Aligning Enterprise Measures, Plans, and Budgets

1. Aligning Enterprise Measures, Plans, and Budgets Coordinating enterprise performance metrics and strategic plans with resource allocation • Much of the material in this presentation was drawn from the following source: • Allio, M. (2006), “Metrics that matter: seven guidelines for better performance measurement”, Handbook of Business Strategy, Vol. 7 Issue 1, pp. 255-263. • Harmon, Paul (2007), Managing the Process-Centric Organization, presentation, BPMTrends.

2. Enterprise BPM Methodology “Managing the Process-Centric Organization”, presentation by Paul Harmon. Session 5 Session 4 Session 8 Sess. 3 Session 8 Session 9 BA 563: Process Improvement BA 553: Business Process Management

3. Aligning Strategy, Measures, and Processes This is a process for ensuring alignment among the organization’s performance measures, strategic plans, improvement projects, and budgets. • Establish the organization’s key goals • Establish KPIs associated with the organization’s key goals, and measure performance in these • Develop and deploy the enterprise strategy to the process level • Establish process measures (if not already existing) • Enterprise KPIs are then recalibrated and aligned with process-level metrics • Once the metrics are aligned at all levels, process improvement projects can be identified • Budget must be allocated aligned with the process improvements needed to achieve the strategic goals. This is why it is critical to align the budgeting process with the strategic planning process BA 553: Business Process Management

4. Aligning Strategy, Measures, and Processes BA 553: Business Process Management

5. 6. Identify Process Improvement Projects How can we identify the most useful improvement projects? • Once KPIs and strategic plans are developed, the next step is selecting improvement projects that will help achieve these goals and targets • A starting point is the value chain, which can help identify process areas where change is likely to lead to improved KPIs • Once that part of the value chain is located, use the process architecture to narrow down the list of processes that need to be improved • The alignment of the process and performance metrics can help confirm the specific process(es) that contain the metrics that will most impact the KPIs and targets where improvement is desirable BA 553: Business Process Management

6. 7. Allocate Budget Aligned with Strategy BA 553: Business Process Management

7. Traditional Budget Allocation Approach • In traditional organizations, budget is allocated based upon last year’s budget • This is like driving a vehicle while only looking in the rear-view mirror BA 553: Business Process Management

8. Improved Budget Allocation Approach • In order to get where you want to go and achieve the organization’s goals, you need to be looking ahead • The budget needed to accomplish the goals should be allocated according to the new direction for this year, not based upon what was done last year BA 553: Business Process Management

9. What Other Resources Need to be Aligned? • In addition to the annual budget, there are other resources that need to be aligned properly in the organization • These include: • Personnel • Support processes • Infrastructure • Policies • IT resources • Job descriptions • Training BA 553: Business Process Management

10. Aligning Other Resources with Processes • A well-structured Business Process Architecture gives you a way of tracking the alignment of a variety of corporate resources • Different organizations will stress different types of alignment to achieve different goals • The US Government is largely focused on IT alignment • Many companies are heavily focused on identifying common processes to reduce the number of ERP applications they need to maintain BA 553: Business Process Management

11. Items to Consider When Aligning BPM • Alignment with Corporate Strategies and Goals • Alignment with specific process strategies • Alignment with stakeholder needs and KPIs • Alignment with other processes • Management processes • Support processes • Repeated standard processes • Alignment with policies and rules • Which processes implement which policies? • Which processes rely on which business rules? BA 553: Business Process Management

12. Items to Consider When Aligning BPM • Alignment with IT resources (e.g. with an Enterprise Architecture) • Which software applications are used by which processes? • Which databases are used by which processes? • Alignment with HR resources • Which job descriptions are used by which processes? • Which training courses support which processes? • Alignment with Sarbanes-Oxley, ISO 9000 and various risk management standards BA 553: Business Process Management