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Targeting Value in the Digital World

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Abstract and Figures

Extensive research has proven that an organization competes through less than 20% of its business processes which have a high impact on strategic value drivers. Over 80% of the processes are commodity processes. It is sufficient to achieve industry average performance in this area. A value-driven process design and implementation considers this by focusing innovation and optimization initiatives as well as company specific digitalization on the 20% high impact processes, while commodity processes are designed based on industry reference models and implemented as far as possible through available standard solutions. Design and implementation of processes focus systematically on creating business value. The paper describes an approach to such a value-driven segmentation, design and implementation of businesses processes, transferring strategy into execution, at pace with certainty in the digital world. The approach is explained using case examples.
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BPM-D Paper - Philadelphia, London, October 2014
Targeting Value in the Digital World:
Value-driven Design and Implementation of Business Processes
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By Mathias Kirchmer and Peter Franz
Abstract
Extensive research has proven that an organization competes through less than 20% of its
business processes that have a high impact on strategic value drivers. Over 80% of the
processes are more routine (commodity) processes. It is sufficient to achieve industry
average performance in these areas. A value-driven process design and implementation
considers this by focusing innovation and optimization initiatives, as well as company
specific digitalization, on the 20% high impact processes. Commodity processes are
designed based on industry reference models and implemented, as far as possible,
through available standard solutions. Design and implementation of processes thus
focuses systematically on creating business value.
The paper describes an approach to such a value-driven segmentation, design and
implementation of businesses processes, transferring strategy into execution, at pace,
with certainty in the digital world. The approach is explained using a number of case
examples.
Keywords
ARIS, BPM, BPM-Discipline, Execution, Innovation, Optimization, Modeling, Process
Design, Process Implementation, Reference Models, Strategy, Value, Value-driven BPM
Content
1. Targeting value systematically
2. Segmenting business processes
3. Value-driven design
4. Value-driven implementation
5. BPM-Discipline to Sustain Value
6. References
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1. Targeting value systematically
In our increasingly digital world, organizations have to master the ability to continuously
adapt to an ever-changing business environment in order to strive and to survive in the
medium to long term. Dealing successfully with a volatile business environment, in
general, means continuously “leveraging people to build a customer-centric performance-
based culture” (Mitchel, Ray, van Ark, 2014). Therefore it is not only important to have a
good strategy, hence to know what to do. But in many organizations the key challenge is
about how to execute the strategy. In order to overcome this challenge, more and more
organizations establish a value-driven Business Process Management (BPM) Discipline
(BPM-Discipline) with a consequent process-orientation across the company (Kirchmer,
Franz, 2014-2) (Franz, Kirchmer, 2012).
This management discipline is about moving strategy into execution, fast with low risk. It
especially enforces a customer and performance focus since business processes deliver
(by definition) a result of value for a client outside the process. This is even more
pronounced for a digitalization approach, to make sure that emerging technologies are
used in a way they really have a positive business impact. A key component of a BPM-
Discipline is a structured value-driven design of processes realizing the business strategy
of an organization (Rummler, Ramias, Rummler, 2010) (Burlton, 2010).
This chapter presents an approach for business process design and implementation that
meets those requirements of targeting value (Kirchmer, 2014). It is both, focused on
executing the strategy of an organization while being as resource efficient as possible.
Result is a practical and effective approach to process design and implementation. Typical
results of this approach embedded in a BPM-Discipline are transparency over an
organization’s processes which enables achieve quality and efficiency, agility and
compliance, external integration and internal alignment, as well as innovation and
conservation. Figure 1 shows the “BPM-D Value-Framework” with categories of values
delivered through a BPM-Discipline (Kirchmer, Franz, 2014-2).
Figure 1: The BPM-DTM Value-Framework
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Research has shown that organizations only compete with approximately 5% of their
processes with a further 15% being important core processes, supporting the competitive
advantage (LEADing, 2014) (Franz, Kirchmer, 2012). This means that 80% of the
business processes are commodity processes that can be carried out using industry
standards or common industry practices. An industry average performance is sufficient for
these and significant innovation in these usually detracts focus away from the
differentiating core. Sophisticated improvement approaches or even innovation and
sophisticated digitalization initiatives, targeting higher performance, don’t deliver any real
additional business value on this 80%. Hence, process innovation and optimization
initiatives have to focus mainly on the 20% high impact processes while other business
processes can be designed and implemented using existing industry common practices.
Results are highly organization specific business processes where this really delivers
competitive advantages and processes following industry common practices where this is
sufficient.
Targeting value systematically requires the appropriate segmentation of processes, as
basis for a differentiated design and implementation approach. Process models,
developed during the process design, need to reflect the requirements of those different
process segments with an understanding of the importance, of the resulting business
processes, in enabling the strategy of the organization. Different levels of sophistication of
the improvement approaches are required. The subsequent process implementation,
including the appropriate software support, is executed according to the process design
based on the characteristics of the identified process segmentation. Value-driven design
often prescribes different approaches to procure the required, enabling software. Highly
organization-specific processes often require an individual development of software.
Processes designed based on industry standards lead, in most cases, to the use of
standard software packages, adapted as little as possible.
A value-driven approach to design and implementation of processes enables
organizations to use resources where they provide best value during improvement
initiatives. As an example the people, who are highly qualified in applying sophisticated
process improvement methods, focus their time on high value areas. They can
systematically target value as well as reduce the risk of project failure (Kirchmer 2013).
They focus on moving the organization to the next level of performance, including the right
degree of digitalization. This requires in many cases an “enlightened” Chief Information
Officer (CIO) (Scheer 2013) who moves away from being a technical expert to becoming a
driver of innovation and performance. The business value-focus allows such a CIO to
transition into a “Chief Process Officer” (CPO) (Franz, Kirchmer, 2012)(Kirchmer, Franz,
2014-1).
The approach has been developed based on practical experience in large and mid-size
organizations, mainly in the USA, South America, Japan, India and Europe. It has been
combined with academic research regarding value-driven design and implementation
methodologies, especially the LEADing Practice guidelines (LEADing, 2014).
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2. Segmenting business processes
A business strategy needs to be operationalized in order to use it to drive process design
and implementation. (Some would call this creating a “Strategic Execution Plan”) This
starts by deriving strategic value-drivers from the organization’s strategy. Value-drivers are
simple statements that describe necessary achievements required to make the strategy
happen. The degree of realization of a value-driven process design is measured through
key performance indicators (KPIs). A business process assessment based on the impact
of a business process on strategic value-drivers is the basis for the segmentation of
processes into high impact and commodity processes (Franz, Kirchmer, 2012). This
process assessment is the key tool to align business strategy with process design and
implementation. It enables the desired value-driven approach and is a core part of a BPM-
Discipline, where we focus on transferring strategy into execution.
Value Drivers
The value-drivers are derived from the business
strategy of the organization using value-driver-tree
models (value-driver trees). This is a way of transferring
the strategic intent of an organization into operational,
value-driven business targets. An excerpt of an
example value-driver tree is shown in figure 2. The
value-drivers can be further weighted, to focus the
segmentation (and subsequent analysis) on the most
important business objectives.
In practice a three-step approach to developing a value-
driver tree has proven to be most successful as
depicted in figure 2. The strategy describes the
business priorities outlining the overall direction the
company is taking. These priorities are decomposed
into strategic objectives (the second column in figure 2),
describing the key components of a business priority.
Then one or several value-drivers (the final column) are
identified for each objective, hence the operational
achievements that make this objective happen.
Shipping'Services'Execution'
A" company," of" great" vision,"
needed" to" reinvent" its" service"
proposition" to" remain" relevant"
in" an" increasingly" digital,"
information"intensive"world.""
Turning" this" vision" into" reality"
started" with" a" design" of" the"
business" process," focusing" on"
those" processes" at" the"
waterfront," enabled" by" a" more"
sophisticated" back&office," which"
would" deliver" the" value" to" the"
customer"and"to"the"business."
The" program" plan" was" then"
shaped"around"these"priorities"–"
refocusing" efforts" from" other,"
less"critical"areas."""
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Figure 2: Value-driver Tree (Excerpt)
Process Impact
The business processes of an organization are then evaluated based on their total
assessed impact on the specific value-drivers. The result gives two segments of business
processes: high impact and commodity processes. “High impact” processes are the ones
that are key to make the business strategy of the organization happen: the “competitive”
processes and “supporting core” processes. They are the most important link of business
strategy to execution. This approach is visualized in figure 3 (with the high impact
processes shown in red).
Figure 3: High Impact and Commodity Processes
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The value-drivers can be weighted according to their importance. Minor changes and
adjustments in strategy can then be reflected through adjustments of the weights.
Changing, removing or adding value-drivers accommodates larger strategy changes. This
update of value-drivers and their weights enables an agile adjustment of process-priorities
to respond to revised strategies, reflecting the ever-changing business environment.
Impact Assessment
For each process it is necessary to assess if it has no (0), low (1), medium (2) or high (3)
impact on each of the value-drivers. Then the overall impact is calculated in a process
assessment matrix by multiplying impact with the weight of the appropriate value-driver
and calculating the total of all impacts of a process. An example of a process impact
assessment (PIA) is shown in figure 4.
Figure 4: Process Impact Assessment (Excerpt)
The high impact processes have then to be evaluated based on general industry
practices, e.g. through benchmarks or purely qualitative evaluations. In that way you
identify the high impact “high opportunity” business processes. These are the processes
where improvements have the biggest value potential since the process has a high impact
on the strategy but it currently performs only in or even under the industry average.
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Practice experience, with different companies,
has shown that the processes should be
analysed on a level of detail so that 150-200
process definitions describe the entire
organization. This is often referred to as “level
3” (L3). This level is detailed enough to obtain
differentiated results but high level enough to
avoid excessive work efforts and getting “lost
in the weeds”. Using the results of the
process impact assessment the 20% of the
processes that are classified as high impact
can be identified. The others are considered
the commodity processes.
In practice there is often a “grey” area of
processes that could be in either group.
Hence there may be slightly more or less than 20% of the processes in the high impact
segment. This issue has to be resolved, on a case-by-case basis, reflecting the specific
situation of an organization, its business strategy and the overall business environment it
works in. The absolute level is not important, as the level of improvement is, based on
experience, normally driven by the level of process expertise available and the appetite it
has for investment.
3. Value-driven design
The high impact, high opportunity processes are subject to detailed process innovation
and optimization activities, focusing on the previously identified value-drivers (Kirchmer,
2011). The degree of achievement is measured through KPIs that relate to the identified
value-drivers. The check of the quality of a process design through KPIs can be used in
agile as well as in top-down waterfall design approaches. Depending on the specific
process and the culture of the organization, either approaches or a combination of both
can be relevant (Morris, 2014). The design approach uses formal modeling methods like
Event-driven Process Chains (EPC) or the Business Process Modeling Notation (BPMN)
to facilitate the integration of process design and implementation.
Product and market-oriented design approaches (Kirchmer, 1999b) have been proven
effective since they link processes with their value-drivers to the offerings a client is
looking for. The product and market-oriented design supports an integrated product
(offering) and process innovation. Such an approach is especially important for the
processes that are highly relevant for the strategic positioning of an organization, hence
the top 5%. In order to identify these business processes another segmentation of the high
impact processes is required distinguishing between strategic and non-strategic high
impact processes. The focus is on high impact strategic processes (Franz, Kirchmer,
2012).
PIA'at'Energy'Company'
Implementing" a" Process" Impact" Assessment"
for" the" first" time" was" an" eye&opener" for" a"
division" of" an" energy" company." " The" first"
challenge"was"to"simplify"their"list"of"(level"3)"
processes" from" the" morass" of" corporate"
reference"models."
Then"a"simple"survey" technique"was"used"to"
assess" the" impact" of" all" processes" on" the"
major" value" drivers." The" result," in" the"
Process" Managers" words," was:" “change" the"
process"team" language"to"be"relevant"to"the"
business.”""
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New technologies, especially information technologies (IT),
relevant for a specific process, have to be evaluated in the
same business-driven way. You can, e.g. model different
processes scenarios representing various degrees of
automation. The best scenario is chosen based on the
expected value of the relevant KPIs as compared to the
level of investment (and complexity) to introduce it.
For all high impact processes techniques like process
model based simulations and animations are helpful to
identify the most appropriate design solutions based on
KPIs. Often even the transparency created through these
information models is sufficient by itself to discover
relevant improvement or even innovation opportunities.
Traditional improvement methods like Lean or Six Sigma
(George, 2010) can be applied in selected cases.
However, these are generally not approaches that support
a focused innovation or a full blown optimization of processes, including automation
opportunities. Hence, they are more targeted to bringing less strategic, people intense
processes to better efficiency, in most cases resulting in cost or time reductions.
The starting points for the design of the 80% commodity processes are industry or
functional reference models. These models are available through industry organizations or
consulting and software companies (Kirchmer, 2011). In many cases they are already
developed using standard modeling methods. The industry common practices reflected in
those models are only adjusted to the specific organization when this is absolutely
necessary, e.g. due to legal requirements in country subsidiaries or specific logistics
requirements through the product.
The process design work focuses on making the industry standard happen”. If process
areas are identified where the industry standard cannot be applied, e.g. due to product
specifics, only those areas will be designed in a company specific way, keeping the
adjustments as close to the industry standard as possible. Process solutions can here
often be found through a simple application of the mentioned traditional improvement
methods like Lean and Six Sigma since a pure efficiency focus is in most cases justified
here. However, it is important to keep in mind that it is in general not worth improving
above industry average performance.
A structured modeling and design approach is essential to produce information models of
the business processes that enable a seamless link to implementation. A well proven and
academically sound framework is “ARIS”, the Architecture of Integrated Information
Systems (Scheer 1998). This framework facilitates the design of processes from different
view points: organization, functions, data, deliverables and control flow. Result are
process models and other information models (e.g. entity-relationship-models) that contain
Compressor'Product'
Innovation'
A" compressor" company"
decided" to" sell"“compressed"
air"as"a" service”"instead"of"just"
selling"compressors."To"do"this"
they" change" the" strategic"
nature" of" their" processes." In"
addition" to" sales," other"
processes" like" delivery" and"
maintenance" processes"
needed" to" be" refocused"
simultaneously" and" were"
reflected" in" the" integrated,"
value&driven"design."""
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all information necessary for a holistic process design and the following process
implementation. The ARIS architecture is shown in figure 5.
Figure 5: ARIS Architecture by August-Wilhelm Scheer
This value-driven process design approach is visualized in figure 6. It shows that
reference models can also be used as an input for the design of high impact processes.
But this is only one component of getting all information together to come up with real
innovative and optimized solutions regarding the KPIs and the value-drivers they relate to.
Figure 6: Value-driven Process Design approach
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In both cases process models are developed down to a level of detail that still provides
relevant business information. The decomposition of the function “Enter Customer Order”
into “Enter First Name”, “Enter Last Name”, etc. would from a business point of view not
add any additional relevant content (but may be necessary later for the development of
software). Less detail would also be required when reference models are used, only
adding more detail where the design deviates from the initial industry model.
Both, high impact and commodity processes are part of overlying end-to-end business
processes. Process-interfaces in the underlying detailed processes reflect this overall
context and make sure that the various process components or sub-processes fit together.
Hence, during the process improvement work cause-and-effect considerations have to
take place in order to avoid fixing issues in one area while creating new ones in other
processes.
4. Value-driven implementation
The organization specific process models for high impact business processes are
generally implemented through people and highly flexible next generation process
automation engines. Processes are “what we do” in the business and are executed, in
part, by people. This required the right level of change management. In most cases, the
implementation also requires the development of specific application software
components. The process models, reflecting the optimized KPIs in support of the relevant
value-drivers, are the starting point for the more detailed modeling of the underlying
software. They enable a consistent, value-driven process implementation and automation.
At this point the modeling method can change, for example to the Unified Modeling
Language (UML), reflecting the desired software structure to support the high impact
processes. The workflow engine, of next generation process automation, can also be
configured based on those models. This, depending on the underlying modeling repository
and execution technology, could even be done automatically or semi-automatically. The
integration between process modeling and execution tools can be extremely beneficial in
this situation, especially since it enables the flexible value-driven adjustment of processes.
The overall architecture of such next generation process automation environments is often
referred to as Service Oriented Architecture (SOA). In such an architecture the “execution
software” and the “process logic” (workflow) are separated (Kirchmer, 2011) (Slama,
Nelius, 2011). Hence, the developed process models can, on one hand, be used to
configure the workflow and, on the other hand, be used to develop the software services
that are not available in existing libraries. Existing software services may include detailed
process reference models that can be re-used in the process design. This architecture of
next generation process automation environment is visualized in figure 7.
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Figure 7: Next Generation Process Automation
One of the key advantages of this architecture is the high degree of flexibility in adjusting
process flows and functionality. This can be crucial for a company looking for agility and
adaptability. The main disadvantages are: the effort required in providing the appropriate
governance for running such an environment; and the information modeling efforts
required in the building phase.
The process models of the commodity processes are used to select or at least evaluate
pre-selected “traditional” software packages like Enterprise Resource Planning (ERP)
systems, Supply Chain Management (SCM) or Customer Relationship Management
(CRM) systems. These can become part of the overall next generation architecture,
representing one software component. Then those models developed during the process
design are used to drive a process-oriented implementation of the software packages
across the various organizational units involved in the business processes in scope
(Kirchmer, 1999). Ideally the industry specific software-reference models are already used
as an input during the process design. This means, one procures the reference models to
be used from the software vendor. If this is possible you benefit from the “business
content” of the software and minimize design and modeling efforts. Using other industry
reference models (different from the software based model) may lead to design
adjustments and extensive re-work once the software is selected.
Figure 8 shows the architecture of a more traditional software environment. Here process
definition and software functionality are linked in a static way. This means the software
more or less dictates how a process has to be executed (allowing only pre-defined
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variants through the software configuration). This is fine for commodity processes but
often causes issues in strategic high impact processes that need to be company specific.
Consequently we have used another implementation approach for those strategic
processes. However, in some cases it is also possible to develop add-on software to
support high impact processes and integrate it into the larger software package, e.g. the
ERP system.
Figure 8: Traditional Software Architecture
Advantages and disadvantages are the opposite of the earlier description for next
generation process automation approaches. Hence, in practice, a combination of both
implementation technologies and approaches is, in most cases, the solution that delivers
best value.
The process-interfaces in the different process models guide the software integration. This
can be supported from a technology point of view through appropriate enterprise
application integration environments – in general included in SOA environments. Such
software tools or middle-ware tools reduce the efforts for interface development to a
necessary minimum. Their efficient use is again driven through the appropriate process
models, specifically the integration of the various process components.
The implementation of processes includes as a main component the preparation of the
involved people for the new work environment. They have to learn new manual processes
and how to use the automation technologies in the specific process context. The
necessary change management is carried out using the same process design as a basis
that was used to drive the development and configuration of the IT components.
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Information, communication, and training are supported through the information models of
the process design (Kirchmer, 2011) (Franz, Kirchmer, 2012). The integrated
implementation of people and IT based processes leads to a “digital organization” that
really delivers additional business value.
The implementation of the business processes can again be based on an agile approach,
developing several “intermediate” prototypes or a top-down waterfall approach. In most
cases a combination of both is best suited since this avoids a possibly “end-less” number
of development cycles created by agile development or developments getting stuck on
their way top-down of waterfall development models (Morris, 2014).
The result is end-to-end business processes based on a value-driven process design and
an appropriate integrated automation. The approaches provide the necessary flexibility
where it delivers real business value and the required efficiency where possible.
5. BPM-Discipline to Sustain Value
Once business processes have been designed and implemented targeting business value,
these results need to be sustained. You have to “control” and re-evaluate your business
processes, especially the high impact processes, to see if the KPIs remain in an
acceptable range and adjust the design or implementation if necessary. Also changes in
business strategy need to be reflected. Therefore the value-driven design and
implementation approach needs to be part of the larger BPM-Discipline, the management
discipline focused on moving strategy to execution, fast and at low risk. This BPM-
Discipline is established through an appropriate “process of process management”, that
manages the lifecycle of each business process to keep it on track (Kirchmer, Franz,
2014-2) (Franz, Kirchmer, 2012). This BPM-Discipline is visualized in figure 9.
Figure 9: The BPM-Discipline – Management Discipline to move Strategy into Execution
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Providing appropriate process governance is especially important to make a BPM-
Discipline reality and keep processes focused on creating value. This means that the
process ownership, accountability and responsibility, as well as a mechanism to take
decisions and execute resulting actions across organizational boundaries are defined
(Kirchmer, Hofmann, 2013). In many successful organizations the “process of process
management” is owned and focused on value by a chief processes officer (CPO) and
operationally managed by a BPM Center of Excellence (CoE) with various operational
roles (Franz, Kirchmer, 2012) (Kirchmer, Franz, 2014-1). Business processes require roles
like process owners and supporting operative roles to be kept on target over time. These
roles can be decentralized in business units or centralized, project based or permanent,
in-house or out-sourced.
The groups of extended and core roles of a BPM-Discipline are shown in the BPM-D
Organization Framework in figure 10. Targeting value in the design and implementation of
processes only leads to real business success if that value is sustained through a BPM-
Discipline and kept alive through people in the required governance roles.
The approach of value-driven business process design and implementation allows an
organization to move its strategy systematically into execution. It aligns the modeling and
implementation efforts with the strategic direction of the organization.
First experiences with real live companies showed that this approach helps on one hand
to dramatically reduce process design and implementation times due to the efficient
handling of commodity processes. Companies estimated more than 50% savings in time
and effort. On the other hand it enables real strategic advantage though the innovation
and optimization of high impact process areas based on the KPIs and the related strategic
value-drivers.
Figure 10: BPM-D Organization Framework – Providing Process Governance
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While the basic approach has proven to be successful in practice there are still gaps to
close. In the design phase the systematic achievement of appropriate process innovation
is still a topic that needs further research. Considering the importance of process
innovation, this is a real key research topic. In the field of process implementation the
integration of the process modeling and execution environments must still be improved.
While there is quite a bit of progress on the software-side (Scheer, 2013) (Stary, 2012),
there is work to do on integrating software and organizational governance solution. The
biggest remaining challenge is to build the overarching BPM-Discipline to keep the value-
driven processes on track while providing the appropriate degree of freedom necessary in
an agile organization.
6. References
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George, 2010. The Lean Six Sigma Guide to Doing More with Less – Cut Costs,
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Kirchmer, Franz, 2014-2. The BPM-Discipline – Enabling the Next Generation
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LEADing, 2014. The Leading Practice Value Reference Content #Lead-
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Mitchel, Ray., van Ark, 2014.: The Conference Board – CEO Challenge 2014: People
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Rummler, Ramias, Rummler, 2010: White Space Revisited – Creating Value through
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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, 1998. ARIS – Business Process Frameworks, Springer, 2nd edition, Berlin, e.g.
Slama, Nelius, 2011. Enterprise BPM – Erfolgsrezepte fuer unternehmensweites
Prozessmanagement. dpunkt.verlag, Heidelberg.
Stary, 2012. S-BPM One – Scientific Research. 4th International Conference, S-BPM
ONE 2012, Vienna, Austria, April 2012, Proceedings.
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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
... High impact processes that have a lower maturity level, compared to other organizations, are the best improvement targets. Digitalization initiatives that move those processes to the next performance level deliver most value for an organization [5]. Hence, it is key to identify the high impact low maturity processes and prioritize transformation initiatives in those areas. ...
Article
Full-text available
Most organizations have started, or have at least planned, their digital transformation journey [0] [1]. These organizations expect to increase their performance drastically by leveraging digital technologies. However, many of those businesses struggle to meet the high expectations through their digitalization initiatives, and don’t deliver the expected value. A successful digital transformation is value-driven, process-led, and data-based. It targets business value and works towards a well-defined business case. This value of the transformation is delivered through new or enhanced business processes [2]. Digitalization only delivers its business benefits if you improve what you do or if it helps to do something new that provides additional value – without creating issues in other areas. Hence, processes guide the transformation initiatives towards value-realization. A process delivers, by definition, a result of value – which needs to be moved to the next level. To optimize the time-to-value, fast and well-informed decisions are required. This is achieved through a data-based approach, delivering the required information about current and future process performance at pace in the required quality.
... To have a clear idea about those goals and how they relate to your business processes and the potential value of RPA is a simple but important precondition for the successful use of RPA. You can segment your processes to identify where you get best value by improving their maturity level through RPA [6]. Once you have identified a process you want to improve using RPA, it is key to create the necessary transparency. ...
Article
Full-text available
Robotic Process Automation (RPA) has become an important trend in process management and automation. The article examines briefly the value it delivers and associated risks. On this basis it recommends a company specific approach to maximize RPA value and minimize risk.
Chapter
There is a growing agreement in academia as well as in practice that business process management (BPM) has become the management discipline for the systematic execution of business strategy. As any other management discipline, it is implemented through a business process itself, the process of process management. Many components of this process of process management are supported through digital technologies. However, there are critical gaps in the digitalization of the BPM process and existing digital components are often not sufficiently integrated. As a result, organizations do not realize the full potential of a BPM-Discipline. This issue is addressed through the BPM-D Application. A key digitalization gap is the transfer of the strategy of an organization into the appropriate portfolio of process improvement initiatives. For top executives this means that they have to be able to take fast well-informed decisions based on strategic priorities. The operational managers need to drive aligned execution activities. This paper discusses an approach towards a process-driven and value-focused portfolio management to create project portfolios that reflect the priorities of the business strategy, combined with a systematic approach to value realization, during a project and especially after project conclusion. As a result, top executive and operational management views are aligned towards the desired outcome. This paper shows how the presented approach is enabled through the BPM-D Application which represents another step towards digital BPM.
Chapter
Business Process Management (BPM) has become a management discipline that translates strategy into people and technology based execution – fast and at minimal risk. It helps organizations to realize the full potential of their digitalization enterprise transformation initiatives. BPM is implemented through the “process of process management” (PoPM). To assure continuous improvements of the PoPM an appropriate digitalization approach for the PoPM itself is essential. However, little work has been done in this field and companies are failing to recognise the importance of an integrated digitalization of the PoPM. This paper presents a successful approach for the digitalization of the PoPM to enable a powerful BPM-Discipline. It includes experiences from a first pilot implementation of the developed prototype, the BPM-D Application.
Chapter
Many organizations still struggle with the management of their internal business processes to overcome functional barriers. However, an increasing number of companies are targeting the integration between organizations or so-called inter-enterprise processes. Successful companies operate in a network with other organizations to leverage their strengths and compensate for their weaknesses. Mutual interdependencies are created and managed to drive additional value and to ensure high performance for the “inter-enterprise organization” as a whole. Companies become “platforms” that integrate customers with various suppliers, as enterprises like Amazon, eBay, or Uber show. Uber, for example, does not own many physical assets like a traditional taxi or limousine company. But they have processes in place linking clients to the owners of cars who are the suppliers of Uber.
Chapter
Several readers of the past editions of this book have asked for an integrated case study. That is why I have added this chapter describing the case of a consumer goods company that needs to address, on one hand, urgent business issues using process-led approaches and wants, on the other hand, to establish BPM as a management discipline that supports the ongoing systematic execution of the business strategy.
Chapter
Today, many enterprises still use concepts of business process management (BPM) for one-time transformation and improvement projects or short-term initiatives. An increasing number of organizations, however, recognize its power as a fundamental management discipline which is instrumental in achieving strategic goals for competitive advantage and long-term success. BPM becomes the discipline of strategy execution. This demands ongoing attention to deliver high performance in our digital world. The “process of process management” has to be managed as part of the day-to-day business. Organizations must orchestrate and adapt their overall management approach to realize the full potential of the BPM-Discipline. These organizational aspects about granting power, making decisions, acting on them, and controlling the results are referred to as business process governance (BPG). BPG enables the effective management of the process life cycle and with that the achievement of high performance.
Chapter
Today, businesses need to master the volatile business environment with its opportunities and threats to ensure short-term success and long-term survival. The agile transformation, improvement, and adjustment of business processes are no longer an option but mandatory for sustainable business success. Therefore, business process management (BPM) has become an important topic for most organizations—even if they sometimes call it something different.
Article
Full-text available
Im neuen Sonderheft der IM+io berichtet August-Wilhelm Scheer über die Rolle des Chief Information Officers, die sich wandelt. Das „I“ steht nicht mehr nur für IT, sondern auch für Infrastruktur, Internet und Innovation. CIOs werden vermehrt die CEO Rolle einnehmen und Innovationen im Unternehmen durchsetzen, um den Unternehmenserfolg anzutreiben und die Wettbewerbsfähigkeit zu steigern.
Conference Paper
Full-text available
An organization only competes with approximately 20% of its business processes. 80% of the processes are commodity processes that can have an industry average performance. A value-driven process design and implementation considers this by focusing innovation and optimization initiatives as well as individual software development on the 20% high impact processes, while commodity processes are designed based on industry reference models and implemented as far as possible through standard software. The paper describes an approach to such a value-driven design and implementation of businesses – transferring strategy into execution, at pace with certainty.
Technical Report
Full-text available
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.
Technical Report
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.
Chapter
The starting point of successful business reengineering projects is a market- and product-oriented definition of the business processes. The approach presented describes the market and the products of a company using a market and product model. Company-specific business processes can be derived from such a model. This method for defining business processes has been used successfully in various consulting projects. It helps to keep all design and implementation activities, e.g., a process-oriented SAP-R/3 implementation, consistent with a company’s market and product needs.
Book
Continuously changing customer and market requirements as well as new developments in information technology have become a dominating factor in today's business environment. To be successful enterprises have to adapt quickly to new opportunities and threats. They have to take smart decision and execute fast. Innovation and agility become important success factors. The Management of Process Excellence (MPE) is the main enabler. It helps achieving immediate benefits while building lasting process management capabilities. MPE links strategy with people and technology based execution. Service Oriented Architectures (SOA), Web 2.0 or "cloud computing" support this approach. The right process governance, including centers of excellence, and knowledge assets in form of reference models increase the delivered value again. The resulting next generation enterprise is ready for long term success. The book discusses how business process management delivers real value in private and public sector organizations around the world. It addresses executives and managers as well as educators and students.