The Process of Process Management

Delivering the Value of Business Process Management

For many years, companies have deployed business process management (BPM) techniques and tools to improve, refine and adapt business processes efficiently to support changing business goals. Such use of BPM traditionally has been on a project basis, not as a sustainable capability. Today, however, BPM increasingly is viewed as a source of value in its own right and as a powerful management discipline. BPM can be used to create sustainable competitive advantages that are difficult to copy. This valuedriven BPM helps organizations to transform strategy into people and IT based execution, at pace and with certainty. In this paper, we explore how companies can use BPM to generate value and competitive advantage for the business on an ongoing, consistent basis. We discuss how organizations can establish a process of process management to realize a sustainable discipline of value-driven BPM.

A Process of Process Management to Deliver Value-Systematically and move from strategy to execution with certainty at pace
While companies historically have seen BPM as a way to help drive a onetime, project-driven focus on process excellence, todays business climate requires companies to develop and nurture a sustainable process of process management that helps them establish and manage a value-driven BPM capability that provides ongoing operational transparency, agility and compliance, quality and efficiency as well as improves external networks with market partners and internal integration and alignment. These benefits, in turn, help enable companies to respond successfully to changing market conditionsfor example by understanding which processes produce which costs, or how to decrease costs and quickly implement changes that can have a bottom-line impact, or respond to new technology trends (such as using cloud computing to improve business processes). Value-driven BPM helps to move quickly from strategy to execution while minimizing the related risk. Companies can and should implement such a value-driven BPM capability using a process approach. This paves the way to an outcome oriented approach: A process delivers by definition a result of value. Indeed, this process of process management follows the same lifecycle as any other business process: It must be designed, implemented, executed and measured. The BPM process is at the center of a BPM capability blueprint, which outlines the infrastructure as well as the organizational components required (Figure 1). Core infrastructure components are: Content/Data - for example; process models Applications and infrastructure - for example; process repository tools or process execution engines Policies and standards - for example; modeling guidelines The organizational components of a process of process management are: Roles and responsibilities - for example; the definition of a process architect or a process owner Organization - for example; how a BPM center of excellence is defined and positioned in the organization Competencies or offerings; hence what a BPM organization delivers to the company, for example; management of a process repository or process improvement projects Culture - including e.g. the end-to end process thinking. The process of process management brings all those components together resulting in a functioning management capability for value-driven BPM. The process approach to BPM enables a systematic definition and rollout of a value-driven BPM capability, as well as its ongoing management, with one goal in mind: value creation. This process of process management, like any other business process, has its own constituent sub-processes, support requirements, and impacts on the overall business, all of which must be organized and proactively managed. Those sub-processes are in most cases not established all at once but step by step, as required by the organization to achieve the BPM maturity necessary to meet its current business goals.

Figure 1: BPM Capability Blueprint

A Reference Model for the Process of Process Management

There are several interrelated subprocesses that together constitute the process of process management, each of which must be mastered and integrated with each other. These sub-processes define which tasks the BPM organization performs and how these activities are integrated with BPM activities handled by business units or IT function. A BPM organization consists of one or multiple formal BPM organizational units to which people are deployed. In most cases, those units are called BPM Centers of Excellence which, in general, also includes the owner of the process of process management. The reference model of the process of process management is a valuable tool for any company beginning to define a process of process management (Figure 2 shows the highest level of our reference model for the process of process management). This reference model is a basic, cross-industry description of a general process of process management that can be adjusted easily to a specific organization and that captures all the BPM-related activities and sub-processes that enable a value-driven approach to BPM. Hence, this model can have tremendous impact on the successful establishment of a BPM organization, which we view as a critical step in building and sustaining an effective process of process management. As shown in the diagram, our process reference model for BPM includes five major process areas: BPM Operations BPM Methods & Tools BPM Delivery BPM Transformation BPM Support

BPM Operations
BPM Operations encompasses four basic BPM sub-processesBPM maturity and value analysis, process value analysis, roadmap, and governancethat are required to start the implementation of the process of process management. BPM maturity and value analysis enables companies to understand the strength and maturity of their current BPM capabilities for example, their ability to analyze, design, and measure processes, define key performance indicators, establish process owners, and other capabilities outlined in the BPM capability blueprintwhich, in turn, helps identify which new BPM capabilities must be built and which existing ones must be expanded to meet the companys goals. Another core sub-process under BPM Operations is process value analysis, which focuses on classifying the companys business processes in terms of both impact on strategic goals and maturity compared with similar companies. High-impact processes that are relevant to the companys overall goals and that also have low maturity in most cases take center stage, as they are the most likely to generate substantial value upon improvement. A BPM roadmap is a third critical BPM Operations sub-process. Such a roadmap defines which BPM capabilities must be built and to which processes they are applied, thus enabling the company to achieve immediate benefits while developing sustainable BPM capabilities. A high-level business case is assigned to each element of the BPM roadmap so the return on investment is clear. The road map serves as frame work for project portfolio management.

The final core sub-process of BPM Operations is the ability to create, roll out and manage a governance structure that ensures the BPM roadmap is executed as effectively and efficiently as possible. This includes the definition of roles, responsibilities and accountabilities of members of the BPM organization, the business and IT. Well-orchestrated collaboration among those groups is of the highest importance to the successful implementation of the process of process management. In practice, the four sub-processes of BPM Operations are often the core activities of a BPM center of excellence and starting point of the BPM journey.

BPM Methods and Tools

While the core sub-processes of BPM Operations are necessary to get the process of process management started, by themselves they are just the beginning of the value-driven approach to BPM. To make BPM truly effective, a company must put in place the Methods and Tools to help form the infrastructure necessary for successful process management. These methods and tools are aligned based on the BPM roadmap so that they are all focused on creating best value for an organization. A key sub-process of Methods and Tools is the management of a business architecture containing all information about the processes an organization executes and related aspects such as the organizational structure or software application architecture. The business architecture provides the necessary transparency into the company that enables fast decisions such as how to adapt a specific process or introduce a new process to meet a certain customer needand the

Figure 2: Accenture Process Reference Model for BPM

execution of the resulting actions. The business architecture structures the process assets of a company, and is housed in a repository that enables it to be used and re-used easily. Other key elements of the Methods and Tools sub-process are BPM systems (such as process execution engines or monitoring systems, rules engine or document management systems as well as other IT enabling value-driven BPM); capabilities for traditional improvement approaches such as Lean and Six Sigma which can be very important to deliver value-driven BPM; and the necessary standards and guidelines, which can include a modeling handbook or procedures defining how process changes should be handled or how new processes are established. Methods and Tools are the enablers of the value that BPM provides; hence they are used to deliver BPM.

other business processes, and are key to enabling the lifecycle management of an organization business processes. The BPM delivery follows the BPM roadmap developed in the BPM Operations.

BPM Support
Underpinning all of the above are key corporate, or BPM Support, processes. The process of process management must engage tightly with these support processes, which typically include those related to finance, procurement, human resources, enterprise services, and information technology (IT). For instance, to derive maximum business value from changes made to core business processes, companies also must adjust compensation and reward systems, or underlying software applications and technology. In sum, value-driven BPM is itself a process, and for it to be adapted successfully all of its moving parts and interrelated workflows must be integrated into a cohesive whole. Indeed, while BPM is similar in concept to other management processes, such as those related to human resources and information technology, it differs in several substantial ways. For instance, no other management process has the same breadth and depth of impact as BPM. It has the potential to impact every other business process in the company, as well as every resource, asset, and relationship between the company and the outside world. Given the sheer impact of BPM on a organization and its culture, it requires the highest levels of management focus.
4

BPM Transformation
The BPM Delivery sub-processes also are closely related to the BPM Transformation sub-processes, which include all of the processes that enable BPM to support larger process-led transformation efforts. BPM Transformation sub-processes include culture and change management; the provision of change management, hence, information, communication and training; and project or program managementall of which are necessary to the success of large-scale change initiatives. Another important BPM Transformation sub-process is the creation and management of an internal BPM community that allows people to exchange thoughts and best practices and make BPM a living component of their day-to-day jobs.

BPM Delivery
The third BPM process group encompasses BPM Delivery, which describes the delivery approach for specific improvement projectsfrom process strategy, through analysis, design, implementation, execution, and performance monitoring. The BPM Delivery sub-processes use the Methods and Tools to deliver value by improving

How to use the Process Reference Model for BPM

Once an organization has defined its BPM roadmap it knows which process to improve using BPM and it has defined which BPM capabilities are required new and existing ones. Now those BPM capabilities have to be aligned and prepared for a roll out in the organization. Hence the process of process management must be defined and how it is executed within the company. Thats where we use the reference model of the process of process management. We suggest a five step approach: Eliminate the components of the process of process management that are not required Add missing components to the process of process management Detail the areas of immediate relevance Identify necessary roles and responsibilities Define the organizational structure The required BPM capability (as defined in the road map) may not require all sub-processes shown in the process of process management. An organization may for examples decide in the medium term not to build up capabilities regarding specific traditional process improvement methods or they may come to the conclusion not to establish a formal process community or use any process execution software. In that case the related process of the process of process management can be eliminated or assigned to a later implementation phase. This is an important discussion about the scope of the BPM capability based on the identified roadmap. This discussion may also lead to the conclusion that process have to be added, If, for example, the use of and ERP system plays an important role for the execution of processes, a company could define a specific sub-process Processoriented ERP, including activities like the integration with a process repository or the process-oriented testing of new configurations of the ERP system. Once the high level operating model of the BPM organization is defined based on the process of process management the concrete implementation and roll out of that process has to be defined. Therefore those sub-processes of the process of process management are identified that are relevant for the first round of activities defined in the roadmap. These sub processes are then detailed until task level, so that it is exactly defined how the BPM work is executed. This includes for examples the definition of the tasks necessary to update the repository once a process change happens or the description of the steps necessary to update the BPM roadmap on an ongoing basis. On the task level we also define which information is used or produced in the processes, e.g. the results of interview may be transformed into process models. The definition of the processes until task level is also supported by the reference model: it includes a breakdown of the process of process management until task level, so that one can proceed on every level of detail as described in step 1 and 2. Once the detailed processes are defined the necessary roles and responsibilities necessary to execute the process are identified. The reference model includes sample definitions of such roles that can be used as a starting point. Responsibilities, accountabilities, support, control, and information roles are defined using e.g. a RASCI diagram. This is the basis for the process governance. It is managed through the governance processes defined in the process of process management. The identified roles are in general added to the detailed models of the BPM process. Once those roles and responsibilities are defined the organizational structure for the process organization is developed. This means it is defined if a central BPM center of excellence is required right away, which decentralized units are necessary and which of those roles are executed by people in business units or information technology. The process of process management helps by providing sample structures for this organization. This BPM organization is the basis for integrating the valuedriven BPM capability into the overall organizational structure. The organization is now ready to establish the organizational units and start the execution of the BPM process and its sub-processes as defined.

Once an organization has defined its roadmap to value-driven BPM. It knows which process to improve and transform using BPM and it has defined which BPM capabilities are required new and existing ones.

Drivers of a Successful Process of Process Management

As organization set out to implement a process of process management, they should keep in mind several key success factors Accenture has gleaned from its research and experience. These include the following: Robust support from and engagement with senior leadership Focus on rapid realization of benefits while creating sustainable BPM capabilities Keep things as simple as possible Provide the right degree of freedom through appropriate BPM governance, e.g. define processes in detail to achieve compliance goals but leave this definition on a high level where you want to encourage creativity and innovation in executing the process. The most important of these factors is robust support from and engagement with senior business and IT leadership, as well as close alignment of the BPM organization with business and IT strategy. This enables fast decisions during the implementation and helps establishing the BPM organization in the company. Furthermore, because building the process of process management often requires significant investments of effort and resources, the more quickly benefits are realized the better. In a continuously changing business environment it is not possible to take years to develop all BPM capabilities before applying them to create benefits. It is key to combine the BPM capability building with operational initiatives delivering immediate value. In our experience, speed can be enhanced by developing and adhering to clear priorities that are focused on the business goals of an organization. A third factor is keeping things as simple as possible. Methods and tools addressed in the process of process management often encourage people to come up with very sophisticated but also very complex solutions and processes. For instance, one company had identified more than 40 modeling methods for developing its business architecture in its repository. It was no surprise that no business person used themit was just too complex and would take the average person too much time to understand them. The company ultimately greatly simplified the models by using fewer than 10 methods. That said, a company should avoid oversimplifying things. Fostering transparency of organizational processes inherently requires a certain level of detail and sophistication, without which a company may end up creating a BPM approach that looks good on paper but does deliver the value desired. Successfully implementing a process of process management also requires maintaining the freedom of people to do their jobs. Indeed, BPM applied in a toorigid way may end up failing to foster the agility the company seeks. Thus, It is key to decide for each operational process the degree of freedom allowed. Complianceor safety-relevant processes, such as those in finance or production, are often defined in detail to avoid any accidents or legal issues and, consequently, provide little freedom to do things differently. In the research and development area, however, processes could be only very roughly outlined to encourage creativity and out of the box thinking. Finally, as companies implement the process of process management, they should encourage initiative and process innovation and refrain from punishing early-adopter mistakes. BPM can be used to organize process innovation by providing the right infrastructure to try out process-related ideas. This is especially important for service companies because their offerings are also processes. Hence, the innovation of offerings can be organized through BPM and the process of process managementwhich means the process of process management itself has to be flexible enough, especially in the Methods and Tools and BPM delivery areas.

Because building the process of process management often requires significant investments of effort and resources, the more quickly benefits are realized the better. BPM capabilities should be built and applied right away to deliver immediate benefits.

The Process of Process Management in Action

A number of leading organization have experienced substantial business benefits by implementing a formal process of process management. One of these companies is a major global company. In the wake of a merger, this company found itself managing a host of legacy and newly inherited business processesmany of which were duplicative or met varying process standardsas well as several distinct BPM tools and environments. This hampered the companys visibility into and control over key processes. In short, the company lacked a strong process of process management. Working with Accenture, the company launched an initiative to bring its BPM practices up to speed. The company conducted a series of individual sessions and group workshops to develop a clear and comprehensive BPM strategy, and hence a roadmap that would reflect its BPM capabilities, objectives, and challenges. The company started to put in place their BPM operations. After identifying and prioritizing the relevant work packages, the company began working toward its BPM-related goals. One way it did this was by using workshops to define common post-merger business processes using a repository-based modeling tool, which allowed the company to publish and roll out new, standardized processes. Hence, selected BPM Methods and Tools processes were implemented. In this fashion, the company created process assets and made them ready for ongoing use. Subsequently, the company extended those process assets to include all safety and compliance procedures, which were enforced through a combination of the process repository and a simple workflow tool. In pursuit of a more efficient, standardized, and accountable approach to BPM, the company created a global BPM center of excellence with centralized responsibility for the process of process management and accountabilities across the company, in business and IT. This led to a BPM governance approach as part of the BPM operations. The resulting new process of process management has helped the company improve the transparency of key processes and, by extension, its compliance with safety and other legal regulations. Furthermore, by eliminating overlap between BPM processes and capabilities, the company has reduced its BPM-related costs and improved the efficiency of key operational processes via automation. The new BPM CoE also has generated cost savings and efficiency by using synergies between business units. Most importantly, the initiative has enabled the company to ensure that these advances are baked into its corporate DNA and will drive effective and globally consistent operations, aligned to the overall business goals, for years to come.

BPM: A Key Driver of High Performance

Several years ago, business and technology leaders debated the value of formalized, standalone IT functions as opposed to more fragmented capabilities. BPM is at a similar inflection point today. While many companies continue to maintain pockets of BPM distributed throughout the enterprise, those in the vanguard are achieving more impact and greater synergies through the process of process managementcreating related BPM centers of excellence, establishing clear accountability and governance for process management. Ultimately, the process of process management leads to greater returns on BPM investments in the form of improved operational transparency, agility and compliance, quality and efficiency as well as external networks with market partners and internal integration. For leading companies, the process of process management has become a key generator of enterprise value, as well as an important driver of high performance for years to come.

While many companies continue to maintain pockets of BPM distributed throughout the enterprise, those in the vanguard are achieving more impact and greater synergies through the process of process management.

About the Author

Dr. Mathias Kirchmer
Dr. Mathias Kirchmer is Executive Director for Business Process Management (BPM) at Accenture. He leads the global BPM-Lifecycle Practice, as well as the program for the development of Accentures Business Process Reference Model Repository across industries and functional areas. His special field of expertise is to set up BPM capabilities that deliver both immediate benefits as well as durable competitive advantage. Before joining Accenture, Dr. Kirchmer had been for 18 years with IDS Scheer, a leading provider of business process excellence solutions, known for its BPM software, the ARIS Platform. He was a member of the Extended Executive Board, including roles as CEO Americas, Japan, and Chief Innovation and Marketing Officer. During his career, Dr. Kirchmer has developed deep knowledge in approaches, methods, tools and software for the design, implementation, execution and controlling of business processes. He has applied this knowhow in companies of various sizes and industries around the world. Dr. Kirchmer is an affiliated faculty member of the Program for Organizational Dynamics of the University of Pennsylvania as well as a faculty member of the Business School of Widener University, Philadelphia. In 2004 he won a research fellowship from the Japan Society for the Promotion of Science. He is the author of numerous publications, including five books. The last one is entitled High Performance through Process Excellence From Strategy to Operations and was published in November 2008. Dr. Kirchmer holds a PhD in Information Systems from Saarbruecken University (Germany), a Masters in Business Administration and Computer Science (Wirtschaftsingenieur) from Karlsruhe Technical University (Germany) and a Masters in Economics from Paris-IXDauphine University (France).

10

About Accenture
Accenture is a global management consulting, technology services and outsourcing company, with more than 244,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the worlds most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$25.5 billion for the fiscal year ended Aug. 31, 2011. Its home page is www.accenture.com.

Copyright 2012 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

12-0764_US