Business Process Architecture - IRMACirmac.ca/0506/Roger Burlton IRMAC.pdf · Business Process Architecture Technology Architecture Information ... PRG’s Business Process Management

PROCESS RENEWAL GROUPPRG-BPF 1-1

Business Process Architecture

The Eye of the Hurricane

IRMAC – Toronto: December 7 2005

Roger T. BurltonThe Process Renewal Consulting Group Inc.

www.processrenewal.comwww.adaptive.com

[email protected]


Copyright

Business Process Management:

This seminar contains proprietary methods and materials developedby The Process Renewal Consulting Group Inc. of Coquitlam BC Canada.

They may not be copied, recorded, transmitted or reused without theexpressed permission of the author. All rights reserved.


Reference Materials

www.amazon.comwww.amazon.co.ukwww.amazon.ca


1. Introduction

2. Process Management

3. Stakeholder Perspective

4. Process Architecture

5. Process Architecture Alignment

6. Program Management

7. Process Projects

8. Example

9. Conclusion

Business Process Architecture Agenda


Introduction


Mass Customization Invention

Mass Production

ContinuousImprovement

Stable Dynamic

Dynamic

Stable

What we provide

How we do it

Business Driver: Speed of ChangeVersatility = Being able to many things with your capabilitiesAdaptability = Being able to renew your capabilities quickly

New Age Invention => Develop environments that assume & enable variation and change


HumanCompetency

BusinessEnvironment

Understanding

ProcessAbility

Info/KnowledgeAccessibility

StakeholderRelationshipIntelligence

TechnologyEnablers

As business product cycles are changing more and more rapidly and each organization is required to form an individual and unique relationship with each of its customers and other stakeholders, only flexible processes and maneuverable technologies can enable knowledgeable staff to make the commitments required to continuously adapt.

Adaptability Requires Alignment of Critical Capabilities


Business Strategy

Business Drivers

Business Stakeholder

Strategy

Current Results

Alignment

Alignment Method: The Basis for Traceability

Business Architecture

Business Process

Architecture

Technology Architecture

Information Architecture

Org/HR Strategy

OtherStrategies

Program Management

Migration Strategy

Project Portfolio

Traceability


Process Management


You already have all your Processes – But you may not know WHAT they are

ProcessSteward

Customer

Supplier

Yourco

The complex Stakeholder Relationships and the Knowledge required to satisfy them can only be

managed through Business Processes working at optimum performance.


Scoping (Event) View:

Is activity initiated and terminated by one or more business events of importance to the stakeholders of the ‘Organization-in-Focus’.

Relationship View:

Is completed only when all of the business outcomes of importance to all relevant stakeholders of the process have been provided.

Processing View:

Transforms inputs of all types into outputs, according to guidance(policies, standards, procedures, rules etc.), employingreusable resources of all types.

Performance View:

Has performance indicators for which measurable objectives can be set and actual performance evaluated.

Functional / Organizational View:

Contains logical steps requiring a set of functional capabilities often found in disparate organizational units.

A process is a complete set of activities conducted to achieve a specific business

result for one or more stakeholders.

Perspectives of a Real Business Process

Strict Naming Convention:

A Process isdescribed by an

active verb-noun

The name should unambiguously

communicate the intent of the

process


BPM: the discipline that improves measurable businessperformance for stakeholders, through ongoing optimization and synchronization of enterprise-wide process capabilities.

whole processes for stakeholders

their guiding factors

their enablers

Local Resturant

Finance & Administration

Marketing & Sales

Purchasing

Transporation

CateringBanquet Services

Accounts Payable

Accounts Receivable

Legal Sevices

Faciliticies Management

Human Resources

Customer Service Information Systems

Operations

Food Preparation

Logistics

Credit

Delivery

Technology

Hum

anRe

sour

ces

Polic

ies

& Ru

les

OrganizationalStructure

BusinessPerformance

Processes

Business

Roles & Jobs

Facilities

What is Business Process Management ?


A BPMS automatically manages the navigation of the execution of ALL instances of work from the initial triggering event through to the attainment of its last closing status of the defined process.

What is a Business Process Management System?

Invokes the rules and navigation for each role in the entire process

Roles can be:technological (through any technology enabler in any location)human (through links to work portals)organizational (through any defined internal or external entity)

Each process instance can have its own unique path

Can monitor, measure and report status and performance

BPMS is NOT BPM but enables it

Technology

Hum

anRe

sour

ces

Polic

ies

& Ru

les

OrganizationalStructure

BusinessPerformance

Processes

Business

Roles & Jobs

Facilities


PRG’s Business Process Management Framework

Understandthe

Enterprise

Architect&

Align

DefineProcessProject

Understandthe

Process

Renewthe

Process

DevelopCapabilities

Roll-out&

Nurture

ContinuouslyImprove

HumanChange

ManagementAwareness

PerceptionsUnderstanding

MotivationCommunications

Commitments

BP GovernanceProgram and Project ManagementOpportunity CostResource CommitmentGating CheckpointsQuality AssuranceRisk / Reward


Stakeholder Perspective


Validate Strategic Intent Concepts

Organization in Focus

Mission

Vis ion

Goals

Business Drivers

Objectives

Strategies

Bus iness Stakeholder Groups

Business StakeholderRelationship Criteria

St rengths

Opportunities

Threats

W eaknessesPrinciples and Values

Stakeholder RelationshipExpectations

Business Stakeholder RelationshipKPIs & Targets

Stakeholder Relationship CSFsProducts and Services of the

Relationship

Scoreca rd for Organization inFocus

Drivers *

Capabilities * Raison D'Etre * Business StakeholderRelationship Criteria !

Strategic Intent *En terprise *

Process Perform ance Observations


All GSI Stakeholders

Small Direct Customers

All Customers

Stockholders

OutsourcedProfessional Services

Facil ity Support

Channel Partners

Government andRegulatory

Stakeholders

Large Direct Customers

All Suppliers

Banking

Telcom

Others

Humongeous Inc.

Minority Shareholders

Channel Partner'sCustomers

Stakeholder Segmentation and Types: Examples *

* Note: Partial Set Only Join the dots

be aware

analyze


Process Architecture


Framework Concepts in The Architect and Align PhaseOrganization in F ocus

Business Stakeho lderRelationship Crit eria

Prioritized andSelected Processes

Change ProgramProjects

Process Architect ure

Renewal StrategyB i ll F i n a n c eV P F i na n ce

J i m E a g l eV P S a l es

Mark MakeI tVP MFG

Joe BigShotChairman

Roles & Organization S tructure

Program Busine ssCase

Program

Facility P lans

Technology Architec ture

Human Capabilities

Knowledge Requirem ents

Business StakeholderRelationship Criteria *

Aligned Enterprise AssetArchitectu res !

Program M anagementGuidance !

Business Stakeholder Groups


The complex Stakeholder Relationships can only be managed through Business Processes working at optimum performance across your ‘Organization-in-Focus’.

Stakeholder Relationships Define Business Processes

Customer Type 1

Customer Type 2

Customer Type 3

Supplier Type 1

Supplier Type 2

Staff

OwnersCommunity Start with

these

Then do the rest

Then these

Everything which flows must link to at least one process


CORE business processes are linked directly to external customers

.

GUIDING business processes provide direction, rules and practices.

ENABLING business processes provide reusable resources to be used by other processes

Process Architecture Map

Objects of Process Transformation :

Physical Materials

Data / Information

Commitments

Knowledge

Classification will help Define the Right Processes


Some Process Architecture Principles

• Every Architecture is built with a clear “Organization in Focus”

• Every interaction with an external stakeholder triggers the start of a process or some activity in it

• Every incoming exchange-item from the business context diagram must come from an external stakeholder and be received by at least one process

• Every outgoing exchange-item from the business context diagram must be produced by at least one process and go to an external stakeholder

• Every external stakeholder relationship proceeds through a lifecycle enacted by relevant processes – from unawareness through termination


Some More Process Architecture Principles

• Every asset of the enterprise proceeds through a lifecycle enacted by relevant processes–from conception through retirement

• Always start with the ‘Raison d’etre’ of the enterprise –the customer, supply chain and product cycles. These will reveal the core processes.

• After the core ,move to the processes that plan and direct the business and ensure appropriate governance against the plans. These are the guiding processes.

• Finish with the processes that provide the reusable capabilities and enabling physical assets that are used to run the business. These are the enabling processes.


Types of Stakeholder Interactions (Exchanges)

The interactions between each stakeholder type and the “Organization in Focus” is documented or modeled showing all current and future interactions or exchanges including:

– Products delivered or received– Services provided or received– Information exchanged– Knowledge shared – Commitments (formal and informal) made– State changes

Look for and expect in and out pairings


B il l Fi nanc eV P Fi nanc e

J im E agleV P S ale s

Mark MakeItVP MFG

Joe BigShotChairman

Global SW Inc.

All Customers

Requests forInformation

Product and ServiceCatalogs

Stockholders

Government andRegulatory

Stakeholders

Channel Partners

Proposals

Contracts

Governing LegislationCompliance ReportsTarget ROE Financial Results

Software for Resale

Working Software

Services

Payment

Invoices

All GSI Stakeholders

Information

Market Knowledge

Product Strategies

Marketing and Salescapab ility

Royalties and Payments

Terms and Conditionsof Partnership

Partnership Contracts

Packaged Services

Often later than promised but quality is good

Rarely well-defined . Channels re-invent their own.

Sometimes out of date

We are good at thisWe commit to changes

in scope too easily

Outside-In: External Stakeholder flows connect to Internal Processes

Identify prospects Qualify prospectsSell products and

servicesDeliver client business

solutionTerminate client

contractProvide services

Determine productdirection

Develop\maintainstandards & methods

Monitor and assurequality

Develop Global SWbusiness strategy

Control financial assets

Provide ITinfrastructure

Provide tools

Plan, assess andmitigate risk

Develop marketingstrategy

Promote products andservices

Develop core products

Arrange facilities

Report results

Establish projectmanagement guidelines

Provide humanresources

Develop Partnerships


Sample 1 Process Architecture Map DiagramLevel 1

Identify prospects Qualify prospectsSell products and

servicesDeliver c lient business

solutionTerminate client

contractProvide services

Determine productdirection

Develop\maintainstandards & methods

Monitor and assurequality

Develop Global SWbusiness strategy

Control financial assets

Provide ITinfrastructure

Provide tools

Plan, assess andmitigate risk

Develop marketingstrategy

Promote products andservices

Develop core products

Arrange facilities

Report results

Estimate ofLost Business

Volume

Annual SalesVolume

Total Cost ofNon-Conformance

Establish projectmanagement guidelines


Develop Partnerships

Note:

Lines represent major dependencies only !

Note:



Deliver clientbusiness solution

Install modif iedsoftw are

Migrate data

GatherBusiness

Requirements

Design clientsolution

Build clientsolution

Providetraining

Test Solution

Ins tall basesof tw are

Evaluatesolutiondelivery

ManageProjects

Supports allProcesses

Sample 1 Process Architecture Diagram Level 2


Some Frameworks (Operations Reference Models) as an Architecture Productivity Aid

Audit of IT processesCOBIT (Control Objectives for Information and related Technology )

IT Governance Institute

Cross-Industry processesPCF (Process Classification Framework)

American Productivity Quality Center (APQC)

Government Services Patterns and Lifecycles

GSRM (Governments Strategic Reference Model)

Treasury Board Secretariat (Government of Canada)

IT Service Management (IT service support and delivery)

ITIL (IT Infrastructure Library)UK Office of Government Commerce & itSMF

Telecommunications IndustryeTOM (enhanced TelecomOperations Map)

Telemanagement Forum

Internal and Inter-company Value Chains

VCOR (Value Chain Operations Reference Framework)

Value Chain Group

Inter-company Supply Chain Management

SCOR (Supply Chain Operations Reference Framework)

Supply Chain Council

FocusFrameworkSponsoring Body

For a comprehensive treatment of Reference Models and Frameworks visit www.BPTrends.com and search for “frameworks”


Supply Chain Council: SCOR FrameworkSCOR is a management tool. It is a process reference model for supply-chain management, spanning from the supplier's supplier to the customer's customer.

Cus

tom

ers

Cus

tom

ers

Supp

liers

Supp

liers

P1 Plan Supply ChainP1 Plan Supply ChainPlanPlan

P2 Plan SourceP2 Plan Source P3 Plan MakeP3 Plan Make P4 Plan DeliverP4 Plan Deliver

SourceSource MakeMake DeliverDeliverS1 Source Stocked ProductsS1 Source Stocked Products M1 MakeM1 Make--toto--StockStock

M2 MakeM2 Make--toto--OrderOrder

M3 EngineerM3 Engineer--toto--OrderOrder

D1 Deliver Stocked ProductsD1 Deliver Stocked Products

D2 Deliver MTO ProductsD2 Deliver MTO Products

D3 Deliver ETO ProductsD3 Deliver ETO Products

S2 Source MTO ProductsS2 Source MTO Products

S3 Source ETO ProductsS3 Source ETO Products

Return Return SourceSource

P5 Plan ReturnsP5 Plan Returns

Return Return DeliverDeliver

EnableEnable

D4 Deliver Retail ProductsD4 Deliver Retail Products


Sample from the APQC PCF (Process Classification Framework)

2.0 Design and Develop Products and Services2.1 Design products and services

2.1.1 Develop strategy and concepts for new products and services

2.1.1.1 Research customer and market needs2.1.1.2 Plan and develop cost and quality targets2.1.1.3 Develop product life cycle and development timing targets2.1.1.4 Research leading technology components and development

requirements2.1.1.5 Integrate leading technology into product/service concept and

components

Interpreting the PCFCategory: The highest level within the PCF indicated by whole numbers (e.g., 8.0).Process Groups: All PCF items with one decimal numbering (e.g., 8.1) are considered a process area.Process: All PCF items with two decimal numbering (e.g., 8.1.1) are considered processes.Activity: Items with three decimals (e.g., 8.3.1.1) are considered activities within a process.


GSRM Approach:• Each service type is associated with a pattern of processes (called its

service process pattern) to produce and deliver its corresponding service output type, and a pattern of metrics (called its service metrics pattern) that describe the performance of its service output type. These two patterns together are called a service pattern.

Planning processes:– establishing how the service will respond to demands

Provisioning processes: – preparing the service to respond to demands in accordance with plans

Service delivery processes:– operate repeatedly according to the service’s “value chain” when each request for

a service output is received.Deregister/decommission processes:

– recognize the closing of the lifecycles of resources, suppliers, service outputs, or service recipients

Governments of Canada Strategic Reference Model (GSRM)


Some Process Architecture Principles: Core Processes

`

CORE = Customer + Product/Services

Lifecycles

OwnersRegulatory Community

KnowledgeSources

Raw MaterialSuppliers

Human Resources

IT Providers

Facility & Equipment Suppliers

Distributors

Customers &Consumers


Some Generic Core Processes with boring but well-formed names

Customer Lifecycle– Make Customers Aware– Qualify Prospective Customers– Sell to Prospects– Fulfill Orders– Evaluate and Enhance Customer Relationship– Terminate Customer Relationship

Core Supplier Lifecycle– Select Suppliers– Supply Raw Materials– Optimize Inventory – Terminate Supplier Relationship

Product / Service Lifecycle– Research Ideas– Develop Products and Services– Rollout Products and Services– Optimize Products and Services– Retire / Replace Products and Services


Some Process Architecture Principles: Guiding

`

CORE = Customer + Product/Services Lifecycles

Owners Regulatory Community

KnowledgeSources


Human Resources

IT Providers


Distributors


Guiding = Plan / Policy + Governance Lifecycles


Planning Lifecycle– Monitor Business Performance – Understand Markets– Develop Strategic Plan– Develop Market Strategy– Budget Resources– Improve Process Performance

Governance Lifecycle– Understand Governance Requirements– Assess Compliance– Mitigate Risk – Develop Polices and Procedures– Control Finances– Provide Legal Advice– Report to External Stakeholders

Some Generic Guiding Processes with boring but well-formed names


Some Process Architecture Principles: Enabling

CORE = Customer + Product/Services Lifecycles

Owners Regulatory Community

KnowledgeSources


Human Resources

IT Providers


Distributors


Guiding = Plan / Policy + Governance Lifecycles

Enabling = Core Enabling + Infrastructure Lifecycles


IT Asset Lifecycle : Provide Information Technology Capability– Determine Solution requirements– Develop IT Solution– Develop Infrastructure– Maintain Infrastructure– Support Users

HR Lifecycle: Provide Capable Staff– Recruit & employ– Provide work environment – Evaluate employee– Develop employee– Reward & motivate employee– Provide HR service for employees– Terminate Employment

Some Generic Enabling Processes with boring but well-formed names


Facility Lifecycle: Provide Working Facilities– Determine Facility and Equipment Requirements– Design Facilities– Build / Acquire facilities and equipment– Provide Working Physical Assets– Retire Physical Assets

Goods and Service Lifecycle: Purchase Goods and Services– Find Prospective Suppliers– Create Contracts– Order Goods and Services– Pay Accounts

Some More Generic Enabling Processes with boring but well-formed names


From Internal Process in Architecture or External Stakeholder


To Internal Process

in Architecture

or

External Stakeholder

From Internal Processin Architecture

or


Inputs

Outputs

Guides

Enablers

Do Something

Inputs are processed into Outputs according to Guides using Enablers when Events occur

Processes Interface Requirements: Look at IGOEs

Materials to be transformed

Information to be processed

States to be changed

Results of processing

Information to be referenced while

processing

Methods and Rules to guide the processing

Technologies to be applied

Facilities to be used

People to be assigned


Process Architecture Alignment


Principles

ValuesStrengths

Products

Opportunities

Vision

Strategy

GoalsObjectives

RequirementsThreats

Constraints

StakeholdersValue Chains

Events

Responsibilities

Triggers Functions

Business Rules

Skills

Processes

Workflow

Procedures

Jobs

Roles

Information

Legal

Facilities

Knowledge

Financial Assets

DataTax

Objects Time

LocationsCost

Budget

Hardware Networks

Databases

Applications

Middleware

Systems

Methodologies

Tools

Weaknesses

Mission

Organizations

Models

Use Cases

Services

People ProjectsRisks

Why

Arc

hite

ctur

e an

d W

hy O

bjec

t Rep

osito

ries

Than

k s to

Ad a

p tiv

e, In

c . w

ww

. ad a

ptiv

e.co

m


e.g. DATA

Builder

SCOPE(CONTEXTUAL)

MODEL(CONCEPTUAL)

ENTERPRISE

Designer

SYSTEMMODEL(LOGICAL)

TECHNOLOGYMODEL(PHYSICAL)

DETAILEDREPRESEN- TATIONS(OUT-OF- CONTEXT)

Sub-Contractor

FUNCTIONINGENTERPRISE

DATA FUNCTION NETWORK

e.g. Data Definition

Ent = FieldReln = Address

e.g. Physical Data Model

Ent = Segment/Table/etc.Reln = Pointer/Key/etc.

e.g. Logical Data Model

Ent = Data EntityReln = Data Relationship

e.g. Semantic Model

Ent = Business EntityReln = Business Relationship

List of Things Importantto the Business

ENTITY = Class ofBusiness Thing

List of Processes theBusiness Performs

Function = Class ofBusiness Process

e.g. Application Architecture

I/O = User ViewsProc .= Application Function

e.g. System Design

I/O = Data Elements/SetsProc.= Computer Function

e.g. Program

I/O = Control BlockProc.= Language Stmt

e.g. FUNCTION

e.g. Business Process Model

Proc. = Business ProcessI/O = Business Resources

List of Locations in which the Business Operates

Node = Major BusinessLocation

e.g. Business Logistics System

Node = Business LocationLink = Business Linkage

e.g. Distributed System

Node = I/S Function(Processor, Storage, etc)Link = Line Characteristics

e.g. Technology Architecture

Node = Hardware/SystemSoftware

Link = Line Specifications

e.g. Network Architecture

Node = AddressesLink = Protocols

e.g. NETWORK

Architecture

Planner

Owner

Builder

ENTERPRISEMODEL

(CONCEPTUAL)

Designer

SYSTEMMODEL

(LOGICAL)

TECHNOLOGYMODEL

(PHYSICAL)

DETAILEDREPRESEN-

TATIONS (OUT-OF

CONTEXT)

Sub-Contractor

FUNCTIONING

MOTIVATIONTIMEPEOPLE

e.g. Rule Specification

End = Sub-conditionMeans = Step

e.g. Rule Design

End = ConditionMeans = Action

e.g., Business Rule Model

End = Structural AssertionMeans =Action Assertion

End = Business ObjectiveMeans = Business Strategy

List of Business Goals/Strat

Ends/Means=Major Bus. Goal/Critical Success Factor

List of Events Significant

Time = Major Business Event

e.g. Processing Structure

Cycle = Processing CycleTime = System Event

e.g. Control Structure

Cycle = Component CycleTime = Execute

e.g. Timing Definition

Cycle = Machine CycleTime = Interrupt

e.g. SCHEDULE

e.g. Master Schedule

Time = Business EventCycle = Business Cycle

List of Organizations

People = Major Organizations

e.g. Work Flow Model

People = Organization UnitWork = Work Product

e.g. Human Interface

People = RoleWork = Deliverable

e.g. Presentation Architecture

People = UserWork = Screen Formate.g. Security Architecture

People = IdentityWork = Job

e.g. ORGANIZATION

Planner

Owner

to the BusinessImportant to the Business

What How Where Who When Why

John A. Zachman, Zachman International (810) 231-0531

SCOPE(CONTEXTUAL)

Architecture

e.g. STRATEGYENTERPRISE

e.g. Business Plan

The Zachman Framework for IS Architecture

Range of Process Management: Design

The Process Domain

Range of Process Management: Performance


Sub-contractor

Builder

Designer

Owner

Planner

Operating Enterprise

• In a Row, there are interactions among ‘Primitives’ that define the integrated requirements of the row perspective (Integrity)

• Cells are windows on the business

• Depth of design to ‘Excruciating Levels of Detail’ exists in all cells. (Specification)

• A Bill of Materials is not helpful without Assembly Instructions and Configuration Knowledge

The Three Dimensional Zachman Framework (3-D-Z™)

For a download of the rotatable hex go to www.adaptive.com


Adaptive Enterprise Model: A Model Shows a Thousand Pictures

CriticalSuccessFactor =Robust

Scalable Repository not just a Modeling

Tool

www.adaptive.com

‘Zachman Inside’



To Internal Process

in Architecture

or


From Internal Processin Architecture

or


Inputs

Outputs

Guides

Enablers

Do Something


Information Requirements: Look at Architecture I / O / Gs

Information to be processed

Information produced by processing

Information to be referenced while

processing



Inputs

Outputs

Guides

Enablers

Do Something


Policies and Core Rules are Types of Process Guides

Internal policiesBusiness rules

External Legislation, Regulations & Interpretations

Standards

PrinciplesStrategiesExperience

Best practices



Inputs

Outputs

Guides

Enablers

Do Something


Enterprise Capabilities as Types of Enablers

Information SystemsTechnologies

EquipmentHuman Resources Physical Infrastructure

Locations


Define Technology Principles First: Examples

“Without Big Rules it is impossible to coordinate the IT platform”Peter Keen

“Our Technology Strategy mustbe consistent with ourBusiness Strategy and Culture: We will design for adaptability.”

“Data will be captured once and only onceat the point of entry into the company and shared as broadly as possible”

“All published information will be provided in .PDF”

“All core customer and risk management data mustconform to the company’s enterprise data model”

Standards-based decision making at appropriate level of

detail


interactioncoordination/information execution

multiplefront-offices

multipleback-offices

front-offices

mid-office *

back-offices

“Interface Channels will be linked to processing capability through a common interface standard”

“All functional components will be designed as reusable software components linkable to BPMS orchestration and a Service Oriented Architecture”

“All models will be compliant with industry standards”

Sample Technology Principles for Process Adaptability

* www.mid-office.com


process steward

process manager

process lead

capability manager

specific business

requirement

specific business solution

performance & improvement

feedback

resource effectiveness

feedback

design & improve process

conduct instance of

process

process capabilities

process approach & guidance

specific customer

specific customer

Operations

Management

Many Roles: How many organizations are needed?Governanceprocess executive


• Overall results responsibility rests with the process manager for all instances of the process in their domain

• Process steward assures health of the process in all domains• Specific instance responsibility rests with process lead• Function manager is also the resource manager and the source of expertise and

resources• Functional resources are allocated to process instances and report to the process lead

Product Management Resources:Defining Potential Customer problem,Business Case for new product,Product Specifications,Pricing,User Manual,Product Profitability.

Software Engineering Resources:Software DesignSoftware BuildSoftware TestSoftware DocumentationSoftware Acceptance

Marketing Resources:Market Research,MarketSegmentation,Marketing Materials,Marketing Mechanisms.

Customer Support Resources:Product Knowledge

Define and Develop Offerings

Strategy Resources:Company Strategy,Market Segmentation,Product Roadmap.

= process= function

Create Awareness and Promote Business



Full Process-managed with Function as a Resource Provider “In-sourced Resources”


• Process lead provides cross-functional coordination that links sub processes across functions at the instance level

• Function manager’s role is to ensure performance of sub processes within terms and conditions of their SLA and to act as resource manager for the sub process

• Functional Resources report to the function manager

• Overall results responsibility still rests with the process manager for all instances of the process in their domain

• Process steward assures health of the process

Product Management:Defining Potential Customer problem,Business Case for new product,Product Specifications,Pricing,User Manual,Product Profitability.

Software Engineering:Software DesignSoftware BuildSoftware TestSoftware DocumentationSoftware Acceptance

Marketing:Market Research,MarketSegmentation,Marketing Materials,Marketing Mechanisms.

Customer Support:Product Knowledge


Strategy:Company Strategy,Market Segmentation,Product Roadmap.

= process

= function


Full Process-managed with Function as a Sub-process Service Provider: “Outsourced Resources”




Derive the Process Measurement and Governance Model

Measure and manage the distribution in all domains where this activity applies (same KPI)

Measure and manage the contribution of the component activities all the way down (different KPIs)

Sales activity-steps KPIs

AlignmentTraceability


Program Management


Sample 2 Process Architecture Map Diagram

Note:


Note:


9. Develop StrategicPlan

10. InterpretRegulations

11. Monitor and EnsureCompliance

13. A cquire Customers

14. Develop Produc ts

3. Make CustomersAw are

1. Fulf ill Orders 8. Provide Post-SalesService

4. Manuf actureProducts

5. Develop andMaintain Facilities

16. Purchas e Supplies

6. Communicate w ithStakeholders

7. Supply HumanResources

11. Provide FinancialServices

12. Provide ITCapability

2. Deliver ProcessChange

ABC WIdget Company Top Level Process Architecture

Enables A ll Others Guides All Others

Legend:


Process / Stakeholder Value-Delivery Matrix

Version 1: Degree of Potential Process Leverage / Value ContributionLow (1) Medium (2) High (3) Blank=Marginal or No Relationship (0)

Pro

c 1

RankingP

roc

2

Pro

c 3

Pro

c 4

Summary

Pro

c 5

Pro

c 6

Pro

c 7

Pro

c 8

2

3

21

+11

2

1

3

...

3

13

+8

1

9

12

2

17

+10

1

3

23

1

19

+11

2

2

21

2

16

+7

3

6

33

13

+6

3

9

11

1

16

+9

2

6

33

3

17

+10

3

1

...

Conduct for all Stakeholder typesat the chosen level of decomposition

Stakeholder Criteria *

Stakeholder 1Stakeholder 2Stakeholder 3Stakeholder 4Stakeholder 5

How much could the process

potentially affect what is important to

the stakeholder

relationship?

gain

Value Creation Goals

& KPI Objectives W

eigh

t

1

1

1

1

1


Process / Stakeholder Performance-Gap Matrix

Version 2: Health of Existing Process / OpportunitySmall Gap (1) Moderate Gap (2) Significant Gap (3)

Pro

c 1

RankingP

roc

2

Pro

c 3

Pro

c 4

Summary

Stakeholder 1Stakeholder 2Stakeholder 3Stakeholder 4

Pro

c 5

Pro

c 6

Pro

c 7

Pro

c 8

3

3

59

+47

1

3

...

1

21

+17

1

12

2

56

+46

1

2

33

2

52

+43

2

3

1

2

46

+38

3

5

3

40

+34

9

21

30

+24

1

11

23

49

+40

4

1

...

Stakeholder 5

1

13

2

3

3 2 2 2 1 2

* Health of Current Process

for the Stakeholder

How well does the current

process meet the future

stakeholder performance

criteria?

Process * Performance

pain

Wei

ght

1

1

1

1

1

Conduct for all Stakeholder typesat the chosen level of decomposition


pain

3

Process Migration Strategy (Boston Grid)

Process Number

2

11 12 33 44 85 56 137 168 149 6

10 1511 712 1213 214 915 1016 11

16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1

Plus other considerations such as: Cost, dependency, politics, culture, …

gainGreatest Value Potential to Business Strategy and Performance

Biggest

Gap

Ranking


determine constraints in any policy, capability, or organization that will hinder changes in the priority processesfind problems with the connection among processes and alignment with required capabilitiesdiscover unexploited knowledge, skills, capabilities or capacity within the organizationproduce funding criteria for continuation or freezing of existing projects and initiation of new onesrecommend approval or freezing of current and planned projectsproduce a proposed program of change

Create Program for Change

P


Enterprise BPM Alignment: Real Repository TechnologiesFeatures:

• Meta-model based• Model Integration from many data sources

•Modeling tools, Visio, Excel, etc• Generation of diagrams and views • Multiple Perspectives

• Impact analysis• Change Notification and Collaboration• Registered Interest and Discussion Groups

• Web accessible and updatable (thin client)• Views and Security (Role-based)• Link to BPMS• Link to operational systems performance feedback (BAM)• OO engine on top of scaleable platform (real DBMS)• Standards-based / open


Process Projects


Develop Stakeholder Relationship Criteria for an ‘Organization-in-Focus’ (eg “They always meet my needs”)

Derive contributing Stakeholder Relationship Criteria for the ‘Process-in-Focus’ (eg “They always deliver the right product in the right quantity to the right place on time”)

Traceability

SelectedProcess

Process Stakeholder Value Expectations

Formulate Process Vision and Stakeholder Goals

Enterprise


Start with Stakeholder Relationship KPI’s for the ‘Organization-in-Focus’ (eg Customer Satisfaction)

Derive Contributing Process KPI’s for the ‘Process-in-Focus’ (eg Percentage of orders delivered on time)

Determine required target results to be deliveredby process transformation project (eg 80% in one year and 99% in two years)

Traceability

SelectedProcess

Process Performance Objectives

Identify Process and Project Performance Improvements Targets

Enterprise


Inputs

Outputs

Guides

Enablers

Assign Human

Resources

Inputs are processed into Outputs according to Guiding Factors using Enablers when Events occur

Decomposing an IGOE Diagram


Assign HumanResources

Review Request Analyze Priorities AnalyzeAvailaibity

Determine Match \Gap

Assign Resources

Sample 1 Lower Process Model DiagramsLevel 3 Decomposition



RejectedRequest

Request Details forSkilled Resources

Resource

AllocationInfo.

Skills Inventory

Personal Info

Project Priorities

MBO's

Resource Manager

StaffAvailability

StaffAvailability

Requestor

Requested Resource

Manage Projects

Understand ExistingCommitments

Understand ExistingProjects

Determine Preferences

Review Request

Analyze Priorities

AnalyzeAvailaibity

Determine Match \Gap

Assign

ValidatedRequest

Adjusted AllocationPriorities

ProposedAllocation

Unrealistic

Decisionsoften

political

Goodinfo

Resource Manager

Skills Systems

Resource Manager

Requestor LineManager

Skills Systems

not

WrongSkills

Useless

Biased

Opinionated

Ignored

NotCurrent

Useless

OK

Goodformatbut notcurrent

Too easily swayed by boss

Everthing seems to be a priority

Receivedtoo late

Know what they want

Biased with no consequences

Resource Manager

Sample 1 Lower Process Model DiagramsLevel 3 Partial Process Flow and Analysis



Documenting Each Architectural ProcessModel Attributes (each Process and IGOE flow)

Process Characteristics• Process Number/Name(s)• Description(Component Steps/Sub

Processes)• Triggering and Closing Events• Possible Outcomes• Stakeholders Involved & Affected• Organization Unit Performing

Process Value-Added• Business / Stakeholder Value

Contribution• Objectives / CSF’s supported• Key Performance Indicators• Current and Target Measurements

IGOE Information• Flow Number / Name(s)• Description• Source / Destination Processes• Interface Method / Media Type• Frequency / Distribution• Constraints / Problems• Data Attributes (optional)

Process Assessment• What Works Well• What Doesn’t Work Well• Issues / Constraints / Concerns• Root Causes• Opportunities• Quick Wins• Solution Requirements

Note: Some but not all attributes can be graphically depicted in a

notationNo notation can graphically depict

all attributesThink about the purpose of your

communication


Inputs

Outputs

Guiding Factors

Enabling Factors

Inputs Outputs

Enablers

Guides

Business Rules

• Along with process models, event triggers, data definitions and performance specs, Business Rules ( guides to a process) should be documented as part of IT Requirements.

– Define events with possible input conditions for processes and then ask what must and must not happen when that occurs.

• Processes deliver results or status depending on the invoked rule’s action.

– This is often a new event to trigger another process

• Processes invoke a series of rules (constraints or guidelines) for business decisions and process navigation

Business Rules As Process Guides and IT Requirements

This means that the exact path of a

process instance may not be predictable


A path through the process model

From the perspective of the stakeholders external and then internal to the process

Each stakeholder type has available a set of events to trigger the process

Each event may bring varying conditionsthat trigger the affected rules to produce differing results

Each set of events, rules and conditions may initiate actions in different process paths until completed by the accomplishment of the appropriate outcome associated with each path.

Often conveyed as a story with role play.

Can be used as test cases in user acceptance testing and other enabler validation

Describe main scenarios (most likely) and then alternatives or

exceptions (most risky or troublesome)

Business Process Scenario Analysis


Example


ABC (Banking Services) Drivers and Intent

Fictitious banking operations group (ABC) within a large bank (XYZ) that is growing quickly largely through acquisition.

Deals with banking customers directly and serves the banking group’s businesses.

Essentially a wholly owned subsidiary

Planning horizon is 2009

By 2009 Strategic Performance Objectives:– Reduce the cost of servicing a customer account

by 30%– Improve Customer Satisfaction by 30% over

the current 70%

30 X 30 / 09


ABC (Banking Services) Stakeholder Map: Core

Fee-paying Account HoldersRetail ConsumersSmall Business CustomersCommercial CustomersGovernment CustomersCorrespondent Banks

Account Holder Payees

XYZ Business LinesXYZ Credit Card CoPhone BankingXYZ TrustXYZ BranchesIn-store Branchese-bankCommercial BankConsumer FinanceTreasuryXYZ Mortgage CoGovernment Bank


OwnersXYZMinority Shareholders

Governance StakeholdersXYZ Corporate

AuditFinanceHR

Standards OrganizationsProfessional AssociationsRegulatory

Financial ComplianceOperational Risk

Community

StaffEmployeesContractors/Consultants

SuppliersExternal XYZ Suppliers

Consumables VendorsCourierTelecommunications ServicesExternal HRHardware VendorsSoftware VendorsOutsourced ServicesCorrespondent BanksFederal Reserve

Internal XYZ SuppliersXYZ HRXYZ Professional ServicesXYZ Realty Management

Other XYZ corporate servicesXYZ FinanceXYZ MarketingXYZ Legal

ABC (Banking Services) Stakeholder Map: Support to Core


ABC Banking Services: An XYZ Group MemberPlan the ABCBusiness

Govern the ABCBusiness

Manage End-Customer Lifecycle

Handle Transactions

Support non-ABCOperations

Manage AcquisitionConversion Lifecycle

Manage Product /Solution Lifecycle

Provide BankingInfrastructure

Provide Enabling Capability for ABC


An ABC Process for the Staff Lifecycle

Higher level relevant Process


Update Account

Information

Calculate Fees,

Interest, etc.

Determine Product

Business Requirements

Develop -Acquire

Capabilities

Develop –Implement Technology

Infrastructure

Develop ABC Strategies &

Initiatives

Monitor ABC Business & Financial

Performance

Allocate Capable Human

Resources

Establish ABC Methods

and Standards

Monitor Financial

PerformancePrevent Losses

Track Branch and Business

Lines Performance

Design Product Solution

Provide Product

Support to Users

Provide ABC Tools

Process Financial

Transactions

Maintain & Support

Technology

Maintain XYZ Branch and

Business Lines Relationships

Plan for Acquisition Conversion

Procure ABC Goods and Services

Develop Conversion Capability

Establish Resource

Requirementsand Budget

Understand XYZ Group & ABC Markets

Develop non-ABC Policies

and Procedures

Distribute –Communicate Policies and Procesdures

Determine Governance

Requirements

Develop ABC Policies and Guidelines

Monitor ABC Compliance

Develop Financial & Operational Risk Policies

Establish & Maintain

Distribution & Supply Capability

Settle and Resolve

Branches and Channels etc

Terminate Account

Win Customers

Establish Customer

Relationship

Identify Need for Product

Communicate with

Conversion Stakeholders

Report to Stakeholders

Provide Customer

Information

Process Claims

Provide Facilities for

ABC

Deliver Capabilities

Establish & Maintain

Contingency Capability

Convert Customers

Assess Conversion

ABC Banking Services: An XYZ Group MemberProcess Pain – Gain Grid


Inputs

Outputs

Guides

Enablers

Update Account

Information

• Account management policies and rules

• Banking operations guidelines

• Branch and ABC staff

• Bank Products

• Technology applications and infrastructureUpdate Account

Information

Establish Customer

Relationship

XYZ Business

Lines

Fee-paying Account Holders

Process Financial Transactions

Update Account Information

Prevent Losses

Process Claims

Calculate Fees, Interest, etc.

Terminate Account

Develop non-ABC Policies and Procedures

Deliver Capabilities

Provide Product Support to Users

Develop –Implement Technology

Infrastructure

Maintain & Support Technology

Allocate Capable Human Resources

Develop ABC Policies and Guidelines

Develop Financial & Operational Risk

Policies

Monitor ABC Compliance

XYZ Business

Lines

Fee-paying Account Holders

Correspondent Banks

• Product rules, practices and guides

• Governance requirements

Project Scope

• Customer Information (new and changes)

• Account Information (new and changes)

• Customer & Account Records

• Customer Information

(new and changes)

• Account Information

(new and changes)

• Customer & Account Records

• Compliance Reports


Conclusion


Detail

Simplistic

Complicated

Elegant

Complex

Understanding

Lots

Little

Little

Lots

Implicit Challenges in BPM: In Search of Elegance *

Appropriate levels and communication: get the basics right

“A model should be as simple as it can be,

BUT no simpler’”Albert Einstein

"A designer knows he has achieved perfection not

when there is nothing left to add, but when there is

nothingleft to take away."

Antoine de

Saint-Exup'ery

* Burlton elegance model


1. Business change must be performance driven.2. Business change must be stakeholder based.3. Business change decisions must be traceable to the stakeholder criteria.4. The business must be segmented along business process lines to synchronize change.5. Business processes must be managed holistically.6. Process renewal initiatives must inspire shared insight.7. Process renewal initiatives must be conducted from the outside in.8. Process renewal initiatives must be conducted in an iterative, time-boxed approach.9. Business change is all about people.10.Business change is a journey, not a destination

Principles of Process Management

Documents

Business Process Architecture - IRMACirmac.ca/0506/Roger Burlton IRMAC.pdf · Business Process Architecture Technology Architecture Information ... PRG’s Business Process Management