The Role of BPM within Large The Role of BPM within Large Enterprises & Related ChallengesEnterprises & Related Challenges

Present views on:Present views on:

1.1.The future of Business Processes within Large Organizations; andThe future of Business Processes within Large Organizations; and

2.2.The major challenges that will need be faced in the next 5 years The major challenges that will need be faced in the next 5 years 

Telstra is planning to replace its current suite of Activation systems:Telstra is planning to replace its current suite of Activation systems:

3.3.The role of the Process Architecture team in such a project; andThe role of the Process Architecture team in such a project; and

4.4.The value I would add personally to such an activity.The value I would add personally to such an activity.

7th May 2008 1Kenneth Mortimer

What is BPM? What are Telstra What is BPM? What are Telstra Expectations?Expectations?

IBM Our definition is Business Process Management, which combines business domain expertise and

knowledge with associated and supporting technologies to accelerate process improvement, and to facilitate business innovation. BPM strives to integrate the three pillars of an enterprise architecture -- people, processes, and information -- into a single and managed discipline to manage, control, and dictate business innovation. One value of BPM is its capability and promise to discover, design, deploy, interact with, operate, optimize, and analyse complex, long-lived, multi-company business processes. BPM is part of the cycle from the design of the business processes to the identification and realization of an IT infrastructure that provides the platform for their execution.

CSC "Today, process has become much more of a focus of all IT systems and associated business thinking. It

is now possible to build IT systems whose role is primarily to manipulate processes , any process, not just our usual notions of workflow, data management and application integration. This gives you a direct path to execution of any business design or strategy."

"With BPM today, the business defines, and then simply executes, the business processes. The breakthrough that was required for that had to encompass and synthesize many aspects of what we already had in place," says Smith. This means the unification of a number of enterprise entities, including business design, application development and data management. "We are taking change and innovation off the critical path and out of the IT logjam, by empowering the business as never before," he says.

Key characteristics of Manager Process Architects: Process Knowledge, Team Leadership, and Cultural Fit.7th May 2008 2Kenneth Mortimer

What is Telstra looking from the Manager Process Architects, and BPM overall?

The future of Business Processes within The future of Business Processes within Large Organisations/1Large Organisations/1

SIGNIFICANT! The Australian financial sector including banks and insurance

companies have been Australian trend setters in the take-up of BPM as reflected in significant increases in profits over the past several years;

Why? The financial sector needs to be compliant with AAS, and well as the

Companies Act and the regulatory environment of ASIC and APRA; and

Using Six Sigma and Lean, the financial sector have rationalised and automated their business processes linking with those of their stakeholders, thus improving productivity!

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Only enterprises in the financial services sector have reaped significant benefits from BPM

The future of Business Processes within The future of Business Processes within Large Organisations/2Large Organisations/2

Telco's throughout the world have grappled principally with billing systems with other process areas taking a back seat:

Failure to get billing right results in One-Tel debacles; Telco's have perceived leveraging technology to expand market share also over-

investing in wireless spectrum, over-estimating the take-up by business and consumers, but underestimating internal productivity;

This has not delivered positive results; Over-the-top technology focus sent several Telco’s to the wall or made themselves

takeover targets;

What have been Telstra’s Points of pain?

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Depending on process, system, & competition, states of the respective Telco's the situation is variable

The future of Business Processes within The future of Business Processes within Large Organisations/3Large Organisations/3

Given the background of many Telco’s, the public service/trade union culture hampered their business transformation to a market orientation on both the demand and supply side;

Not only Telco’s but many significant enterprises have failed to recognise the benefits of BPM to deliver customer service and stakeholder outputs; and

Governments and government owned entities have been the worst at seeking and implementing productivity improvements though BPM.

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BPM delivers significant productivity gains that sometimes is anathema to trade unions

The major challenges that will need to be The major challenges that will need to be faced in the next 5 years/1faced in the next 5 years/1

Enterprises expect distinctive solutions from IT that address strategic, customer and market needs. These enterprise expectations form the basis of the Gartner 2008 CIO agenda:

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To what extent will each of the following be a top priority for you in 2008? 2008 2007 2006

Improving business processes 1 1 1

Attracting and retaining new customers 2 3 3

Creating new products or services (innovation) 3 10 9

Expanding into new markets or geographies 4 9 **

Reducing enterprise costs 5 2 2

Improving enterprise workforce effectiveness 6 4 **

Expanding current customer relationships 7 * *

Increasing the use of information/analytics 8 7 6

Targeting customers and markets more effectively 9 * *

Acquiring new companies and capabilities (M&As, etc.) 10 * *

Might this Gartner listing well be the basis of a Telstra Transformation Process strategy?

It is important to maintain knowledge of current process trends

What major challenges exist, and if you have not been informed, what are believed to be the key challenges to Telstra?

The major challenges that will need to be The major challenges that will need to be faced in the next 5 years/2faced in the next 5 years/2

I believe that some of the major challenges facing Telstra include: Ensuring the consistent and sustainable application of TeTom across all Telstra’s

business units; and The balanced application of process improvement effort across internal and

customer-facing areas addressing cost reduction and sales penetration respectively.

Competition policy seems to be a major challenge particularly the risk of the Federal government legislating that Telstra should following the models adopted by the UK and NZ governments forcing the separation of wholesale operations from the rest of the carriers’ operations;

It may be that Telstra has problems with accelerating the process enabling strategy-to-deployment to gain a competitive advantage?

7th May 2008 7Kenneth Mortimer

The major challenges that will need to be The major challenges that will need to be faced in the next 5 years/3faced in the next 5 years/3

Assess the Telstra Business Plan with regard to those business artefacts relating to areas impacted by Activation Systems;

This might include but not be limited to key performance indicators (KPIs) on facets of Activation Systems operations and outcomes; and

Surveys of stakeholders including identifying “Points of Pain” involved with the operation of Activation Systems and those affected by less than satisfactory performance of Activation Systems.

Obtain and review existing business process maps and related documentation;

How do these business process maps align with current operations? Do owners of Activation Systems believe that the current business process maps:

Align with “stakeholder needs”; and Are the process maps out of synch with emerging needs of users and beneficiaries of Activation Systems?

Determine the revenue at risk from unaligned Activation Systems; Assess the “Buy vs. Build” options open to Telstra; and

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It is critical that processes align upwardly with business artefacts and downwardly with technology infrastructure

The major challenges that will need to be The major challenges that will need to be faced in the next 5 years/4faced in the next 5 years/4

In parallel with assessing the “Buy vs. Build” options open to Telstra; Commence the design of the Future State, Customer Value-driven

Business Process Design:

Governance Governance

Repositoryof GenericBuildingBlocks

CustomerSpecificBusinessProcesses

Integrated

Process,

Accountabilities,

Measures & Interface

AgreementsCustomerFocusedDesignMethod

CustomerFocusedDesignMethod

Position Descriptions.PerformanceAgreements, &SLAs

MultipleViewsofCustomer

Updates

Updates Used as a basis

to createIndust

ry K

nowledge,

Best P

ractic

e,

Standar

ds etc

.

7th May 2008 9Kenneth Mortimer

It is critical that processes align upwardly with business artefacts and downwardly with technology infrastructure

The major challenges that will need to be The major challenges that will need to be faced in the next 5 years/5faced in the next 5 years/5

Good process design starts with the “customer”, internal or external, as represented by this Customer Value Focused Process Design

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Customer Value Focused Process Design

CustomerValues

1. What does thecustomer value?

Outputs

2. Match outputsto customer values

Processes

3. Define process togenerate outputs

Inputs

4. Identify inputs& their source

InterfaceAgreements

7. Create IA for everytask flow that passes across an agency levelboundary

Processes

6. Identify accountablePerson and putperformance measureson their performanceagreement

PerformanceMeasures

5. Design performancemeasures to confirmoutputs achieved

The major challenges that will need be The major challenges that will need be faced in the next 5 years/4faced in the next 5 years/4

Service Management Case Study: We describe the application of the Business Process Modelling Notation to the redesign

of a service management process in a truck dealership in the N.E. US. After the deployment of a new service management system did not lead to the expected

efficiency gains we analysed the as-is service process, made suggestions for improvement, and simulated the financial impact of the proposed changes.

The as-is and to-be process were documented in BPMN, and a BPMN-based simulation tool was used to quantify the effects of process improvement.

Practical Application of this Research: Experience has shown me that there are many practitioners out there that do not balance

the theoretical with the practical; At Intouch, there was initial resistance to meddling the AS IS processes given that

Intouch knew they were broken, but I persuaded the SMT that we needed to establish a base line so that when we compared the Future State with the AS IS, we could determine the precise nature of the improvements

This was important not only for internal confidence building but also for their principal stakeholder the Federal Dept of Health & Ageing to convince them of the extent of the performance improvement. The aim is to win the next round of federal funding.

7th May 2008 11Kenneth Mortimer

The role of the Process Architects team in The role of the Process Architects team in replacing Telstra’s Activation systems/5replacing Telstra’s Activation systems/5

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It is critical that processes align upwardly with business artefacts and downwardly with technology infrastructure

Without knowing the background for replacing the Activation Systems I would see the Process Architects team fulfilling:

Points of Pain Process characteristics: Degrees of Complexity, Process Points of Failure and

Causes of Work Identifying Process Diagnostics (Moments of Truth, Break Points, and Business

Rules) Determining the effect on the customer and the organization from Process Points of

Failure and Causes of Work Identifying opportunities for process improvement Scope of Application; any process, sub-process, service or code

The value I would add personally in The value I would add personally in replacing Telstra’s Activation systems/1replacing Telstra’s Activation systems/1

The principal contribution I would make is one of leadership not only of the Process Architects’ team but also as a member of the wider Telstra IT Transformation - Business Process group;

Recently with a much smaller enterprise I completed a comparable task involving the replacement of the company’s ERP system:

Complete an end-to-end Future State process and encompassing healthcare, supply chain, and additional processes from the basis of the Current State;

Facilitate the determination of a new business model enabling significant business transformation incorporating functions to support health-funding/purchasing/provider; and

Project-manage the acquisition of a new ERP aligned with the business processes and business rules of the mapped business processes.

This involved not only working with the senior management team but also getting across some of the strategic detail of core processes.

7th May 2008 13Kenneth Mortimer

With 29 projects over 19 years, delivering Business Transformation, I will add value to the team, Business Transformation, and Telstra

The value I would add personally in The value I would add personally in replacing Telstra’s Activation systems/2replacing Telstra’s Activation systems/2

I have developed the adjacent diagram illustrating intertwined & interdependent relationships between business plans, business process models, and ICT infrastructure;

I am very focused on improving business practices through process improvement;

Business rules govern the execution of processes with a high degree of consistency and accuracy;

Outcomes are enhanced if the process is automated through workflow; and

A key aspect of this format is the availability of business rules that provide the substance to a specific task within a process.

7th May 2008 14Kenneth Mortimer

It is vital to align business, process, and technology

The value I would add personally in The value I would add personally in replacing Telstra’s Activation systems/3replacing Telstra’s Activation systems/3

I have 19 years experience in analysing, documenting and re-engineering business processes and developing business process frameworks over twenty-nine projects:

Complete the Future State Process Model that enabled an open source vendor to offer an ERP/CRM solution that will enable the enterprise to scale their business from $24 million to $70 million over four years;

Review the financial, accounting, & reporting processes of a coal mining business with a view of rationalising processes across its two mines and joint venture with Rio-Tinto;

Analyse and map the core processes and business rules of a health distribution business and identify a new business model enabling significant business transformation and performance improvement;

Review the system managing ministerial correspondence and assess its impact on process and people recommending improvements and action plan;

Process analysis & mapping to conform with new Federal Child Support legislation and training & coaching members of the process improvement team;

Process analysis and establishment of AS IS & TO BE business processes leading to a new Global Consular Management system to assist Australians and other Commonwealth citizens in distress;

Process management analysis and establishment of business process framework & governance across multiple revenue and law & order Federal government agencies;

Analysed and mapped network management process, captured business rules and developed business process framework of the Public Safety Network across multiple revenue and law & order agencies of the Queensland State Government;

Developed quality assurance framework for whole of government finance business processes analysis and mapping for the Queensland State Government;

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The value I would add personally in The value I would add personally in replacing Telstra’s Activation systems/4replacing Telstra’s Activation systems/4

I have led a range of “leading edge”, technology-related projects based on solid process analysis and design:

Internet portal deployed in local government (Brisbane City Council) in Australasia 1999; New Zealand Parliament (Office of the Auditor-General) in to link business processes of

substantive audit and parliamentary investigations to the deployment of a national switched network integrated with a range of office automation applications. The time savings were estimated at $2 million annually on the then annual budget of $48 million 1991;

Government department (Conservation) slashed costs by nearly half of its national network of telecommunications’ assets yet retain comparable bandwidth 1990;

In the public or private sectors in New Zealand Department of Conservation to publish an RFI integrating the enterprise’s requirements of telephony, networking and computing requiring the marketplace to form consortia to provide the total solution required 1989;

Rationalising and streamlining Bank of New Zealand’s global network of computing and telecommunications’ assets and Telco relationships stretching from New York and London across to Singapore, Hong Kong and Tokyo 1988;

2 Mb/s digital pipe for the Bank of New Zealand linking PABXs in Wellington and Auckland, IBM SNA networks, & shout-down circuits for currency trading 1987; and

Aussat-B satellite of an integrated commercial transaction network based on IBM SNA and voice networks for BNZ Australia 1987.

7th May 2008 16Kenneth Mortimer

Led “leading edge”, technology-related projects leading to performance improvement

The value I would add personally in The value I would add personally in replacing Telstra’s Activation systems/5replacing Telstra’s Activation systems/5

Develop Value Proposition Verification of Value Proposition

That the value proposition is sound; That it is supported by the proposed structure of the new framework, and That it is supported by the integrated design of process, accountabilities and

performance measures

Confirmation that the governance model for the new framework is workable, and will be endorsed and supported

Approval to put forward a schedule for implementing the new model and phasing out of the current framework

7th May 2008 17Kenneth Mortimer

We need to gain from you clear messages that we are on track, where we could improve and that our recommendations are sound

The value I would add personally in The value I would add personally in replacing Telstra’s Activation systems/6replacing Telstra’s Activation systems/6

Strong, primary focus on our customers through use of end-to-end processes and a Design Method that focuses on customer values;

Implement processes that “stick” through focus on customer outcomes, and process performance measures applied directly to position descriptions and performance agreements;

Encourage continuous improvement through accountabilities linked to performance measures;

Processes that are easier to design as they are sourced from a repository of standard, reusable, and repeatable building blocks; and

Simplify the business as process building blocks are reused across the business in multiple processes.

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The value proposition must be compelling as it changes the way in which we view our business

The value I would add personally in The value I would add personally in replacing Telstra’s Activation systems/7replacing Telstra’s Activation systems/7

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This is a subset of a piece of work completed for Telecom Corp NZ aimed at reducing the time elapsed from strategy development to deployment; resulting in reduction from 36 to 20 months

Questions?Questions?

Key characteristics of Manager Process Architects: Process Knowledge? Team Leadership? Cultural Fit?

Are there any aspects of my responses to these characteristics that you feel that I could add further information?

Q&A on my presentation? Discussion regarding my experience/suitability.

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