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Performance Design Lab
Cherie Wilkins Alan Ramias
Performance Design Lab 2012 BBC Conference The Dangers of Prefab Models 2
} An Overview of Reference Models
} Some Observations
} Our Approach to Building a Business Process Architecture
Performance Design Lab
} Founded by Dr. Geary Rummler (1937-2008)
} PDL Partners: Alan Ramias, Rick Rummler, Cherie Wilkins
} Based in Arizona, USA
3
Improving Performance - It isn't magic, it's science.
Performance Design Lab The Dangers of Prefab Models 4 2012 BBC Conference
Presenters • Cherie Wilkins
• Rummler-Brache Group (1995-1999) • Performance Design Lab (2000-present)
• Alan Ramias • Motorola (1981-’91) • Rummler-Brache Group (1991-99) • Performance Design Lab (2005-present)
Performance Design Lab
} We have been at this “process stuff” for 30+ years
} We’re known for application and transfer of practical process improvement and management methods and tools
} We’ve seen and helped organizations achieve dramatic improvements in results
Yet } Notion of real business process is often
misapplied in organizations } Caused us to revisit the basic notions in our
2 recent books
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Performance Design Lab
} A reference model provides a shortcut to developing an organization’s business process architecture
} In turn, a BPA can provide a:
◦ Taxonomy for IT systems and documentation ◦ Way to imbed process management/process thinking into
the way the business manages
◦ Means for identifying process improvement priorities
◦ Standard for benchmarking your practices against other companies
2012 BBC Conference The Dangers of Prefab Models 7
Performance Design Lab
} Functional Frameworks ◦ SCOR
ITIL
} Enterprise Frameworks ◦ APQC ◦ eTOM
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Performance Design Lab
} Supply-chain operations reference-model (SCOR) } developed by the management consulting firm
PRTM, now part of PricewaterhouseCoopers, endorsed by Supply-Chain Council (SCC)
} supplier's supplier to the customer's customer } 3 levels of process } The model is based
on 3 major "pillars": ◦ Process modeling ◦ Performance
measurements ◦ Best practices
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Performance Design Lab
} The Information Technology Infrastructure Library (ITIL)
} a set of practices for IT service management
} describes procedures, tasks and checklists for establishing a minimum level of competency.
} used to demonstrate compliance and to measure improvement.
10
Performance Design Lab
} APQC states uses of the framework as: ◦ Benchmarking ◦ Content management ◦ Business process definition
} originally envisioned as taxonomy of business processes; common language through which member organizations could benchmark processes.
} initial design involved APQC and 80+ member organizations
} Now have industry specific versions
} 5 levels
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Performance Design Lab
} Enhanced Telecom Operations Map } defines widely used/accepted standard for business
processes in telecom industry. } full scope of business processes required by a
service provider ◦ key elements ◦ how they interact
} 4 Levels (0-3)
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13 2012 BBC Conference The Dangers of Prefab Models
Performance Design Lab 2012 BBC Conference The Dangers of Prefab Models 14
} Their Design
} Their Usage
Performance Design Lab The Dangers of Prefab Models 15 2012 BBC Conference
1. Functionally Bound
2. Overly Generic
3. Poor Formatting
4. Irrelevant to the Business
Design Traps
Performance Design Lab The Dangers of Prefab Models 16 2012 BBC Conference
1. Functional View of Process
R&D Production/ Operations Mktg Sales
Customer Support
Customer
Market
Performance Design Lab The Dangers of Prefab Models 17 2012 BBC Conference
Functional View of Process
R&D Production/ Operations Mktg Sales
Customer Support
Market
Customer
Performance Design Lab 18
Is Banking? Is Pharmaceutical? Is Utility?
Performance Design Lab 19
Bank Utility1.1 Define the business concept and long-‐term vision (10014) 1.1 Define the business concept and long-‐term vision (10014)1.2 Develop business strategy (10015) 1.2 Develop business strategy (10015)1.3 Manage strategic initiatives (10016) 1.3 Manage strategic initiatives (10016)2.1 Manage product and service portfolio (10061) 2.1 Manage product and service portfolio (10061)2.2 Develop products and services (10062) 2.2 Develop products and services (10062)3.1 Understand markets, customers and capabilities (10101) 3.1 Understand markets, customers and capabilities (10101)3.2 Develop marketing strategy (10102) 3.2 Develop marketing strategy (10102)3.3 Develop sales strategy (10103) 3.3 Develop sales strategy (10103)3.4 Develop and manage marketing plans (10104) 3.4 Develop and manage marketing plans (10104)3.5 Develop and manage sales plans (10105) 3.5 Develop and manage sales plans (10105)
3.6 Perform energy trading and related activities (11256)4.1 Plan for and acquire necessary resources (Supply Chain Planning) (10215) 4.1 Plan for and acquire necessary resources (Supply Chain Planning) (10215)4.2 Procure materials and services (10216) 4.2 Procure materials and services (10216)4.3 Produce/Manufacture/Deliver product (10217) 4.3 Produce/Manufacture/Deliver product (10217)4.4 Apply Anti-‐Money Laundering (AML) policy (13953)4.5 Perform Know Your Customer (KYC) activities (13954)4.6 Deliver service to customer (10218) 4.4 Deliver service to customer (10218)4.7 Manage logistics and warehousing (10219) 4.5 Manage logistics and warehousing (10219)
4.6 Operate assets (11264)5.1 Interface with customers (14017)5.2 Manage customer information (14021)5.3 Develop customer care/customer service strategy -‐10378 5.1 Develop customer care/customer service strategy (10378)5.4 Plan and manage customer service operations (10379) 5.2 Plan and manage customer service operations (10379)5.5 Measure and evaluate customer service operations 5.3 Measure and evaluate customer service operations6.1 Develop and manage human resources (HR) planning, policies, and strategies (10409) 6.1 Develop and manage human resources (HR) planning, policies, and strategies (10409)6.2 Recruit, source, and select employees (10410) 6.2 Recruit, source, and select employees (10410)6.3 Develop and counsel employees (10411) 6.3 Develop and counsel employees (10411)6.4 Reward and retain employees (10412) 6.4 Reward and retain employees (10412)6.5 Redeploy and retire employees (10413) 6.5 Re-‐deploy and retire employees (10413)6.6 Manage employee information (10414) 6.6 Manage employee information (10414)7.1 Manage the business of information technology (10563) 7.1 Manage the business of information technology (10563)7.2 Develop and manage IT customer relationships (10564) 7.2 Develop and manage IT customer relationships (10564)7.3 Manage business resiliency and risk (11216) 7.3 Manage business resiliency and risk (11216)7.4 Manage enterprise information (10565) 7.4 Manage enterprise information (10565)7.5 Develop and maintain information technology solutions -‐10566 7.5 Develop and maintain information technology solutions -‐105667.6 Deploy information technology solutions (10567) 7.6 Deploy information technology solutions (10567)7.7 Deliver and support information technology services -‐10568 7.7 Deliver and support information technology services7.8 Manage IT knowledge (10569) 7.8 Manage IT knowledge (10569)8.1 Perform planning and management accounting (10728) 8.1 Perform planning and management accounting (10728)8.2 Perform revenue accounting (10729) 8.2 Perform revenue accounting (10729)8.3 Perform general accounting and reporting (10730) 8.3 Perform general accounting and reporting (10730)8.4 Manage fi xed asset project accounting (10731) 8.4 Manage fi xed asset project accounting (10731)8.5 Process payroll (10732) 8.5 Process payroll (10732)8.6 Process accounts payable and expense reimbursements -‐10733 8.6 Process accounts payable and expense reimbursements -‐107338.7 Manage treasury operations (10734) 8.7 Manage treasury operations (10734)8.8 Manage internal controls (10735) 8.8 Manage internal controls (10735)8.9 Manage taxes (10736) 8.9 Manage taxes (10736)8.10 Manage international funds/consolidation (10737) 8.10 Manage international funds/consolidation (10737)8.11 Perform global trade services (14089)9.1 Design and construct/acquire nonproductive assets -‐10937 9.1 Design and construct/acquire non-‐productive assets (10937)9.2 Maintain nonproductive assets (10938) 9.2 Maintain non-‐productive assets (10938)9.3 Obtain, install and plan maintenance for productive assets (10939) 9.3 Obtain, install and plan maintenance for productive assets9.4 Dispose of productive and nonproductive assets (10940) 9.4 Dispose of productive and non-‐productive assets (10940)9.5 Manage physical risk (11207) 9.5 Manage physical risk (11207)10.1 Determine environmental health and safety impacts -‐11180 10.1 Determine health, safety, and environment impacts (11180)10.2 Develop and execute environmental health and safety program (11181) 10.2 Develop and execute environmental health and safety program (11181)10.3 Train and educate employees (11182) 10.3 Train and educate employees (11182)10.4 Monitor and manage environmental health and safety management program (11183) 10.4 Monitor and manage environmental health and safety management program (11183)10.5 Ensure compliance with regulations (11184) 10.5 Ensure compliance with regulations (11184)10.6 Manage remediation efforts (11185) 10.6 Manage remediation efforts (11185)
10.7 Develop security strategy (11281)10.8 Develop threat response strategy (11291)10.9 Manage security programs (11294)
11.1 Build investor relationships (11010) 11.1 Build investor relationships (11010)11.2 Manage government and industry relationships (11011) 11.2 Manage government and industry relationships (11011)11.3 Manage relations with board of directors (11012) 11.3 Manage relations with board of directors (11012)11.4 Manage legal and ethical issues (11013) 11.4 Manage legal and ethical issues (11013)11.5 Manage public relations program (11014) 11.5 Manage public relations program (11014)11.6 Provide corporate services to manage external relations (14102)12.1 Create and manage organizational performance strategy (11071) 12.1 Create and manage organizational performance strategy (11071)12.2 Benchmark performance (11072) 12.2 Benchmark performance (11072)12.3 Develop enterprise-‐wide knowledge management (KM) capability (11073) 12.3 Develop enterprise-‐wide knowledge management (KM) capability (11073)12.4 Manage change (11074) 12.4 Manage change (11074)13.1 Establish enterprise risk framework (14115)13.2 Monitor and manage compliance with enterprise risk policies and procedures (14119)13.3 Manage financial risk (14138)13.4 Manage market risk (14155)13.5 Manage operational risk (14161)
Performance Design Lab
} Looking at all the line items, all levels: } The Utility specific version differs from the
“generic” version by 1% } The Banking specific version differs from the
“generic” by 8% } At level 3 – the process level – The Banking
and Utility have 13 processes that are different (out of 78 processes)
20
Performance Design Lab 21
} 4.3 Produce/Manufacture/Deliver product?
} How about Banking?
Performance Design Lab 2012 BBC Conference The Dangers of Prefab Models 22
Performance Design Lab
1.1 Define the business concept and long-term vision 1.2 Develop business strategy 1.3 Manage strategic initiatives 2.1 Manage product and service portfolio 2.2 Develop products and services 3.1 Understand markets, customers and capabilities 3.2 Develop marketing strategy 3.3 Develop sales strategy 3.4 Develop and manage marketing plans 3.5 Develop and manage sales plans 4.1 Plan for and acquire necessary resources (Supply Chain Planning) 4.2 Procure materials and services 4.3 Produce/Manufacture/Deliver product 4.4 Apply Anti-Money Laundering (AML) policy 4.5 Perform Know Your Customer (KYC) activities 4.6 Deliver service to customer 4.7 Manage logistics and warehousing 5.1 Interface with customers 5.2 Manage customer information 5.3 Develop customer care/customer service strategy 5.4 Plan and manage customer service operations 5.5 Measure and evaluate customer service operations 6.1 Develop and manage human resources (HR) planning, policies, and strategies 6.2 Recruit, source, and select employees 6.3 Develop and counsel employees
6.4 Reward and retain employees 6.5 Redeploy and retire employees 6.6 Manage employee information 7.1 Manage the business of information technology 7.2 Develop and manage IT customer relationships 7.3 Manage business resiliency and risk 7.4 Manage enterprise information 7.5 Develop and maintain information technology solutions 7.6 Deploy information technology solutions 7.7 Deliver and support information technology services 7.8 Manage IT knowledge 8.1 Perform planning and management accounting 8.2 Perform revenue accounting 8.3 Perform general accounting and reporting 8.4 Manage fixed asset project accounting 8.5 Process payroll 8.6 Process accounts payable and expense reimbursements 8.7 Manage treasury operations 8.8 Manage internal controls 8.9 Manage taxes 8.10 Manage international funds/consolidation 8.11 Perform global trade services 9.1 Design and construct/acquire nonproductive assets 9.2 Maintain nonproductive assets 9.3 Obtain, install and plan maintenance for productive assets 9.4 Dispose of productive and nonproductive assets
9.5 Manage physical risk 10.1 Determine environmental health and safety impacts 10.2 Develop and execute environmental health and safety program 10.3 Train and educate employees 10.4 Monitor and manage environmental health and safety management program 10.5 Ensure compliance with regulations 10.6 Manage remediation efforts 11.1 Build investor relationships 11.2 Manage government and industry relationships 11.3 Manage relations with board of directors 11.4 Manage legal and ethical issues 11.5 Manage public relations program 11.6 Provide corporate services to manage external relations 12.1 Create and manage organizational performance strategy 12.2 Benchmark performance 12.3 Develop enterprise-wide knowledge management (KM) capability 12.4 Manage change 13.1 Establish enterprise risk framework 13.2 Monitor and manage compliance with enterprise risk policies and procedures 13.3 Manage financial risk 13.4 Manage market risk 13.5 Manage operational risk
23
Performance Design Lab 24
Wealth Management Bank BPAC
ore
Cor
eM
anag
emen
tM
anag
emen
t
Business Planning
Ena
blin
gE
nabl
ing
StrategicPlanning
Business Planning
Business PlanningBusiness
PlanningEnabler Planning
Human CapitalFin & Risk Mgmt
Technology
Human CapitalBusiness Planning
EquityNon-Trad
Investment Strategy &
Mgmt
R & CPerformance Managed
New Service/New Vehicle Development
Referrals Mgmt
Marketing
Launched Sold
Securities Selection
Portfolio Management (incl Trading)
Client Acquisiton
Client Services Planning and Management
EB Plan Design Client Investment Planning
Basic Services Delivered
(Compliance)
Consulting Services Delivered
Delivered
Financial & Risk Mgmt Support
Acctg
Reporting
Purchasing
Human Capital Support Technology Support
Comp & Ben Admin
Resource Acquisition
Resource Developmnt Tech Maint
Tech Acquisition & ImplementationRisk
Management
Performance Design Lab
} Which one helps you understand the essence of the business?
} Which one would allow you to predict upstream/downstream impacts?
} Which one would facilitate a troubleshooting conversation?
} Which one would you use to orient a new employee?
25
Wealth Management Bank BPA
Cor
eC
ore
Man
agem
ent
Man
agem
ent
Business Planning
Ena
blin
gE
nabl
ing
StrategicPlanning
Business Planning
Business PlanningBusiness
PlanningEnabler Planning
Human CapitalFin & Risk Mgmt
Technology
Human CapitalBusiness Planning
EquityNon-Trad
Investment Strategy &
Mgmt
R & CPerformance Managed
New Service/New Vehicle Development
Referrals Mgmt
Marketing
Launched Sold
Securities Selection
Portfolio Management (incl Trading)
Client Acquisiton
Client Services Planning and Management
EB Plan Design Client Investment Planning
Basic Services Delivered
(Compliance)
Consulting Services Delivered
Delivered
Financial & Risk Mgmt Support
Acctg
Reporting
Purchasing
Human Capital Support Technology Support
Comp & Ben Admin
Resource Acquisition
Resource Developmnt Tech Maint
Tech Acquisition & ImplementationRisk
Management
Performance Design Lab The Dangers of Prefab Models 26 2012 BBC Conference
4. Irrelevant to the Business
Process Architecture
Performance Design Lab The Dangers of Prefab Models 27 2012 BBC Conference
5. Terminology Wars
6. Absolutism
7. Lack of Purpose
Usage Traps
Performance Design Lab The Dangers of Prefab Models 28 2012 BBC Conference
5. Terminology Wars
Outputs Services Processes
Features Attributes
Performance Design Lab The Dangers of Prefab Models 29 2012 BBC Conference
6. Absolutism
“Adopt, not adapt!”
Performance Design Lab The Dangers of Prefab Models 30 2012 BBC Conference
7. Lack of Purpose
Performance Design Lab
1. Have a defined purpose for the architecture � Or risk being irrelevant to the business � Not having a clear yardstick for amount of detail and
focus � Taking forever to complete it
2. Adapt any reference model to the specifics of your business, not the other way around � Do you really want to be like everyone else? � Shouldn’t your focus be on what makes an
organization different/competitive?
2012 BBC Conference The Dangers of Prefab Models 31
Performance Design Lab The Dangers of Prefab Models 32 2012 BBC Conference
3. Focus on value: ◦ What value does the organization provide? ◦ The architecture should focus on value creation and
delivery
Some Suggested Principles for Avoiding these Traps
Our Approach
33 2012 BBC Conference The Dangers of Prefab Models
Performance Design Lab The Dangers of Prefab Models 34 2012 BBC Conference
Value Creation System
Resources
Any Enterprise
Suppliers
FinancialStakeholders
Customers
Markets
Enterprise/Business
Value Creation System
Product/Servic
e Sold
Product/Service
Product/Service
Launched
Product/Service
Delivered
Order EnteredEngineering
Assigned and Scheduled
Job Specification Packet
Developed
Design Reviewed
Job Designed
• Engineering Estimated• Resource Availability Reviewed• Job Assigned and Scheduled• Customer Order Spec communicated• Detailed Job Plan Developed
Product/Service
Process
Engineering Estimated• Customer Order Spec Reviewed• Customer Order Spec Issues Clarified• Complexity Assessed • Required Specialties Noted
“It” Developed
and Launched
“It” Sunsetted
“It” Enhanced
“It” Developed
and Launched
“It” Sunsetted
“It” Enhanced
Product/Service
Developed & Launched
Product/Service Portfolio Managed
Processing Sub-Systems
Demand for “It”
Developed
Customer Relationship Maintained
Order for “It”
Obtained
DemandDeveloped
Customer Relationship Maintained
Order Obtained
Programs &Applications
Investments
Sub-Process/Task/Sub-Task
Returns
Order for Product/Service
Product/Service
Sold
Businesses
Engineering Assigned and Scheduled Sub-Process
Launched Sold Delivered
Job Designed
Value Chain
LEVEL 1
LEVEL 2
LEVEL 3
LEVEL 4
LEVEL 5+
Job Produced
Order Shipped and Invoiced
Product Supported and
Serviced
• Engineering Hours Estimated
Business and Competitive Environment
Performance Design Lab The Dangers of Prefab Models 35 2012 BBC Conference
Value Creation System
Resources
Any Enterprise
Suppliers
FinancialStakeholders
Customers
Markets
Enterprise/Business
Value Creation System
Product/Servic
e Sold
Product/Service
Product/Service
Launched
Product/Service
Delivered
Order EnteredEngineering
Assigned and Scheduled
Job Specification Packet
Developed
Design Reviewed
Job Designed
• Engineering Estimated• Resource Availability Reviewed• Job Assigned and Scheduled• Customer Order Spec communicated• Detailed Job Plan Developed
Product/Service
Process
Engineering Estimated• Customer Order Spec Reviewed• Customer Order Spec Issues Clarified• Complexity Assessed • Required Specialties Noted
“It” Developed
and Launched
“It” Sunsetted
“It” Enhanced
“It” Developed
and Launched
“It” Sunsetted
“It” Enhanced
Product/Service
Developed & Launched
Product/Service Portfolio Managed
Processing Sub-Systems
Demand for “It”
Developed
Customer Relationship Maintained
Order for “It”
Obtained
DemandDeveloped
Customer Relationship Maintained
Order Obtained
Programs &Applications
Investments
Sub-Process/Task/Sub-Task
Returns
Order for Product/Service
Product/Service
Sold
Businesses
Engineering Assigned and Scheduled Sub-Process
Launched Sold Delivered
Job Designed
Value Chain
LEVEL 1
LEVEL 2
LEVEL 3
LEVEL 4
LEVEL 5+
Job Produced
Order Shipped and Invoiced
Product Supported and
Serviced
• Engineering Hours Estimated
Business and Competitive Environment
Value Creation System
Resources
Any Enterprise
Suppliers
FinancialStakeholders
Customers
Markets
Enterprise/Business
Product/Service
Investments
Returns
Order for Product/Service
BusinessesValue Chain
LEVEL 1
Business and Competitive Environment
Performance Design Lab The Dangers of Prefab Models 36 2012 BBC Conference
Value Creation System
Resources
Any Enterprise
Suppliers
FinancialStakeholders
Customers
Markets
Enterprise/Business
Value Creation System
Product/Servic
e Sold
Product/Service
Product/Service
Launched
Product/Service
Delivered
Order EnteredEngineering
Assigned and Scheduled
Job Specification Packet
Developed
Design Reviewed
Job Designed
• Engineering Estimated• Resource Availability Reviewed• Job Assigned and Scheduled• Customer Order Spec communicated• Detailed Job Plan Developed
Product/Service
Process
Engineering Estimated• Customer Order Spec Reviewed• Customer Order Spec Issues Clarified• Complexity Assessed • Required Specialties Noted
“It” Developed
and Launched
“It” Sunsetted
“It” Enhanced
“It” Developed
and Launched
“It” Sunsetted
“It” Enhanced
Product/Service
Developed & Launched
Product/Service Portfolio Managed
Processing Sub-Systems
Demand for “It”
Developed
Customer Relationship Maintained
Order for “It”
Obtained
DemandDeveloped
Customer Relationship Maintained
Order Obtained
Programs &Applications
Investments
Sub-Process/Task/Sub-Task
Returns
Order for Product/Service
Product/Service
Sold
Businesses
Engineering Assigned and Scheduled Sub-Process
Launched Sold Delivered
Job Designed
Value Chain
LEVEL 1
LEVEL 2
LEVEL 3
LEVEL 4
LEVEL 5+
Job Produced
Order Shipped and Invoiced
Product Supported and
Serviced
• Engineering Hours Estimated
Business and Competitive Environment
Value Creation System
Product/Servic
e Sold
Product/Service
Product/ServiceLaunched
Product/ServiceDelivered
Product/ServiceSold
LEVEL 2
Performance Design Lab The Dangers of Prefab Models 37 2012 BBC Conference
Value Creation System
Resources
Any Enterprise
Suppliers
FinancialStakeholders
Customers
Markets
Enterprise/Business
Value Creation System
Product/Servic
e Sold
Product/Service
Product/Service
Launched
Product/Service
Delivered
Order EnteredEngineering
Assigned and Scheduled
Job Specification Packet
Developed
Design Reviewed
Job Designed
• Engineering Estimated• Resource Availability Reviewed• Job Assigned and Scheduled• Customer Order Spec communicated• Detailed Job Plan Developed
Product/Service
Process
Engineering Estimated• Customer Order Spec Reviewed• Customer Order Spec Issues Clarified• Complexity Assessed • Required Specialties Noted
“It” Developed
and Launched
“It” Sunsetted
“It” Enhanced
“It” Developed
and Launched
“It” Sunsetted
“It” Enhanced
Product/Service
Developed & Launched
Product/Service Portfolio Managed
Processing Sub-Systems
Demand for “It”
Developed
Customer Relationship Maintained
Order for “It”
Obtained
DemandDeveloped
Customer Relationship Maintained
Order Obtained
Programs &Applications
Investments
Sub-Process/Task/Sub-Task
Returns
Order for Product/Service
Product/Service
Sold
Businesses
Engineering Assigned and Scheduled Sub-Process
Launched Sold Delivered
Job Designed
Value Chain
LEVEL 1
LEVEL 2
LEVEL 3
LEVEL 4
LEVEL 5+
Job Produced
Order Shipped and Invoiced
Product Supported and
Serviced
• Engineering Hours Estimated
Business and Competitive Environment
Job Designed
“It” Developed
and Launched
“It” Sunsetted
“It” Enhanced
“It” Developed
and Launched
“It” Sunsetted
“It” Enhanced
Product/Service
Developed & Launched
Product/Service Portfolio Managed
Processing Sub-Systems
Demand for “It”
Developed
Customer Relationship Maintained
Order for “It”
Obtained
DemandDeveloped
Customer Relationship Maintained
Order Obtained
Launched Sold DeliveredLEVEL 3
Job Produced
Order Shipped and Invoiced
Product Supported and
Serviced
Performance Design Lab The Dangers of Prefab Models 38 2012 BBC Conference
Value Creation System
Resources
Any Enterprise
Suppliers
FinancialStakeholders
Customers
Markets
Enterprise/Business
Value Creation System
Product/Servic
e Sold
Product/Service
Product/Service
Launched
Product/Service
Delivered
Order EnteredEngineering
Assigned and Scheduled
Job Specification Packet
Developed
Design Reviewed
Job Designed
• Engineering Estimated• Resource Availability Reviewed• Job Assigned and Scheduled• Customer Order Spec communicated• Detailed Job Plan Developed
Product/Service
Process
Engineering Estimated• Customer Order Spec Reviewed• Customer Order Spec Issues Clarified• Complexity Assessed • Required Specialties Noted
“It” Developed
and Launched
“It” Sunsetted
“It” Enhanced
“It” Developed
and Launched
“It” Sunsetted
“It” Enhanced
Product/Service
Developed & Launched
Product/Service Portfolio Managed
Processing Sub-Systems
Demand for “It”
Developed
Customer Relationship Maintained
Order for “It”
Obtained
DemandDeveloped
Customer Relationship Maintained
Order Obtained
Programs &Applications
Investments
Sub-Process/Task/Sub-Task
Returns
Order for Product/Service
Product/Service
Sold
Businesses
Engineering Assigned and Scheduled Sub-Process
Launched Sold Delivered
Job Designed
Value Chain
LEVEL 1
LEVEL 2
LEVEL 3
LEVEL 4
LEVEL 5+
Job Produced
Order Shipped and Invoiced
Product Supported and
Serviced
• Engineering Hours Estimated
Business and Competitive Environment
Order EnteredEngineering
Assigned and Scheduled
Job Specification Packet
Developed
Design Reviewed
Process
Job DesignedLEVEL 4
Performance Design Lab The Dangers of Prefab Models 39 2012 BBC Conference
Value Creation System
Resources
Any Enterprise
Suppliers
FinancialStakeholders
Customers
Markets
Enterprise/Business
Value Creation System
Product/Servic
e Sold
Product/Service
Product/Service
Launched
Product/Service
Delivered
Order EnteredEngineering
Assigned and Scheduled
Job Specification Packet
Developed
Design Reviewed
Job Designed
• Engineering Estimated• Resource Availability Reviewed• Job Assigned and Scheduled• Customer Order Spec communicated• Detailed Job Plan Developed
Product/Service
Process
Engineering Estimated• Customer Order Spec Reviewed• Customer Order Spec Issues Clarified• Complexity Assessed • Required Specialties Noted
“It” Developed
and Launched
“It” Sunsetted
“It” Enhanced
“It” Developed
and Launched
“It” Sunsetted
“It” Enhanced
Product/Service
Developed & Launched
Product/Service Portfolio Managed
Processing Sub-Systems
Demand for “It”
Developed
Customer Relationship Maintained
Order for “It”
Obtained
DemandDeveloped
Customer Relationship Maintained
Order Obtained
Programs &Applications
Investments
Sub-Process/Task/Sub-Task
Returns
Order for Product/Service
Product/Service
Sold
Businesses
Engineering Assigned and Scheduled Sub-Process
Launched Sold Delivered
Job Designed
Value Chain
LEVEL 1
LEVEL 2
LEVEL 3
LEVEL 4
LEVEL 5+
Job Produced
Order Shipped and Invoiced
Product Supported and
Serviced
• Engineering Hours Estimated
Business and Competitive Environment
• Engineering Estimated• Resource Availability Reviewed• Job Assigned and Scheduled• Customer Order Spec communicated• Detailed Job Plan Developed
Engineering Estimated• Customer Order Spec Reviewed• Customer Order Spec Issues Clarified• Complexity Assessed • Required Specialties Noted
Programs &Applications
Sub-Process/Task/Sub-Task
Engineering Assigned and Scheduled Sub-Process
LEVEL 5+
• Engineering Hours Estimated
Performance Design Lab The Dangers of Prefab Models 40 2012 BBC Conference
Value Creation System
Resources
Any Enterprise
Suppliers
FinancialStakeholders
Customers
Markets
Enterprise/Business
Value Creation System
Product/Servic
e Sold
Product/Service
Product/Service
Launched
Product/Service
Delivered
Order EnteredEngineering
Assigned and Scheduled
Job Specification Packet
Developed
Design Reviewed
Job Designed
• Engineering Estimated• Resource Availability Reviewed• Job Assigned and Scheduled• Customer Order Spec communicated• Detailed Job Plan Developed
Product/Service
Process
Engineering Estimated• Customer Order Spec Reviewed• Customer Order Spec Issues Clarified• Complexity Assessed • Required Specialties Noted
“It” Developed
and Launched
“It” Sunsetted
“It” Enhanced
“It” Developed
and Launched
“It” Sunsetted
“It” Enhanced
Product/Service
Developed & Launched
Product/Service Portfolio Managed
Processing Sub-Systems
Demand for “It”
Developed
Customer Relationship Maintained
Order for “It”
Obtained
DemandDeveloped
Customer Relationship Maintained
Order Obtained
Programs &Applications
Investments
Sub-Process/Task/Sub-Task
Returns
Order for Product/Service
Product/Service
Sold
Businesses
Engineering Assigned and Scheduled Sub-Process
Launched Sold Delivered
Job Designed
Value Chain
LEVEL 1
LEVEL 2
LEVEL 3
LEVEL 4
LEVEL 5+
Job Produced
Order Shipped and Invoiced
Product Supported and
Serviced
• Engineering Hours Estimated
Business and Competitive Environment
Organization Level
Process Level
Performer Level
Business Process
Architecture
Performance Design Lab The Dangers of Prefab Models 41 2012 BBC Conference
Business ArchitectureProcessing System Hierarchy
Cross Functional Process Map
IT S
ys
DB
IS
ales
Ops
CS
Cross-Functional Value Chain MapAvailable Sold Delivered
Enab
ling
Cor
eM
anag
emen
t
Available Sold Delivered
Performance Planned Performance ManagedBusiness Process Architecture Framework
IT Systems
Customer ServiceOpsSales
Cross Functional Role/Responsibility MatrixProcess Step
Super System Map
ResourcesEnvironmental Influences
Shareholders
Market
Competition
xxx
xxx
xxx
Value Chain
ResourcesAny Enterprise
Capital Market
Competition
BUSINESS ENVIRONMENT- Economy - Culture
TechnologyProviders
Suppliers
Labor Market
ResourcesProducts/Services
FinancialStakeholders
Customers
Markets
Enterprise/Business Model
Value Chain Product/Servic
e Sold
Product/Service
Product/Service
Launched
Product/Service
Delivered
Opportunities Generated
Opportunities Qualified
Opportunity Developed and
Proposal Requested
Proposal Prepared and
Communicated
•
•
Order Taken and EnteredSale Closed
Order Captured and
Communicated
“It” Order Processed
“It” Shipped/ Delivered/ Installed
“It” Order Filled
“It” Order Closed
“It” Supported“It” Customer Serviced
“It” Ready For Delivery
P/S OrderProcessed
P/S Shipped/Delivered/Installed
P/S Order Filled
P/S Order Closed
P/S SupportedCustomer Serviced
P/SReady For Delivery
• Information Gathered• Needs Identified• Deciders and Users Identified• Constraints Determined• Credibility Established
Product/Service
Process
Information Gathered• Relevant Data Sources Identified• Interviews Scheduled• Interviews Conducted• Conclusions Reached and Recorded
“It” Developed
and Launched
“It” Sunsetted
“It” Enhanced
“It” Developed
and Launched
“It” Sunsetted
“It” Enhanced
P/S Developed & Launched
P/S Portfolio Managed
PrimaryProcessing Systems
Demand for “It”
Developed
Customer Relationship Maintained
Order for “It”
Obtained
DemandDeveloped
Customer Relationship Maintained
Order Obtained
Management System
Programs &Applications
Investments
Sub-Process/Task/Sub-Task
- Natural Environment- Geo-Political - Regulatory/Legal
Returns
Enabling Processes
Order for Product/Service
Product/Service
Sold
Mtls/Equip
HumanRes.
$
Tech
Management SystemBusinesses
Opportunity Developed and Proposal Requested
Sub-Process Map
B2, Role 1
B2, Role 2
C1, Role 1
C1, Role 2
Activity 2.1
C1, Role 3
Activity 2.2 Activity
2.3 Activity 2.4
Activity 2.5
Activity 2.6
Activity 2.7 Activity
2.10 Activity 2.11
Activity 2.12
Sub-Process A, Activity 2
Activity 2.8
Activity 2.9
Value Creation Hierarchy
Org.
Process
Job/Performer
Performance Design Lab The Dangers of Prefab Models 42 2012 BBC Conference
Tool: Business Process Framework
} The Process View of the Business – Depicts Level 3 } The reference point for defining the “processes” of the
business } A comprehensive depiction of the work associated with a
business or business unit } There are 3 categories of processes
Launched Sold
Con
tribu
ting
Pro
cess
es
Valu
e C
reat
ion
Pro
cess
es
Man
agem
ent
Pro
cess
es
Delivered
Performance Design Lab The Dangers of Prefab Models 43 2012 BBC Conference
Value Creation Processes } Based on the concept of value chain it represents an end-to-end
view of how value is produced } Organized around the “Value Creation System” which consists of 3
essential value creation sub-systems } “Value” is defined as work that is recognized as adding value in the
eyes of the external customer; it is not an indicator of process importance
Launched Sold
Con
tribu
ting
Pro
cess
es
Valu
e C
reat
ion
Pro
cess
es
Man
agem
ent
Pro
cess
es
Delivered
Performance Design Lab The Dangers of Prefab Models 44 2012 BBC Conference
“Product/Service” Launched
“Product/Service” Sold
“Product/Service” Delivered
1. Finding or inventinga Product/Service/ Offering that will satisfy a customer need.
2. Enhancing existingproduct throughredesign, re-pricing or repositioning.
3. “Sun setting” or discontinuing productsthat are no longer viable.
1. “Demand Developed”Creating demand for the P/S/O, usually done by Marketing. Output is usually a “lead”.
2. “Customer Committed”Frequently requires a sales organizationto convert “interest”into a commitmentto purchase.
3. “Relationship Maintained”Enhancement and maintenance of the customer relationship.
1. Processing the Order, from “Order entered” to “payment received” and “warranty administered”. If a Product: Making and Delivering If a Service Customizing and Delivering
2. May also include installation and support.
Value Creation Categories
Performance Design Lab The Dangers of Prefab Models 45 2012 BBC Conference
} Should be adapted to an organization’s reality
} Is meant to be a tool, not a straitjacket that chokes off discussion
} Is generic only at the highest levels—becomes more specific as one goes down the levels of process
The Value Creation System…
Performance Design Lab The Dangers of Prefab Models 46 2012 BBC Conference
An Example of Adaptation “Policy”
Research “Policy”
Formulation “Policy”
Execution 1..
1. “ 1.
Performance Design Lab The Dangers of Prefab Models 47 2012 BBC Conference
An Example of Adaptation
Launch Delivered
Sold Delivered Launched
Sold
Performance Design Lab The Dangers of Prefab Models 48 2012 BBC Conference
Management Processes } The Management processes exist to provide direction to Value
Creation and Contributing processes } These include all facets of performance planning and management:
corporate, business, country, function and process
Launched Sold
Con
tribu
ting
Pro
cess
es
Valu
e C
reat
ion
Pro
cess
es
Man
agem
ent
Pro
cess
es
Delivered
Performance Design Lab The Dangers of Prefab Models 49 2012 BBC Conference
Contributing Processes } Contributing processes exist to provide value for the business, but not the
business’ customers. } Each Contributing process is actually a “sub-system” of processes } Each sub-system contains 3-8 related processes which together operate as a
system of work organized to achieve one or more business valued milestones } Defining the processes in a contributing sub-system in the absence of agreed
milestones is ineffective and undermines the value of taking a process perspective.
Launched Sold
Con
tribu
ting
Pro
cess
es
Valu
e C
reat
ion
Pro
cess
es
Man
agem
ent
Pro
cess
es
Delivered
Performance Design Lab
Sale
s Un
der-
writ
ing
Clie
nt
Serv
ices
Le
gal
50
Activity Activity Activity
Activity Activity Activity
Activity
Activity Activity
Activity
Activity Activity
The “Underwriting Process”?
Many functional managers erroneously view their swimlane as a process, leading to sub-optimal output.
Performance Design Lab 51
Process = all of the work to get to the outcome
Contract
Activity Functional Group
Customer Acquisition Sales Pricing Parameters Definition
Underwriting
RFP/RFI Response Sales Contracts Review Legal Pricing Review Underwriting Set-up Sale Client Services Finalize Sale Sales
Performance Design Lab
Sale
s Un
der-
writ
ing
Clie
nt
Serv
ices
Le
gal
52
Activity Activity Activity
Activity Activity Activity
Activity
Activity Activity
Activity
Activity Activity
Value Outcomes are most effective way to define processes • Performance-based definition (vs. preference-based) • Optimizes the organization‘s ability to create value
Outcome: Contract
Performance Design Lab
Sale
s Un
der-
writ
ing
Clie
nt
Serv
ices
Le
gal
53
Activity Activity Activity
Activity Activity Activity
Activity
Activity Activity
Activity
Activity Activity
Value Milestones define the boundaries of sub-processes. • The delineation of sub-processes allows accountability for components
of the end-to-end process to managed at an appropriate level
Value Outcome: Contract
VM
VM
Performance Design Lab 54
Launched
Asset Developed
Sold
PatientsPayers
Val
ue C
reat
ion
Delivered
Pla
n &
Man
age
Con
tribu
ting
Exploratory Development Full Development and Launch Readiness
Pre-Clinical Phase 1and Phase 2a
Phase 2b
Toxicology Supports
Human Testing
Success in Humans
Validated Safety, Efficacy, &
Commercial Value Prep for Commercial Launch
Phase 3 Development Regulatory
Filing and Approval
Long Range Performance
Planned- Enterprise
-Portfolio- Region/Country
Subsidiary- Function
Near Term Performance
Planned- Enterprise
-Portfolio- Region/Country
Subsidiary- Function
Performance Managed- Enterprise
-Portfolio- Region/Country
Subsidiary- Function
Human Capital Managed CapabilitiesAcquired/Developed,
Improved and Sustained
Value Recognized
and ManagedHuman Capital Acquired and
Placed
Human Capital Developed
Human Capital Supported and
Secure Performance Compliance
Requirements Implemented
Cost Accounting Maintained
Reports Prepared and Distributed
CapableHuman
ResourcesPerformance
Results toPlan
Financialand Risk
Information
Develop-mentPlans
Support and SecurityRequirements
External Resource Supply
Managed
Performance Improvements Identified and Implemented
Stakeholder Expectations
Managed
Shareholder Relations
Public Relations
Resources
OrganizationPerformanceInformation
Acquired Capabilities Available
Assets Acquired
Strategic ProductPortfolio In Place
Procured Made Delivered
Service Delivered/
Patient Supported
Assets Licensed Out
Products Marketed·∙ Publication
strategy·∙ Physician support
Prescribers
Products Sold
Awareness
StrategicFocus
Asset & Companion Diagnostics Launched
Customer Relationships
and Commitments in
Place
Customer and Enterprise
Commitments Fulfilled
Asset Lifecycle Managed
Focus Area Lifecycle Managed
Strategic Disease Plans
Established
- IP considered
Strategic Disease Plans Executed and
Managed
Safe, Effective and Profitable
Assets in Place
Well Formed Understanding of
Focus Area Science and
Dynamics
TreatmentIndicator Needs
Materials, Service, and Supplies Purchased
Vendors Qualified and Managed
CorrectiveActions
Discovery and Target Program Managed
Discovery
Asset Definition
Viable Asset
Discovery Executed Potential
Target Worthy of Investment
Lead Series
PatientsRegulators
Payers
Market Relationships
Managed
Prescribers
Differentiated, Approved, Safe, Effective Asset &
Indication(s) Available to Patients
MarketedProduct
MaintainedProduct
Sunsetted
Product and Capability to
Sell and Deliver Removed from
Market
Continued demonstration
of safety, efficacy and profitability
PerformanceData
Indicators Acquired
Effective Treatment
Indicators In Place
Differentiated, Approved Asset & Indication(s) and Access to Market
Asset Launched
Prescribed
Prescription Filled and in
use
Operating Plans and Budget
Supply & Support
Market
Supply & Support
Market
Material
Market
Supply & Support
Market
Human Capital
Available
Favorable Stakeholder Perception
Financial and Risk
Valuations Available
Capital/Cash Value and Liquidity
Optimized
Capabilities Available
Externally Sourced
Resources Available
Target Identification
LeadDiscovery
Selected Asset
LeadOptimization
Approved Label
Approved and Viable Asset, Capability to
Sell and Delliver
TreatmentIndicators
TreatmentIndicator Needs
Progress Data
AssetAcquisition
Strategy
Priorities and BoundariesAsset Performance Data
Companion Diagnostics Developed
External Assets
Available
(External Science Interface) Platforms Acquired
TargetProgramDirection
Acquired assets to be further developed
or launched
Commercial Readiness and Market
Access
Demonstrated Compelling Benefit/Risk
External Innovation Available
Lead Asset Identification
Effective Pharmaco
Diagnostics In Place
Companion Diagnostics Launched
Partners and Alliances Managed
Aligned, Effective and Reliable Partnership/
Alliance In PlaceWork Environments Available
Work Environment Needs Defined
Work Environments Supported and
Secure
Facilities & Tech
Resources
Work Environments Developed/
Acquired
Secure, Reliable and Safe
Infrastructure and Environments
Available
Environment Needs
Understood
Environments In Place
Environments Productive
Performance Design Lab
} Defining an organization’s business process architecture should be: ◦ A value-based approach ◦ Should have a defined purpose
} Reference models: ◦ Can be useful tools for defining a business process
architecture, but… � Should be used as intended—as a reference, not a
straitjacket � Must be adapted to an organization’s realities
2012 BBC Conference The Dangers of Prefab Models 55