Business process management center of excellence 2010

Business Process Management Center of Excellence

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Table of Contents Creating a Business Process Management (BPM) Center of Excellence ........................................ 1

What is BPM? .............................................................................................................................. 1

Process, Business Process, and Managing the Processes → BPM .............................................. 1

Defining the BPM Center of Excellence .......................................................................................... 3

DIKW Revisited – As “PKID” ........................................................................................................ 3

The BPM Center of Excellence Roadmap........................................................................................ 5

A Roadmap (i.e., process) for Building the BPM Center of Excellence ....................................... 5

Define COE Charter (Mission & Vision Statement) ..................................................................... 6

Determine BPM Center of Excellence Scope .............................................................................. 7

A Knowledge‐Sharing BPM Center of Excellence ........................................................................ 8

A Strategy/Guidance BPM Center of Excellence ......................................................................... 8

A Strategy/Guidance with Implementation Support BPM Center of Excellence ........................ 9

Identify Key Sponsors (Stakeholders) ......................................................................................... 9

Determine Working Structure(s) ............................................................................................... 11

Define Roles & Responsibilities ................................................................................................. 13

A Knowledge‐Sharing BPM Center of Excellence .................................................................. 14

A Strategy/Guidance BPM Center of Excellence ................................................................... 15

A Strategy/Guidance with Implementation Support BPM Center of Excellence .................. 15

Define Key Metrics .................................................................................................................... 16

Develop Communications Plan ................................................................................................. 18

Implementing the BPM Center of Excellence: Measure, Analyze, Improve, and Control ........ 19

Measure ................................................................................................................................. 19

Analyze ................................................................................................................................... 20

Improve .................................................................................................................................. 20

Control ................................................................................................................................... 21

Conclusion ..................................................................................................................................... 21


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Table of Figures Figure 1 ‐ Project Life Cycle ............................................................................................................. 2 Figure 2 ‐ Ackoff's DIKW Pyramid ................................................................................................... 3 Figure 3 ‐ Inverting the DIKW Pyramid as the "Process Pyramid" .................................................. 4 Figure 4 ‐ BPM Center of Excellence Overview .............................................................................. 5 Figure 5 ‐ Define Charter ................................................................................................................. 7 Figure 6 ‐ Determine BPM COE Scope ............................................................................................ 8 Figure 7 ‐ Identify Key Sponsors (Stakeholders) ........................................................................... 10 Figure 8 ‐ "Two‐Layers" Down Rule .............................................................................................. 12 Figure 9 ‐ Determine Working Structure(s) .................................................................................. 13 Figure 10 ‐ Define Roles and Responsibilities ............................................................................... 16 Figure 11 ‐ Define Key Metrics ...................................................................................................... 18 Figure 12 ‐ Develop Communications Plan ................................................................................... 19 Figure 13 ‐ Sample Analysis Metric ............................................................................................... 20


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Creating a Business Process Management (BPM) Center of Excellence

Question: Define Process, and explain why it matters.

What is BPM?

Business Process Management (BPM) is not another three‐letter shortcut to promises of improved efficiencies and optimization of business and technological tools, methods, or mantras. BPM is a consolidation of earlier management theories and practices with the human element in the business. Specifically, BPM is the current best method to align functional needs with information technology tools and solutions. To achieve this alignment, BPM blends Total Quality Management (TQM), including Six Sigma, Lean Six Sigma, or the Software Engineering Institute’s Capability Maturity Model Integration (CMMI®) – or a mashup of the quality approaches. The end goal of BPM’s inclusion of quality, regardless of the specific quality methodology or model, is to ensure consistent, repeatable, and reliable business processes are captured, documented, corrected, and executed.

Execution is the benefit and the promise BPM can deliver. The ability to deliver the right resources, at the right time, and in the right way is the essence of a business’s ability to operate. Larry Bossidy and Ram Charan’s Execution: The Discipline of Getting Things Done1, among others, in facts distills execution down to three core processes: people, strategy, and operations. This should sound familiar; it is the heart and soul of BPM. BPM is about execution, and execution is the art (and science) of managing who, where, when, what, why, and how.

Process, Business Process, and Managing the Processes → BPM

If BPM is the center of execution, then processes are the center of BPM – and the business. In the “information age” knowing who does what, where it is done, when it is done, what is done, and why it is done, and the final lynchpin remains how it is done – the process or processes. A process is simply the ordered steps necessary to accomplish a specific task. In mathematical terms, a process is an algorithm. Processes tell owners, doers, and customers how something is going to be accomplished. The “attributes” of the process then are who is doing the process, where it is done, and when it is done (and if there are timing parameters); the process is the “what;” and why it is done becomes the intellectual capital of the business.

1 Larry Bossidy and Ram Charan, Ram (2002) Execution: The Art of Getting Things Done. New York: Crown Business.



The “information age” contributes more to processes than a titular era name. Processes merge together the basic building blocks of business and at the same time processes are the core “knowledge management” entity of business. Over the past 25 years, data was queen – or arguably longer if tracked back to earlier quality quantifiers. The reification of data bled from the information technology sphere in to the information management sphere, and the world is now seen through a relational database perspective – or current business practices are heavily data‐centric. The end result is a barrier between the business (or functional) side of the house and the information technology (or the enabler of modern business). BPM breaks down this barrier by replacing the reliance on technology to enable the business; rather process trumps data as the key enabler of business – and this is fully within the control of the functional half of the house that continues to rely on the support (and data) from the technology half. Together a house is built that stands the test of time, and it is a structure controlled, shaped, and handled (i.e., managed) by the execution arm of the business. The end result is a process‐centric business that emphasizes and values the capital represented by well defined, understood, repeatable, measurable, and optimized processes.

Before jumping into the mechanics of establishing a BPM Center of Excellence (and following the precepts laid out here), the scope of this paper focuses on the foundational steps in the life cycle of any project. In quality or Six Sigma (or any variations thereof) circles and terms the focus here is on “defining” the BPM Center of Excellence.

Figure 1 ‐ Project Life Cycle



Defining the BPM Center of Excellence

DIKW Revisited – As “PKID”

Understanding how and why process‐centric thinking shifts the business paradigm away from data‐centricity examine the following image:

Figure 2 ‐ Ackoff's DIKW Pyramid

Russell Ackoff’s representation of the “Wisdom Hierarchy” works its way up towards “wisdom” at the pinnacle2. Data, as the rudimentary input material forms the base. Data is then grouped or sorted into “information” – semantics, taxonomies, etc. Information progresses up to “knowledge,” where data/information is adapted to a working awareness of how to use and apply information (and when). Knowing how, where, and when to apply “knowledge” forms the basis for a “self‐realization”3 of knowledge as “wisdom.”

In the BPM context, however, replacing “wisdom” with “process” as the end state suggests an interesting inversion of the traditional DIKW hierarchy. Moreover, and in the sense of filtering the stages/categories, the result is an inverted “process pyramid” that draws downward the

2 Russell L. Ackoff, “From Data to Wisdom,” Journal of Applied Systems Analysis (1989): 3‐9. For a more recent update and other visualizations of the “wisdom hierarchy” see Jennifer Rowley, “The Wisdom Hierarchy: Representations of the DIKW Hierarchy,” Journal of Information Science (2007): 163‐180. 3 Borrowing from Abraham Maslow’s language of hierarchies, self‐realization in this context implies the capability to select and determine which “knowledge sets” to apply (as well as how and when).



constituent elements from data, information, and knowledge to result in process. Important to this visualization (or re‐visualization) is the idea that “process” supports knowledge, information, and data; and the filtering effect of data, information, and knowledge results in process.

Figure 3 ‐ Inverting the DIKW Pyramid as the "Process Pyramid"



The BPM Center of Excellence Roadmap

A Roadmap (i.e., process) for Building the BPM Center of Excellence

With the outline of the “process pyramid” defined, the next step in implementing a BPM Center of Excellence is the organizational structure and content of each developmental stage – in other words the processes!

Figure 3 below maps the processes from beginning to completion for executing a BPM Center of Excellence strategy. The overall process begins from the high‐level strategic vantage point (define charter) and culminates with the tactical‐level operational details (develop communications plan).

Figure 4 ‐ BPM Center of Excellence Overview

Each of the sub‐processes or tasks in the “roadmap” is sequential and cumulative. That means the roadmap order is important; and like building blocks, each task becomes embedded or nested in the following task or sub‐process. The final result is that the Communications Plan contains all or key elements from the preceding processes.

The steps to building the BPM Center of Excellence are:

1. Define Charter 2. Determine Scope 3. Identify Sponsors 4. Determine Working Structure



5. Define Roles and Responsibilities 6. Define Key Metrics 7. Develop Communications Plan

As the BPM Center of Excellence becomes the natural “center of gravity” for all things BPM, and recognizing that building this Center of Excellence is itself a process, each of the seven (7) core elements (sub‐processes) are briefly described and a suggested business process model is presented visualizing the decomposition of each step in the journey.

Define COE Charter (Mission & Vision Statement)

The longest journey begins with a single step, and often a “simple” step. The first task is to create the administrative framework supporting the BPM Center of Excellence. The task is simple in idea only. Establishing the framework begins with crafting and creating the broad purpose statement for the BPM Center of Excellence.

Fundamentally, the Charter provides the shared organizational understanding of why the BPM Center of Excellence is being created; and the Charter outlines the high‐level organizational drivers the Center of Excellence will support. The two main constituent components of the Charter will be the Mission and Vision Statements. Why create a single area of expertise for BPM within an organization? Is BPM truly a “cross‐cutting” activity across an organization? The answers to these (and other) questions form the basis of the BPM Center of Excellence Charter.



Figure 5 ‐ Define Charter

Determine BPM Center of Excellence Scope

With the Charter in hand, the next logical step is to define the boundaries of the BPM Center of Excellence – both what it will be and what it won’t be. The Scope statement or document shall clearly set the boundaries for the activities supported by the BPM Center of Excellence. What this means, according to several emerging best practice trends, is focusing the BPM Center of Excellence’s efforts in one of three areas:

1. Knowledge‐Sharing 2. Strategy/Guidance 3. Strategy/Guidance with Implementation Support



Figure 6 ‐ Determine BPM COE Scope

A Knowledge‐Sharing BPM Center of Excellence

A knowledge‐sharing BPM Center of Excellence is either a library or repository of developed or emerging best practices. While this is the easiest type of center to automate, careful attention to potential users and user styles should contribute to determining how much of this center type may be automated. Automated formats may run the gamut from simple portal tools (e.g., SharePoint) to more complex BPM and Workflow Management systems.

A Strategy/Guidance BPM Center of Excellence A strategy/guidance BPM Center of Excellence may contain automated elements (i.e., library or repository), or this type of center may also be a “think tank” of best practices and lessons learned. The ideal combination would combine elements of an automated repository with “real” experts – the BPM Subject Matter Experts, who can work with users to evaluate resources and make smarter choices.



A Strategy/Guidance with Implementation Support BPM Center of Excellence

The ultimate BPM Center of Excellence embodies all of the knowledge‐sharing and strategy/guidance qualities and adds an implementation support infrastructure to support internal users. The strategy/guidance with implementation support BPM Center of Excellence offers a menu of services from self‐help (the automated library or repository of BPM solutions) to strategy/guidance support (either automated or direct human interaction) or implementation/execution teams capable of working with stakeholders to choose/develop and implement BPM solutions into work centers or lines of business operations.

Identify Key Sponsors (Stakeholders)

Identifying the BPM Center of Excellence’s key sponsors is a dual‐tracked process. The first track aligns the center’s priorities and purpose, which should work in concert with the organization’s goals and objectives. Preferably the focus in both cases is long term; however, shorter focal points may still support the center. The second track “connects the dots,” or links the center with people in the organization. This includes a center champion (or champions), the staffers, and the end users (internal and external stakeholders).

The BPM Center of Excellence owes its existence to the organizations goals and objectives. Creating such a Center of Excellence also tangibly elevates the often invisible priorities of process as critical to an organization’s intellectual and financial capital. Accordingly, the center manages, monitors, measures, and matures the business processes within an organization to ensure that “the right job, the right people, and the right cost” are coordinated – indisputably a “bottom line” foundation to any organization (for profit or non‐profit).

Holding up the alignment of the organization and the BPM Center of Excellence are those individuals within (and outside of) the organization. The key stakeholder and center champion is the business owner – or senior most leader. Whether this is a CEO (or equivalent) or a business unit head may vary. The organizational size, structure, and culture may offer a business unit the capacity to inaugurate a BPM Center of Excellence. However, the scope and purpose of a Center of Excellence is more cross‐cutting and silo‐crossing than one single business unit – again depending on the organization’s size, structure, and culture. Emerging from a business unit is not a bad idea, although support will be needed higher up the “chain‐of‐command.” The ideal champion is the organization leader: the CEO, commander, head, etc. While BPM as a management philosophy attaches to both the top and bottom rungs of any



ladder, without support from the head “the center cannot hold” and neither will the BPM Center of Excellence (to borrow from W.B. Yeats4).

The center requires a champion. Ideally the champion should be the organization’s leader (CEO, commander), or a business unit leader. In larger, more matrixed‐oriented organizations the higher up the “chain” support from a champion the better. The support in the form of an organizational leader as a champion bestows legitimacy, urgency, and a sense of primacy underlying the BPM Center of Excellence.

Figure 7 ‐ Identify Key Sponsors (Stakeholders)

With the champion secured, the next step is to identify the internal stakeholders. An organizational chart may help, and scratching the surface to identify additional resources is worthwhile. The organizational chart provides the business unit leaders and owners, who will be both customers and consumers of the BPM Center of Excellence. Including these key internal stakeholders early in the development of the center does not ensure success, but gathering the right people allows personal investments to intermingle – and that is a good thing for ensuring future successes.

4 William Butler Yeats, “The Second Coming” in Richard J. Finneran, ed. (1996) The Collected Poems of W.B. Yeats, Second (rev) Ed. New York: Scribner.



A champion and internal stakeholders is the first half of the BPM Center of Excellence equation. With the internal side lined up, the center is ready to strategically bring in external stakeholders – the organization’s customers, to round out the formula. In many industries and sectors this is becoming an increasingly popular and successful method of not only ensuring stability and quality across an organization’s operations, but integrating customers more directly into the business processes exposes both partner organizations (or more) to additional business opportunities and rewards. Exposure, unfortunately, is the key word. With a more integrated relationship via business process management comes additional risks and challenges. Trusting partners and the process by securing the early advocacy of external stakeholders early in the BPM Center of Excellence process is a solid first step. Working with all stakeholders through the remaining steps in establishing the center (determining work structure, defining roles and responsibilities, defining key metrics, and developing the communications plan) shores up the trust factor and increase the collaborative and partnering relationship between both parties. Following the “What About Bob?5” dictum, “baby steps” builds the trust and relationship (another process!).

Determine Working Structure(s)

The institutional foundations of the BPM Center of Excellence laid (charter, scope, and sponsors) operationalizing the concept is the next step. Even with the cornerstone documents in hand, how is the BPM Center of Excellence realized – and made meaningful to the organization? Mapping the working relationships between the stakeholders (internal and external vis‐à‐vis the champion) is a good starting point. Going down at least two or more layers below the champion and other business owners (senior leadership/management) to the functional level is needed to create an organizational framework for the center. At this point the concern is not for what or how work is done; the emphasis is still on the “who” is doing the work, i.e., staffing, managing, and monitoring the BPM Center of Excellence.

Similar to Communities of Practice and other cross‐cutting cells within an organization, the BPM Center of Excellence requires a well understood and laid out acknowledgement of who all the participants are, which is one of the key reasons for looking at least two layers below the champion and business unit layers. Two factors determine how far this initial pass at mapping working structures is needed. First, the size of the organization; and yes, size matters in this case. The larger an organization, the more complex and more likely the organization is divided into either functional or other lines of business foci. 5 What About Bob? Is a 1991 movie starring Bill Murray and Richard Dreyfuss. In the movie, Dreyfuss plays a psychiatrist whose treatment of choice focuses on patients taking “baby steps” in the discovery/healing process [sic].



Figure 8 ‐ "Two‐Layers" Down Rule

At the second “rung” below the CEO (or C‐Suite), division or departments become visible on the organizational chart. In smaller or more flatly organized companies this may be the general account level (i.e., a general category and not a specific client). At this level (division/department or equivalent) work is done – not management activities exclusively but the actual “meat and potatoes” of the organization’s reason for being (i.e., producing products, services, etc.).

Integrating these three layers of internal stakeholders and the selected external stakeholders around the framework of the Charter and Scope, the next step is to draft a Business Plan. The Business Plan contains the business rules and other governance criteria needed to coordinate the BPM Center of Excellence among the various internal and external stakeholders. The final result may be a simple organizational chart reflecting the center’s structure and operating spheres, but this should be augmented with the commitment to agreed business rules and other coordinating policies.



Figure 9 ‐ Determine Working Structure(s)

Define Roles & Responsibilities

The architecture of the BPM Center of Excellence secured through the Charter and Scope documents, sponsors and stakeholders identified, and the Working Structure. Defining the Roles and Responsibilities assigns the work of the center aligned with champion/stakeholder and organizational priorities. The center’s scope will shape most directly the staffing of the BPM Center of Excellence (i.e., how many managers, workers, and associated people are required to do the work envisioned).

Equally important to the lifeline of the BPM Center of Excellence are the roles and responsibilities across and outside the organization – the stakeholders. Primacy is given to the center’s champion (the CEO or business unit leader), who must endorse, support, and proliferate the benefits and activities of the center (and the organization!). In other words, the



champion must be the center’s number one cheerleader. Stakeholder responsibilities “trickle down” from the champion in a similar fashion – but no less important.

Assigning the actual work (the responsibilities) is a negotiated process: who does what, by when, and how. The why is implied, and is often a good reminder question to ensure alignment with purpose, scope, goals, and objectives. Pinning together the roles and responsibilities at all levels of the BPM Center of Excellence must be accountability – accountability for work, activities, and direction. Not only are the center’s staff and stakeholders accountable to each other; the center as a collective and collaborative effort is accountable to the organization. In this frequent reminder of Business Etiquette 101 lies the secret to success: teamwork. Not much of a secret; most people know this basic truism. But like process itself (and the reasons for creating a BPM Center of Excellence), calling out or emphasizing and reminding ourselves about responsibility and accountability focuses purpose and accomplishment.

The following examples concentrate on the responsibilities within the BPM Center of Excellence. The basic “waterfall” staffing and delegation of responsibilities outlined here provides a modularized approach building on the basic BPM Center of Excellence model (knowledge‐sharing) up to the more complex model (strategy/guidance with implementation support). In addition to the organization’s size and geographic distribution other factors may play larger roles in defining/delegating the center’s workload. These include the complexity of the organization’s primary business, organizational culture, and technological capabilities.

A Knowledge‐Sharing BPM Center of Excellence

• “Librarian”/Administrator

At its most basic level, this model is a process archive or library of best practices and lessons learned. Within the knowledge‐sharing BPM Center of Excellence the primary focus is basic records management (collect, sort, store, and filter – update/replace/retire). In an age of automation and networked systems, this model can be as simple as a folder of notes and collected documents. On the more technologically‐enabled end of the spectrum, the knowledge‐sharing BPM Center of Excellence can be a web‐enabled portal (or portlet) linking documents and process‐executable files with users. Regardless of the tools used, the knowledge‐sharing model center may either be staffed with a shared or dedicated resource, but also may be automated to provide a shared service.



A Strategy/Guidance BPM Center of Excellence

• “Librarian”/Administrator • Policy Analyst/Facilitator

In addition to staffing the BPM Center of Excellence with the “librarian”/administrator, the strategy/guidance model is the first type requiring dedicated human resources. Building on the archive/repository knowledge‐sharing model, the strategy/guidance center offers expertise in business process management to assist users in developing, improving, or reengineering business processes.

As a “think tank” of processes, the strategy/guidance center model creates an organizational competency for process, improvement, and quality. Combined with people and processes, this BPM Center of Excellence model supports the “learning organization”6 in its quest of becoming a high performing organization.7

A Strategy/Guidance with Implementation Support BPM Center of Excellence

• “Librarian”/Administrator • Policy Analyst/Facilitator • Business Analyst(s)/Subject Matter Experts

Continuing to build on the successes of a knowledge‐sharing center, starting with a strategy/guidance BPM Center of Excellence, or jumping in with both feet, the strategy/guidance with implementation support model broadly supports, monitors, and collaborates with an organization for all aspects of the business process life cycle. From the beginnings (collecting and making available a process library/repository) through implementing (or improving) processes, this center works side‐by‐side enabling departments, divisions, or an enterprise wide focus on process.

The “secret sauce” of this models efficacy is stopping short at the implementation phase of a process initiative. Why not continue to monitor, control, and otherwise manage each process? The short answer (and there are many longer explications) is that the power of BPM and the Center of Excellence concepts both empower and enable the loci of control to the lowest possible level of work. The result is a process‐centered organization, and not an organization

6 Peter M. Senge (2006). The Fifth Discipline: The Art and Practice of the Learning Organization. New York: Broadway Business. 7 William A. Pasmore (1994). Creating Strategic Change: Designing the Flexible, High Performing Organization. New York: Wiley.



centrally controlled – that is, replacing one bad management paradigm with another potentially worse management philosophy.

Figure 10 ‐ Define Roles and Responsibilities

Define Key Metrics

Wrangling stakeholders and securing the champion’s endorsement may be challenging, but the real grist of developing a BPM Center of Excellence comes in the form of the often unasked question, “so what?” In an era of balanced score cards, 360‐degree reviews, and other mechanisms to shore up bottom lines, the “so what” question shines the light on the unseen benefits of both BPM and a Center of Excellence.

Brandishing all the tools of quality control (statistical to qualitative), a BPM Center of Excellence creates inherent value for the organization by recognizing the key asset of process – the how, the actions. Pithy platitudes and lofty organizational mission statements aside, the real value an organization offers is its ability to do something (develop a product, perform a service) better, faster, or cheaper than its competitors. For example, most organizations tout “quality” as a core goal. The real question (and value on either end of the buyer‐seller spectrum) is how “quality” is achieved. Measuring that value becomes the key metrics sustaining a BPM Center of Excellence.



The metrics are divided into two main classes. First, the BPM processes; and second, the organization’s processes. BPM processes include all activities capturing, documenting, archiving, improving, and monitoring the practices of instituting business process management. For example, this whitepaper is a template process to create a BPM Center of Excellence. Determining what and how to measure these processes evolves through the collaborative discussions about the process among the stakeholders. Primarily the process metrics for the process (without being overly redundant) link outcomes to other resources (e.g., financial, human, etc.), while addressing the trio of questions: “how can we do this better;” “how can we do this faster;” and “how can we do this cheaper.”

An organization’s processes rank among its highest level of intellectual capital. Although comparatively few processes are patented, trademarked, or otherwise branded, how an organization does business defines its competitive advantage. Less sexier than the formula for a soft drink or other “secret sauces,” processes are the visible characteristics of an organization; and processes represent the actions of an organization from the micro‐level to the macro‐level and global. Think for a moment the last time you thought about how an organization does business? If you scratch the surface of the initial possible responses to this question, you will recognize that many of the superlatives (or lesser thoughts) are not possible without actions or doing (or not as the case may be).



Figure 11 ‐ Define Key Metrics

Develop Communications Plan

The glue of any organization, project, or business plan is its Communications Plan – whether it is called by that name or embedded in another document or tool. As a living and evolving document, the Communications Plan captures and makes visible the communication channels and content of who [sender] is communicating with whom [receiver] (as well as when [frequency] and how [mode/channel]). Depending on the organization’s size, the BPM Center of Excellence Scope, and the number of stakeholders, the Communications Plan may be as simple as a spreadsheet with names, reports, communication documents, and tools (e.g., telephone, email, etc.), or the plan may be a standalone document describing in greater detail the various communications and participants. The center’s communication strategy (à la plan) may take the form of a technology tool (a portal/portlet, for instance, stocked with content – the reports, documents, and other transactional items).



Figure 12 ‐ Develop Communications Plan

Implementing the BPM Center of Excellence: Measure, Analyze, Improve, and Control

The operational or execution stages of the BPM Center of Excellence begins simultaneously with the planning (the “define”) stage and continue through the life span of the center. Following the Six Sigma principles of Define, Measure, Analyze, Improve, and Control, the preparatory stages discussed here cover the “define” portion of the BPM Center of Excellence’s life cycle.

As a Center of Excellence, the remaining life cycle stages support and visibly demonstrate the process control of the center and the organization. M‐A‐I‐and C are out of scope for this discussion, but in closing the process loop here is a brief sketch:

Measure

The key metrics identified by the BPM Center of Excellence and its stakeholders are the bases for measuring the value, contribution, and significance of the center. The sample questions are financially oriented. However, applying a Balanced Score Card approach (or other similar tool), the center’s metrics should include also the intangible benefits (or deficits) created by and through the BPM Center of Excellence.

• Value – what is the value proposition or value added benefit created by the BPM Center of Excellence? Ultimately, is there a financial metric that can be tied to the services of the center?



• Contribution – rather than simple “silo busting,” how does the BPM Center of Excellence add to a collaborative working environment? Is there a collaborative benefit beyond the organization to customers and the customers customers?

• Significance – what is the scope of the BPM Center of Excellence? Bridging value and contribution, what are the financial benefits of the center – an aggregated cost savings?

Analyze

The BPM Center of Excellence should be allowed enough of a life span to conduct a fair and valid assessment of the center’s impact on the organization. The initial analytical period consists of two phases: pilot and initial assessment. The pilot stage consists of a period of three to six months (or longer depending on business cycles, scope, etc.) to verify and validate the center’s value and contributions to the organization. The initial assessment phase, which may or may not include the pilot period, affords a longer run to provide more data to assess and evaluate the impact of the BPM Center of Excellence.

As an example, applying a “double helix” cause and effect analysis that includes financial and non‐financial metrics (established in the “measure” section) provides a rounded profile demonstrating the value (or lack thereof) of the center. These metrics for analysis may include:

Financial Non‐Financial Revenue Growth Collaboration Market Share Knowledge/Information Sharing Return on Investment Employee/Customer Satisfaction

Figure 13 ‐ Sample Analysis Metric

Improve

As a meta‐process managing the BPM Center of Excellence, this stage of the center’s life cycle is marked by continuous measurement and analysis seeking to increase productivity. More than a stated philosophy of “continuous improvement” or “re‐engineering,” improvement for the BPM Center of Excellence must be connected directly increasing the tangible benefits of the center’s services based on the key metrics established earlier – and often revisited to ensure currency and validity. To achieve this continuous process, a rigorous “lessons learned” or “best practices” process must be included in the center’s daily, tactical, and strategic operations. The United States Army Center for Lessons Learned (CALL)8 is an excellent model (and center of excellence)

8 United States Army Center for Lessons Learned (CALL), http://usacac.army.mil/cac2/call/index.asp.



worthy of studying to better understand how to “manage” and implement lessons learned into an organization.

Control

Working almost in tandem with the “improve” stage(s) of the BPM Center of Excellence’s life cycle, the control phase(s) provides the mechanisms to monitor and provide adjustments as needed. The control points are derived from the key metrics, and this phase adds the managed responses of variance deviations. For example, as a conventional business or cost center within an organization, the BPM Center of Excellence is expected to maintain common operating margins.

Conclusion

A BPM Center of Excellence is a value‐added proposition for any organization. Whether labeled as a center of excellence, or subsumed under a core competency, the goals should be the same. Understand how the organization “does business” and seek to improve those actions, activities, and processes. The decision to establish a BPM Center of Excellence involves many additional factors and considerations. This whitepaper assumes those discussions, negotiations, and decisions have been made (e.g., resources, strategic alignment, etc.). The next step is creating a viable and successful center of excellence that embodies the ideas of business process and becomes a beacon for the organization – from capture to improvement and controlling processes. The Six Sigma concepts of Define, Measure, Analyze, Improve, and Control form the basis of this realization of the BPM Center of Excellence. This paper extends the “define” phase as the foundation stepping stone for the BPM Center of Excellence.

Answer to the Question at the beginning: A process is an action – the “how” of doing something. All organizations do something, and that something (“what”) should matter – as much or more than “who” is doing “what.”

Documents

Business process management center of excellence 2010