BPM Best Practices

Mechelen, November 24th 2008

Why BPM for Dummies?

>40,000 Copies Distributed 5 Languages

Take a copy for your boss! A market rich in awareness but poor on understanding Lots of different perspectives across the enterprise Misunderstanding about webMethods/Software AG

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Software AG At Glance
39 Years of Recognized Software Expertise
Over 4,000 global customers in 70 countries Gartner Research:
Leader in BPMS Leader in SOA Governance Leader in B2B

Forrester Research:
Leading Enterprise Service Bus Provider Leading Business Process Management Suite

AMR Researchs top-ranked solution for SOA/BPM

Financial Strength and Reach

Annualized revenues approaching $1B Highly profitable (EBIT margin 23% in 2006) Over 65 global partners
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Software AG webMethods Suite

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BPMS Customer Success

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BPMS Technology Architecture

Unified Workspace
Task Inboxes User Interfaces (CAF) Process Engine Monitoring Dashboards (BAM)

Execution Environment
Business Rule Engine Analytics Engine (BAM)

Simulation Engine Process Design

Process Modeling Rule Definition KPI Definition Process Development & Implementation UI Design

Metadata Management Integration/SOA

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A New Approach
Business Output
Intuitive Process Workspace Real-time Monitoring & Analytics (BAM)

Im

e ov pr

Business Input
Process Modeling Business Rules Collaboration Tools Simulation

Business Infrastructure Software

M od el

Sim

os mp Co
e lat u

IT
Drag & Drop Service Reuse Composite Applications Business Rules Simulation

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What Makes webMethods BPMS Different?

1.All process scenarios 2.Completeness

3.Suite!

4.Apple-like Usability 5.Performance-driven 6.Time-to-Business-Value 7.Governance

Enterprise BPM
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Cox Communications
Innovation in Productivity and Customer Service

Customer Service Excellence

Field Service Productivity

Save 10 minutes per Field Service Rep (FSR) per day. At 3,500 FSRs and a rough cost of $25 per hour per tech, that would deliver some $4.4 million annually in productivity gains and nearly $40 million in net present value

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Autotrader.com
Innovation in Customer Retention Proactive Alerts Project
event driven service alerts trigger and assign tasks to sales rep Goal = reduce dealer cancellations

Business users own and document agile business processes Real-time monitoring and reporting of retention lifecycle

Reduced cancellation of dealer

contracts by 20% in year 1 and reclaimed all associated revenue

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Florida Community College Jacksonville

Innovation in HR Initiative to eliminate all paperbased processes Leave and attendance forms and workflow was most intensive and most valuable Personnel costs = 80% of total expenses Process model at the heart of the system Project extended/enhanced the existing legacy systems and demonstrated their extensibility
Reduced average approval and

submission time from 5 business days to <1 business day

The cost of developing this system productivity was $45,000. The increases valued at more than $1,390,000 over 5 years resulting return on investment (ROI) is over 3,000%

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Best Practices in Enterprise BPM

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Achieving Perspective

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Local Execution

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BPM Maturity

Immature
No process No process documentation documentation Some Some documentation, documentation, but no but no sophisticated or sophisticated or integrated integrated toolset toolset

Maturing
Process Process tools tools Linked BPM Linked BPM and SOA and SOA strategies strategies

Mature
Process Process repository repository Process reuse Process reuse Process Process controllership controllership Processes Processes linked to linked to business business strategy strategy A culture of A culture of process in process in place place

No No recognition recognition of process of process problems problems No culture of No culture of process process

Typical
Process Process metrics metrics Basic Basic methodology methodology

Multi-process, Multi-process, multimultidepartment department .Enterprise BPM .Enterprise BPM

Clear enterprise Clear enterprise process process methodology methodology Inter-Enterprise BPM Inter-Enterprise BPM

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The Move to Enterprise BPM

How would you characterize your organization's current interest in BPM? (Choose one) Major strategic commitment by executive management Significant commitment to multiple high level process projects Initial commitment to limited number of mid or low-level projects Exploring opportunities No interest Total

70 64 69 63 6 272

26% 24% 25% 23% 2% 100%

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Getting Started With Enterprise BPM

Engaging the Business Choosing Projects Managing Projects Dealing with BPMs Politics

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Engaging the Business

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Learn What You Can About the Business I

Consistent, predictable, low cost, error free, efficient

Operational Excellence More efficient but less flexible

in changing directions or meeting needs of individual customers Tailors service delivery to the processes of individual customers More flexible for adapting to specific customer needs (but less efficient) Continuous and rapid introduction of new products and services More flexible for adapting to needs of new offerings (but less efficient)
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Customer Intimacy

Product Leadership

Learn What You Can About the Business II

1. What must the first accomplish this year to be successful? 2. What competitive factors have impacted us most in the last 2 years? 3. What are the three most important products or services? 4. What are the sales of each and how will that change over the next 2 years? 5. What is the largest change in the works for products or services? 6. What is the demographic serviced by each of the products? 7. What us our market share in each product? Changes? 8. Who are our main competitors? 9. What is the strategy for each product line? What is the differentiator? 10.How are our competitors better exploiting processes or IT than us?
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Measure First
Measure First
An On-Ramp For BPM Success

BPM..Where to Start? 1. Determine whats critical to business success 2. Define KPIs & monitor with Optimize for Process

Process Improvement Lifecycle

3. See whats working and what isnt 4. Focus improvement on areas of day-to-day pain ..without ever having orchestrated a process
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Focus Efforts, Maximise ROI

Choosing Projects

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Understand Your Scale

Projects Projects Projects Projects Projects Projects

Projects Projects Projects Projects

Initiatives Initiatives Initiatives Initiatives

Transformation Transformation

Discrete Localized Stable Tactical Short Term

Breakthrough Enterprise Destablizing Strategic Medium Term

Continuous Ubiquitous Routine Visionary Longer Term

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Supporting Organizational Strategy

Strategy Strategy

Process BPM Functions & Projects

People Materials

Resources Resources

Applications Services
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Data

Size Matters

Small Project Smaller Returns Learning By Doing Higher chance of Success

Big Project Big Returns Steep Learning Curve Higher chance of failure

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What Processes Are People Improving?

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Managing Projects

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The Role of the Process CoE

Aligning with Aligning with Corporate Corporate Strategy Strategy Encouraging Encouraging Collaboration Collaboration

Controlling Controlling Governance Governance

BPM CoE
Consistent adoption Consistent adoption of tools and process of tools and process frameworks frameworks Development Development Of BPM Of BPM Roadmap/Vision Roadmap/Vision

Consistent adoption Consistent adoption and alignment of and alignment of methodologies methodologies

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Keys to Success with BPM CoE

Dont form a CoE too early Evolve an existing (Integration) Competency Center Ensure cross-team support
Finance EA team (governance role) LoB Ensure executive representation

Address a framework for definition of KPIs developing a consistent business case Address a consistent methodology for project selection Ensure consistent communication Meet face-to-face

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Dealing with Politics, Roles, etc.

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Understand Your Org Structure

Understand the current roles and responsibilities in your organization Note: There are two versions.the official, documented version and the real version Investment here saves time later Start to think about how they could changebut be careful!
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Thanks to Alec Sharp of Clariteq Systems for concepts in this slide

Improvement is Hard Honest criticism is hard to take, especially from a Honest criticism is hard to take, especially from a relative, a friend, an acquaintance, or a stranger. relative, a friend, an acquaintance, or a stranger.
Franklin Jones Franklin PPJones

Thats why we must: Make it clear - what processes really are Make it visible how their processes behave Make it blame-free everyone is working hard .Then let the facts speak for themselves

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Thanks to Alec Sharp of Clariteq Systems for concepts in this slide

Acknowledge Different Perspectives.But Get Agreement

If you cant agree on what a process is, youll have a hard time discovering, modeling and improving one!

Size
Bigger than a business process: Customer relationship management A group of related processes

Concept
Confusion with organisation: Our Customer Service process

A True Business Process Acquire Customer Smaller than a business process: Setup customer A sub-process or activity Much smaller than a business process: Calculate credit limit A procedure or task Confusion with systems: Our Oracle CRM system

Confusion with technology: Our e-business strategy

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Thanks to Alec Sharp of Clariteq Systems for concepts in this slide

Functions are Critical

Sales Production Logistics Accounts Receivable

Process: Order Fulfilment

BPM aligns the objectives and work of functions Functional structure is an efficient organizational concept Contain specialized knowledge, skills and experience But they must be coordinated and managed as a whole

Dont call them functional silos Be positive.You are improving their ability to do their job
Where they fit into the value chain and how they contribute How they focus on delivering value
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Thanks to Alec Sharp of Clariteq Systems for concepts in this slide

3 Common Obstacles
1. Processes are not identified properly and made visible 2. No process owner to set overall direction and resolve conflict 3. The goals of the functions often conflict with the goals of the process
Sales Production Logistics Accounts Receivable

Process: Order Fulfilment

Sales Goal: push for end of quarter sales

Process goal: Shortest Cycle Time A/R Goal: Precision vs. rapid collection

Production Goal: Minimize setup

Logistics Goal: Lowest cost of delivery

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Other Best Practices and Pitfalls

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The Importance of Data Metadata

Handling an increasingly complex and granular environment What stuff do you have?

Master Data Management

Youre aligning systems around a single item of workflow Data quality and consistency are critical Now That Should Clear Up a Few Things Around Here!
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10 BPM Best Practices/ Common Pitfalls 1 Ready, Fire, Aim! 2 Automate This! 3 4 5 6 7 8 9 10

The veiled RIF Program Ignoring End Users Liberate and Govern Hear the Voice of the Customer Adopt a Methodology Ignoring Master/Meta Data Issues Not Thinking Differently Doing it All Yourself
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BPM Best Practices

Thank you!
mike.lees@softwareag.com