Processes and the Process Management Evolution S ession 2 Ann Rosenberg 16th Februar 2012

1. Processes and the Process Management EvolutionSession 2 Ann Rosenberg 16thFebruar 2012

2. Agenda • Process and process parameter - definition • Classical process management frameworks: TQM, Lean, Six Sigma, BPR etc. • Process Management Evolution • Process management modeling notations • Process Management Technology (BPM Technology) • The Evolution of Enterprise Systems • Process Classification Frameworks • RACI framework • BPM Technology (business to model and modeling to execution) • Group Exercise • Final Exercise types • Session 3

3. Overview of all sessions

4. Purpose of the session I denne session vil vi gennemgå, hvad en process er og den historiske udvikling, der er sket indenfor process management. Vi vil gennemgå nogle af de mest klassiske process management frameworks såsom Total Quality Management (TQM), Lean Manufacturing, Six Sigma, Business Process Reengineering (BPR), Business Process Engineering (BPE) mv. Sessionen vil illustrerer hvor, hvordan og hvorfor denne udvikling har været nødvendig. Den studerende vil lære at skeldnemellem de forskellige process management frameworks inklusive hvorfor denne udvikling er fundet sted og dernæst hvordan man definerer og arbejder med processer inklusive de parameter der understøtter en process. I sessionen vil vi ligeledes se på nogle af de forskellige process modeling værktøjer som anvendes i dag og hvorfor der er en stigende brug af disse værktøjer (Business to model and modeling to execution).

5. Process and process parameter - definition

6. Definition of a Business Process 1/2 A business process begins with a mission objective and ends with achievement of the business objective. Process-oriented organizations break down the barriers of structural departments and try to avoid functional silos. A business process can be decomposed into several sub-processes, which have their own attributes, but also contribute to achieving the goal of the super-process. The analysis of business processes typically includes the mapping of processes and sub-processes down to activity level. Business Processes are designed to add value for the customer and should not include unnecessary activities. The outcome of a well designed business process is increased effectiveness (value for the customer) and increased efficiency (less costs for the company).

7. Definition of a Business Process 2/2 There are three types of business processes: Management processes, the processes that govern the operation of a system. Typical management processes include "Corporate Governance" and "Strategic Management". Operational processes, processes that constitute the core business and create the primary value stream. Typical operational processes are Purchasing, Manufacturing, Advertising and Marketing, and Sales. Supporting processes, which support the core processes. Examples include Accounting, Recruitment, Call center, Technical support.

8. The Business Process Lifecycle

9. ASAP Methodology including BPM Technology – BPM, AML, SOA and Value perspectiveThe 4 lifecycles To BeDesign Process Owner Process Architect Business Architect CIO Enterprise Architect Application Consultant Project Manager Program/Portfolio Manager Business Unit Owner Business Architect Business Analyst Process Management Performance Management Value Management Process/Performance Gov. IT Gov. Project/Program Gov. Business Governance

10. Event 1 Entity Application Role Process Step 1 Entity Information Carrier Document Event 2 • Process and process parameters - Definitions

11. Process parameters

12. The Evolution of Process Management

13. The Evolution of Process Management

14. The Evolution of Process Management

15. Toyota Production System

16. 4 P´er

17. LEAN – fokus: Fjerne Spildtid

18. LEAN – fokus: Fjerne Spildtid

19. LEAN – fokus: Fjerne Spildtid

20. Six Sigma – fokus: Forbedre process kvalitet

21. Six Sigma – fokus: Forbedre process kvalitet

22. Six Sigma - DMAIC

23. Six Sigma – fokus: Forbedre process kvalitet

24. Six Sigma – fokus: Forbedre process kvalitet

25. BPR

26. BPR

27. TQM

28. Classical process management frameworks: TQM, Lean, Six Sigma, BPR etc. Process Management EvolutionProcess management modeling notations

29. Why Process Modeling matters? It‘s green

30. Why Process Modeling matters? Thank you, I did see this myself If you know and see everything better, why don‘t you drive? Thank you It‘s green

31. Aligning Sender and Receiver It‘s green Pure Information + Personal Experience + Personal Mood + Personal Education + Personal Interpretation + … Pure Information + Undertone + Wording + Language + … CommunicationChannel Receiver Sender

32. “Modeling only generates more efforts“How to become Model minded? Informationabouta Process Asfd dsaasdf adf ds fas fd wf wf fyads fy sxd f ew f asd fy sf dw sdw fa sd Ads wf e sd f dsf ad sf a df we s fd fa sd fa sfweedf asd f asd vcfy sdfdwew f sad Adsf asdf adsfasdfasd dsfasdfwd fycvx dgfasdf ysdv yds fgqadf ysfydfdsfa ? Visio Visio Sender Receiver

33. Aligning Sender and Receiver Process Model Sender Receiver

34. Modeling Convention vs. Modeling Tool Modeling Tool Graphical ProcessDescription Textual ProcessDescription Visio + = Powerpoint Modeling Notation / Convention Aris ...

35. PROCESS HIERARCHY ProcessArea Extend enterprise map Level 1 MainProcess Level 2 Process Level 3 Activity Level 4

36. “The RealThing“ What is a Model? Why model processes? Analyze, design, and optimize business processes. MANAGERS, BUSINESS PEOPLE Represen-tation Derive requirements on IT landscape and software. IT EXPERTS At a point in time Demonstrate compliance (e.g. SOX) or get certification (e.g. ISO). The Model AUDITORS Viewpoint ! The Reason MODELER Models are not what happens – they are a representation of what happens or happened or should happen! ! • … a representation of the real thing • … built to a certain scale and level of detail for a specific purpose • … built to show a viewpoint (here: process focus) • … representation of a snapshot in a point of time

37. What Makes A Good Model? CONTENT QUALITY FAITHFUL TO BUSINESS REALITY COMPLETE SUSTAINABLE CONTENT-WISE CONSISTENT FOSTER HIGH QUALITY PROCESS MODELS UN-AMBIGUOUS / CLEAR EASY-TO-READ UNIFORM STRUCTURAL QUALITY COMPARABLE The Model FORMALLY CONSISTENT Goal Attributes

38. Guiding Principles for Good Modeling • Models must contain only relevant elements,i.e. only aspects that are important with respect to • the selected space of business reality • the project goals • shall be modeled in order to keep model complexity manageable. • Models must be efficiently built, i.e. • modeling effort must be kept low, • modeling must be prioritized according to most relevant aspects, • models must be reusable, flexible, adaptable and sustainable for future use. • Models must be correct and consistent. • Models must be comparable. • Models must be well-structured, intuitively understandable, transparent, and easy-to-read. • !

39. Classical process management frameworks: TQM, Lean, Six Sigma, BPR etc. Process Management EvolutionProcess management modeling notations

40. The Evolution of Enterprise Systems

41. The Evolution of ArchitectureWhy do we need a new implementation approach Architecture Maturity Have Change To Business Modularity and Dynamic Venturing Source: Ross et. al, 2006

42. Mainframe Client-Server Internet SaaSCloud Changing Business Needs drive IT ArchitectureEvolution of Enterprise Systems EAI SCM Model Simulate Deploy Discover Deploy Discover Model Simulate Execute Monitor Execute Monitor Purchasing Sales SRM CRM ProcessModels ProcessModels ITArchitecture ERP Database B2B B2C PLM CPM Manu-facturing Finance HRM Heterogeneous Landscape (SAP, non SAP) Semantic Integration B2E OnPremise On Demand Applicationlifecycle On Device Database-centric EAI-centric SOA-centric Orchestrated Business Agility Business Needs Operational Excellence OngoingTransformation of Processes and Business Networks Global Rollouts &Integration of Business Partners Integration ofCore Processes Source:: Møller (2008)

43. Timeless Software

44. Processes remain the Linchpin of Biz/IT Alignment Why do we need a new implementation approach Value Chains • Business Domain • Vision, Strategy • Business Model • Value Chains Procure to Pay Plan to Fulfill Order to Cash Budget to Report Hire to Retire Processes are the linchpin between your Value Chain and our Solution World Technology Domain • Solutions • Applications • Technology Components BI Business Suiteapplications Technology Components SaaS ByD … Third Party Information Technology

45. Process Classification Frameworks

46. APQC – Process Classification Framework • PCF: • Process Classification Framework developed by APQC (American Productivity & Quality Center) • Source: http://www.apqc.org/portal/apqc/site

47. APQC – Process Measures As the world’s No. 1 most used management tool*, benchmarking is a must for organizations that want to survive—and thrive—in an increasingly competitive marketplace. Knowing where you stand is the first step in getting better. Source: http://www.apqc.org/benchmarking

48. Raci framework

49. 4 3 2 1 BPM Methodology at a Glance To-Be Design Process Scanning As-Is Analysis Solution Transformation 1.1 Understand high-level business vision and strategy 1.2 Identify business success factors 1.3 Calibrate IT topics 1.4 Define high-level process landscape 1.5 Prioritize processes 2.1 Assess reference content 2.2 Identify relevant process parameters and classification 2.3 Document as-is processes and process flow 2.4 Analyze processes and identify weaknesses 2.5 Identify interdependencies and cluster weaknesses 2.6 Assess and prioritize weakness clusters 2.7 Analyze as-is IT architecture 2.8 Consolidate roles, systems, information carrier etc. 3.1 Design to-be IT architecture 3.2 Develop weakness cause elimination approach for all relevant weakness clusters 3.3 Create to-be process definition and map solutions 3.4 Detail process description on activity level 3.5 Consolidate roles, systems, information carrier etc. 3.6 Derive necessary adoptions of the organizational structure 3.7 Develop business case • Activities for all Solution Tracks • 4.1 Elaborate solution approach per business process • 4.2 Develop transformation roadmap • 4.3 Transform IT architecture • 4.4 Identify requirements for master data concept • Solution Tracks • Core Configuration • Core enhancement • SOA/Composition • Third Party Solution • Clearly defined and agreed project goal • List of prioritized processes to be analyzed in detail • Identify relevant architecture topics • Prioritized and clustered list of weaknesses regarding process, organizational or IT technical aspects • Detailed to-be design for weakness elimination regarding all aspects evaluated during as-is • IT capabilities • BPM Blueprint that provides details of identified solution tracks and their relevant contents

50. Typical weaknesses in processes can be structured by three criteria Typical process weaknesses Process flow Organizational structure System support/data structures • Loops • Decentralized activities • Inputs not necessary, waiting times • Long lead times • Not enough information for process owners • Goal of the process not specified • High number of interfaces • Low quality of process output • No quality control for process results • No process standardization where possible • Big product and service portfolio which leads to complex processes • No outsourcing of processes which are not core to the customers business • Not enough process automation • … • Pure functional organizational structure (no process ownership across departments) • Responsibilities not clearly assigned • Overlapping responsibilities • Decision processes take too long • No fit of competencies andresponsibilities (governance) • Wrong degree of centralization and decentralization • Not enough transparency • … • Systems do not support the processes (degree of automation) • Missing functionalities • Redundant systems support • User interface not user friendly • Low data quality, redundant data • No integration • Slow information access for process owners • System support not standardized • …