Towards aTowards a BPM Success Model: BPM Success Model:

An Analysis in South African An Analysis in South African Financial Services Financial Services

OrganisationsOrganisationsGavin Thompson, Gavin Thompson, Lisa F Seymour & Lisa F Seymour & Brian O'DonovanBrian O'Donovan

Centre for Information Technology and Centre for Information Technology and National Development in AfricaNational Development in Africahttp://www.commerce.uct.ac.za/http://www.commerce.uct.ac.za/

Organisations/CITANDA/Organisations/CITANDA/

BPMDS’09

Research QuestionResearch Question

What are the enablers What are the enablers of BPM success?of BPM success?

How is success How is success defined? defined?

Rosemann, de Bruin & Rosemann, de Bruin & Power BPM success model Power BPM success model [1][1]

Context

Strategic Alignment

Governance

Methods

Information Technology

People

Culture

Bu

sine

ss Pro

cess Ma

na

gem

en

t Su

ccess

Imp

act o

n Pro

cess S

uccess

Imp

act o

n Bu

siness S

ucce

ssContext

Strategic Alignment

Governance

Methods

Information Technology

People

Culture

Bu

sine

ss Pro

cess Ma

na

gem

en

t Su

ccess

Imp

act o

n Pro

cess S

uccess

Imp

act o

n Bu

siness S

ucce

ssContext

Strategic Alignment

Governance

Methods

Information Technology

People

Culture

Bu

sine

ss Pro

cess Ma

na

gem

en

t Su

ccess

Imp

act o

n Pro

cess S

uccess

Imp

act o

n Bu

siness S

ucce

ssContext

Strategic Alignment

Governance

Methods

Information Technology

People

Culture

Bu

sine

ss Pro

cess Ma

na

gem

en

t Su

ccess

Imp

act o

n Pro

cess S

uccess

Imp

act o

n Bu

siness S

ucce

ss

ContextContext

• SA Financial Services in 2008SA Financial Services in 2008– SA economy favourable until end 2007, shifted in 2008SA economy favourable until end 2007, shifted in 2008– Increase in interest rates and oil prices,Increase in interest rates and oil prices,– Concerns around political stability. Concerns around political stability.

• Org1 & Org2 Org1 & Org2 – large, multi-nationalslarge, multi-nationals– reducing operating costsreducing operating costs – history of BPRhistory of BPR

• Org3 & Org4 Org3 & Org4 – medium sizemedium size – Started process improvementStarted process improvement

with implementing BPM suitewith implementing BPM suite

Source: Kevin Lings, Stanlib, May 27, 2008.

MethodMethod

• Interpretive Interpretive philosophy philosophy

• General Inductive General Inductive Approach [9]Approach [9]

• Semi-structured Semi-structured interviews, 2 interviews, 2 documentsdocuments

STRATEGIC STRATEGIC ENABLERENABLER

Findings Ref

Corporate strategy consciously linked to core processes

Performed consciously in only one instance; acknowledgement that this was difficult to achieve

10,11

Strategy to implement the technology AND principles of BPM

Organisations either had a strategy that addressed the technology implementation or, the implementation of a process improvement methodology with only Org1 having both

‘Process’ recognised as an organisational dimension

In no cases did the participants agree that the dimension of process was well understood

11

BPM initiatives driven from the top

“Due to the vastness of what it entails, it is not something you can drive from within the business; you need to do it from a higher level towards various businesses in the company”

12

Sufficient initial and medium-term central funding for BPM

“External factors such as the economic pressure that the organisation might experience could result in the organisation going for short term gains rather than long term gains and to get BPM right completely you need to take a longer term view and take it slow and get things established”

New

Not just strategic Not just strategic alignmentalignment

CULTURAL CULTURAL ENABLERENABLER

Findings Ref

A culture of continuous improvement

“Given that the organisation has been through a number of cost reduction initiatives, this has made people conscious that if we do not continuously improve, you are going to get these large (process improvement) interventions”

10

Process improvements that don’t concentrate merely on cost savings

Int2 stated that linking process improvement to cost savings, rather than improvements such as productivity, quality, and client experience was a concern and would discourage adoption

16

A cross functional (between business functions and between business and organisations) team work culture

large organisations were structured around the value chain yet cross functional team work was difficult. Difficult to find an optimal structure to manage processes. “I do not think you will ever find an ideal structure as at some stage you will have to go across boundaries and you will need to make sure that your MIS and culture is such that you can manage that”

12

Empowerment and incentivising of employees to improve the process

Only Org1 reported an incentive scheme to improve process but suggested that it needed more work. Org2 and Org4 had Key Performance Indicators to measure employees’ contribution to process improvement

16

PEOPLE / PEOPLE / RESOURCE RESOURCE ENABLERENABLER

Findings Ref

The development of a process understanding amongst all employees but selected promotion of BPM understanding

“...people still tend to view things functionally and not necessary in a process dimension” (Int8)“The communication of BPM into the organisation is low key, specifically because we are trying to move away from this being the next fad. It is more something that we build into the fibre of the organisation rather than a big bang, ho-ha, ra-ra type approach of implementation” (Int2).

10

A well defined BPM training programme

Employees involved in process improvement need to be skilled in process modelling, analysis and simulation

11

Sufficient IT resources There appears to be a real danger that organisations can become efficient at identifying improvement opportunities but not efficient enough at implementing these. There need to be sufficient IT resources available to implement improvements in a timely manner.

New

GOVERNANCE GOVERNANCE ENABLERENABLER

Findings Ref

Clearly defined process owners

“If you look at it from a process point of view that crosses boundaries or business units, then someone needs to overlook the total process. Currently we are not set up like that so it is more silo driven for a specific piece of the process” (Int5)

11

A cross-functional facility that has responsibility for the management and improvement of processes and the adoption of a formal process improvement methodology

“...they have a group that they call the Process Owner Team with representatives from Distribution Support and New Business and they talk through process issues across the boundaries” (Int3).

The larger organisations had both adopted a formal process improvement methodology (based on Lean or Lean Six Sigma)

12, 16

METHODOLOGICAL METHODOLOGICAL ENABLERENABLER

Findings Ref

Standardised process mapping and storage practices

“We don’t have a central process repository… but it is quite tough to come up with an answer that everyone is going to buy into” In two organisations the Business Analysts did process mapping in Microsoft Visio, IT developers then re-did these in the BPMS interface prior to generating executable BPEL code.

19

Standardised process measurement; simulation and monitoring practices

Only Org3 reported that they were able to measure process quality to an acceptable standard. Three of the organisations were using metrics to monitor and adjust process performance.

10

Develop a flexible process improvement methodology that fits with the organisation’s culture and maturity

In addition to Lean and Six Sigma, both large organisations were doing work around Client Experience and incorporating these techniques into their own process improvement methodology. Employees were put off by Lean’s manufacturing background and terminology such as ‘waste’

New

Quantify the value of BPM through smaller projects

“I think we first want to see what will come of this (pilot project) before it is driven as a company-wide initiative”

13

IT ENABLERIT ENABLER New Findings

An appropriately priced BPMS, with good vendor support and proven implementation history

three organisations reported that they were dissatisfied with vendor support levels as well as their level of technology knowledge

BPEL compliant BPMS with good BAM and process rules capability

All of the suites could model and execute processes and had some BAM capability. However, not all were using BAM and that the BPMS at Org1 was not BPEL compliant. Two organisations reported that their BPMS rules engine capability was not very powerful.

BPMS needs to fit the IT architecture with good legacy system integration

Int3 made specific mention of the dependence of BPM on SOA. Two organisations reported that integration was relatively easy. One of these organisations selected its BPMS based on compliance with its current technology stack and strategic technology plans. Both Org3 and Org4 reported integration issues. “The integration into existing systems was not as easy as we had thought and it took a lot more effort than we had originally thought” (Int9)

Insights on Technology or Insights on Technology or Methodology firstMethodology first

Org1 and Org2 had started with process improvement and was Org1 and Org2 had started with process improvement and was following that with technology. following that with technology. “We did a lot of departmental “We did a lot of departmental level Lean improvements but realised that we could not get level Lean improvements but realised that we could not get any further improvement until we started linking our value any further improvement until we started linking our value chain together and supporting that by BPM”chain together and supporting that by BPM” (Int1). (Int1).

In contrast, both Org3 and Org4 had gone the technology route In contrast, both Org3 and Org4 had gone the technology route first. first. “We have to bed the system down and then look at how “We have to bed the system down and then look at how we can improve the process”we can improve the process” (Int8). (Int8).

The technology-first approach:The technology-first approach:

• may help to alleviate some of the IT resource constraints, may help to alleviate some of the IT resource constraints,

• would provide rich process metrics to support Six Sigma’s would provide rich process metrics to support Six Sigma’s statistical data analysis requirements.statistical data analysis requirements.

LinkagesLinkages• A continuous improvement culture can not be A continuous improvement culture can not be

established in isolation of a clearly communicated established in isolation of a clearly communicated BPM strategy.BPM strategy.

• Many of the People/resource enablers will be best Many of the People/resource enablers will be best addressed when there is a clearly communicated addressed when there is a clearly communicated BPM strategy in place. BPM strategy in place. – The structured trainingThe structured training– The creation of IT capacity to implement process The creation of IT capacity to implement process

improvements. The average IT department will be unwilling to improvements. The average IT department will be unwilling to incur this extra cost unless it is in response to a stated incur this extra cost unless it is in response to a stated corporate strategy. corporate strategy.

• Process improvement methodology needs to be Process improvement methodology needs to be customised to organisational culture. customised to organisational culture. – Creating a process language that employees can identify with. Creating a process language that employees can identify with.

• The use of methodology is dependent on the amount The use of methodology is dependent on the amount of technology implemented, specifically BAMof technology implemented, specifically BAM

BPM enables BPM enables Process SuccessProcess Success

• Process QualityProcess Quality– ““It definitely reduces error rates. … It definitely reduces error rates. … – The error rates were previously about 5 – 8% and are now down to The error rates were previously about 5 – 8% and are now down to

0.something %”0.something %”

• Process EfficiencyProcess Efficiency– ““The automation saves time. We are definitely doing a lot more The automation saves time. We are definitely doing a lot more

now with the same number of people than what we did two years now with the same number of people than what we did two years ago”ago”

• Process AgilityProcess Agility– Int3 reported that his organisation had to wait about six months to Int3 reported that his organisation had to wait about six months to

get process changes implemented on its legacy systems, with BPM get process changes implemented on its legacy systems, with BPM technology, they would benefit from better process agility and technology, they would benefit from better process agility and flexibilityflexibility

Defining BPM Defining BPM SuccessSuccess

• Process success does not Process success does not necessarily result in business success.necessarily result in business success.

• Business Success can be measured through Business Success can be measured through improved operational cost efficiency, improved improved operational cost efficiency, improved client experience, and business agility.client experience, and business agility.

• BPM Success should only be achieved when BPM Success should only be achieved when BPM initiative leads to measurable degrees of BPM initiative leads to measurable degrees of business success. business success.

ConclusionConclusion

• This researchThis researchexpanded on the expanded on the RosemannRosemann, de Bruin , de Bruin and Power [1] BPM success modeland Power [1] BPM success model

• Generalisability can be arguedGeneralisability can be argued

• It is hoped that this model will be able to assist It is hoped that this model will be able to assist organisations in making a success of BPM and that organisations in making a success of BPM and that future research could validate this model in other future research could validate this model in other industries.industries.

ReferencesReferences

1.1. Rosemann, M., de Bruin, T., Power, B.: A model to measure Business Process Rosemann, M., de Bruin, T., Power, B.: A model to measure Business Process Management Maturity and improve performance. In Jeston, J., Nelis, J. (Eds), Management Maturity and improve performance. In Jeston, J., Nelis, J. (Eds), Business Process Management, Butterworth-Heinemann, London, Chapter 27 Business Process Management, Butterworth-Heinemann, London, Chapter 27 (2006)(2006)

10.10.Lee, R. G., & Dale, B. G.: Business Process Management: A Review and Lee, R. G., & Dale, B. G.: Business Process Management: A Review and Evaluation. Business Process Management Journal, 4 (3), 214-225. (1998)Evaluation. Business Process Management Journal, 4 (3), 214-225. (1998)

11.11.Melenovsky, M. J., Sinur, J.: BPM Maturity Model Identifies Six Phases for Melenovsky, M. J., Sinur, J.: BPM Maturity Model Identifies Six Phases for Successful BPM Adoption. Stamford: Gartner (2006)Successful BPM Adoption. Stamford: Gartner (2006)

12.12.Rosemann, M., de Bruin, T.: Application of a Holistic Model for Determining BPM Rosemann, M., de Bruin, T.: Application of a Holistic Model for Determining BPM Maturity. Proceedings of the AIM Pre-ICIS Workshop on Process Management Maturity. Proceedings of the AIM Pre-ICIS Workshop on Process Management and Information Systems, Washington D.C., December, 46-60. (2004)and Information Systems, Washington D.C., December, 46-60. (2004)

13.13.Mooney, L.: Building a Business Case for BPM - A Fast Path to Real Results, Mooney, L.: Building a Business Case for BPM - A Fast Path to Real Results, http://www.metastorm.com/ec/sf/WP_Building_a_Business_Case.asp (2008)http://www.metastorm.com/ec/sf/WP_Building_a_Business_Case.asp (2008)

16.16.Lees, M.: BPM Done Right: 15 Ways to Succeed Where Others Have Failed, Lees, M.: BPM Done Right: 15 Ways to Succeed Where Others Have Failed, http://whitepapers.silicon.com/0,39024759,60447963p,00.htm (2008)http://whitepapers.silicon.com/0,39024759,60447963p,00.htm (2008)

19.19.Engiles, M., Weyland, J.: Towards Simulation-Based Business Process Engiles, M., Weyland, J.: Towards Simulation-Based Business Process Management. Proceedings of the 35th Conference on Winter Simulation: Driving Management. Proceedings of the 35th Conference on Winter Simulation: Driving New Orleans Innovation, 225-227. (2003)New Orleans Innovation, 225-227. (2003)