Session 1: Business Process Management Six Sigma (BPSM & SS) Part 1: Focus Strategy link to BPM

1. Session 1: Business Process Management Six Sigma (BPSM & SS)Part 1: Focus Strategy link to BPM Ann Rosenberg January 31st 2012

2. AgendaBusiness Process Management Six Sigma (BPSM & SS) - Session 1: Focus Strategy link to BPM • Introduction to Business Process Management part 1 • Overview, Literature which will be used and Execises • Processes/ IT and the Process/ IT Evolution • Strategy link to BPM part 2 • What initiate BPM • Different frameworks- Strategy (Kaplan and David P. Norton/ Michael E. Porter)- Blue Ocean- Business Model Generation (Alexander Osterwalder)- Linking Strategy to Operations (D.P. Norton and Randall H. Russel) • Exercise • Next time: Session 2: Focus BPM Governance and Company Presentation (IV)

3. AgendaBusiness Process Management Six Sigma (BPSM & SS) - Session 1: Focus Strategy link to BPM • Introduction to Business Process Management part 1 • Overview, Literature which will be used and Execises • Processes/ IT and the Process/ IT Evolution • Strategy link to BPM part 2 • What initiate BPM • Different frameworks- Strategy (Kaplan and David P. Norton/ Michael E. Porter)- Blue Ocean- Business Model Generation (Alexander Osterwalder)- Linking Strategy to Operations (D.P. Norton and Randall H. Russel) • Exercise • Next time: Session 2: Focus BPM Governance and Company Presentation (IV)

4. BPM definition CMMI BPM Governance BPR SIX Sigma LEAN EA BPM Technology Process Owner PPI Efficiency Innovation Optimization

5. Overview of all sessions

6. https://blog.itu.dk/BSPF-F2012/schedule/

7. Introduction to Business Process Management part 1 Processes/ IT and the Process/ IT Evolution • Process and process parameter - definition • Classical process management frameworks: TQM, Lean, Six Sigma, BPR etc. • Process Management Evolution • Process management modeling notations • Process Management Technology (BPM Technology) • The Evolution of Enterprise Systems

8. Definition of a Business Process 1/2 • A business process begins with a mission objective and ends with achievement of the business objective. Process-oriented organizations break down the barriers of structural departments and try to avoid functional silos. • A business process can be decomposed into several sub-processes, which have their own attributes, but also contribute to achieving the goal of the super-process. The analysis of business processes typically includes the mapping of processes and sub-processes down to activity level. • Business Processes are designed to add value for the customer and should not include unnecessary activities. The outcome of a well designed business process is increased effectiveness (value for the customer) and increased efficiency (less costs for the company).

9. Definition of a Business Process 2/2 • There are three types of business processes: • Management processes, the processes that govern the operation of a system. Typical management processes include "Corporate Governance" and "Strategic Management". • Operational processes, processes that constitute the core business and create the primary value stream. Typical operational processes are Purchasing, Manufacturing, Advertising and Marketing, and Sales. • Supporting processes, which support the core processes. Examples include Accounting, Recruitment, Call center, Technical support.

10. Business Process Management covers both automated and manual perspective Manual Activities End to End process spans manual and automated activities Typically >80% Automated Activities Typically <20% Of the 20% of the Automated Activities Typically <20% Processes that deliver competitive advantage and evolve regularly (SOA , mobility etc. candidates) Differencing Activities Typically >80% Standard Activities Processes that should be as cost effective as possible (SAP Best Practice candidates)

11. Typical weaknesses in processes can be structured by three criteria Typical process weaknesses Process flow Organizational structure System support/data structures • Loops • Decentralized activities • Inputs not necessary, waiting times • Long lead times • Not enough information for process owners • Goal of the process not specified • High number of interfaces • Low quality of process output • No quality control for process results • No process standardization where possible • Big product and service portfolio which leads to complex processes • No outsourcing of processes which are not core to the customers business • Not enough process automation • … • Pure functional organizational structure (no process ownership across departments) • Responsibilities not clearly assigned • Overlapping responsibilities • Decision processes take too long • No fit of competencies andresponsibilities (governance) • Wrong degree of centralization and decentralization • Not enough transparency • … • Systems do not support the processes (degree of automation) • Missing functionalities • Redundant systems support • User interface not user friendly • Low data quality, redundant data • No integration • Slow information access for process owners • System support not standardized • …

12. The Business Process Lifecycle

13. ASAP Methodology including BPM Technology – BPM, AML, SOA and Value perspectiveThe 4 lifecycles To BeDesign Process Owner Process Architect Business Architect CIO Enterprise Architect Application Consultant Project Manager Program/Portfolio Manager Business Unit Owner Business Architect Business Analyst Process Management Performance Management Value Management Process/Performance Gov. IT Gov. Project/Program Gov. Business Governance

14. Event 1 Entity Application Role Process Step 1 Entity Information Carrier Document Event 2 • Process and process parameter - Definitions

15. Process Parameters

16. The Evolution of Process Management

17. Introduction to Business Process Management part 1 Processes/ IT and the Process/ IT Evolution • Process and process parameter - definition • Classical process management frameworks: TQM, Lean, Six Sigma, BPR etc. • Process Management Evolution • Process management modeling notations • Process Management Technology (BPM Technology) • The Evolution of Enterprise Systems

18. Aligning Sender and Receiver Process Model Sender Receiver • + Knowledge Exchange • + Reduced Complexity • + Common “Language“ • + Standardized Documentation • + Compliance • + Measuring Possibilities…

19. Modeling Convention vs. Modeling Tool Modeling Tool Graphical ProcessDescription Textual ProcessDescription Visio + = Powerpoint Modeling Notation / Convention Aris ...

20. Process Hierarchy ProcessArea Extend enterprise map Level 1 MainProcess Level 2 Process Level 3 Activity Level 4

21. Modeling Activities in Process Management

22. Introduction to Business Process Management part 1 Processes/ IT and the Process/ IT Evolution • Process and process parameter - definition • Classical process management frameworks: TQM, Lean, Six Sigma, BPR etc. • Process Management Evolution • Process management modeling notations • Process Management Technology (BPM Technology) • The Evolution of Enterprise Systems

23. The Evolution of ArchitectureWhy do we need a new implementation approach Architecture Maturity Have Change To Business Modularity and Dynamic Venturing Source: Ross et. al, 2006

24. Timeless Software

25. Processes remain the Linchpin of Biz/IT Alignment Why do we need a new implementation approach Value Chains • Business Domain • Vision, Strategy • Business Model • Value Chains Procure to Pay Plan to Fulfill Order to Cash Budget to Report Hire to Retire Processes are the linchpin between your Value Chain and our Solution World Technology Domain • Solutions • Applications • Technology Components BI Business Suiteapplications Technology Components SaaS ByD … Third Party Information Technology

26. AgendaBusiness Process Management Six Sigma (BPSM & SS) - Session 1: Focus Strategy link to BPM • Introduction to Business Process Management part 1 • Overview, Literature which will be used and Execises • Processes/ IT and the Process/ IT Evolution • Strategy link to BPM part 2 • What initiate BPM • Different frameworks- Strategy (Kaplan and David P. Norton/ Michael E. Porter)- Blue Ocean- Business Model Generation (Alexander Osterwalder)- Linking Strategy to Operations (D.P. Norton and Randall H. Russel) • Exercise • Next time: Session 2: Focus BPM Governance and Company Presentation (IV)

27. What initiate BPM BPM Today

28. What initiate BPM BPM Today What have initiated BPM • Burning Platforms • Continuous Process Improvement (efficiency) • Operation Excellence • Change the IT based implementations to process based implementations • Process optimization • BPM Tomorrow What will/ are today initiating BPM • Compelling Opportunity • Game Changer • Linking the Strategy Model to the Operation Model • Business Transformation • Link between Strategic Business Objectives, Transformation KPIs and ployees PBOs • Process Innovation

29. Business Process ManagementToday Process orchestration by leveraging process based pre-built assets SKILLS & MINDSET Six Sigma, Lean, BPR…… BPM METHODOLOGY & GOVENANCE ARIS, PowerDesigner, Netweaver BPM….. BPM TOOLS APQC, VCG, eTOM, SCOR PROCESS BASED IMPLEMENTATION CONTENT Content TRAINING/ EDUCATION SAP Modelling Handbook External BPM Webinars http://www.sdn.sap.com/irj/bpx/starterkitforbpm http://www.sdn.sap.com/irj/sdn/soa-kit http://www.sdn.sap.com/irj/sdn http://www.sdn.sap.com/irj/bpx http://ecohub.sdn.sap.com/ http://www.sdn.sap.com/irj/uac COMMUNITY AND ENABLEMENT

30. BPM tools facilitate the Process Management LifecycleBPM Today

31. Governancethrough the lifecyclesBPM Today

32. McFarlan’s strategic grid http://visual.placodermi.org/2009/01/14/toolkit-mcfarlans-strategic-grid/

33. What initiate BPM BPM Tomorrow

34. What initiate BPM BPM Today What has initiated BPM • Burning platforms • Continuous process improvement (efficiency) • Operation excellence • Change the IT based implementations to process based implementations • Process optimization • BPM Tomorrow What will/ are today initiating BPM • Compelling opportunity • Game changer • Linking the strategy to the operational model • Business transformation • Link between strategic business objectives, transformation KPIs and employees PBOs • Process innovation • Use BPM to implement sustainability

35. BPM Framework

36. BPM Framework

37. Different frameworks:- Linking Strategy to Operations (D.P. Norton and Randall H. Russel) - Strategy (Kaplan and David P. Norton/ Michael E. Porter)- Blue Ocean- Business Model Generation (Alexander Osterwalder)

38. Linking the Strategy Model to the Operation Model Source: Linking Strategy to Operations: Process Models and Innovation by David P. Norton and Randall H. Russell

39. Linking the Strategy Model to the Operation Model Source: Linking Strategy to Operations: Process Models and Innovation by David P. Norton and Randall H. Russell

40. Linking the Strategy Model to the Operation Model Source: Linking Strategy to Operations: Process Models and Innovation by David P. Norton and Randall H. Russell

41. A Six-Stage System Source: Integrating Strategy Planning and Operational Execution: A Six-Stage System by Rover S. Kaplan and David P. Norton

42. Stage 1: Develop the Strategy • Develop the strategy using an array of strategy tools such as mission, values, and vision (MVV) statements; external competitive, economic, and environmental analyses; methodologies such as Michael Porter´s five forces and competitive positioning framework, the resource-based view of strategy, and blue ocean strategies, as well as scenario planning, dynamic simulations, an war-gaming. • Questions: • What business are we in, and why? • What are the key issues we face? • How can we best compete?

43. Porter Generic Strategies

44. What is innovation ? • http://www.wimp.com/innovationfinest/

45. Blue Ocean vs. Red Ocean An approach to develop Business Model Innovation

46. Blue Ocean Strategy : Overview Click image to access Blue Ocean synopsis on YouTube

47. Blue Ocean Strategy Approach > What factors in the business model should be created/increased or eliminated/decreased (compared to the industry standard) to create an uncontested market space and make the competition irrelevant and what ideas does that trigger?

48. Blue Ocean Strategy: Overview

49. Blue Ocean Example : Apple iPhone Eliminate Raise Multiple operating system platforms Complexity of user interface The view of a mobile phone Ability to access all type of media Clear distinction between products EXAMPLE Create Reduce New market segments for smart phones Desire for a “status item” New simple and profitable route to market forpublishers (apps, video, ...) Complexity to buy (“ONE” DEVICE ONLY)

50. Other Blue Ocean Examples … from emotional to functional appeal Online bookstore • Nintendo WII • new User experience •  cheaper hardware … from functional to emotional appeal Netflix vs. Blockbuster  DVD-Mail Order vs. Video rental Store