Presentation given at the BPM Executive Day, Bogota, Colombia, December 4, 2012. The presentation outlines the different dimensions of BPM activities an organization should consider when organizing their BPM efforts.

1. Building BPM Competency
Growing a Center of Excellence
Michael zur Muehlen, Ph.D.
Stevens Institute of Technology
Howe School of Technology Management
Center for Business Process Innovation
Hoboken, New Jersey
Michael.zurMuehlen@stevens.edu
1

2. Agenda
Background
What is your challenge?
How good are you?
How good do you want to become?
Components
Mechanics
Tools
Skills
Governance
Culture
2

3. “They have done process innovation very well,” says
Nelson Fraiman, a professor at Columbia Business
School [...] “Product innovation? No. But tell me one
Chinese company that has done product innovation
very well. They are brilliant at process. I think you
should give a cheer for process innovation.”
Source: New York Times, November 9, 2012 3

4. What’s your Challenge?
Increase Transparency
Standardize Operations
Manage Risk
Increase Performance
Create Innovation
Often: All of the above
4

5. Why BPM?
0 75 150 225 300
216
146
Cost/Productivity
Responsiveness
Customer Satisfaction 117
Innovation
Improve IT
Risk Management 106
68
50
Source: BPTrends
Number of Responses 5

6. Do Process Managers Exist?
Value Chain Manager
Process Manager for Major Processes 32%
Process Manager for Specific Processes
All Managers are Process Managers
Other
19%
27%
10%
13%
Source: BPTrends
6

7. Visibility
7

8. Industrial BPM
Paper Process 1
Business
Phone Process Process 2
Management
Fax
= Work ...
Management
E-mail
Process n
Web
White collar production management
Input Transparent work pipeline
Process
Channels Automation, but only if not
Types
too complex / rare
regulatory requirements
lack of economies of scale
8

9. Search processes using
‣technical and
‣business criteria
Display shows
‣status
‣start time
‣end time
‣instance data
Industrial Back-Office 9

10. Task Management
10

11. How Good Are You? Business Process Management
Maturity Model
Strategic Governance Method IT Support People Culture
Alignment
Process Improvement Process Roles and Process Design & Process Design & Process Skills & Process Values &
Plan Responsibilities Modeling Modeling Expertise Beliefs
Strategy & Process Decision-making Process Process Process Education & Process Attitudes &
Capability Linkage Processes Implementation & Implementation & Training Behaviors
Execution Execution
Process Output Process Metrics & Process Control & Process Control & Process Collaboration Responsiveness to
Measurement Performance Linkage Measurement Measurement & Communication Process Change
Process / Business Process Management Process Improvement Process Improvement Process Knowledge Leadership Attention
Architecture Standards & Innovation & Innovation Management to Process
Process Customers & Process Management Process Project & Process Project & Process Management Process Social
Stakeholders Controls Program Program Leaders Networks
Management Management
largely$true$ somewhat$ largely$
true$ untrue$
P"1 P"2 P"3& P"4&
The$process$has$not$been$designed$on$an$end1to1end$ The$process$has$been$designed$to$fit$with$other$enterprise$ The$process$has$been$designed$to$fit$with$customer$and$
The$process$has$been$redesigned$from$end$to$end$in$
Design Purpose basis.$Functional$managers$use$the$legacy$design$primarily$ processes$and$with$the$enterprise’s$IT$systems$in$order$to$ supplier$processes$in$order$to$optimize$inter1enterprise$
order$to$optimize$its$performance.$
as$a$context$for$functional$performance$improvement.$ optimize$the$enterprise’s$performance.$ performance.$
The$process$owner$and$the$owners$of$the$other$processes$ The$process$owner$and$the$owners$of$customer$and$
The$process’s$inputs,$outputs,$suppliers,$and$customers$ The$needs$of$the$process’s$customers$are$known$and$
Context with$which$the$process$interfaces$have$established$ supplier$processes$with$which$the$process$interfaces$have$
have$been$identified.$ agreed$upon.$
mutual$performance$expectations.$ estab1lished$mutual$performance$expectations.$
The$process$documentation$describes$the$process’s$ An$electronic$representation$of$the$process$design$
The$documentation$of$the$process$is$primarily$functional,$
inter1faces$with,$and$expectations$of,$other$processes$and$ supports$its$performance$and$management$and$allows$
Documentation but$it$identifies$the$interconnections$among$the$ There$is$end1to1end$documentation$of$the$process$design.$
links$the$process$to$the$enterprise’s$system$and$data$ analysis$of$environmental$changes$and$process$
organiza1tions$involved$in$executing$the$process.$
architecture.$ reconfigurations.$
Performers$can$describe$the$process’s$overall$flow;$how$ Performers$are$familiar$both$with$fundamental$business$
Performers$are$familiar$with$the$enterprise’s$industry$and$
Performers$can$name$the$process$they$execute$and$ their$work$affects$customers,$other$employees$in$the$ concepts$and$with$the$drivers$of$enterprise$performance$
Performers Knowledge its$trends$and$can$describe$how$their$work$affects$inter1
identify$the$key$metrics$of$its$performance.$ pro1cess,$and$the$process’s$performance;$and$the$ and$can$describe$how$their$work$affects$other$processes$
enterprise$performance.$
required$and$actual$performance$levels.$ and$the$enterprise’s$performance.$
Performers$are$skilled$in$problem$solving$and$process$ Performers$are$skilled$at$change$management$and$change$
Skills Performers$are$skilled$in$teamwork$and$self1management.$ Performers$are$skilled$at$business$decision$making.$
improvement$techniques.$ implementation.$
Performers$try$to$follow$the$process$design,$perform$it$
Performers$have$some$allegiance$to$the$process,$but$owe$ Performers$strive$to$ensure$that$the$process$delivers$the$ Performers$look$for$signs$that$the$process$should$change,$
Behavior cor1rectly,$and$work$in$ways$that$will$enable$other$people$
primary$allegiance$to$their$function.$ results$needed$to$achieve$the$enterprise’s$goals.$ and$they$propose$improvements$to$the$process.$
who$execute$the$process$to$do$their$work$effectively.$
Enterprise$leadership$has$created$an$official$process$
The$process$owner$is$an$individual$or$a$group$informally$ The$process$comes$first$for$the$owner$in$terms$of$time$ The$process$owner$is$a$member$of$the$enterprise’s$most$
Owner Identity owner$role$and$has$filled$the$position$with$a$senior$
charged$with$improving$the$process’s$performance.$ allo1cation,$mind$share,$and$personal$goals.$ senior$decision1making$body.$
manager$who$has$clout$and$credibility.$
The$process$owner$develops$a$rolling$strategic$plan$for$
The$process$owner$articulates$the$process’s$performance$
The$process$owner$identifies$and$documents$the$process,$ the$process,$participates$in$enterprise1level$strategic$
goals$and$a$vision$of$its$future;$sponsors$redesign$and$ The$process$owner$works$with$other$process$owners$to$
Activities communicates$it$to$all$the$performers,$and$sponsors$small1 planning,$and$collaborates$with$his$or$her$counterparts$
im1provement$efforts;$plans$their$implementation;$and$ integrate$processes$to$achieve$the$enterprise’s$goals.$
scale$change$projects.$ working$for$customers$and$suppliers$to$sponsor$inter1
ensures$compliance$with$the$process$design.$
enterprise$process1redesign$initiatives.$
The$process$owner$controls$the$IT$systems$that$support$
The$process$owner$can$convene$a$process$redesign$team$ The$process$owner$controls$the$process’s$budget$and$
The$process$owner$lobbies$for$the$process$but$can$only$ the$process$and$any$projects$that$change$the$process$and$
Authority and$implement$the$new$design$and$has$some$control$over$ exerts$strong$influence$over$personnel$assignments$and$
encourage$functional$managers$to$make$changes.$ has$some$influence$over$personnel$assignments$and$
the$technology$budget$for$the$process.$ evaluations.$
evaluations$as$well$as$the$process’s$budget.$
An$integrated$IT$system,$designed$with$the$process$in$ An$IT$system$with$a$modular$architecture$that$adheres$to$
An$IT$system$constructed$from$functional$components$
Infrastructure Information Systems Fragmented$legacy$IT$systems$support$the$process.$ mind$and$adhering$to$enterprise$standards,$supports$the$ industry$standards$for$interenterprise$communication$
sup1ports$the$process.$
process.$ sup1ports$the$process.$
Hiring,$development,$reward,$and$recognition$systems$
Functional$managers$reward$the$attainment$of$functional$ The$process’s$design$drives$role$definitions,$job$ Hiring,$development,$reward,$and$recognition$systems$
rein1force$the$importance$of$intra1$and$interenterprise$
Human Resource Systems excellence$and$the$resolution$of$functional$problems$in$a$ descrip1tions,$and$competency$profiles.$Job$training$is$ em1phasize$the$process’s$needs$and$results$and$balance$
collabora1tion,$personal$learning,$and$organizational$
process$context.$ based$on$pro1cess$documentation.$ them$against$the$enterprise’s$needs.$
change.$
The$process$has$end1to1end$process$metrics$derived$from$ The$process’s$metrics$as$well$as$cross1process$metrics$ The$process’s$metrics$have$been$derived$from$
Metrics Definition The$process$has$some$basic$cost$and$quality$metrics.$
11
customer$requirements.$ have$been$derived$from$the$enterprise’s$strategic$goals.$ interenter1prise$goals.$
Managers$use$the$process’s$metrics$to$track$its$ Managers$use$the$process’s$metrics$to$compare$its$ Managers$present$the$metrics$to$process$performers$for$
Managers$regularly$review$and$refresh$the$process’s$
Uses perfor1mance,$identify$root$causes$of$faulty$performance,$ perfor1mance$to$benchmarks,$best1in1class$performance,$ awareness$and$motivation.$They$use$dashboards$based$on$
met1rics$and$targets$and$use$them$in$strategic$planning.$
and$drive$functional$improvements.$ and$cus1tomer$needs$and$to$set$performance$targets.$ the$metrics$for$day1to1day$management$of$the$process.$

12. Organization of BPM Initiatives
Did not identify or define specific Process Team
Identified and defined Internal Process Team
Plan to create BPM COE
Successfully implemented BPM COE 15% 23%
16%
46%
Source: Palmer (2007) 12

13. Organization of BPM Initiatives
18%
36% 16%
No formal BPM Group
BPM Group at Executive Level
BPM Group at Departmental Level
BPM Group in IT 15%
BPM Group within HR 6%
5% 4%
BPM Group within Finance 1%
BPM Group within Quality Control
Other
Source: BPTrends
13

14. BPM Capability Growth
Source: Forrester (2009)
14

15. Mechanics
15

16. “Vision without execution is hallucination”
Thomas Alva Edison
16

17. Scheduled
5% 3%
Project Time 8%
7%
during First BPM
Project 12%
41%
Business Case
Project Team Selection
Process Discovery 11%
Documentation
Functional and Technical Specification
Tools Evaluation and Selection
9%
Implementation 4%
Testing and Debugging
Deployment and Training
17
Source: BPTrends (2006)

18. Normal Flow
Task
End Event
Start Event / Event
Pool
Data-Based XOR
Start Message
Text Annotation
Message Flow
Parallel Fork/Join
Lanes
Gateway
Sub-Process (Collapsed)
Association
Data Object
Intermediate Timer
Intermediate Message
End Terminate
Sub-Process (Expanded)
End Link
Default Flow
Inclusive Decision/Merge
Activity Looping
Exception Task
Start Link
End Message
End Exception
Complex Decision/Merge
Event-Based XOR
Multiple Instance
Group
Transaction
Intermediate Event
End Cancel
Compensation
Intermediate Compensation
Conditional Flow
Exception Flow
Intermediate Link
Start Timer
Off-page connector
Start Rule
Intermediate Rule
Intermediate Multiple
End Compensation
Start Multiple
Intermediate Exception source: zur Muehlen, Recker (2007)
Intermediate Cancel
End Multiple
Compensation Association
18

19. Process Description Levels
Level A
Business Activities Scorecard
Business Activities Objectives
Level B
Process Groupings
What
Process Groupings Ownership Services
Level C
Core Processes
Core processes Delivery Units Products
Level D
Business Process Flows
Processes Delivery Teams Systems
Level E
Operational Process Flows
Level F
Sub Processes How Roles System Functions
Detailed Process Flows
Detailed Processes Detailed Roles Transactions
Source: British Telecommunications plc 2006

20. Tools
20

21. “All models are wrong,
some are useful”George P.E. Box
21

22. Collaboration
22

23. Tools
Use Cases User Groups
Documentation Line of Business
Modeling Software Engineers
Analysis Business Analyst
Simulation Enterprise Architect
Execution Executives
Prediction
23

24. Skills
24

25. BPM Project Issues
Commitment
to Change
Value Proposition Governance
Project Management
Setup Design Maintenance
Info. Tools
Modelers Users
Providers and Lang.
25

26. Strategy-related Issues
Top
Economic Value
Management Governance
(economics)
Support
Lack of value
Commit-
End-goal Focus on ROI metrics (i.e., Lack of Corporate Ownership
ment to Sponsorship Incentives Costs Politics
perceptions Initiatives Justification Balanced Benchmarks standards of models
long term
Scorecard)
Costs
Lack of
New tool associated with Lack of
Training coordination
acquisition updating the control
point
models
Strategy-related Issues
26

27. Process Modeling
Life Cycle Issues
Setup Design Maintenance
Lack of Lack of Lack of Consoli-
Model quality Variant
modeling standards common Infrastructure Rework Timeliness dation and
assurance management
objectives for reuse methodology Integration
Corporate
Level of Model Modeling
modeling
abstraction maintenance guidelines
standard
Modeling-related Issues
27

28. Resource-related Issues
Process Information Tool and
Model User
Modeler Provider Language
Level of Hierarchical Lack of Integration
Lack of Limited
expertise Capability BPM Level of decompo- using full with other
adequate access to
and to abstract education complexity sition of toolset modeling
toolset repository
experience models features tools
Resistance Lack of good
Lack of Lack of efficient
Cost Turnaround to change / Knowledge Integration graphical
model repository search
efficiency time adoption of sharing of activities process
utilization engine
BPM mapping
Lack of Lack of Loss of Intellectual
transfer communication knowledge property
Resource-related Issues
28

29. Different Perspectives
What
happens
Who is in
next?
charge?
What are the
possible What’s the
outcomes? overall
status? 29

30. BPM Project/Program
Process Analyst Process Modeler Systems Analyst Process Owner
Manager
Oversee individual
Process
process, staffing,
Process identification, documentation, Process Project/program
monitoring of key
performance analysis, architecture implementation, planning, scheduling,
Responsibility performance
redesign, monitoring, development, high- systems integration, oversight, staffing,
indicators, sponsorship
continual improvement level workflow interface design reporting
of process
implementation
improvement efforts
Process modeling
Workflow automation, Process dashboard,
toolset, Simulation tool, Process modeling Project management
Tools Used application integration, Business Intelligence
Business Intelligence toolset toolset
software development tools
tools
Domain of the
Process application Process
individual process,
area (eg. procurement), implementation Project management,
Process documentation process performance
Domain Expertise Data analytics, Quality platform (eg. BPMS), Process improvement
technique (eg. BPMN) measurement (eg.
management, Systems Integration methodology
linkage to balanced
Reengineering (eg. SOA)
scorecard)
Business
MBA, MS in IS, ME in BS in IS, BE in MS in IS, CS or related
Typical Degree Administration MBA
Industrial Engineering Industrial Engineering discipline
background
Business
Information Systems;
Administration; Information Systems; Business Business
Typical Background Operations Research; Industrial Engineering Computer Science; Administration Administration
Systems Engineering
Industrial Engineering
Business Analyst Body
Project Management
of Knowledge (BABOK), OMG Certified Expert in
External OMG Certified UML Institute (PMI) Certified
Lean Six Sigma Green BPM, Lean Six Sigma n/a
Certification(s) Professional Project Management
Belt / Black Belt / Black Belt
Professional (PMP)
Master Black Belt
30

31. Governance
31

32. Goal Specification,
Strategy Definition
Business Process Innovation Organizational Business Process Management
Analysis
Strategy
Revision
Process
Design
Process
Modeling and Models
Specification
Improvement
Measures for
Process Process
Evaluation Implementation
Target Metrics
Process Mining / Build Time /
Warehousing Integration
Implemented
Processes
Process
Enactment
Export for other Process
reporting purpose Metrics Run Time / Task
and Resource
Allocation
Measure-
ments
Process
Monitoring
Process
Metrics
Business Activity
Business Process Monitoring Monitoring Business Process Automation
32

33. Goal Specification,
Strategy Definition
Business Process Innovation Organizational Business Process Management
Analysis
Manage Change
Strategy
Revision
Process
Design
Process
Modeling and Models
Specification
Improvement
Measures for
Process Process
Evaluation Implementation
Target Metrics
Process Mining / Build Time /
Warehousing Integration
Implemented
Processes
Process
Enactment
Manage Execution
Export for other Process
reporting purpose Metrics Run Time / Task
and Resource
Allocation
Measure-
ments
Process
Monitoring
Process
Metrics
Business Activity
Business Process Monitoring Monitoring Business Process Automation
33

34. Goal Specification,
Business Process Innovation Strategy Definition Business Process Management
Organizational
Analysis
Strategy
Revision
Process
Design
Anticipatory
Process
Models
Reactive
Modeling and
Specification
Improvement
Measures for Problem
Problem
Process Process
Evaluation Implementation
Target Metrics
Process Mining / Build Time /
Warehousing Integration
Solving Solving
Implemented
Processes
Process
Enactment
Export for other Process
reporting purpose Metrics Run Time / Task
and Resource
Allocation
Measure-
ments
Process
Monitoring
Process
Metrics
Business Activity
Business Process Monitoring Monitoring
Business Process Automation
34

35. Product Product Product Product Product
Line 1 Line 2 Line 3 Line 4 Line 5
Core
Process 1 Process
Manager
Core
Process 2 Process
Manager
Core
Process 3 Process
Manager
Core
Process 4 Process
Manager
Core
Process 5 Process
Manager
Compare: Sainsbury (2006)
Who Owns the Process?
35

36. Source: Sainsbury (2006)
Process Ownership
36

37. Enterprise Process Map: Fortune 500
Level
concept Roles &
Responsi-
Convention
bilities
handbook
Process
Modeling
Owners
handbook
Corporate Process
Modeling Managers
Service
Methods Organization
37

38. Focus Role Objective Level
Corporate Regional
Process Sponsor Facilitate & Drive
Process Framework Method & Compatibility
Strategic Executive
Process Executive Standardize & Optimize
Process Performance
Process Owner Management
Operational
Process Manager Implement & Optimize
Process DB Manager Responsible for ARIS
Shared
Service
Process Modeler Modeling Processes
BPM Roles - Example
38

39. Culture
39

40. “If it doesn’t make
three people angry,
it is not a process”
Beyond Reengineering (Michael Hammer, 1996)
40

41. Process Improvement
vs. Established Practice
41

42. Does your BPM specialist look like this?
42

43. Or like this? 43

44. “You know, the cultural change takes time,” Mr.
Smisek said. “And people resist change. People are
sort of set in their ways.” [...]
“And there are people who don’t like that,” he said.
“I understand that. What I want is those people
to either change or leave.”
Source: New York Times, November 29, 2012 44

45. Takeaways
Define your challenge
Assess your skills
Determine how you will learn
Match the mechanics to your needs
Invest in tools, but not too much
Grow skills, and spread them
Be clear about your culture, and how it will change
45

46. Thank You - Questions?
Ph.D. ion
Mu ehlen, ess Innovat
zur oc ment
M ichael Business Pr gy Manage
for nolo
Center hool of Tech hnology
Sc ec
Howe Institute of T dson
s u
Steven int on the H
Po
Castle , NJ 07030 3
n 6-829
H oboke +1 (201) 21 5385
Phone
: 216- ns.edu
+1 (201) @steve /bpm
Fax: uehlen du
: mzurm w.stevens.e urmuehlen
E-mail ww
http:// eshare.net/
mz
Web: www.s
lid
slide s:
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