© 2010 ibm corporation smart work for a smarter planet mike howell business process excellence...

© 2010 IBM Corporation

Smart Work for a Smarter Planet

Mike HowellBusiness Process Excellence Manager

Making BPM Real

© 2010 IBM Corporation 2

Duration: ~ 60 minutes

• Topics

– Why BPM– BPM Deployment– BPM at corporate CIO level – Three examples of BPM at business unit level and use of BPM software

enablement– Questions

• Outcomes

– Awareness of how BPM and associated software play out in a large globally integrated organization


Today’s Landscape Challenges Progress

• Recession Hits Economy

• Inefficiencies Abound

• New Technology Is Driving Change


Economic flows are increasingly multi-directional, but information flows and visibility are still critical to value

23

US radiologists send x-rays to Australia

for analysis

Between 2000 and 2003, foreign firms built 60,000 manufacturing plants in

China

Customer service centers in Nova Scotia handle warranty

inquiries for US shoppers

Global investment banks send derivatives processing to

Dublin

Asian chipmakers using US engineers for

expertise

Asian clothing manufacturers

outsourcing design to Italian designers


New Priorities Have Emerged

• Collaboration: Rising expectations of demanding customers -2008 IBM CEO Study

• Process: #1 priority for the fourth year in a row -2009 Gartner CIO Study

• Business Flexibility: #1 driver of SOA Adoption -2008 Forrester Study

How can we work smarter?


The Need for Action is Clear

Poor collaboration contributes to the U.S. healthcare system losing more than $100 billion a year to fraud.

Inefficient processes leave up to 22 percent of total port containers empty in North America.

$11.5B worth of produce is wasted in India because outdated post-harvest

infrastructure lacks service orientation


Business Process Management is a solution

Business Process Management (BPM) is

• a customer-focused , process centric approach for delivering business performance that combines process and governance methodologies with information technologies

• a set of methods, tools, and technologies used to design, implement, measure, analyze, improve and control operational business processes.

• a communication vehicle between business, employees and information technologists to foster effective, agile, and transparent business processes.

“I define process management as designing, measuring, and managing work on an end-to-end basis across the enterprise. I define a process as an organized group of related tasks that work together to create value for customers. Everything else (process owners, redesign teams, metrics, etc.) all flow from these." – Dr. Michael Hammer


Business Process Management can be deployed at any level using this framework

8.0 Create project selection criteria, select projects

6.0 Collect data on KPIs,

Dashboards

7.0 Rank relative performance

5.0 Develop and validate KPIs, Dashboards

1.0 Develop business vision

and mission

2.0 Develop strategic business

objectives

3.0 Create Core, Enabling, Key Sub-

processes

4.0 Identify process owners and their R & R

10.0 Execute projects

9.0 Select Improvement

Method

11.0 Monitor and manage to achieve

business objectives

Note the emphasis on Key Performance Indicators and dashboards that provide visibility into the process

Note the emphasis on Key Performance Indicators and dashboards that provide visibility into the process


On-going Improvements Process/Product Development

PROCESS EXCELLENCE

IBM uses a number of tailored methodologies for process improvement

Improve Existing Process/Product/Services

Lean Six SigmaTOC

DMAIC

Needless Complexity

VSM

Kaizen/ RPC

Waste Analysis

Seven Basic Tools

Response to Signal

DOE

Design New Process/Product/Services

DFLSS

Lean Development DFSS

Agile DOX

DMEDI

Discovery

Service Process ProductSoftware

DOE

IIDOV, CDOV

OTM

PDCA8D


BPM TRANSFORMATION FRAMEWORK

Pain Points Base-lining

VSM QFD/VOC

CTQ Flow-down

Theory of ConstraintsKotter Model

BTO CM Model

C- Change ManagementA - Project Selection

Better Change Method

D - Training

Executive Awareness

Consultant training

B -Leadership Engagement

Executive Council

Bus. Area Steering Committee Project Prioritization

Bus. Area Steering Committee Project Reviews

Practitioner Training

Champion Training

Process Owner Training

E- Resource Selection F - Accountability/Rewards

Transformation consultants

Deployment champions

Practitioners

Performance Evaluations

Project Team Recognition

Practitioner Recognition

Yearly Program Celebrations

AA BB CC DD EE FF ResultsResults

MDBT


Business Process Management proceeds through various stages

Adhoc and variable processes. Success depends on individual and heroic efforts. Metrics are not available or ignored.

Standardized methods and processes are in place and followed. Data on KPIs and process metrics are collected and acted upon

Business Strategies have been clearly defined and communicated. Project and Change Management in place. Learning from successes and failures are captured.

Process improvement methods have made processes more efficient and effective

Dynamic businesses with agile business models

Baseline

Stabilize

Simplify

and

improve

Automate

and

optimize

Initial

Software that in one package helps value stream map, collect data on KPIs, generate reports, model and simulate adds value and enables more rapid transformation no matter where you are.


Manage the enterprise as a system of interconnected processes that transform inputs to deliver business (customer and stockholder) wants and needs

BPM Vision:

Optimize the enterprise, a system of interconnected processes, that transform inputs to deliver business (customer and stockholder) wants and needs

1) Develop high level process maps called “SIPOCs” and document them using Websphere modeler

2) Connect the SIPOCs together and manage them as an integrated system

3) Develop detailed as-is process maps and improve the processes to optimize the enterprise.

InputsBusiness Wants

and needs


Corporate level implementation of BPM• 5 core, 4 enabling and 4 support processes defined.

• End-to-end Enterprise Executive Process Owners identified along with their roles and responsibilities

• Key sub-processes with inputs and outputs (KPIs) defined as part of an enterprise process framework.

• Standards defined:

– Process teams should leverage the process taxonomy as the starting point for transformation and process improvement initiatives.

– All process documentation must be provided in a common format, which is consistent with the process industry standard, APQC Process Classification Framework

– All business processes must be modeled using Websphere Business Modeler (WBM) that enables you to design, model, analyze, and generate reports for your business processes.

• We are integrating end-to-end processes across business units, geographies and capturing the models within Websphere Business Modeler

• Business units have used epf, KPIs, etc. to manage and improve their performance.

11.0 Manage Finances sub-processes

Enterprise Process Framework (epf)


Business Unit BPM Example I

15© 2009 IBM Corporation

Daily Takt Report

One of IBM’ s support sub-processes, creation and maintenance of customer information, was already captured in WBM and was not performing to expectations and was improved through application of Lean Six Sigma method.

Problem Statement Only 36% of the complex update requests were completed within the

24 hour requirement with an average cycle time of 75.3 hours Delays in completion led to 1) delays in contract development,

pricing and order placement, 2) Inaccurate maintenance contracts and/or untimely billing, 3) Missed sales forecasts and improper flow of commission revenue and 4) Complaints from requesters

Solution Eliminated non-value added activities such as the CSO form,

sending information to the Content Manager for Legal Name and Enterprise Changes, searching for request by the Asset Manager

Simplified work by centralized access to Complex Update requests Standardized work for processors and Asset managers by providing

check lists and standardized source and searches. Replaced batch processing with first-in first-out one-piece flow. Improved process was fed into WBM

Benefits Enabled same day request completion for 98+% of the requests Reduced average completion cycle time ~10X to 7.6 hours Cost avoidance benefits from not having to hire more processors to

meet the requester specification. No requester complaints since process improvements in place. Faster contract development, pricing, and order placement More timely billings and flow of commissions revenue

Asset Manager:- Worked request in a different environment (vs. the Processor)- High level of rejections by Asset Manger because not all Processors were experienced in handling Complex updates.- Did not notify Requester once request processed

Processor- Over twelve Processors dedicated to Complex updates- Re-entered information already in the request into a different database before routing to Asset Manager- Had to find requests processed or returned by Asset Manager in a different database from the one it was created in.

Processor– Four Processors dedicated to Complex updates at 50%

of their time.– No need to re-key information already in the request

into a different database before routing to Asset Manager

– Balanced loads

Asset Manager– Does not need to work in a dual environment.

Minimal number of rejections – Notifies Requester directly.

Str

ea

mli

ne

d P

roc

es

sO

rig

ina

l P

roc

es

sDashboard

75 hours

7.6 hours


Business Unit BPM Example II


Used BPM baselining approach Identified Critical Customer Requirements through Focus groups

Documented high level SIPOC , detailed “as is” end to end process and value-stream maps with cross-functional team involvement

Developed a data collection plan & collected initial data on current process performance

Identified 16 potential quick wins

Developed Communications & Stakeholder Plans

Identified several improvement projects

An example of a project improved using Lean Six Sigma follows

Everyone is Singing from the same Song Sheet Everyone is Seeing Priorities and Performance the same.

Def

ine

Mea

sure


Lean Six Sigma Project launched after base-lining

D

M

A

I

C

Define Opportunities

Measure Performance

Analyze Opportunity

Improve Performance

Control Performance

Where We Were: It took an of average 3.5 days (81 hours) from order placement to shipment.

Control Xs to deliver order in less than 48

hours

Critical Customer Requirement < 48 hours from order placement to shipment

As-Is ProcessCollect Data

Baseline PerformanceCustomer Validation

(23) Potential Xsto

(3) Critical Xs

ID ImprovementsLaunch Pilot


Program Results

Importance / Priority Customer Satisfaction

Characteristic Before After Before After

Cycle Time ~ 5(Very High)

~ 5(Very High)

1(Very Dissatisfied)

4(Satisfied)

Generated new revenue with reduced average cycle time from 81 to 27 hours Customer Satisfaction increased 3 levels (from 1 to 4) in focus group surveys Leveraged results to other geographies

Positive customer feedback:

“…has saved a couple of deals for me already” “This program is a HUGE plus. Exactly what we need….” “…you did what you said you would do…”


Customers, operations and management wanted further improvement

• Customers pleased with progress and wanted further reduction in fulfillment cycle time to less than 24 hours

• Operations team wanted to increase execution consistency and capacity further and more execution than audit focus.

• Executive Management committed to model driven approach as a way to manage business process.


BPM enabled by Websphere Business Modeler being used to optimize process further

• WebSphere Business Modeler used to create detailed process model based on Phase 1 Fast Ship target process

– Process flows Input to initial Business Operation Model

– Control panel Basis for monitoring & KPI requirements

– Enhancements identified Prioritized improvements

• Websphere Business Modeler to model the flow of a customer request as different entities through the process to increase process efficiency & execution consistency


Automate processes end-to-end

Transform insight into action

Adapt and respond dynamically

Gain valuable insight… Gain valuable insight…

and empower action…and empower action…

Gain insight from analytics, find optimal solutions to complex problems

Integrate structured and unstructured data, massive data and uncertain data

Transform it into useful information

Agile Business Model

Dynamic Business Processes

WBM enabled model drives Agility and Optimizes Costs


Business Unit BPM Example III


Process Deployment

Pro

cess

Mea

sure

men

t

Rep

ort

ing

an

d R

evie

w

Au

dit

an

d A

sses

smen

t

Pro

cess

Im

pro

vem

ent

Governance Model

Standard Processes

ITDelivery BPMS

Process IntegrationProcess Integration

Governance

ITDelivery Business Process Management System

Ownership By Service Line

Global Governance

Processes Modeled and Engineered using Websphere Business Modeler and Rational Method Composer

Controlled through Change Management

Quality Focus

Supported by automation to ensure consistent deployment and process improvement


Standard processes across the IBM Lines of Business

• Aligned to ITIL V3 and other industry standards

• Rigorous engineering of inputs, outputs, controls and roles

• Same process models underlie, software products, consulting, and outsourcing


ITIL® is the foundation upon which IBM IT processes are built

Strengths

ITIL • Wide ranging, narrative treatment of the lifecycle of Service Management• Largely consistent style across the set of books• Introduction of key new concepts• Provides process objective, goals, activities, high level responsibilities

PRM-IT Process Reference Model for IT• Coherent, consistent model and downstream items such as assessment matrixes• Integrated set of rigorously defined inputs, outputs and controls – essential for process

automation• Covers the full range of IT – includes governance• PRM-IT is customer shareable – can be used by our customers for their infrastructure

ITUP IBM Tivoli Unified Process• Builds on PRM-IT• Simple web navigation and visualization of processes• Is built on Rational Method Composer – provides simple tool to customize & tailor processes• Provides roles and responsibilities at the task level – key for process automation• Provides detailed activity flow• Our customers can download and use ITUP for free


ITUP: IBM Tivoli Unified Process

Adds task level, roles, process flow, tailoring and an easily navigable web interface

ITD ITUP: http://ausgsa.ibm.com/projects/i/itd-itup/release/en/index.htm#ITD_ITUP/guidances/supportingmaterials/process_content_intro_updated_27F2C708.htmlCustomer Download: http://www-306.ibm.com/software/tivoli/governance/servicemanagement

http://ausgsa.ibm.com/projects/i/itd-itup/release/en/index.htm

http://www-306.ibm.com/software/tivoli/governance/servicemanagement


Engineering of ITDelivery Processes: Change Management Example

ITIL Specifies Best Practice Guidelines for Change Management

PRM-IT Process Standard for Change

Management

Specific ITDelivery Change Process is defined in IT Unified Process, with drill downs and

process roles for each step of the Process

Account XChange

ManagementProcedure &

Work Instructions

Change Management ToolChange Workflow and Manual

Work Instruction

Change Management Team and Approvers (7 ITUP

Roles)


Management System Structure for Process Governance

• Every process is owned, managed, reviewed and improved by a global competency owner

• Management system is automated through tools to ensure audit readiness and management review– Processes were maintained in Websphere Business Modeler and

were dynamically updated with inputs by users.


Americas

AP

Europe

Japan

Our infrastructure services are made up of competency segments to form fully integrated, consistent delivery capabilities

Support Competencies Support functions

Operational Competencies Services we sell

Server S

ystems O

perations

End U

ser Services

Security &

Risk M

anagement

Business A

cquisition

Service M

anagement

Infrastructure/ Resource M

gt

Asset m

anagement

Technology Integration M

gt

Segments lead in definition, standardization, and continuous improvement of metrics, processes, tools, skills, intellectual capital for their business areas


Service Line Component


JapanEUR AGAP

Global IT Delivery Competency Model: Standard Structure and Definition provides the means for clear ownership and decision-making across all areas of Service Delivery

Co

mp

etency S

egm

ent

Competency StandardsStandards / Integration / EnablementProcess

Benchmarking

Metrics

Tools

Quality

Glo

bal IT

Delivery

Co

mp

etency

ServiceDelivery


Service Line




Service Line

Service Line


GCSE

GCSL

SERVICE LINE OWNER

SERVICE LINECOMPONENT OWNER

GLOBAL PROCESS MANAGER

DELIVERY PROJECT EXECUTIVE

ACCOUNT PROCESS OWNER

Aligning processes to service designs, making decisions regarding cost and best practice alignment, participating in standards strategies and providing Global Leadership. Owners of change management and implementation decisions.

Analyzing metrics, tracking deviations, providing direction to accounts and keeping SLO/SLCO informed of process defects. This role may be performed by the SLO/SLCO.

Owner of SLAs and delivery quality to the customer. Standards will demonstrate IBM’s knowledge and global abilities.

Could provide service to one account or many so using standards will increase effectiveness.

Leveraging the Competency Management Systems

GSAR,TIM, Process Standards Center of Excellence

Focused Process Management

Training

Everyone is Singing from the same Song Sheet

~1240Accounts

GCSE - Global competency Segment ExecutiveGCSL - Global competency Segment LeaderTIM - Technology Integration ManagementGSAR - Global Solution Architecture Repository


Continual Process Improvement

• BPM applies prevention methodologies to implement and improve business processes and achieve process management objectives of effectiveness, efficiency, adaptability

– Effective - process produces outputs that conform to customer requirements (the basic definition of quality)

– Efficient - process produces the required output at the lowest possible cost– Adaptable - process is designed to maintain effectiveness and efficiency as

customer requirements and the environment change– Used Websphere Business Modeler to dynamically update changes.

Account Process Managers (APMs)deploy BPM at the account level

Four focus activities:

1 - Own and Manage

2 - Define and Document

3 -M e a s u r e

4 - Im p r o ve


Account Process Management Account Process Management and BPMAccount Process Management uses BPM methodologyGoal is to continuously improve quality of service delivery

processes

ParticipantsAccount Process Owners (APOs) own process improvementSubject Matter Experts (SMEs) participate in improvement activitiesProcess Improvement Teams (PITs) are formed as needed Account Process Manager (APM) facilitates and supports

improvement

Account Process Management Key ActivitiesEstablish Business Process Management (BPM) basics Measure process maturity, identify gaps, develop plans Measure process performance and analyze gaps Develop process improvement plans to address gaps Develop controls to maintain process performance


Continuous Process Improvement Activities

DefineProcess OwnersProcess RequirementsProcess Documentation Document ControlDocument RepositoryProcess RolesSupport ToolsMeasurementsIssues TrackingProcess Improvement TeamsProcess Performance TargetsProcess Maturity Targets

Measure / Analyze Measure process performanceIdentify process performance gapsMeasure process maturityIdentify process maturity gapsMonitor process compliance

Improve / ControlAddress process maturity/performance gapsConduct Process Improvement Projects Control process performance

Service Delivery teams (Account Process Owners and SMEs) own process improvement Account Process Manager facilitates improvement activities


Key Take-Aways

BPM can be started and used at any level (though it is preferable to start at the highest level and go down).– Start simple, pilot and then expand

Use an enabling software to capture processes so they can be integrated at the global level and standardized– Use KPI dashboards from software for managing and improving

processes

Communicate findings and share learnings across organizations

Recognize and reward organizations that manage through process.

Make sure all six BPM transformation elements are in place.

Accelerate business process improvement at no cost with this cloud-based platform. Some of the features and tools include:

Hundreds of industry-specific strategy, capability and process maps

Private online tools and work spaces to build new business processes

Capability to share online work spaces with your colleagues

Jumpstart Your BPM Projects Today! IBM BPM BlueWorks

© 2010 ibm corporation smart work for a smarter planet mike howell business process excellence...

Documents

bpm bpm deployment bpm

bpm real slide

examples of bpm

ibm corporation smart

change slide

service orientation

ibm ceo study process

integrated organization