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Presentation on BPM fundamentals at PegaWorld. Introduces business process professionals to drivers for bpm, defining the business case, evaluating ROI, and when/where to use technology.
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BPM Fundamentals: Develop Your Game Plan for BPM Success
Clay RichardsonSenior Analyst
Forrester Research
April 26, 2010
3Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Clay RichardsonSenior Analyst
Forrester Research
Serving Business Process Professionals
4Entire contents © 2009 Forrester Research, Inc. All rights reserved.
66%66%BPMBPM
64%64%OpenOpen
SourceSource40%40%SaaSSaaS
Survey of 2227 SMB and Enterprise IT decision makersSurvey of 2227 SMB and Enterprise IT decision makers
I heard this BPM thing might help us
reduce costs.
5Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Diverse factors trigger firms to investigate BPM’s potential
Enterprise And SMB Software Survey, North America And Europe, Q4 2009
Survey of 227 Enterprise and SMB IT Decision Makers
Which of the following have been major drivers for your BPM initiative?
6Entire contents © 2009 Forrester Research, Inc. All rights reserved.
What we hear – common drivers for BPM
“SEC audits have raised concerns over inconsistent and undocumented business practices”
“We need to be able to provide rule changes at the an enterprise level due to rapidly changing regulatory
environment (Model audit, 38a-1)”
“Process standardization will be difficult with our current set of development tools for custom software
development”
7Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Firms attack process from different angles
SixSigma
BusinessProcess
Re-engineering
Lean
Methodologies
ProcessAnalysts
ChangeAgent
Tools & Techniques
Service Oriented Architecture
Workflow
Process skills
Business RulesBusinessArchitct
ITILeTOMSCOR
Sarbanes Oxley Basel II
BusinessProcess
Management
Source: Adapted from Management by Process
8Entire contents © 2009 Forrester Research, Inc. All rights reserved.
So, what exactly is business process
management?
9Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Defining business process management
• Business process management focuses on continuous improvement of cross-functional end-to-end business processes
• Process improvement methodology and discipline essential ingredients for success
• Require a specific set of process skills and talents in order to be truly effective
• BPM suites and other technology can greatly accelerate and institutionalize process improvements
10Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Don’t let the “BPM” term confuse you
October 2008 “Drive BPM Initiatives To Higher Business Value”
11Entire contents © 2009 Forrester Research, Inc. All rights reserved.
BPM is now the language of IT-to-BT
Vertical/ functional
Functional/process overlays
Process/functional overlays
Service/process organization
From traditional LOB management
To process-based management
12Entire contents © 2009 Forrester Research, Inc. All rights reserved.
BPM center of excellence drives process transformation
Source: October 2007 US And UK Enterprise Architecture And Business Process Management Online Survey
*Base: 46 IT architects and †65 IT architects(percentages may not total 100 because of rounding)
13Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Primary Process Improvement Tasks And Functional Categories
Source: June 20, 2008, “The BPM the BPM center Is Here: Now What?”
14Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Where’s the money for this BPM thing
going to come from?
15Entire contents © 2009 Forrester Research, Inc. All rights reserved.
ROI metrics for BPM success
16Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Efficiency Benefits
Benefit Example
Eliminate Manual Data Entry
Reduction in time to add a new employee record into the HR system from 9 hours to 10 minutes
Reduce Process Cycle Time
Reduction in compensation processing timing for 12,000 sales reps from 33 days down to 7.
Reduce Manual Analysis/ Routing
Elimination of 80% of the manual work previously required to route invoice exceptions to the appropriate resolution teams.
17Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Effectiveness Benefits
Benefit Example
Handle Exceptions Faster and Better
Evolve process from saving 5% of distressed shipments to saving 70% - yielding $2M per quarter in saved revenues.
Make Better Decisions Better review process results in $3M saved in billing dispute write-offs that would formerly just been processed because the process was poorly controlled.
Consistent Execution Customer satisfaction improvement to 92% based on proactive tasks that help ensure the home loan process executes better and faster
18Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Agility Benefits
Benefit Example
Faster Regulatory Compliance
Change customs related processes after September 11, 2001 within 90 days to comply with new federal regulations for better shipping visibility.
Support New Business Models
Ability to change shipping partners within 10 minutes in core process allows manufacturer to change primary shipper every quarter – based on best bid provided.
19Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Example: ROI of Correspondence Management
20Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Example: ROI of Correspondence Management (cont.)
21Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Example: ROI of Correspondence Management (cont.)
22Entire contents © 2009 Forrester Research, Inc. All rights reserved.
How to demonstrate the value that governance brings to the organization
• Project cost overrun reduction – Quantify the project time and cost overruns prior to the implementation of the BPM function.
• Project time and cost savings – Track the number of requirements defects discovered during testing and after the solution is in production prior to the implementation of BPM.
• Project portfolio value – Prepare reports that provide the investment costs and expected value of the portfolio of projects
• Report actual value new solutions add to the organization as compared to the expected value predicted in the business case.
23Entire contents © 2009 Forrester Research, Inc. All rights reserved.
How does BPM fit in with the rest of our
technology portfolio?
24Entire contents © 2009 Forrester Research, Inc. All rights reserved.
1st: Identify the characteristics of your key business processes
25Entire contents © 2009 Forrester Research, Inc. All rights reserved.
2nd: Identify which category best supports your process needs
September 2009 “The Importance Of Matching BPM Tools To The Process”
26Entire contents © 2009 Forrester Research, Inc. All rights reserved.
3rd: Explore where BPM fits within your current mix of applications
27Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Forrester Wave™: Human-Centric BPM For Java Platforms, Q3 ’07
28Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Process standards facilitate intra-department communication and collaboration
Source: http://www.bpmn.org/Samples/Elements/Core%20BPMN%20Elements.htm
29Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Recommendations
• Understand the BPM focuses on methodology and tools can accelerate delivery
• Connect your ROI and business case to strategy to minimize waste and maximize impact
• Evaluate your process requirements to identify which BPM pattern and tools are best fit
30Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Recommended research
• April 2010, “Pegasystems Acquires Building Blocks For Next-Generation CRM”
• January 2010, “Lean Business Technology Maturity Matrix For BPM Governance”
• December 2009, “Dynamic Case Management - An Old Idea Catches New Fire”
• October 2008, “Drive BPM Initiatives To Higher Business Value”
31Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Thank you
Clay Richardson+1 [email protected]: passion4process
www.forrester.com