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PROCESS WITH A PURPOSE
BUSINESS PROCESS MANAGEMENT (BPM)
SESSION ONE AGENDA
•FOUNDATION
oWHY DO WE NEED PROCESSES?
oDEFINITIONS
oPROCESS LEVELS
oNAVIGATING THE CLUTTER
•
• THE BPM METHODOLOGY
oBPM TOOLS
oSYSTEMATIC APPROACH
Most managers don't take the time to properly determine what the most efficient processes are or
they don't take the time to communicate these processes to those who need them most.
The absence of systematic processes generally results in a fiasco, usually at the worst possible
time. And as the organization grows, the potential for miscommunication, catastrophes,
inconsistency and inefficiency increases exponentially.
Al Einstein ---- Insanity: doing the same thing over and over again and expecting different results.
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PROCESS WITH A PURPOSE
PROCESS WITH A PURPOSE
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PROCESS WITH A PURPOSE
BPM FOUNDATION
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PROCESS WITH A PURPOSE
DEFINITIONS
oPolicy --- Documented set of principles and guidelines
o
oProcess --- An activity that converts inputs to outputs with added value that are
then inputs to the next process --- or are the end state
o
oProcedure – Step-by-Step method(s) used to convert inputs to outputs within
the process
o
oAlignment – Linking improved processes to achieve an organization’s goals
BusinessProcess
Business ProcessManagement
Management(BPM) (BPM) systematicapproach
PROCESS WITH A PURPOSE
isisaasystematic approachto
tohelp
help
organizationselevate
organizations elevatethe effectivenessofoftheir
theeffectiveness theiroperating
operatingprocesses
processestoto
improveinternal
improve internalcontrol
controland
andoperating
operatingperformance
performanceacross
acrossthe
theEnterprise.
Enterprise.
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PROCESS WITH A PURPOSE
PROCESS LEVELS EXAMPLE
Level One: Mission,
Revenue
RevenueCycle
Cycle Objectives & Strategy
(POLICIES)
= SYSTEMATIC
PROCESS WITH A PURPOSE
Based on work & concepts
APPROACH Of Edward Deming
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PROCESS WITH A PURPOSE
BPM TOOLS & BUILDING BLOCKS
oENTERPRISE OBJECTIVES/ EMPHASIS are used in process design --- ensure
that processes support the enterprise’s direction and that policies are properly
aligned.
o
oBUSINESS RULES define how a particular transaction or activity will be
executed within the process --- process change may require a rules change ---
generally built into an automated portion of the process.
o
oPOLICIES AND PROCEDURES are the key building blocks for process success.
Procedures define the operations within a process --- activities that convert the
input into an output.
o
oPROCESS METRICS provide the level of process effectiveness generated by
the process/ procedures --- derived from Business Intelligence
PROCESS WITH A PURPOSE
o
oVISIO, SMARTDRAW or other process mapping tools that are used to depict
WORKFLOWS and connections between workflows --- show manual & automated
steps --- enable view of critical process steps, control risk points, duplicated work &
process/ work constraints. If you can’t draw a picture ----
o
o
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PROCESS WITH A PURPOSE
WHAT IFS/ WALKTHROUGHS/
SIMULATE VARIABLES PRIOR
BPM SYSTEMATIC TO EXECUTION
APPROACH
IMPLEMENT DESIGN:
•TRAIN
•CHANGE MGT
PROCESS OBJECTIVES/ •TEST
AS IS AND FUTURE •GO LIVE
PROCESS STATES
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PROCESS WITH A PURPOSE
APPLYING THE BPM METHODOLOGY
Aligns w ith Aligns w ith Aligns w ith YES
P R O C E S S O W N E &R O
S PE R A TOR S
YES YES
N ext level up
? N ext level up
? N ext level up
? IN V O LV E D IN A LL S T E---PESX P E R T S
NO
NO NO C reate theoretic al
T O-B E proc es s that
M eet w ith M eet w ithproc es s M eet w ith
proc ess M ap A S-IS proc es s from
addres s es ris k&s
m anagem ent to ow nersto ex plain operatorsto dis c us s end-to-end, identify
ineffic ienc ies
---
Identify c ritic al the projec&t projec&t interv iew for inputs, doc um ents
,
identify required
goals/ objec tiv es
/ identify goals& des ign inform ation proc edures,w eak nes s es
doc um entation &
s trategies objec tiv es & opportunities
c reate P roc es s
M etric s
E x ec ute
/
T es t theoretic al M onitor proc es s O ptim iz e the
Im plem ent the new M ov e on to the
proc es s w ith res ults--- ac t on proc es s--- follow-
proc es s--- nex t proc es s
v ariables/ w hat-ifs les s than ex pec ted up on c ontrol ris k s
c om plete proc es s tes ting outputs
& w alk through m etric /sobv ious & effic ienc y
doc s, train s taff
, from c urrent one
w ith operators is s ues opportunities
tes t& go liv e
N ex t P roc es s
NO
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PROCESS WITH A PURPOSE
BPM SAMPLE CASE
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PROCESS WITH A PURPOSE
SAMPLE TOP LEVEL FLOW
Revenue
RevenueCycle
Cycle
Sales
Sales Book Order Deliver Invoice Collect
Contact Book Order Deliver Invoice Collect
Contact
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PROCESS WITH A PURPOSE
Billing Objectives are to:
•Bill on a timely basis --- CSAT & &
Invoice
Invoice Process
Process “As
“As Is”
Is” profitability
•100% invoice accuracy --- CSAT
& collections (cash flow)
Sales Staff •Increase throughput efficiency to
allow more analysis time for staff
Order
Input
I/ FACE
Billing/
NO
Receivab ERRORS? Print Sample for
Stuff & Mail
les Invoices Accuracy
System
YES
YES
Invoice Accuracy (#
disputes or calls) 15 0 Awful
PROCESS WITH A PURPOSE
Billing Efficiency
(% 1st time pass through) 85% 95% (10) Pts
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PROCESS WITH A PURPOSE
IDENTIFY ISSUES 15
JULY
RESULTS OBJECTIVE VARIANCE
Error type analysis & interviews with billing & IT revealed the following:
1.On average, 65% of errors result from sales staff order input mistakes
2.On average, 15% of errors result from customer master not being updated promptly
3.On average, 15 % of errors result from product master not being updated promptly
4.The remaining 5% of errors result from miscellaneous causes
PROCESS WITH A PURPOSE
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PROCESS WITH A PURPOSE
“TO BE” PROCESS RECOMMENDATIONS
SHORT TERM SOLUTION RECOMMENDATIONS:
Issues --- Financial management holds billing clerks responsible for efficiency even
though most errors occur in upstream processes. The clerks say that they can fix the
issues faster than upstream staff.
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PROCESS WITH A PURPOSE
“TO BE” PROCESS RECOMMENDATIONS
LONGER TERM SOLUTION RECOMMENDATIONS:
Issues --- Product and customer information exists in the billing system as well
as in the master databases. Invoices reject when the data is not in agreement
creating the rework done by billing and the upstream processes. These
databases have evolved over time using different formats and logic with
resulting interface issues.
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PROCESS WITH A PURPOSE
BPM Applications
oCommercial
oNon-Profit
oMedical
oGovernment
oEducation PROCESS WITH A PURPOSE
oMilitary
oReligious
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PROCESS WITH A PURPOSE
Current Process Issue Examples
State Government:
vState Employee Insurance Shortfall
vParole System Controls
vDHHS Medicare “Accounting Error”
v
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PROCESS WITH A PURPOSE
WHAT PROCESS IMPROVEMENT LOOKS LIKE
oStrengthened Internal Control and Risk Management
oQuality & Efficiency at Higher Levels
oCustomer Satisfaction Enhanced
oEmployee Morale Improved
oEmployees Trained in BPM Techniques --- Sustaining
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PROCESS WITH A PURPOSE
SOME CLOSING CONSIDERATIONS
CHANGE MANAGEMENT
ØProcesses are owned and managed by people but many
times, individuals become the process. A consistent, sustainable
process by definition is person neutral. A process is tailored to
meet enterprise objectives, not to fit the owner. In the absence of
direction, individuals will invent their own processes +-
ØThe BPM advisor must be prepared to add change managemen
elements to the BPM project plan.
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PROCESS WITH A PURPOSE