Business Process Management – process modeling; methods and techniques; applying the agile or waterfall model; benefits and efficiencies

1. Business Process Management – scope2. Process Modeling: Methods and Techniques 3. Agile or Waterfall Model comparison4. Using the Methods and Techniques to assess a model5. Conclusion/Discussion

Presented by: Shawn Maynard

(shawnmaynard@hotmail.com)

Business Process Management – process modeling; methods and techniques; applying the agile or waterfall model; benefits and efficiencies

The only reasons a CEO should ever consider starting an improvement process is to generate more profit and make your organization more competitive

Business Process Management – Scope from the life cycle perspective

Develop and optimize

market segment plan

Create Market

Segment Strategy

Manage Market Segments and performance

Perform Portfolio Analysis

Define Market Segment

Understand the

Market

Market needs

Competitive Drivers

Customer feedback

Current product/service

portfolio

Technology trends

Portfolio Life Cycle Management

Program and Project Life Cycle Management

ProjectDefinition

ProductDeployment

IterationPlanning

ReleasePlanning

ProductDevelopment

Initiation Planning Execution Closeout

Monitor and Control

Senior Leadership Team

Market Performanc

e Metrics

Product Performan

ce Metrics

Project Performance Metrics

Product Development

PipelineManagement

Field & EOLmanagement

Product Development Life Cycle Management

Strategic Front End/

Product Line plans

Business Process Management – Scope from the life cycle perspective

What is the most effective and efficient way to navigate the business life cycles for my company ?

To address this question consider the following business process assessment tools :

1. The cost of delay (P&L or NPV) – What is my price tag for time spent?

2. Value Stream Mapping –where am I spending my time and money?

Use these tools to compare the approaches (waterfall and

agile) to determine if the time/money I save adds to my

companies bottom line.

Process Modeling – Methods and Techniques: Value Steam Maps

Work time

Wait time

6 wks

1 hr

1.5 wks

2 wks

8.5 wks

3 wks

1 wk

Submit Reque

st

Project Approval

Gather Req’mt

s

Customer Signoff

Analysis

DesignDesign Review

Code Test Deploy

Submit Reque

st

Project Approv

al

Prelim Architectur

e

WATERFALL

AGILE

1 hr

2 wks

2 wks

2 wks

2 wks

6 hrs

2wks

3 wks

2wks

2.5 wks

2 wks

2wks

2wks

Select 1st segment. Assess the problems. Design, code and test solution. Review with customer. Deploy(optional)

2 wks

1 day

Work time

Wait time

1day

1hr

(*Work time = Value add activities)

1 wk2 days

2 wks

Select 2nd segment. Assess the problems. Design, code and test solution. Review with customer. Deploy(optional)

Select 3rd

segment. Assess the problems. Design, code and test solution. Review with customer. Deploy(optional)4

wks

1 day

4 wks

4 wks

1 day

2wks

Process Modeling – Methods and Techniques: Value Steam Maps

Work time

Wait time

6 wks

1 hr

1.5 wks

2 wks

8.5 wks

3 wks

1 wk

Submit Reque

st

Project Approval

Gather Req’mt

s

Customer Signoff

Analysis

DesignDesign Review

Code Test Deploy

YOUR CURRENT PROCESS?

1 hr

2 wks

2 wks

2 wks

2 wks

6 hrs

2wks

3 wks

2wks

2.5 wks

2 wks

2wks

2wks

2 wks

2wks

Your developer brings you a request for a new development tool that they feel will speed up development. Can you justify the cost ($ and time) to acquire the tool?

You should be able to put a price tag on time. Create a simple economic model in the form of a P & L statement to obtain development cost, unit cost, performance and introduction date.

Use the same approach to assess whether waterfall or agile is right for you create a waterfall and an agile P&L . The Value stream maps give you the time table for your P&L statements. (can also use NPV for this).

Process Modeling – Methods and Techniques: Cost of Delay

Assumptions

Yr 0 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5

Revenue

Avg. Selling price Decreases 10% yearly

Total Market units

Market share

Units Sold

Total Revenue

Expenses

Unit production and distribution cost (plus warranty and support)

Decreases 5% yearly

Gross Margin $

Development X $ per launch

Marketing %15 of sales

G & A %5 of sales

Total Expenses

Process Modeling – Methods and Techniques: Cost of Delay...continued

Change your baseline P & L (or NPV) to see the impact on Cumulative profit. What would a 6 month delay mean to your business? If the impact is high see what the cost is to speed up development by 6 months.

Business Process Management : Methods and Techniques– Building your Value Stream Map

In order to build your value stream map for your model it is important to know how you will implement the model(Agile or Waterfall) within your organization as the model needs to be tailored to the type of business.

EXAMPLE: Lets look at what each model looks like a organization in the social network business. This comparative view allows us to identify benefits and potential constraints the model may place on your organization in terms of the types of resources you need, the culture changes that may need to occur and/or the impact to your current business model.

Business Process Management –agile and waterfall model characteristics

e.g. Building a social network Waterfall Agile

What drives the development? Wireframes drive the project

Wireframes are used to infer the feature set which is then prioritized weekly and daily and which REALLY drives the project to completion; wireframes are also used for future development features.

Ideal team Large offshore team who have done these large social network major site builds and who can duplicate the wireframes quickly.

Small focused team working in an agile methodology

What is the release cycle Big bang (all functionality at once); Replicate current site, then begin adding social functionality one feature at a time in collaboration with your community members

Agility Not as much; costly to refactor on the fly Inherently flexible. Development structure Milestones A long list of features in priority order

How do you budget? You get a fixed price bid and hold your developer to it

You decide on your budget cap and you "buy features" until you are either happy with the ROI or you decide that it is time to stop spending money

How involved is YOUR team? Intermittent involvement from key team members at specified "check in" and "milestone" dates.

DAILY - near full-time involvement from contract signature to "Marketing launch"

Release Management: Features shipped vs. "Launched" A shipped "version" is a "launch release"

With iterative development, you create marketing "release dates" that are simply the time that you bunch the features up into a logical release grouping and "announce" them (even if they have already been out for a while.)

Benefits fixed spending cap; fixed development time; predictable expectations for the outcome.

you can adapt to change faster; be more flexible if business requirements surface that aren't in the plan; can get it to market faster and develop faster, thereby increasing potential return; more fitted to user demands than arbitrary "design demands"; you can "ship at any point" once you have started.

Risks

fixed staffing; no ability to flex the site with the user's feedback; don't know what the user feedback is until you release the larger block; changes cost a LOT more.

business isn't educated enough on agile to buy into this model; requires EXTREMELY high end developers - not a hand-off team in India at low cost; in other words, need "architect level" people for the team and they cost a lot more; will incur a slightly higher cost in development on testing;

Summary You build what you want to build regardless of what your users want.

You build what your market and users want you to build, and you use agility to do it.

Process Modeling –Agile Vs Waterfall example

Business Process Management : Methods and Techniques– Flow Charts and procedures

Once we have characterized our business in terms of the model we should flow chart out the process in your company. The flow chart is used to define the process your company will follow. The flowchart and supporting procedures capture:

1. Input and Output Criteria (what do I need)2. Sequence of activities (when do I do it)3. Feedback loops and dependencies (who should be

involved)4. Exceptions to the rules (there will always be some)

Once the process is defined for your company then roll it out and

collect value-add and waste times to generate your Value Stream

Map.

Process Modeling – Methods and Techniques: Flow Charts and Procedures

Text TextText Text TextText

Requirements

Architecture Plan Release Plan

Iteration Planning

Bugs

Customer ApprovalLatest Version

Next Iteration

New User Story project Velocity

Acceptance Test scenarios

Release Planning

Product Development Pipeline

Prototype

Acceptance TestingProduct

Definition

Scope mgmt

Common Life cycle Support Processes

User Stories

Deployment

Development

1 2 34 5

Process Modeling – Methods and Techniques: - Your Value Stream Map (the flowchart transformed into a Value Stream Map)

Work time

Wait time

2days 1day

1 wk2 days

4 wks

1 day

4 wks

User Stories

Common Life cycle Support Processes

RequirementsIteration Planning

Product Definition

AcceptanceTesting

Text TextText

DevelopmentDevelopment

Deployment

Text TextText

Prototype

AcceptanceTestingRelease

PlanningIteration Planning

Common Life cycle Support Processes

Business Process Management – Summary and DiscussionSummary:

1. Take your existing process and do a Value Stream Map. Identify bottlenecks (this will be your baseline) and set performance improvement goals (P & L or NPV) that you expect to achieve by adopting the new process (i.e. by planning to get rid of all those nasty delays you identified in your Value Stream Map) 2.Apply an alternate model (e.g. Agile) by tailoring that model to your business (i.e. Create the process flow and supporting procedures for Agile in your company). You will need to train your staff in the new process before starting.3. Try it out - and as you do measure your performance. Put your new process on a Value Stream Map to verify the expected efficiency improvements and uncover new bottlenecks. Review your performance against your P&L/NPV as part of your strategic planning process.

1. Select the model (Agile or Waterfall) with your P&L/NPV goals in hand and your legacy Value Stream Map

2. Define your companies implementation of the model (policies/process/ procedures/standards)

3. Your Value Stream Map for rapid

evaluation and and P&L/NPV review for

longer term evaluation

Business Process Management – Summary and Discussion

Agile home ground:Senior developersRequirements change oftenSmall number of developers

Waterfall home ground:Junior developersRequirements do not change oftenLarge number of developers

Experience shows that it will take several months (at least 6 iterations before you get beyond the learning curve and start to see the efficiency benefits and longer before you see the impact to the bottom line as the P & L projections are usually in terms of quarters or years).

Business Process Management – Summary and Discussion

THANK YOU!Shawnmaynard@hotmail.com250-893-9041Some good references:1. User Stories Applied – Mike Cohn2. Agile Estimating and Planning – Mike Cohn3. Project Portfolio Management – Ginger Levin4. PMI OPM 3 – PMI institute5. Business Process Improvement – James Harrington6. Managing Agile Projects – Kevin Aguanno7. Lean Software Development – Mary/Tom Poppendieck8. Fit for Developing Software – Ward Cunningham