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1 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Dr. John W. AldenManaging PartnerCapability Measurement, LLC
Measuring Process Maturity: The Business Process Maturity Model
WelcomeWelcome
to Transformation and Innovation 2007 The Business Transformation Conference
2 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Topics Covered:– Transformation: Core Performance Challenges
– Origins of the BPMM and its OMG status
– How are organizational maturity and organizational performance linked
– Structure of the BPMM
– What is the impact of the BPMM on measurement and analytics capability
– How is the BPMM used as a framework for improvement
– Discussion
3 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Open Standards Frameworks Focus
© Capability Measurement 2006,2007 All Rights Reserved
4 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Executive “Process Health” Workforce Workforce
Talent: currentTalent: current
Baseline: ? Target: ?
CustomersCustomers
NPS? currentNPS? current
Process ability: currentProcess ability: current
Baseline: ? Target ?
Renewal rate: currentRenewal rate: current
Baseline: ? Target ?
Baseline: ? Target ?
© Capability Measurement 2006,2007 All Rights Reserved
5 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Management Visibility
In OutLevel 1
In OutLevel 2
In OutLevel 3
In OutLevel 4
In OutLevel 5
© Capability Measurement 2006,2007 All Rights Reserved
6 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Customer claims
Work Unit 1
Claims investigationWork Unit 1
Damage assessmentWork Unit 1
Claims payment
Work Unit 1
Customer claims
Work Unit 1
Claims investigationWork Unit 1
Damage assessmentWork Unit 1
Claims payment
Work Unit 1
Customer claims
Work Unit 1
Claims investigationWork Unit 1
Damage assessmentWork Unit 1
Claims payment
Work Unit 1
Procedure 1Procedure 1• Do this
• Do that
Procedure 4aProcedure 4aProcedure 3Procedure 31. Do this first2. Do this next3. Do this last
Procedure 2Procedure 2
Business Processes Are Immature
Customer claims
Work unit 1
Claims investigationWork unit 1
Damage assessmentWork unit 1
Claims payment
Work unit 1
Workgroups performing the same task in the business process workflow have different ways of doing it!
Banking example: credit card operations
185 credit card processes
18 ways to open an account
51 credit card processes
Process tailoring guidelines
3 ways to open an account
ProcessProcess
synthesissynthesis
© Capability Measurement 2006,2007 All Rights Reserved
7 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Evidence of Low maturity-Configuration
The tools thatsupport work
must be consistent
with each other
≠ ≠ ≠Training Process maps Forms Systems
Tools whosecurrent states aretightly linked must
be controlled
© Capability Measurement 2006,2007 All Rights Reserved
8 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Unmeasured, Snowballing Rework
Items left offbill of sale
Sales
Bill of sale
Incompleteinformation
Legal
Contract
reworkvalue
addingwork
UnspecifiedRequirements
Provisioning
Specification
valueaddingwork
rework
Finance
Invoice
Incorrectinvoices
valueaddingwork
rework
BPM focuses on the enterprise: Create seamless workflow Integrate functional silos End snowballing rework Roadmap for automation
© Capability Measurement 2006,2007 All Rights Reserved
9 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Absence of end to end capability
In Out
TechnologySolutions
Sales
AD and SI
ClientServices
TechnologyServices
Immature Products
Fixed Date, Budget
Vague Requirements
Defects
Deferred Items
Ineffective Execution of Product Strategy
Customer Dissatisfaction
Liquidated Damages
Increased Service Calls
Increased Rework
The hidden costs grow from project to project
© Capability Measurement 2006,2007 All Rights Reserved
10 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Leads to Huge Costs
In Out
TechnologySolutions
Sales
SystemsIntegration
ClientServices
TechnologyServices
Immature Products
Fixed Date, Budget
Vague Requirements
Defects
Deferred Items
Ineffective Execution of Product Strategy
Customer Dissatisfaction
Liquidated Damages
Increased Service Calls
Increased ReworkScope Containment
Enterprise Cost Model Corporate Product Strategy
© Capability Measurement 2006,2007 All Rights Reserved
11 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
The Five Maturity LevelsThe Five Maturity Levels
Level 1Initial
InconsistentInconsistentmanagementmanagement
Repeatablepractices
Level 2Managed
Work unitWork unitmanagementmanagement
Standardized
best practices
Level 3Standardized
Business lineBusiness linemanagementmanagement
Quantitativelymanaged
practices
Level 4Predictable
CapabilityCapabilitymanagementmanagement
Level 5Innovating
ChangeChangemanagementmanagement
Continuously
improvingpractices
© Capability Measurement 2006,2007 All Rights Reserved
12 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
How the BPMM WorksLevel 5
Innovating
Implement continual proactive improvements to achieve business targets
Capable processesPerpetual innovationChange management
Level 4Predictable
Manage process and results quantitatively and exploit benefits of standardization
Predictable resultsReuse/knowledge mgt.Reduced variation
Level 3Standardized
Develop standard processes, measures, and training for product & service offerings
Productivity growthEffective automationEconomies of scale
Level 2Managed
Build disciplined work unit management to stabilize work and control commitments
Reduced rework Repeatable practicesSatisfied schedules
Level 1Initial
Motivate people to overcome problems and just “get the job done”
Mistakes, bottlenecksAd hoc methodsHero worship
© Capability Measurement 2006,2007 All Rights Reserved
13 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Structure of the BPMM
Level 5
Level 4
Level 3
Level 2—
Managed
Level 1
MaturityLevels
Organizational Business
Governance
Organizational Process Leadership
Work Unit Requirements Mgt.
Work Unit Planning and Commitment
Work Unit Monitoring & Control
Work Unit Performance
Sourcing Management
Work Unit Change Management
Process and Product Assurance
Level 2Process Areas
SG1: Requirements are identified and evaluated
SG2: Requirements baseline is maintained
InG: Process is institutionalized
Work UnitRequirements
Mgt. Goals
SP1: Identify requirements
SP 2: Clarify requirements
SP 3: Evaluate requirements for implementation
SP 4: Negotiate requirements
SP 5; Maintain agreed to requirements
SP 6: Conduct regular requirements review
In 1: Describe the process
In 2: Plan the process
In 3: Provide knowledge and skills
In 4: Control the process
In 5: Objectively assure adherence
Work UnitRequirementsMgt. Practices
© Capability Measurement 2006,2007 All Rights Reserved
14 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Institutionalizing Practices“The practices for [process_area]
are institutionalized.”
Process Area
SpecificPractices
(Implementation)
Monitoring& Control
ProcessAssurance
Process Planning
Skills & Training
Process Description
© Capability Measurement 2006,2007 All Rights Reserved
15 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
People
Work unitmembers
Executives
Ma
na
ge
rs
Level 2 Process Areas
Work UnitRequirementsManagement
Work UnitPlanning andCommitment
Work UnitMonitoringand Control
Work UnitPerformance
SourcingManagement
Process andProduct Assurance
Work UnitChange
Management
Org
an
iza
tio
na
l Pro
ce
ss L
ead
ers
hip
Org
an
iza
tio
na
l Bu
sin
ess
Go
vern
an
ce
© Capability Measurement 2006,2007 All Rights Reserved
16 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
StandardProcess
This is a process description derived from the local method of doing itLevel 3
Levels 2 to 3 Transition
TailoredProcess
This is a process description derived from the local method of doing it
WorkUnit 1
WorkUnit 2
WorkUnit 3
WorkUnit 4
WorkUnit 5
Enterprise-wide end-to-end, integrated business process
WorkUnit 5
Procedures
WorkUnit 5
Procedures
WorkUnit 5
Procedures
WorkUnit 4
• Do this
• Do that
Procedures
WorkUnit 2
1. Do this first2. Do this next3. Do this last
Procedures
WorkUnit 2
1. Do this first2. Do this next3. Do this last
Procedures
Confederatedwork units
WorkUnit 1
Procedures
WorkUnit 2a
1. Do this first2. Do this next3. Do this last
Procedures
WorkUnit 3
Procedures
WorkUnit 4a
• Do this
• Do that
Procedures
WorkUnit 5a
Procedures
Level 2 © Capability Measurement 2006,2007 All Rights Reserved
17 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Managers
PeopleLevel 3 Process Areas
Product andService
Preparation
Product andService
Deployment
Product andService
Operation
Product andServiceSupport
Product andService
Management
OrganizationalProcess
Management
OrganizationalCompetencyManagement
OrganizationalResource
Management
ConfigurationManagement
© Capability Measurement 2006,2007 All Rights Reserved
Work unit members
18 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
BPMM integration with core processes
Line of Business
Workunit
Workunit
Workunit
Value-adding core work processesSupplierprocess
Customerprocess
Product & Service
Preparation
Product & Service
Deployment
Product & Service
Operations
Product & Service Support
Product & Service Work Management
Organizational Process
Management
Organizational Competency Development
Organizational Resource
Management
Process areas directly affecting
the core work processes
Process areas directly supporting multiple products and services in a line of business
Configuration Management
Product & Service Business
Management
Figure 1. Relationships of BPMM Level 3 process areas to core work processes Source: BPTrends.com (search for “Alden”)
19 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Process Performance Management
Issue raised inAIMS or CRID
Manufacturing
Issue raised inAIMS or CRID
ManufacturingManufacturing
General E-mail to CAD Designer
Engineering
General E-mail to CAD Designer
EngineeringEngineering
Raise Concern
Engineering
Raise Concern
EngineeringEngineering
Populate the “D”Screen
Engineering
Populate the “D”Screen
EngineeringEngineering
Populate the “B”Screen. One screen per part
Engineering
Populate the “B”Screen. One screen per part
EngineeringEngineering
ProcessesProcesses
End to End
BPMM KPIs
Business KPIs
Appraisal, Survey & Tracking
Process Capability
BP
MI E
xecutive
Go
vern
ance &
S
trateg
y Tea
m
Date
Indiv
idual Valu
e
11/3/20069/28/20068/23/20067/18/20066/9/20065/3/20063/27/20062/20/20061/19/200612/9/200511/1/2005
400
300
200
100
0
_X=277.6
UCL=417.2
LCL=138.0
11/1/2005 9/5/2006
Date
Movin
g R
ange
11/3/20069/28/20068/23/20067/18/20066/9/20065/3/20063/27/20062/20/20061/19/200612/9/200511/1/2005
400
300
200
100
0
__MR=52.5
UCL=171.5
LCL=0
11/1/2005 9/5/2006
1
1
111111
1
1
11
1
1
1
1
1
1
1
11111
Daily Beelines, Count, NORTH Only
© Capability Measurement 2006,2007 All Rights Reserved
TrackingEnablement
20 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Status
Level 2: Descriptive measurement
WorkUnit 1B
WorkUnit 1B
WorkUnit 2B
WorkUnit 3B
ProceduresThis is a process description
derived from the local method of doing it
ProceduresThis is a process description
derived from the local method of doing it
ProceduresThis is a process description
derived from the local method of doing it
WorkUnit 1A
WorkUnit 2A
WorkUnit 3A
WorkUnit 4A
WorkUnit 5A
• Do this
• Do that
Procedures
Procedures Procedures
Here is what I would do. First I would try to getSomeone else to do it. IfThat fails I would try toProcrastinate for days.
1. Do this first2. Do this next3. Do this last
Procedures
Region ‘A’ workflow
Region ‘B’ workflow
ProceduresThis is a process description
derived from the local method of doing it
Outcomes
Outcomes
© Capability Measurement 2006,2007 All Rights Reserved
21 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Level 3: Predictive measurement
WorkUnit 1B
WorkUnit 2B
WorkUnit 3B
WorkUnit 4B
WorkUnit 5B
WorkUnit 1A
WorkUnit 2A
WorkUnit 3A
WorkUnit 4A
WorkUnit 5A
Workflow A
Workflow B
Ou
tcom
es
StandardProcess
This is a process description derived from the local method of
doing itProcessAsset
Library
Tailoring
Guidelines
for
Standard
Processes
Defined Defined processprocess
Offering Offering AA
Defined Defined processprocess
Offering Offering BB
© Capability Measurement 2006,2007 All Rights Reserved
22 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Dramatic Improvements with standards
BenefitLevel 1Baseline
Level 2 Level 3 Level 4 Level 5
Rework 40% 20% 10% 6% 3%
Estimating accuracy
+30% to >100%
+10% to +20%
+5% +3% +1%
Delivered defects
X ½ X 1/4 X 1/10 X 1/100 X
Pretest defect detection
<30% 60% 80% 90+% 99%
Productivity X 1.5X 2X 3-4X >4X
Component reuse
negligible negligible occasional >30% >50%
*Based on Bill Curtis extrapolations of SEI certified and other published research
© Capability Measurement 2006,2007 All Rights Reserved
23 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
What are the top BPMM benefits?1. The BPMM was designed to compliment the CMMI and PCMM:
• Both are domain centric, e.g. software and people• Neither support for enterprise improvement programs concerned with end to
end business processes and workflow
2. The Business Process Maturity Model (BPMM) enables greater fidelity between the actual performance of business processes and their model-based representations
3. Organizations which do not have standards based process maturity have elevated risk in SOA implementations.
• The immaturity of business processes strictly limits the value and success of component reuse.
• Reaching a particular level of capability is a proven means of unlocking the value of investments in technology enabled processes.
4. BPMM compliments existing diagnostic tools and improvement frameworks.
Improving organizational readiness for technology deployment is the motivation for making the BPMM available as a specification
from OMG.
24 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Thank YouThank YDr. John W. AldenManaging PartnerCapability Measurement, LLC
ou