BPM Fundamentals: Develop Your Game Plan For BPM Success
Presentation on BPM fundamentals at PegaWorld. Introduces business process professionals to drivers for bpm, defining the business case, evaluating ROI, and when/where to use technology.
BPM Fundamentals: Develop Your Game Plan for BPM Success Clay Richardson Senior Analyst Forrester Research April 26, 2010 Clay Richardson Senior Analyst Forrester Research Serving Business Process Professionals 66% BPM 64% Open Source 40% SaaS Survey of 2227 SMB and Enterprise IT decision makers I heard this BPM thing might help us reduce costs. Diverse factors trigger firms to investigate BPM’s potential Enterprise And SMB Software Survey, North America And Europe, Q4 2009 Survey of 227 Enterprise and SMB IT Decision Makers Which of the following have been major drivers for your BPM initiative? What we hear – common drivers for BPM
- “ SEC audits have raised concerns over inconsistent and undocumented business practices”
- “ We need to be able to provide rule changes at the an enterprise level due to rapidly changing regulatory environment (Model audit, 38a-1)”
- “ Process standardization will be difficult with our current set of development tools for custom software development”
Firms attack process from different angles Six Sigma Business Process Re-engineering Lean Methodologies Process Analysts Change Agent Tools & Techniques Service Oriented Architecture Workflow Process skills Business Rules Business Architct ITIL eTOM SCOR Sarbanes Oxley Basel II Business Process Management Source: Adapted from Management by Process So, what exactly is business process management? Defining business process management
- Business process management focuses on continuous improvement of cross-functional end-to-end business processes
- Process improvement methodology and discipline essential ingredients for success
- Require a specific set of process skills and talents in order to be truly effective
- BPM suites and other technology can greatly accelerate and institutionalize process improvements
Don’t let the “BPM” term confuse you October 2008 “Drive BPM Initiatives To Higher Business Value” BPM is now the language of IT-to-BT Vertical/ functional Functional/process overlays Process/functional overlays Service/process organization From traditional LOB management To process-based management BPM center of excellence drives process transformation Source: October 2007 US And UK Enterprise Architecture And Business Process Management Online Survey *Base: 46 IT architects and †65 IT architects (percentages may not total 100 because of rounding) Primary Process Improvement Tasks And Functional Categories Source: June 20, 2008, “The BPM the BPM center Is Here: Now What?” Where’s the money for this BPM thing going to come from? ROI metrics for BPM success Efficiency Benefits Benefit Example Eliminate Manual Data Entry Reduction in time to add a new employee record into the HR system from 9 hours to 10 minutes Reduce Process Cycle Time Reduction in compensation processing timing for 12,000 sales reps from 33 days down to 7. Reduce Manual Analysis/ Routing Elimination of 80% of the manual work previously required to route invoice exceptions to the appropriate resolution teams. Effectiveness Benefits Benefit Example Handle Exceptions Faster and Better Evolve process from saving 5% of distressed shipments to saving 70% – yielding $2M per quarter in saved revenues. Make Better Decisions Better review process results in $3M saved in billing dispute write-offs that would formerly just been processed because the process was poorly controlled. Consistent Execution Customer satisfaction improvement to 92% based on proactive tasks that help ensure the home loan process executes better and faster Agility Benefits Benefit Example Faster Regulatory Compliance Change customs related processes after September 11, 2001 within 90 days to comply with new federal regulations for better shipping visibility. Support New Business Models Ability to change shipping partners within 10 minutes in core process allows manufacturer to change primary shipper every quarter – based on best bid provided. Example: ROI of Correspondence Management Example: ROI of Correspondence Management (cont.) Example: ROI of Correspondence Management (cont.) How to demonstrate the value that governance brings to the organization
- Project cost overrun reduction – Quantify the project time and cost overruns prior to the implementation of the BPM function.
- Project time and cost savings – Track the number of requirements defects discovered during testing and after the solution is in production prior to the implementation of BPM.
- Project portfolio value – Prepare reports that provide the investment costs and expected value of the portfolio of projects
- Report actual value new solutions add to the organization as compared to the expected value predicted in the business case.
How does BPM fit in with the rest of our technology portfolio? 1st: Identify the characteristics of your key business processes 2nd: Identify which category best supports your process needs September 2009 “The Importance Of Matching BPM Tools To The Process” 3 rd : Explore where BPM fits within your current mix of applications Forrester Wave™: Human-Centric BPM For Java Platforms, Q3 ’07 Process standards facilitate intra-department communication and collaboration Source: http://www.bpmn.org/Samples/Elements/Core%20BPMN%20Elements.htm Recommendations
- Understand the BPM focuses on methodology and tools can accelerate delivery
- Connect your ROI and business case to strategy to minimize waste and maximize impact
- Evaluate your process requirements to identify which BPM pattern and tools are best fit
- April 2010, “Pegasystems Acquires Building Blocks For Next-Generation CRM”
- January 2010, “Lean Business Technology Maturity Matrix For BPM Governance”
- December 2009, “Dynamic Case Management – An Old Idea Catches New Fire”
- October 2008, “Drive BPM Initiatives To Higher Business Value”
- Clay Richardson
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