Smart Work for a Smarter Planet
Making BPM Real
Mike Howell
Business Process Excellence Manager
© 2010 IBM Corporation
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
© 2010 IBM Corporation
2
Today’s Landscape Challenges Progress
• Recession Hits
Economy
• Inefficiencies
Abound
• New Technology Is
Driving Change
© 2010 IBM Corporation
3
Economic flows are increasingly multi-directional, but
information flows and visibility are still critical to value
Global investment banks send
derivatives processing to
Dublin
Customer service centers in
Nova Scotia handle warranty
inquiries for US shoppers
Between 2000 and 2003,
foreign firms built 60,000
manufacturing plants in
China
Asian clothing
manufacturers
outsourcing design
to Italian designers
Asian chipmakers using
US engineers for
expertise
US radiologists send
x-rays to Australia
for analysis
23
© 2010 IBM Corporation
4
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?
© 2010 IBM Corporation
5
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outdated post-harvest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
© 2010 IBM Corporation
6
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
© 2010 IBM Corporation
7
Business Process Management can be deployed at any level using this framework
1.0 Develop
business vision
and mission
5.0 Develop and
validate KPIs,
Dashboards
2.0 Develop
strategic business
objectives
6.0 Collect data
on KPIs,
Dashboards
3.0 Create Core,
Enabling, Key Subprocesses
7.0 Rank relative
performance
4.0 Identify
process owners
and their R & R
8.0 Create project
selection criteria,
select projects
© 2010 IBM Corporation
9.0 Select
Improvement
Method
10.0 Execute
projects
Note the
emphasis on
Key
Performance
Indicators and
dashboards
that provide
visibility into
the process
11.0 Monitor and
manage to achieve
business objectives
8
IBM uses a number of tailored methodologies for process improvement
PROCESS EXCELLENCE
Design New Process/Product/Services
Improve Existing Process/Product/Services
DMAIC
DFLSS
Lean Development
TOC
Lean
DFSS
OTM
Six Sigma
VSM
Software
Service Process Product
DOX
Agile
Seven Basic Tools
Kaizen/
RPC
Waste
Analysis
DMEDI
IIDOV, CDOV
Needless
Complexity
Response to
Signal
DOE
8D
PDCA
DOE
Discovery
Process/Product Development
© 2010 IBM Corporation
On-going Improvements
9
BPM TRANSFORMATION FRAMEWORK
Results
A
B
A - Project Selection
Pain Points
VSM
Base-lining
MDBT
CTQ Flow-down
Process Owner Training
Executive Council
Champion Training
Consultant training
Practitioner Training
E
Deployment champions
C- Change Management
Better Change Method
BTO CM Model
Kotter Model
F - Accountability/Rewards
Project Team Recognition
Transformation consultants
Practitioners
Results
F
Bus. Area Steering Committee
Project Reviews
E- Resource Selection
D - Training
Executive Awareness
B -Leadership Engagement
Bus. Area Steering Committee
Project Prioritization
QFD/VOC
Theory of Constraints
D
C
Practitioner
Recognition
Yearly Program
Celebrations
Performance Evaluations
© 2010 IBM Corporation
10
Business Process Management proceeds through various stages
Adhoc and
variable
processes.
Success
depends on
individual
and heroic
efforts.
Metrics are
not available
or ignored.
Business
Strategies
have been
clearly
defined and
communicate
d. Project
and Change
Management
in place.
Learning from
successes
and failures
are captured.
Standardized
methods and
processes are
in place and
followed. Data
on KPIs and
process
metrics are
collected and
acted upon
Process
improvement
methods
have made
processes
more
efficient and
effective
Dynamic businesses
with agile business
models
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.
© 2010 IBM Corporation
11
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
Inputs
Business 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.
© 2010 IBM Corporation
12
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
Enterprise Process Framework (epf)
• 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.
11.0 Manage Finances sub-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.
© 2010 IBM Corporation
13
Business Unit BPM Example I
© 2010 IBM Corporation
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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.
75 hours
 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
Original Process
Problem Statement
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.
7.6 hours
Dashboard
15
Streamlined Process
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
Daily
Takt
Report
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.
© 2009 IBM Corporation
Business Unit BPM Example II
© 2010 IBM Corporation
16
Used BPM baselining approach
Define
 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
Measure
 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.
© 2010 IBM Corporation
17
Lean Six Sigma Project launched after base-lining
Where We Were:
It took an of average 3.5 days (81 hours) from order placement to shipment.
D
Define
Opportunities
M
Measure
Performance
A
Analyze
Opportunity
I
Improve
Performance
C
Control
Performance
© 2010 IBM Corporation
Critical Customer Requirement < 48 hours
from order placement to shipment
As-Is Process
Collect Data
Baseline Performance
Customer Validation
(23) Potential Xs
to
(3) Critical Xs
ID Improvements
Launch Pilot
Control Xs to deliver
order in less than 48
hours
18
Program Results
 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
Importance / Priority
Characteristic
Cycle Time
Customer Satisfaction
Before
After
Before
After
~5
(Very High)
~5
(Very High)
1
(Very Dissatisfied)
4
(Satisfied)
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…”
© 2010 IBM Corporation
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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.
© 2010 IBM Corporation
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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
© 2010 IBM Corporation
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WBM enabled model drives Agility and
Optimizes Costs
Gain valuable insight…
Agile Business Model
 Integrate structured and unstructured data,
massive data and uncertain data
 Transform it into useful information
 Gain insight from analytics, find optimal solutions
to complex problems
and empower action…
Dynamic Business Processes
 Adapt and respond dynamically
 Transform insight into action
 Automate processes end-to-end
© 2010 IBM Corporation
22
Business Unit BPM Example III
© 2010 IBM Corporation
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ITDelivery Business Process Management
System
ITDelivery BPMS
 Ownership By Service Line
Governance
 Global Governance
Standard Processes
 Processes Modeled and
Engineered using Websphere
Business Modeler and Rational
Method Composer
Process Integration
Governance
Model
© 2010 IBM Corporation
Process Improvement
Audit and Assessment
Reporting and Review
Process Measurement
Process Deployment
 Controlled through Change
Management
 Quality Focus
 Supported by automation to ensure
consistent deployment and process
improvement
24
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
© 2010 IBM Corporation
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ITIL® is the foundation upon which IBM IT
processes are built
Strengths
ITIL
•
•
•
•
PRM-IT
Process Reference Model for IT
ITUP
IBM Tivoli Unified Process
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
• 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
•
•
•
•
•
•
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
© 2010 IBM Corporation
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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.html
Customer Download: http://www-306.ibm.com/software/tivoli/governance/servicemanagement
© 2010 IBM Corporation
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Engineering of ITDelivery Processes: Change
Management Example
PRM-IT Process
Standard for Change
Management
ITIL Specifies Best
Practice Guidelines for
Change Management
Account X
Change
Management
Procedure &
Work Instructions
Change Workflow and Manual
Work Instruction
© 2010 IBM Corporation
Change Management Team
and Approvers (7 ITUP Roles)
Specific ITDelivery Change
Process is defined in IT Unified
Process, with drill downs and
process roles for each step of the
Process
Change Management Tool
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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.
© 2010 IBM Corporation
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Our infrastructure services are made up of competency
segments to form fully integrated, consistent delivery
capabilities
Technology Integration Mgt
Japan
Infrastructure/ Resource Mgt
Americas
Service Management
AP
Business Acquisition
Asset management
Security & Risk Management
End User Services
Server Systems Operations
Operational Competencies
Services we sell
Europe
Support Competencies
Support functions
Segments lead in definition, standardization, and continuous improvement of metrics,
processes, tools, skills, intellectual capital for their business areas
© 2010 IBM Corporation
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Global IT Delivery Competency Model: Standard Structure and Definition provides
the means for clear ownership and decision-making across all areas of Service Delivery
AP
EUR
AG
Japan
Service
Delivery
Service Line Component
Service Line
Service Line Component
Competency Segment
Global IT Delivery Competency
Service Line Component
Service Line Component
Service Line
Service Line Component
Service Line Component
Service Line
Competency Standards / Integration / Enablement
Process
© 2010 IBM Corporation
Tools
Metrics
Quality
Benchmarking
31
Leveraging the Competency Management Systems
Everyone is Singing from the same Song Sheet
GCSE - Global competency Segment Executive
GCSL - Global competency Segment Leader
TIM - Technology Integration Management
GSAR - Global Solution Architecture Repository
GSAR,TIM, Process Standards
Center of Excellence
GCSE
GCSL
SERVICE LINE
OWNER
Focused Process
Management
Training
SERVICE LINE
COMPONENT OWNER
GLOBAL PROCESS
MANAGER
DELIVERY PROJECT
EXECUTIVE
~1240
Accounts
ACCOUNT PROCESS
OWNER
© 2010 IBM Corporation
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.
32
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:
© 2010 IBM Corporation
33
Account Process Management
Account Process Management and BPM
Account Process Management uses BPM methodology
Goal is to continuously improve quality of service delivery
processes
Participants
Account Process Owners (APOs) own process improvement
Subject Matter Experts (SMEs) participate in improvement activities
Process Improvement Teams (PITs) are formed as needed
Account Process Manager (APM) facilitates and supports
improvement
Account Process Management Key Activities
Establish 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
© 2010 IBM Corporation
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Continuous Process Improvement Activities
Define
Measure / Analyze
Process Owners
Process Requirements
Process Documentation
Document Control
Document Repository
Process Roles
Support Tools
Measurements
Issues Tracking
Process Improvement Teams
Process Performance Targets
Process Maturity Targets
Measure process performance
Identify process performance gaps
Measure process maturity
Identify process maturity gaps
Monitor process compliance

Improve / Control
Address process maturity/performance gaps
Conduct Process Improvement Projects
Control process performance
Service Delivery teams (Account Process Owners and SMEs) own process improvement
 Account Process Manager facilitates improvement activities
© 2010 IBM Corporation
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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.
© 2010 IBM Corporation
36
Jumpstart Your BPM Projects Today! IBM BPM BlueWorks
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Hundreds of industry-specific
strategy, capability and
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Private online tools and work
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Capability to share online
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colleagues