Business Management Competency Methodology Presentations Process Management

Establishing a Business Process Management Center of Excellence – Impact 2012


Speakers: Benny Higdon, Prolifics; Howard Webb, Prolifics
Description: Introducing a new technology in to an enterprise may be fraught with problems. The same is true for Business Process Management (BPM), which are both a technology and a methodology. Establishing a properly staffed and empowered Center of Excellence (CoE) can improve your chances of success. Learn the considerations for setting up a BPM CoE in your organization.


Establishing a BPM Center of Excellence Best Practices & Case StudyHoward WebbDirector, BPM Advisory ServicesProlifics INTRODUCTIONS2 Howard Webb  Director of BPM Advisory Services – Prolifics  Over 25 years as a consultant, trainer, facilitator, and speaker on the topics of Business Process Management (BPM), data architecture, and project management  Founded the Midwest BPM Users Group  Published articles on BPM and enterprise architecture3 ABOUT PROLIFICS4 Prolifics at a Glance Who Are We? A Corporate Group of 1,200 Employees Worldwide specializing in the expert delivery of end-to-end IBM Solutions Over 30 years in business, Prolifics is an end-to-end systems integrator specializing in IBM technologies New York Orlando Boston San Francisco Philadelphia London Application Testing Washington DC Hamburg Santa Clara, CA USA Off-Shore Development Center Hyderabad, India S t a b i l i t y, L o n g e v i t y & G r o w t h Solution Leadership $70 Gross Revenue (millions)  SOA solutions and appliances for connectivity $60  Business Process Management for business optimization $50  Portal, Collaboration and Content Management $40  IT Security for Applications and the Enterprise $30  Monitoring and Managing Applications $20  Testing, Governance and Methodology $10  Information Management for Data Cleansing, BI & Dashboards $0  Technology Migrations to the IBM Software Platform 2004 2005 2006 2007 2008 2009 20105 Prolifics’ Customers Healthcare Financial Services Government Retail & Distribution Utilities Insurance Education6 WHAT IS BUSINESS PROCESS MANAGEMENT?7 Business Process Management Some definitions… A top-down methodology A systematic approach for improving a specific process A set of software technologies The same thing as business process reengineering8 Business Process Management “Business Process Management (BPM) is a holistic management approach that encompasses all aspects of a business including Strategy, People, Processes and Technology, in order to delivering value to customers and other stakeholders.”9 You never arrive.10 It requires coordination to keep the Journey moving forward smoothly.11 12 Challenges  Limited resources  Competing priorities  Standardization (methods, technologies)  Increasing demands from both the business and customers  Management demand to show ROI  Gain process maturity and foster an environment of continuous improvement  Struggling with complexity and change13 Complexity  “Change is linked to complexity. Complexity increases both when the rate of change increases and when the amount of things that are changing around us increase.” Theodore Modis14 WHAT IS A BPM CENTER OF EXCELLENCE?15 The BPM Center of Excellence  A centralized organization focused on the enterprise-wide coordination of process activities  The Hub for all things BPM  A Steward of methods and standards  A link between strategy and execution  Agent of change16 WHY ESTABLISH A BPM COE?17 The Need for Coordination  The only way organizations can deliver value to their customers is via cross-organizational business processes  Business strategy is therefore delivered and executed by means of business processes  To ensure the business strategy is being delivered as desired, process initiatives must be coordinated, managed and controlled  Few organizations have a centralized structure dedicated to this objective18 Traditional Management Model  Redundant activities/duties  Misaligned incentives/ compensationDepartmental Silo  Isolated measurementPerspective model  Limited reuse Traditional  Multiple breakpoints Hierarchical Management  Multiple moments of truth  No cross-organization Corporate control Dept A Dept B Etc. Process-Oriented Model  Begin and end with the customer experience in mind  Incentives based on end-to- Cross-Departmental end process performance Perspective  Fewer handoffs, fewer breakpoints  Few moments of truth  Process measures providing visibility Corporate Function A Function B Etc. Process 1 Process 2Customer Process 3 Customer Poorly Coordinated BPM   Redundant standards Competing priorities Program  Sub-optimized operations  Inefficient use of technologyProcess Silo Perspective  More handoffs, more breakpoints  Multiple moments of truth  Limited or no cross- organization control Corporate Dept A Dept B Etc. Sub-Process Sub-Process Sub-Process Customer Customer The Customer Experience  Discontinuous thinking leads to disjointed customer experiences… How many people or departments did I have to talk to just to get my issue resolved?22 Current Trends “Broadly speaking, investing in better coordination and management of process work has been on the rise, while incremental approaches are slowly declining, or at least being integrated into larger, organization-wide BPM initiatives..” bpm six sigma Lean six sigma business architecture *BPTrends, 2012, The State of Business Process Management, Celia Wolf, Paul Harmon : www.bptrends.com23 Operating Model Maturity Influencing Directing  Leading by example  Setting policy  Gaining support  Determining what projects to  Small, early successes do  Have a seat at the Strategy table  Where your COE falls on this spectrum depends largely upon your environment  How much power and authority the COE is granted  Not likely to start as a Directing model24 Structure BPM COE Management Process Process Management Improvement  Strategic organizational perspective  Process modeling  Coordination of activities  Facilitation  Track and monitor benefits, ROI  Coaching  Support the use of tools and  Project management technologies  Business analysis  Development of standards, methods  Data analyst and techniques  Integrate with Project Office  Customer surveys  Process maturity assessments25 Staffing BPM COE Management  Office administration  Communications coordination Process Process Management Improvement  Business Architect  Project manager  Customer segmentation  Process modeler  Delivery channels  Revenue streams  Data analyst  Trainer/coach  IT analyst  Methodologist  Facilitator  Business Rules Specialist  Statistician Some roles can be virtual, tapping expertise as needed.26 Funding BPM COE Management  Centrally Funded Process Process Management Improvement  Centrally Funded  Project Funded Without central funding, staff could be „reallocated‟ to other duties or continually be searching for funding.27 Positioning the COE Location of the BPM Group 2011 Survey results We do not have a formal BPM Group 36% Our BPM Group is at the Executive 18% level Our BPM Group is at the Divisional or 16% Departmental level Our BPM Group is located within IT 15% Our BPM Group is located within HR 1% or Training Our BPM Group is located within 4% Finance Our BPM Group is located within 5% Quality Control Other 6% *BPTrends, 2012, The State of Business Process Management, Celia Wolf, Paul Harmon : www.bptrends.com28 OTHER CONSIDERATIONS…29 BPM Maturity Model Assessment Criteria30 Role-Based Organizational Structure Service Catalog RACI Chart31 Discipline Roadmaps BPM COE Intranet Three Year Roadmap32 CASE STUDY – HORIZON HEALTHCARE33 Who is Horizon Healthcare Services?  Horizon is New Jersey’s oldest and largest health insurer.  Horizon traces its history back to 1932, when Associated Hospitals of Essex County, Inc. began selling multi-hospital pre-payment plans for $10 a year covering 21 days of in-patient care.  The company was one of the first health insurance companies in the nation and also one of the first Blue Cross Plans.  Today, it serves more than 3.6 million members.  In 2010, the company processed more than 57.6 million claims totaling more than $13 billion for its members.  The company has more than 4,800 employees and is headquartered in Newark with offices in Harrison, Wall Township, Mt. Laurel, and West Trenton.34 Why Horizon Decided to Get Involved in BPM Journey to Agility The Horizon Multi Year Strategy Competitive Pricing Responsive Agile Cost Reduction Standardization Event Driven  Horizon defined a comprehensive systems strategy and plan to achieve the following goals:  Complexity reduction  Sources of truth for core business information  Flexible and agile platforms to respond quickly to change  Business model shift to self-service and the Internet  Catalyst for change  Industry trends requiring faster business response  Shift to the individual consumer  Shifting demographic to technology sophisticated customers  Increasing healthcare costs forcing operational excellence  Increased reliance on business partners35 What Horizon Expects from BPM? From Here To Here36 LESSONS LEARNED37 Key Considerations  Executive Sponsorship is Key  Startups take vision and investment  BPM is a big investment … Hardware, Software, People, Project Costs  It’s a business … financial benefit to the Organization needs to be documented  Communication … do it early … do it often  Surprises … Communicating the Reference Architecture to the Business is important  Your peers don’t know what you have not shared with them … until you tell them three times  You don’t know what your team has not told you …  Communication will create demand … do you have the capacity?38 Key Considerations  Demand comes quickly … get your capacity ready  Recruit … Recruit … Recruit … get help  You need a diverse set of skills …  Setting up a new business takes a LOT of energy … Plan for change … and stress  Work to stay aligned to your plan (“Plan your work and work your plan”)  Work to get others aligned to your plan … communicate  Setting up the Infrastructure and Base Platform installs is a massive project • Development, Test, Pre-Production, Production39 Good Things Happen Along the Way  BPM & SOA lead to reuse Reuse sometime pops up unexpectedly … especially when focused on core processes  Example … Our pilot had to do with managing the process and data for customers with multiple insurance policies.  Currently using two claim systems but working to converge to a single one.  We reused knowledge, services, and processes to accelerate and ensure consistency for the migration.40 Horizon BPM Success Stories BPM & Web 2.0 Mash-Ups = Consolidation Cycle Time Improvements of 20x 20 Letter Systems to 1 CRM & SOA = First Call Resolution BPM Automations Integrated Medical Record Management 10% Increase in FPR Timely Resolution of Complex Claims41 WRAP UP42 Summary  Cross-organizational coordination of process initiatives is critical to success  Implement your Center of Excellence sooner vs. later  Properly staff and fund the Center of Excellence with the appropriate roles and skills  Don‟t burden individual process improvement teams with defining standards and methods43 Next Steps  BPM Readiness Assessment  Setting Up and Configuring A BPM COE in Your Environment44 For more information: Contact: Howard Webb Email: Phone: 646.380.2948 And visit these useful links on the Prolifics Web site:  Case Studies:  Webcasts:  Podcasts:  Service Brochures:  Technology Blog:  Twitter:  Prolifics TV:

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