bpm fundamentals: develop your game plan for bpm success

BPM Fundamentals: Develop Your Game Plan for BPM Success

Clay RichardsonSenior Analyst

Forrester Research

April 26, 2010

3Entire contents © 2009 Forrester Research, Inc. All rights reserved.

Clay RichardsonSenior Analyst

Forrester Research

Serving Business Process Professionals


66%66%BPMBPM

64%64%OpenOpen

SourceSource40%40%SaaSSaaS

Survey of 2227 SMB and Enterprise IT decision makersSurvey 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

SixSigma

BusinessProcess

Re-engineering

Lean

Methodologies

ProcessAnalysts

ChangeAgent

Tools & Techniques

Service Oriented Architecture

Workflow

Process skills

Business RulesBusinessArchitct

ITILeTOMSCOR

Sarbanes Oxley Basel II

BusinessProcess

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.)


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”


3rd: 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


Recommended research

• 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”


Thank you

Clay Richardson+1 [email protected]: passion4process

www.forrester.com