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Chief Process Officer - The Value Scout

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Abstract and Figures

We live in a continuously changing business environment which is closer and closer connected in the digital world. Successful organizations need to be proactive and adjust quickly. Therefore more and more organizations establish a Business Process Management-Discipline (BPM-Discipline™) in order to move their strategy into execution at pace with certainty. As any other management discipline, the BPM-Discipline is established through the appropriate business process, the process of process management. This new process is led through an emerging top management role, the Chief Process Officer (CPO). The CPO manages the process of process management in a way that it creates value by executing the business strategy across organizational boundaries, like departments or divisions. The CPO is the “value scout” of the organization.
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BPM-D Paper - Philadelphia, London, 06/15/14, V3.0
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Chief Process Officer The Value Scout
By Mathias Kirchmer and Peter Franz
Abstract
We live in a continuously changing business environment, which moves ever-closer to a
more-connected digital world. Successful organizations need to be proactive and adjust
quickly. Therefore an increasing number of organizations establish a Business Process
Management Discipline (BPM-Discipline™) in order to move their strategy into
execution at pace with certainty. As any other management discipline, the BPM-
Discipline is established through the appropriate business process, the process of
process management. This new process is led through an emerging top management
role, the Chief Process Officer (CPO). The CPO manages the process of process
management in a way that it creates value by executing the business strategy across
organizational boundaries, like departments or divisions. The CPO is the “value scout”
of the organization.
Keywords
ARIS, BPM, Business Process Management, BPM-D™, BPM-Discipline™, Chief
Process Officer, CPO, Execution, Governance, Process Organization, Strategy, Value
Content
1. The Discipline of Business Process Management
2. The Chief Process Officer – An emerging Top Leadership Role
3. Key Tasks of the Chief Process Officer
4. Positioning of the Chief Process Officer in the Organization
References
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1. The Business Process Management-Discipline
A rapidly growing number of organizations establish a Business Process Management
Discipline (BPM-Discipline™) to move their strategy into execution, fast and at low risk.
The concept of Business Process Management is not new but has a renewed relevance
as the most effective way of helping organizations remain competitive in an increasingly
dynamic business environment and the related digitalization. In a world of change it is
imperative to have a good understanding of what processes should not, or only rarely,
change and which need to enable the responsiveness required by the market.
In order to develop the management discipline of BPM it should be approached just as
with any other management discipline. In the same way you develop, for example, a
human resources (HR) management discipline by implementing HR processes and
systems, you develop the BPM-Discipline by implementing the “process of process
management” (PoPMa) with the relevant BPM information and systems. This includes
all sub-processes necessary to manage the lifecycle of a business process from design,
through implementation, execution and ongoing controlling of a processes (Franz,
Kirchmer, 2012-1). The overall BPM-Discipline™ is visualized in the BPM-DTM
Framework in figure 1 (Kirchmer, Franz, 2014).
Figure 1: The BPM-DTM Framework
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The PoPMa can be segmented into different groups of sub-processes to simplify its
company specific implementation (Scheer, 1994) (Kirchmer, Franz, 2014). PoPMa sub-
processes consist of
- Project-focused sub-processes, focusing on improvement initiatives; and
- Asset-focused sub-processes, focusing on creating and managing assets to
enable efficient and effective project-related processes.
Each segment of PoPMA sub-processes can again be divided into
- Planning sub-processes; and
- Execution sub-processes.
Hence, you end up with a 2 by 2 matrix including all PoPMa sub-processes establishing
a BPM-Discipline™.
Project-focused planning processes are all about developing a process management
strategy: targeting the strategic value drivers; understanding which processes have the
most impact on delivering these; identifying those actions that will systematically enable
the execution of the business strategy; and developing the right BPM capabilities to
realize the business benefits. Project-focused execution sub-processes are those that
ensure the proper conduct of improvement projects and BPM operations, ensuring e.g.
the value-realization of business process improvement projects.
Asset-focused planning sub-processes provide the enterprise architecture to store all
information models, necessary to improve business processes, as well as the critical
business process governance sub-processes. Asset-focused execution processes
provide pre-defined improvement methods that can be used in improvement projects,
e.g. an approach for process transformation or for incremental improvement, people
enablement processes, e.g. supporting change management, as well as tool and
technology related processes, providing the necessary information technology (IT), such
as repository tools or process automation engines.
Figure 2 shows the BPM-D™ Process Framework, a reference model for the PoPMa
that can be used as starting point to develop a company specific version of the PoPMa
(Kirchmer, Franz, 2014). It illustrates important sub-processes that an organization may
address in order to establish a BPM-Discipline™. Not every organization will need each
of those sub-processes and there may be additional processes required for a specific
company. In each situation, the BPM-D™ Framework helps in shaping this discussion
and coming to an enterprise specific solution quickly and at low risk, benefiting from the
years of experience summarized within it.
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Figure 2: The BPM-D Process Framework – The Process of Process Management
2. The Chief Process Officer – An emerging Top Leadership Role
As with any other important business process the PoPMa needs an effective leadership.
Hence, an appropriate management role is required. Given the increasing importance of
process, as the key enabler in the transfer of the business strategy into execution, a real
top management role emerges. We call this new top manager the “Chief Process
Officer” (CPO) (Franz, Kirchmer, 2012-2) (Kirchmer, 2011) (Jost, 2004). The CPO
creates value through strategy execution and we see an increasing number of
organizations appointing someone into this role. This is the “Value Scout” of the
company. In more and more cases organizations use the “CPO” to name that role, but
others name it differently, consistent with others roles. Examples are Senior Vice
President (SVP) of BPM, SVP or Process Excellence or SVP of Enterprise
Performance.
Managing the PoPMa appropriately creates a company’s capability to deal with the
volatile business environment and digitalization successfully. The CPO enables the
journey of an organization to the next generation enterprise. He/she develops an
integrated view on the organization, across organizational boundaries and helps
business people to see the power of IT and IT people to understand the business
challenges.
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The transparency created under the leadership of the CPO enables other values, like
quality and efficiency, agility and compliance, external integration of the company and
internal alignment of the employees, as well as innovation and conservation where
appropriate (Kirchmer, Franz, 2014). Result is a lasting competitive advantage, enabled
through the BPM-Discipline under the leadership of the CPO.
The CPO creates a process-centric organization and culture across the more or less
functional organization of an existing company. We often refer to this as the “value-
network” led by the “Value Scout”. She/he integrates function-driven and process-driven
decision making and management. The CPO enables an end-to-end process view
focused on value-creation for clients (Kirchmer, Hofmann, 2013) leveraging the power
of digitalization effectively. This overall management approach of the CPO, resulting in
company-wide process governance, is shown in figure 3.
Figure 3: CPO – Enabling a Process-centric Management of Functional Organizations
Where do you find such a CPO? In many cases it is an enlightened Chief Information
Officer (CIO) who recognizes that, with trends like “the Cloud” or “Software-as-a-
Service”, the key asset in the organization are the processes and that BPM is the
means to get business value out of such technology trends (Scheer 2013). Some
organizations even show that transition openly and move from the CIO role to the “Chief
Process and Information Officer” (CPIO). Also a Chief Operating Officer (COO) could
become a CPO if she/he recognizes that BPM is more than just efficiency
improvement. The role frequently develops on the back of a large business
transformation program with the “Transformation Director” stepping into this role to
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create sustainable value. Other organizations need to build up the role of a CPO from
scratch, co-existing with the CIO and COO. The best solution depends on the specific
situation in an organization.
3. Key Tasks of the Chief Process Officer
The tasks of the CPO can be directly deducted from the definition of the PoPMa that he
owns (see reference model in figure 2) and his company-wide integration role (see
figure 3). There are five groups of tasks:
- General integration tasks
- Project-related planning tasks
- Project-related execution tasks
- Asset-related planning tasks
- Asset related execution tasks.
As part of his general integration tasks the CPO defines and owns the overall PoPMa of
the organization, for example based on a reference structure as shown in figure 2. He
drives a cross-functional culture in which people think about how they fit into the overall
end-to-end process and what that means for their work. The CPO is the overall contact
for all process related topics and provides input in the strategic business planning.
Core of the project-related planning task is the management of a BPM strategy. This
includes the identification of the high impact high opportunity processes of an
organization on which BPM initiatives focus, the identification of required capabilities
and capability gaps as well as the definition of the overall process management agenda.
The process management agenda includes high-level business cases that allow the
prioritization of projects.
Project-related execution task include the launch and oversight over improvement
initiatives as well as the ongoing BPM operations. Typical operations tasks are the
organization of a value-realization approach that enforces the ongoing focus on value,
even after the project has concluded, or the procurement of administrative parts of the
PoPMa as externally delivered Managed Services.
The organization of an Enterprise Architecture (EA) approach and the appropriate
process governance are key asset-related planning tasks. The governance related-
tasks are crucial for a successful BPM-Discipline. They include the definition of
governance related roles, like process owners, and procedures as well as the
organization of governance bodies, e.g. for the process owners to take cross-process
related decisions.
Asset-related execution tasks include the development of capabilities in various
improvement methods, like a process transformation approach, so that those can be
applied in improvement projects. A key task is to organize people enablement initiatives,
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like change management (ongoing or as part of a project) or the launch of BPM
communities. Last, but not least, the direction and oversight for tool and technology
related assets, like: repository tools; process execution systems; social platforms; or
process intelligence tools, comes from the CPO. A increasingly important role he/she
plays here is the use of “Big Data” and in-memory applications to enable next
generation of business processes, for example regarding the predictive maintenance as
part of a service processes of a machinery company.
4. Positioning of the Chief Process Officer in the Organization
The positioning of the CPO in an organization depends heavily on the nature of the
specific company. It has to be defined in the context of the existing organizational
structure as well as market and growth dynamics. However, there are several aspects
to consider when positioning this role:
- The CPO provides input in the overall business strategy based on his/her cross-
functional view and drives the execution of this strategy. She/he requires
appropriate access to the board and the position needs to provide the necessary
standing in the organization.
- The CPO works closely with the other process owners, who are in general very
senior executives. She/he needs to have the standing and positioning to be
successful in this context.
- The CPO leads the BPM core team, often a Center of Excellence. Her/his
positioning needs to give his reports the appropriate standing and development
perspectives.
These points motivate most organizations to have the CPO role report directly to the
board or at least to another C-level position. This has been confirmed in an empirical
research study (Kirchmer, Lehmann, Rosemann, zur Muehlen, Laengle, 2013) with
companies from around the world of different industries and sizes. It is consistent with
our observations working with large and mid-sized organizations.
The typical positioning of the CPO is shown in figure 4. It also describes his integration
in various governance bodies, like a BPM Management Board, a BPM Strategy Board
or a Process Oversight Authority, e.g. to drive the transformation of a key business
process.
The CPO is an emerging role targeting the creation of value by focusing on transferring
the business strategy into execution, fast and with minimal risk. We expect this role to
become more and more important in organizations, similar to the rise of the CIO about
25 years ago.
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Figure 4: Typical Positioning of the Chief Process Officer
References
Franz, Kirchmer, 2012-1. Value-driven business Process Management The Value-Switch for
Lasting Competitive Advantage, McGraw-Hill, New York, e.a.
Franz, Kirchmer, 2012-2. The Chief Process Officer A role to drive value, Accenture Whitepaper,
London, Philadelphia.
Jost, 2004. Vom CIO zum CPO. Harvard Business Manager, p. 88.89.
Kirchmer, Franz, 2014. The BPM-Discipline Enabling the Next Generation Enterprise. BPM-D
Executive Training Documentation, London, Philadelphia.
Kirchmer, 2013. How to create successful IT Projects with Value-driven BPM, In: CIO Magazine
Online, February 27th 2013.
Kirchmer, Hofmann, 2013. Value-driven Process Governance Wettbewerbsvorteile durch die
richtige Processorganisation. In: IM+io Fachzeitschrift fuer Innovation, Organisation und
Management, Germany, 03/2013.
Kirchmer, Lehmann, Rosemann, zur Muehlen, Laengle, 2013. Research Study BPM Governance in
Practice. Accenture Whitepapers, Philadelphia 2013
Kirchmer, 2011. High Performance through Process Excellence From Strategy to Execution with
Business Process Management. Springer, 2nd edition, Berlin, e.a.
Morris, 2014. Architect, Design, Deploy, Improve (ADDI) A BPMS Development Methodology.
Wendan Whitepaper, Chicago 2014.
Scheer, 2013. Tipps fuer den CIO: Vom Tekki zum Treiber neuer Business Modelle. In: IM+IO Das
Magazin fuer Innovation, Organisation und Management, Sonderausgabe, Dezember 2013.
Scheer, 1995. Business Process Engineering Reference Models of Industrial Enterprises, Springer,
2nd edition, Berlin, e.a.
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Dr. Mathias Kirchmer
As innovative CEO and Managing Director at BPM-D, Accenture, and IDS Scheer, Dr.
Kirchmer has worked successfully in an international environment across various
industries. He has combined his broad practical business experience with his extensive
academic research. This systematic integration has led to pioneering management
approaches that have proven to be both sustainable and provide immediate benefits.
Dr. Kirchmer is visionary leader, thought leader and innovator in the field of Business
Process Management (BPM). He is an affiliated faculty member at the University of
Pennsylvania, published six books as well as numerous articles and shares his insights
regularly in presentations around the world.
Peter Franz
Peter Franz has been working at the forefront of Business Process Management (BPM)
for many years as part of a 30-year career with Accenture. He has a deep
understanding of the application of Business Process Management discipline to drive
real business results.
His career includes education and experience in the use of Information Technology and
thus understands the Business / IT interaction from both sides and can help bridge this
divide. He is passionate about BPM and its application to real business challenges.
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www.bpm-d.com
... The discipline of BPM 4.0 is realized through the process of process management (PoPM) [8]. This PoPM is owned by a Chief Process Officer (CPO) [9] (or a top executive with a similar title) who organizes the BPM-Discipline, just as another process owner organizes, e.g. the order-to-delivery process. ...
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... Especially the "focus" and "sustain" effects of the PoPM are often underestimated and underdeveloped in traditional companies so that the BPM-Discipline helps here to move existing practices to the next level of performance. It becomes the key means that helps the "Chief Process Officer" (Kirchmer, Franz, 2014a) guide his/her journey of ongoing strategy execution and digitalization. ...
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We live in a fast changing business environment. The ability to move new ideas into execution fast and reliably will continue to be the prerequisite to business differentiation and success for the next decade. The course provides an executive overview of the management discipline of Business Process Management (BPM-D™) as a key enabler of the Next Generation Enterprise. It describes the value proposition and its positioning in the organization. Then provides an executive insights into some of the essential components of a value-oriented BPM capability.
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From the Publisher: Written by the leading expertise in the area of business process modeling, this book describes modem methods for developing enterprise-wide information systems using the proven "Architecture of Integrated Information Systems (ARIS)" framework for the development of business process models for industrial companies. Examples from the standard software systems (SAP R/3) demonstrate the book's down-to-earth practicality. 554 illus.