Business Process Management Conference


Brainstorm Group.Tuesday, June 22, 2004. Hyatt Regency, San Francisco Airport

Business Process Management – The Path to Becoming an Adaptive Organization

by Janelle Hill, METAGroup

Confusion among the terms: BPM, SOA, On Demand, Adaptive Organization. BPM includes integrating human activities with required data & systems.

True e-Business has yet to happen. Although process management theory is mature, process thinking & use of BPM technology is not.

Adaptability of Business Processes

  • Enhancements
  • Extensions
  • Corrections
  • Refinements

How much is too much? How often? Don’t do it all; do the processes that need to be adaptable.

To understand the bounds and potential of adaptability, business users must have an appreciation for the technologies.

Historical perspective

EDI Successes

EDI Failures

Standardized top business documents for reusability; standards based, bullet proof

Point to Point one-offs, hard-coded, complex, high cost, specialized skills, single implementation infrastructure (VAN), data interchange only



EAI/B2B Successes

EAI Failures

Brokered architecture encourages reuse, Simpler tools, metadata driven engine, Standaradized application adapters, Transport Choices

High entry cost, Specialized skills, Emphasis on data an message transformation, not process, Not bullet proof



BPM Advantages

·

Lowers costs with standards – fewer skills required, commoditization drives down software cost, leverages existing data nd process. E.g., $500K in 2002, $50-250I in 2004. Visual representation (BPMN). Open (XML). Supports multiple levels of process abstraction in the modeloing palette. Change the process and automatically change the code.

·

The more your applications expose themselves as Web services, the easier they link to existing systems.

A summary of this report will appear at

Modeling must become a business discipline – not a creative pastime. Get a real modeling tool, not just a drawing tool like Visio. The model facilitates the conversation between business process and IT. It defines what events – human or system interactions – advance the process. Abstract objects hide implementation details. (It’s software application-agnostic.) This just lets you define where you want business processes to be adaptive.

BPM is a Service Oriented Architecture. Interoperable, virtual network.

Challenges of BPM…

  • Willingness to “blow up” the current way of doing thing
  • Transcending from a culture of individual hero to team player
  • Embracing change as a constant
  • Different roles, reporting structures, performance metrics & budgets

(Business modeler = someone “like a former McKinsey consultant, who really understands the big picture.” I can’t imagine the cost of putting together a team of these guys.)

IT culture shock: From Code to Models. Model mindset – not just learning the tool. Willingness to share development responsibility. This is a new game for IT, which has been accustomed to squirreling away during development and returning with a solution. If IT architects don’t buy in, this won’t work.

BPM is both a strategy and a set of technologies. It requires business and IT to work with one another. Educate everyone, then assess readiness. Establish notational standards (not just Visio drawing).

Competing on Time with the Revolutionary Business SEx Machine

Peter Fingar, co-author of BPM, The Third Wave and The Real-Time Enterprise

Peter is great. He wraps BPM into a package management can buy into. It's a Strategy-Execution Machine. Give your people "Work Processors" so they can get your business aligned. Bravo!

Dot-com bust: $3.5 trillion sucked out of market. 300,000 jobs lost. Enough technology already.

RTE = real time enterprise; BRM = business process management. Executives are fed up with three-letter acronyms and technology being foisted off on them. They’re reading Nick Carr’s “IT doesn’t matter” in Harvard Business Review. Carr suggests that IT is a commodity. Fingar says IT is nothing but an enabler. Porter taught us that differentiation is the key to competitive advantage. (Don’t read Porter; it’s soporific. Read Max Strategy, a 100 page parable.)

FedEx founder wanted to “sell time.” Poo-pooed at first, Fedex IS NOW A $20 billion enterprise.

George Stalk’s Competing Against Time is the argument in favor of BPM. We need a better vocabulary than IT’s to get managements excited about this.

Toyota and Honda managed structural changes that enabled their operations to execute their processes much faster. Toyota went through a two-year internal M&A. (Now you can do it with BPM.) HBR July 1988.

Change has switched from episodic to evolutionary. What was discontinuous is now a flow; the pace of innovation is what’s key. Serial innovators will run circles around the competition.

Time-Based Competition

Cycle, product design, lead, lag, time to market

The most value for the lowest cost in the least amount of time. Cheaper, Better, Faster.

Toyota: Empower the people on the line, not just the production line.

“Downsizing was the objective of BPR.”

Time based competitors:

········· Compress time to mfg and distribution

········· Cut time to develop and introduce new products

········· Cut inventory thru value-delivery system

········· Lever all competitive differences

Process maps are not the object. The point is whether that map will execute with my business. We need executable BP models. BPM is not IT Software Development, its an IT tool that enables business people to build and manage processes

“Time is the scarcest resource.” – Drucker

  1. Response time: lag time, lead time, cycle time
  2. Restructuring time: reorganization, asset reallocation, business process changes, strategy-to-execution time

GE: Digitization of business process was the key. Now it's shifting to managing processes.

Time-based competition is not new. But the BPM System is a way to make it real. Look for his new book, differentiating BPM from IT.

No one in the corner office has a clue what BPM is.

BPM is all about strategy execution.

Typical value chain has 22 companies in it.

With BPM systems, the tide has shifted--For the 1st 50 years IT has automated the business, for the next 50 years BPM systems will be used to automate IT.

Competition is one end-to-end value chain vs your end-to-end value chain.

Peter conceptualizes a Work Processor. It’s the competitive weapon of choice. BPMS inside. What does it do? It squeezes out time. This squeezes out the right kind of costs.

  • The Work Processor doesn’t create things on its own (nor does Word write the novel.)
  • The Strategy-Execution Machine, the Sex Machine. The competitive weapon of choice for time-based competition and executing on innovation.

NDA…

The specs. Doesn’t automate people out of their jobs, but instead amplifies their work by providing human connections, a shared information base, a communal knowledge base, shared design tools, shared problem-solving tools, and a command and control capability over existing IT systems…all without onhe line of code.

Underpinning include cognitive science, HCI, AI, pi calculus, M, collaborative filtering, semantic search, etc.

Peter told me he is putting the finishing touches on his new book, which takes the Work Processor metaphor forward.

Expo break

BPM Thought Leader Panel: Creating the Process Oriented Enterprise

  • Greg Carter, Metastorm, CTO. “We do everything that Staffware does, but better.”
  • John Pipe, TIBCO Software, former CEO Staffware (acquired by TIBCO).
  • Mark Christensen, Exigen Group, marketinhg manager. Focus on big installs, e.g. turning on a phone network, transferring bank processes, creating “process utilities”
  • Rachel Helm, IBM. Direct, product market management for WebSphere Workflow Platform. A key priority for most of our Fortune 1000 customers.

Q: John’s familiar with the automation of human processes. That market never took off. What’s different now? What’s the trigger to growth?

A: BAM, Web Services, etc., are all helping from a technical perspective. Accountability and governance issues raise issues of corporate control. A triggering event is the thought of the CEO going to jail.

Q. Greg, senior execs ready to take on process responsibility?

A: Yes, there’s a general understanding that processes are vital. Senior managers feel like they can’t understand ownership and execution. They must own the automation of the process.

Q. Mark, why do you think outsourcing is the right approach?

A: It becomes easier and easier to construct a contract if there’s outsourcing involved. Both parties need to manage their risk. Challenge – example – call center answers in funny accent you can’t understand. A measure might be how long it takes to get a question answered. Either party can game the system.

John: Can an outsource guy go to jail? Who owns the process? Who decides? Rachel: customers are just starting to implement Sarbanes-Oxley. There are interesting court cases on the way. How about process insurance? Seems to me companies and their outsourcers need a pre-nup.

Q. IBM’s modeling tool for BPM is a way to draw boundaries. What’s your experience? Do customers take ownership of the models?

A: The most successful contracts go that way. BPM can enhance teaming, too.

IBM is committed to standards. They are the only one with a BPEL runtime engine.

Off the shelf processes viable? IBM: I’d call them process templates. RosettaNet and UCCNet involve processes, too. Use the 80/20 rule. It’s similar to packaged ERP.

Takeaways from IBM at First Data

Train motivated analysts

Culture change required

Find success everywhere

Build confidence in the modeling process through ultra-competency

Whatever you do, don’t give the analyst job to anyone in IT. They won’t buy it because they know better.

Reading List:

  • Serious Play
  • Technology Paradise Lost by Erik Keller
  • The Michael Hammer collection

Luncheon speech by key sponsor

Enron. Worldcom. Power blackouts. Hurricanes. Every one of these is the result of broken processes. Agility is the cure-all.

AIIM finds that 44% put BPM on the top of CIO to-do lists.

IDC says Managing Business Processes is #1 call in IT.

The prime sources of BP value are:

  1. business agility. (Be quick to change. Speed.)
  2. efficiency (the usual suspects)
  3. control (usually financial, lowering risk)

BPM is not IT. BPM works by consolidating the white space on the chart, not IT.

Gartner looked at 50 BPM projects. 2/3 took less than 6 months to implement. 2/3 were primarily human focused. 2% had no human component. 60% hd no system activity. (Which makes me wonder if this is really BPM.)


I asked METAGroup’s Janelle Hill if BPM designers were thinking about the workers’ quality of life that would result from implementing BPM Suites.

She told me that process designers were aware that BPM would fail without people. They focus on human systems. I replied that eLearning experts all parroted the mantra that what counts is the people, not the technology. Then they sell and install the technology, and the workers are left to sift through excruciatingly poorly-designed programs.

Do BPM folks factor the satisfaction of the worker into the equation? Alas, Janelle told me, no. It’s the old one-quarter-at-a-time thinking. I said we would address the issue at the upcoming Workflow Symposium.

No show.


Posted by Jay Cross at June 22, 2004 07:37 PM | TrackBack
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