When reviewing a Business Process Management or Business Intelligence project it is advantageous for the Business Architect to have a clear understanding of the business drivers. This diagram although simplistic provides a good overview and is used to obtain an agreement with the client on their understanding of their business. This can be taken one step further to gain agreement with the customer on the Value Chain.

Once we have the overview diagram and value chain agreed we can then move to a specific level 1 process (End-to-End) and put together the information required to start building the detailed process diagrams. There is a template for doing this which I have described in a previous blog. However, what I will do now is select a level 1 process and show a generic completed template form. The process I have selected is “Customer Care and Billing”

Process Description	The customer care and billing process covers the end-to-end process associated with: 1.       Handling an initial customer order 2.       Fulfilling the order 3.       Generating a bill 4.       Collecting cash for the service provided.  It is also concerned with: ·         Maintaining customer satisfaction to ensure they do not switch to another provider or cease service; and ·         Providing different types of customer services It is important to view the above as one process rather than four separate processes as inefficiencies or problems anywhere along the chain impacts the level of collection and customer satisfaction.
Process Objectives	1.       Meet specific needs and service levels required by new and existing customers 2.       Attract and retain customers 3.       Deliver tailored services through appropriate distribution channels 4.       Meet management information requirements 5.       Prevent fraud and bad debts 6.       Deliver adequate structured billing data on expected media
Critical Success Factor Key Performance Indicator (KPI) Service Order Processing (Obj. 1,2) ·         Span of time to activate the customer ·         Service Order Aging ·         Held order levels and Aging Customer Service Level Quality (Obj. 1,2,3) ·         Customer Satisfaction ·         Churn rate Subscriber Billing Expectations (Obj. 1,6) ·         Change requests  concerned with delivery of Billing Cash Processing (Obj. 5) ·         Days outstanding analysis Installation and Repairs Expectation (Obj. 1,2,3,4) ·         Trouble Ticket Aging Billing Adjustments (Obj. 5,6) ·         Customer billing enquiry levels ·         Customer & Service profitability ·         Churn rates ·         Rate of bad debts / credit adjustments
Input	Key Activities		Output
·         Customer base data ·         Completed Customer Orders ·         Customer Reliability Information ·         Order Change Request ·         Service Information ·         Customer Information ·         Network Availability Information ·         Order/Service Billing Enquiries ·         Cancellation Statistics ·         Network/ Service/Billing Problems ·         Credit Notes Issued ·         Call Data  Recording ·         Legal and Specific Accounting Regulations ·         Payment Data and Methods ·         Accounts Receivable			·         Customer Invoice ·         Held Over ·         Cash Receipt Trouble Ticket ·         Service Order ·         Financial Accounting Entries ·         Updated Network Information ·         Satisfied Customer ·         Fraud Information ·         Service Order Confirmation ·         Active Circuit ·         Service level Statistics ·         Credit Notes
Systems	·         Service Order Processing ·         Message Processing ·         Automatic Call Distribution	·         Billing System ·         Customer Remittance Processing	·         Customer Enquiry and Error Correction ·         Service Provisioning System
Classes of Transactions	Routine ·         Service order processing (SO) ·         Access service requests (ASR) ·         Held order processing ·         Billing and collection ·         Cash application ·         Settlements ·         Billing adjustments (fraud, etc.) ·         Trouble ticket processing ·         Interconnection billing	Non-routine ·         System implementation and upgrades ·         Rating table changes (can also be a routine transaction) ·         Tariff structure changes ·         Settlement process changes ·         Service level changes	Accounting Estimates ·         Bad debt / credit adjustment reserve ·         Earned and unbilled revenue ·         Billed and unearned revenue ·         Accruals for interconnect billing
Risks Which Threaten Objectives		Management Responses linked to Risks
A.      Inadequate service level (Obj. 1,2) B.      Improperly trained customer service representatives (Obj. 1,2) C.      Delays in service and/or repair provisioning (Obj. 1,2,3) D.      Lack of employee personal accountability (Obj. 4) E.       Provisioning errors (Obj. 3) F.       Billing / cash processing errors (Obj. 5,6) G.     Fraud (Obj. 5) H.     Billing delays (Obj. 6)		Þ     Customer interviews (A) Þ     Setting quality targets (B) Þ     Monitoring performance targets (C) Þ     Accountability and responsibility assignments (D) Þ     Reconciliations (E) Þ     Customer credit analysis (F,G) Þ     Monitoring performance targets (H)
Other Symptoms of Poor Performance	·         Deterioration in service order, held order or trouble ticket ageing	·         Undesired levels of customer churn	·         Undesired levels of customer complaints, billing adjustments, etc.
Performance Improvement Observations	·         Strategy consulting ·         Business process management	·         Billing system evaluation and selection ·         Billing system implementation	·         Revenue assurance ·         Controls assessment ·         Call center process consulting

The methodology provides a framework for setting the Process Objectives and linking the Critical Success Factors (CSFs) to both the objectives and Key Performance Indicators (KPIs). This is important as quite often I am asked how to define the operational KPIs, which hopefully now is explained.  Another important consideration is that the main functions groups within the End-to-End process are defined and linked to their Inputs, Outputs and Systems for maintaining the data along with the main transaction groupings.

The risks of non-performance are also discussed and their impact on achieving the objectives along with how management perceive their responses to mitigate the problem. The document also tries to identify the areas to be considered for performance improvement. This can be very useful information when identifying the “Quick Wins” during a Business Process Improvement project.

The information for the input to the “Entity Level Business Model” is captured during workshops with Process Owners and Stakeholders. Usually the workshops will include those process owners and stakeholders that interface to the Level 1 Process under discussion. In preparation for the workshops I consider competitive companies and how they are structured as well as their financial performance. This is useful benchmark data and helps with understanding the businesses competitive pressures. There may also be specific industry frameworks with predefined industry processes that can be considered i.e. SCOR (Supply Chan) and eTOM (specifically for Telcos).

In a previous blog “Ratio Analysis is KEY to Understanding Process Decomposition” I touched on the DuPont Ratio Analysis technique which is also known as the Strategic Profit Model. The DuPont Ratio Analysis Model is an excellent representation of how KPI decomposition is achieved. Also with its emphasis on Operational Performance it ties key activities to the financial performance of the company.

There are two main performance ratios associated with establishing a profit model:

1.       Return on Equity (ROE) which is used as a general indication of the company's efficiency; in other words, how much profit it is able to generate given the resources provided by its owners. Calculated by (Net Profit) / (Average Shareholder Equity for Period)

2.       Return on Total Assets (ROTA) a measure of how effectively a company uses its assets. Calculated by (Profit before interest and tax) / (Total Assets).

You may ask the question why? It really is quite obvious. ROE is a measure of what an investor gets back in monitory terms from the trust he or she puts in the management team of an organisation. Whereas the Return on Assets is a very good measure of how the management team is using the Assets of a company to generate a profit.

ROTA is used to measure the operating efficiency of the business and is the ratio over which operational management has the most control. There two main drivers that impact ROTA are:

1.       Margin on Sales percentage – Calculated by( PBIT / Sales)

2.       Sales to Total Assets Ratio – Calculated by (Sales / TA)

 

If we now drill down on Margin on Sales, there are four main drivers these are Materials, Labour, overheads and Admin/Selling expense. Each of these can be broken down further with their own drivers to provide a means of a more detailed analysis. Likewise if we drill down on Sales to Total Assets the most significant drivers are Fixed Assets, Inventories and Accounts Receivables which again can again have their own drivers defined to increase the operational control over the activities.

A simple spreadsheet model can be created to provide a means of adjusting the drivers to evaluate the impact on ROTA and ROE. Also a 3 to 5 years outlook can be built to ensure that model supports the aspirations of the owners and stakeholders. The cost ratios provide a mechanism to plan, budget, delegate responsibility and monitor the various functions. They can quantify the target for all areas and calculate the affects of disparity in any one of the subsidiary ratios on the overall performance. I have included a simple spreadsheet model to demonstrate the impact of changing driver values on the higher level performance ratios.

This model does not handle very well the detail around variation in different products, material costs, changes in volumes and different asset depreciation policies. There are different ways of doing this and I will get around to covering these in a later publication. There are many good planning tools around that can be used for detailed planning; however, as a first cut the DuPont Model provides an excellent insight into the impact of ratio variations on the profitability of a business.

 

Profit Model.xls (93.50 kb)

Having worked for American companies for most of my working life, I am accustomed to using the term Value Proposition. However, if I translate this into English “Statement of Direction” is probably the closest interpretation, and for those familiar with Balance Scorecard it is translates closely to “Destination Statement”.  The purpose of defining a Value Proposition is to provide a means of driving the Strategy and to give direction to the organisation and its constituents. When Kaplan and Norton introduced strategy maps to provide a means of connecting strategy and objectives to Performance Indicators it emphasised the focus on driving value, however, later it was necessary to add a Destination Statement to define a goal and purpose. You might ask why? The reason is clear, I have map of how to get there (strategy), and I have a defined set of objectives (KPI’s) but have no defined destination.  

In my previous Blog “Disruptive Business Modeling” where I discussed business modeling it highlighted the importance of establishing a Value Proposition or a “Statement of Direction”. A Value Proposition is defined as “an analysis and quantified review of the benefits, costs and value that an organization can deliver to customers and other constituent groups within and outside of the organization.” To build a Value Proposition the following points can be considered:

1.       The Value you bring as an organisation

a.       A selected set of customers

b.      Why they need your offerings

c.       How your Products and Services fulfill their needs

d.      What benefits you will bring to them

2.       How you differentiate the Value you bring to your Customers and Stakeholders

a.       How you position yourself from the competitors

b.      What differentiate you Products and Services

c.       Identify and produce proof of this differentiation

There is a strong link between the Value Proposition and the Profit Model. Customers and Suppliers  require a company or organisation to have a sustainable financial structure that ensures they will be in business for the foreseeable future. Financial strength is built on healthy sustainable growth in revenues supported by a programme focused on managing and containing costs ensuring the ability to invest in the resources required to grow the business.

There are three principle drivers when considering the development of a Business Model:

1.       Increasing Velocity - The ability to deliver products to end-users as fast or faster than competitors and to reconfigure the business strategy & operations as fast or faster than competitors in response to changes in market or supply/supplier conditions

2.       Improving Visibility - The ability to monitor, control and change the business strategy & operations from supplies acquisition to product or service delivery at end user.

3.       Controlling Variability - The ability to continuously monitor and improve planning and forecast accuracy and reduce the impact of unplanned events on business performance.

Business Processes are developed to maintain the integrity of the business model, that are built into and around applications and data stores supported by the IT Infrastructure. The design and the management of the processes impact the performance of the business and its ability to respond to change. To ensure a quick response, the performance of the business processes are monitored and analysed to assess their impact on the performance of the business. Each activity that is monitored is analysed in terms of its contribution to the overall performance of the business. This ability to roll up and drill down performance indicators are an important aspect to ensure problems are pin pointed and resolved as quickly before they, in conjunction with others, create a much bigger problem.

In conclusion the Value Proposition is not static; it is reviewed periodically to ensure it is maximising value for the business and constituents. The business processes supporting the creation of value are monitored and analysed to ensure they are still relevant and change management processes are used to manage the changes required to keep the business on track or put in place new processes delivering value for new opportunities. This is a continuous improvement programme that adjusts to the changing business environment.

To help understand the areas of coverage in this Blog I will define my perception of Business Performance Management. All too often people assume Performance Management is Business Intelligence (BI). This is not the case, BI is one of the legs on the stool and as the diagram shows there two more legs and a framework within which it is defined and implemented.

The diagram highlights the three main areas which are:

·         Corporate Performance Management

·         Business Intelligence

·         Business Process Management

The framework within which the solution is built is usually part of an Enterprise Architecture (EA). As to what EA framework is used is very much down to the preference of the EA Team. During the course of this Blog I will endeavour to cover all these areas based on my experience and preferences. There is another important factor to cover which is Programme Management since implementing Performance Management comprises of multiple complex projects. The projects have many interdependencies that need to be tied together to ensure the sequence and priorities in which deliverables are made are consistent and do not impact adversely pervious deliverables.

In the centre of the diagram there is a red box called “Assigned Accountability”. One of the most difficult parts of a Performance Management project is assigning ownership of performance metrics, especially at the operational levels within a business. This has a major impact on the existing culture within and often involves assigning performance related incentives to individuals and groups who are responsible for the management of the activities that impact the performance metrics. Since activities are part of a process and processes are affected by upstream and downstream processes difficulties can arise from poor performance that has an impact on the achievements and aspirations of dependent performance metrics owners. Managing these changes is a difficult task and needs a strong management team to mitigating the risk associated with delivering a successful Performance Management Programme.

Performance Management is a top down driven programme that becomes embedded in the culture of an organisation. It is a continuous process that enables an organisation to respond to change quickly and adjust to the changing economic and market dynamics as they occur. Technology plays a large part in the delivery of a successful programme expanding its reach and response to an ever changing business environment. Performance Management projects rely heavily on applications and tools to document and deliver a successful outcome. I will expand on this in future Blogs.

It does seem unreasonable to go through all the effort of defining a strategy for the business and setting goals and objectives to achieve the strategy if its success cannot be measured. I have worked for many companies that set revenue and profit goals with no plan to achieve their targets. Also there is no realisation that success builds on success; by this I mean you should consider the success of the previous plan and define a way to build on that success with stretch, but achievable, growth and stability targets.

When I was working for Burroughs in the early 80’s, in Europe, we developed an Account Management training program for our Branch Managers.  It suddenly dawned on us it was easier and more cost effective to obtain new business from existing customers than to obtain new customers. To ensure this programme succeeded we developed workshops, for branch managers to help them facilitate sales team meetings, building and reviewing  account plans focused on identifying and closing business within the existing customer base. The process we went through was to capitalise on the investment in the account and marketing resources, identify realisable goals and define a roadmap to achieve the goals within an agreed timescale.  The graph of time over effort was used to highlight the impact of not setting objectives and activities to achieve Goals. It shows that if a goal is set without time bound objectives it is human nature to put things off until the last moment which often results in a huge last minute effort to achieve the goal and ultimately results in failure. This is also the same for objectives without time bound activities.  You might ask what has this to do with Business Process Management and Business Intelligence.  Well it highlights a few of points:

1.       There is more control over the outcomes of processes and strategic goals if we break them down into manageable tasks or activities.

2.       Human nature is to react to events based on a perception of urgency derived from the most visible outcomes. This can impact the overall outcome of a planned set of goals.

3.       A detailed history of the activities and objectives to achieve a goal can be stored for future analysis.

Also one of the more important lessons I learned in the early part of my career was that a lack of end-to-end process visibility could have serious implications on the performance of a business.  This lesson was learned from my involvement in the early MRP (Materials Requirement Planning) software market. Many mainframe and mini-computer software solutions were based on separate software packages developed to support a department’s business requirements i.e. financial software applications, production management, inventory management solutions, purchasing applications and sales management systems etc.  Communication between the departmental solutions was manual or batch and there was very little visibility across the organisation. One of the failings of the early Production and Inventory Control systems (MRP1) was the focus only on the material planning of the manufacturing or logistics facility with very little or no marketing or sales input. This lead to highly efficient production facilities converting raw material into finished products based on the material planners interpretation of demand. This caused a massive increase of expensive finished goods inventories with no customer orders. On the other hand there was no capacity taken into account with MRP I which meant there was often insufficient resources and capacity to meet the customer demand if the demand forecast was correct.

To remedy to this problem evolved when MRPII evolved taking into account the four key resources of a manufacturing organisation. MRPII integrated the software applications to manage these resources with resource planning and capacity management. The problem with MRPII is its very complex to implement and expensive to adapt to specific customer needs; also it is a transaction based system which has inadequate reporting for managing the business. Businesses are complex and management does not have time or the capacity to review detailed transaction reports as decisions are usually triggered by exceptions. These deficits lead to the creation of decision support systems and finally Business Intelligence. Also more sophisticated Corporate Planning; Customer and Supplier Relationship applications have evolved which are becoming integrated through web services and business process management solutions.

Sometimes it is difficult to determine the relevance of the information we collect through the many business activities along with the importance of that information to the organisation in achieving its business goals. That it is important to start by reviewing the Value Chain and the Key end-to-end processes decomposing them into operational processes and activities.

Adopting a standard Framework such as SCOR (Supply Chain Council Operations Reference) highlights the typical process decomposition. The SCOR model although focused on Supply Chain can be and is being adapted to other industries and is similar to the APQC Process Classification Framework(PCF) discussed in a previous Blog. SCOR has three defined process Levels with the 4^th level defining unique company practices to maintain a competitive advantage, which is out of scope in terms of the defined reference model. Within the SCOR framework process metrics and best practices are recommended along the ability to fine tune the process elements to a company’s specific needs.

When considering where to start on a business process project I like to investigate the Cash-to-Cash process. I think of the Cash-to-Cash process as the “Cash Supply Chain” managing the key business resource of money. This is an essential ingredient to the survival of the business and the achievement of its Strategy.

There are many KPI’s (Key Performance Indicators) derived from the Cash-to-Cash process. All focused on managing the “Cash Tank” that fuels the company’s progress through its lifelong business journey. The diagram shows a financial perspective which is essential when dealing with investors and organisations that supports the business through its growth and stability objectives. The diagram illustrates clearly how a business maintains sufficient cash resources to meet their resourcing needs, or risk serious financial consequences.

A key measure on a business is whether it has sufficient cash available to meet its short term responsibilities (short term liabilities). There are a number of key ratios used by investors to gauge the liquidity of a business i.e. Current Ratio, Quick Ratio and Working Capital to Sales which are some of their favourites. However, when considering the internal operations of a business, the focus should be more on Working Capital Days.

 

The illustration shows the funding requirements for a business and highlights the points of measure which can be applied to control this process and reduce the organisation exposure. We are all very conscious of the recent economic events and the impact this has had on business. This very simple diagram illustrates the importance of time gap between cash-out and cash-in and the impact that product quality and effective resource management can have on this process. This can be taken further when investigate the impact of the cash-to-cash process on the supply chain and how this affects the relationships between the business and its customers and suppliers.

The importance of the external factors and how they can impact they have on the business is shown in the above diagram. All businesses should have similar internal measures in place to ensure external relationships with Investors, Customers and Suppliers are well maintained and focused on meeting the goals and objectives of the business. It is ideal if the relationships within the supply chain are transparent from a planning perspective to ensure there are no surprises and that the satisfaction level is of the highest standard.

In the next couple of Blogs I will share my views on the development and implementation cycle of a Business Process Project. When considering a BPM or BI project I have a number of criteria that I review. This has arisen from my experience of engaging in projects that end up purely as a documentation exercise to be archived and never seen again.

The following are some of the considerations I take ito account before engaging on a BPM project:

1.       There should be a compelling need, driven top down within the organisation.

2.       There is a well defined business model.

3.       The Business Processes take Input and provide Output to the Strategic Planning and Corporate Performance Management systems. In other words the Processes are directly linked to the Profit Model which in turn is derived from the organisations Value Proposition.

4.       There are well defined planning cycles within the organisation so that performance can be measured against plan. Also so Business Processes can be adjusted or re-designed to meet the goals and objectives of the Plan.

5.       There are well defined End-to-End processes which all other processes are decomposed from.

6.       There is a model to define accountability for managing the processes.  

7.       Business Intelligence is utilised to monitor and analyse the outcomes of the processes and their impact on the organisations performance.

8.       The Stakeholders within the organisation undertake to implement a culture of continuous process of improvement (there is acceptance that this is not a one-off exercise and it is a continuously evolving, contributing to the success of the organisation).

The diagram I have included is a typical BPM cycle and should be reflected in the project plan. My next Blog will provide a more detailed plan.

I have just arrived at my home in Pünderich on the Mosel in Germany. The journey by road from Swieqi, Malta to Pünderich was unplanned and I was totally reliant on my trusty Satellite Navigation system. To locate the ferry ports I broke my journey into three stages from:

1.       Swieqi, Malta to the Valletta ferry departure point

2.       Pozzallo in Sicily to the port of Messina the next ferry departure point to Villa San Giovanni in southern Italy.

3.       Villa San Giovanni I hit the find home key and set out on the rest of the journey, which was over 2100 km travelling the length of Italy and Switzerland to Germany.

I had complete trust in my Satellite Navigation system and did very little preparation for this part of the journey.  This turned out to be a big mistake, in Southern Italy we encountered major road works and changes to their highway system. Around 200 km south of Naples my Satellite Navigation system became extremely confused sending me here, there and everywhere. This went on for about 2 hours before I decided it was time to buy a map. Of course once I had bought the map my Satellite Navigation system decided it now knew the way and managed to work out a way on its own.  This caused major delays to my arrival in Germany and ran up additional costs.

When I calmed down and started think straight once more, I began to see this as a good analogy to business process mapping. If a high-level plan is not first established and broken down into manageable inter-linked stages it is quite conceivable that the processes could become unlinked and lose their way impacting overall performance of the end-to-end process. The same issues arise from changes to processes without established change management procedures in place.

I usually use the high-level business entity diagram, which was discussed in an earlier Blog, to enable me to build a business model that structures the processes around the ‘Core Value Chain”.  It is an excellent framework to use when discussing BPM with Stakeholders as it introduces Objectives, Critical Success Factors, Key Performance Indicators and the concept inter-dependent processes. Overtime I it has provided me with a repository of pre-built generic models by industry which I use to speed up the discussion processes and use as a mechanism for getting quick consensus. In conjunction with this method I also use an application map to establish what is in place and understand the gaps in the processes. Using these simple visual models makes it much easier to discuss the project and start the process of building a repository of project information.

By mapping out the key business areas in this way a portfolio of applications can be established taking into account all external factors as well as the intercompany transactions. Also it gives a quick visual view of the key process areas and their relationships. In fact as a CIO I used this method to establish a portfolio of prioritised projects. For each of the areas in the above application map a more detailed list can be compiled which can be used for annual budgeting purposes. This approach will lead to a future discussion on how BPM and BI play a part in Enterprise Architecture Frameworks such as TOGAF.

Establishing an approach for implementing a Business Process Management Project is dependent on the level of Sponsorship. We all want it to be driven by the board and the successful delivery the responsibility of the CEO. Unfortunately in nearly all cases this does not happen. It is very hard for any level of management to envisage the complexity of the network of integrated processes developed within an organisation to achieve the Value Proposition. That the processes are derived to support the overall vision and goals of the organisation and the outcomes of the processes determine the success or failure of the business model.

When developing a Business Process Strategy one Framework will not do. There will be a number of nested development frameworks required to describe the complexity of a living business and the level of decomposed detail.

At each level of the decomposition model a framework is used to develop and link the decomposed activity. In addition there is continuous change cycles in place to monitor and analyse the outcomes and handle the speed of change required.

The most important ingredient for a successful Business Process project is that the total organisation is on board and supports it enthusiastically. One department doing well and another failing to meet its objectives means the whole organisation is at risk.