Business Process Management – process modeling; methods and techniques; applying the agile or waterfall model; benefits and

efficiencies

Presented by: Shawn Maynard

(shawnmaynard@hotmail.com)

1. Business Process Management – scope

2. Process Modeling: Methods and Techniques
3. Agile or Waterfall Model comparison
4. Using the Methods and Techniques to assess a model
5. Conclusion/Discussion
Business Process Management – process modeling; methods and techniques; applying the agile or waterfall model; benefits and efficiencies

The only reasons a CEO

should ever consider
starting an improvement
process is to generate
more profit and make
your organization more
competitive
Business Process Management – Scope from the life cycle perspective

Portfolio Life Cycle Management

Market needs
Market
Competitive Create
Drivers Understand
Define
Perform Market Develop and Manage Market Performance
the Portfolio Segment optimize Segments and performance
Customer Market Market Analysis Strategy market segment Metrics
feedback Segment plan
Current
product/service Product Development
portfolio Life Cycle Management
Technology trends
Product
Strategic
Development Field & EOL
Front End/
Pipeline management Product
Product Line plans
Management
Performance
Metrics

Project Release Iteration Product Product

Definition Planning Planning Development Deployment

Senior Leadership Team Initiation Planning Execution Closeout

Monitor and Control

Program and Project Life Cycle Management Project

Performance
Metrics
Business Process Management – Scope from the life cycle perspective

What
What isis the
the most
most
effective
effective and
and efficient
efficient
way
way to
to navigate
navigate the
the
business
business life
life cycles
cycles for
for
my
my company
company ??

To address this question consider the following business

process assessment tools :

1. The cost of delay (P&L or NPV) – What is my price tag

for time spent?
2. Value Stream Mapping –where am I spending my time
and money?

Use these tools to compare the approaches (waterfall and

agile) to determine if the time/money I save adds to my
companies bottom line.
Process Modeling – Methods and Techniques: Value Steam Maps

WATERFALL

Submit Project Gather Customer Design

Approval Signoff Analysis Design Code Test Deploy
Request Req’mts Review

1 hr 3 wks 1 hr 2 wks 2 wks 3 wks 6 hrs 2.5 wks 2wks 2wks 2wks
Work
time

Wait
time
6 wks 2 wks 8.5 wks 1 wk 1.5 wks 2 wks 2wks 2wks 2 wks 2 wks 2 wks

(*Work time = Value add activities)

AGILE

Submit Project Prelim Select 1st Select 2nd Select 3rd

Request Approval Architecture
segment. Assess segment. Assess segment. Assess
the problems. the problems. the problems.
Design, code and Design, code and Design, code and
test solution. test solution. test solution.
Review with Review with Review with
customer. customer. customer.
Deploy(optional) Deploy(optional) Deploy(optional)

Work 1day 1hr 2 wks 4 wks 4 wks 4 wks

time

Wait
time
2 days 1 wk 1 day 1 day 1 day
Process Modeling – Methods and Techniques: Value Steam Maps

YOUR CURRENT PROCESS?

Submit Project Gather Customer Design

Approval Signoff Analysis Design Code Test Deploy
Request Req’mts Review

1 hr 3 wks 1 hr 2 wks 2 wks 3 wks 6 hrs 2.5 wks 2wks 2wks 2wks
Work
time

Wait
time
6 wks 2 wks 8.5 wks 1 wk 1.5 wks 2 wks 2wks 2wks 2 wks 2 wks 2 wks

Your developer brings you a request for a new development tool that they feel will
speed up development. Can you justify the cost ($ and time) to acquire the tool?

You should be able to put a price tag on time. Create a simple economic model in
the form of a P & L statement to obtain development cost, unit cost, performance
and introduction date.

Use the same approach to assess whether waterfall or agile is right for you create a
waterfall and an agile P&L . The Value stream maps give you the time table for your
P&L statements. (can also use NPV for this).
 Process Modeling – Methods and Techniques: Cost of Delay

Assumptions Yr 0 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5

Revenue

Avg. Selling price Decreases 10%

yearly
Total Market units

Market share

Units Sold

Total Revenue

Expenses

Unit production and Decreases 5%

distribution cost (plus yearly
warranty and support)
Gross Margin $

Development X $ per launch

Marketing %15 of sales

G&A %5 of sales

Total Expenses
Process Modeling – Methods and Techniques: Cost of Delay...continued

Change your baseline P & L (or NPV) to see the impact on Cumulative
profit. What would a 6 month delay mean to your business? If the
impact is high see what the cost is to speed up development by 6
months.
Business Process Management : Methods and Techniques–
Building your Value Stream Map

In order to build your value stream map for your model it is

important to know how you will implement the model(Agile or
Waterfall) within your organization as the model needs to be
tailored to the type of business.

EXAMPLE: Lets look at what each model looks like a organization in

the social network business. This comparative view allows us to
identify benefits and potential constraints the model may place on
your organization in terms of the types of resources you need, the
culture changes that may need to occur and/or the impact to your
current business model.
 Process Modeling –Agile Vs Waterfall example
e.g. Building a social network Waterfall Agile
Wireframes are used to infer the feature set which is then
What drives the development? Wireframes drive the project prioritized weekly and daily and which REALLY drives the
project to completion; wireframes are also used for future
development features.

Large offshore team who have done these large social

Ideal team network major site builds and who can duplicate the Small focused team working in an agile methodology
wireframes quickly.
Replicate current site, then begin adding social functionality
What is the release cycle Big bang (all functionality at once); one feature at a time in collaboration with your community
Business Process Management –agile and waterfall model characteristics members
Agility Not as much; costly to refactor on the fly Inherently flexible.
Development structure Milestones A long list of features in priority order
You get a fixed price bid and hold your developer to You decide on your budget cap and you "buy features" until
How do you budget? it you are either happy with the ROI or you decide that it is time
to stop spending money
Intermittent involvement from key team members at DAILY - near full-time involvement from contract signature to
How involved is YOUR team? specified "check in" and "milestone" dates. "Marketing launch"

With iterative development, you create marketing "release

Release Management: Features dates" that are simply the time that you bunch the features up
shipped vs. "Launched" A shipped "version" is a "launch release" into a logical release grouping and "announce" them (even if
they have already been out for a while.)

you can adapt to change faster; be more flexible if business

fixed spending cap; fixed development time; requirements surface that aren't in the plan; can get it to
Benefits predictable expectations for the outcome. market faster and develop faster, thereby increasing potential
return; more fitted to user demands than arbitrary "design
demands"; you can "ship at any point" once you have started.

fixed staffing; no ability to flex the site with the business isn't educated enough on agile to buy into this
user's feedback; don't know what the user feedback model; requires EXTREMELY high end developers - not a
Risks is until you release the larger block; changes cost a hand-off team in India at low cost; in other words, need
LOT more. "architect level" people for the team and they cost a lot more;
will incur a slightly higher cost in development on testing;

Summary You build what you want to build regardless of what You build what your market and users want you to build, and
your users want. you use agility to do it.
Business Process Management : Methods and Techniques–
Flow Charts and procedures

Once we have characterized our business in terms of the model we

should flow chart out the process in your company. The flow chart is
used to define the process your company will follow. The flowchart
and supporting procedures capture:

1. Input and Output Criteria (what do I need)

2. Sequence of activities (when do I do it)
3. Feedback loops and dependencies (who should be involved)
4. Exceptions to the rules (there will always be some)

Once the process is defined for your company then roll it out and
collect value-add and waste times to generate your Value Stream
Map.
 Process Modeling – Methods and Techniques:
Flow Charts and Procedures

Product Development Pipeline

Acceptance Test
scenarios
User Stories

Requirements
New User Story
project Velocity Bugs

Customer
Architecture Plan Release Plan Latest Version Approval

Scope mgmt Next Iteration

Product Release Planning Deployment

Iteration Acceptance Testing
Definition
Planning
Text
1 Text
2 3
Text
Text Text Text
4 5

Common Life cycle

Support Processes
Prototype Development
 Process Modeling – Methods and Techniques:
- Your Value Stream M ap (the flowchart
transforme d into a Value Stream Map)

Iteration Acceptance Acceptance

Release Iteration
Requirements Testing Testing
Planning Planning Planning Development
User Stories Development
Product
Definition
Text Text Text
Text Text Text

Deployment
Prototype

Work 2days 1day 4 wks 4 wks

time

Wait
time Common Life cycle Common Life cycle
2 days 1 wk Support Processes 1 day Support Processes
 Business Process Management – Summary and Discussion
Summary:

1. Take your existing process and do a Value Stream Map. Identify bottlenecks
(this will be your baseline) and set performance improvement goals (P & L or NPV)
that you expect to achieve by adopting the new process (i.e. by planning to get rid
of all those nasty delays you identified in your Value Stream Map)
2.Apply an alternate model (e.g. Agile) by tailoring that model to your business
(i.e. Create the process flow and supporting procedures for Agile in your
company). You will need to train your staff in the new process before starting.
3. Try it out - and as you do measure your performance. Put your new process on a
Value Stream Map to verify the expected efficiency improvements and uncover
new bottlenecks. Review your performance against your P&L/NPV as part of your
strategic planning process.

1. Select the model

(Agile or Waterfall) 2. Define your companies 3. Your Value Stream Map
with your P&L/NPV implementation of the for rapid evaluation and
goals in hand and your model (policies/process/ and P&L/NPV review for
legacy Value Stream procedures/standards) longer term evaluation
Map
 Business Process Management – Summary and Discussion

Experience shows that it will take several months (at least 6 iterations before
you get beyond the learning curve and start to see the efficiency benefits and
longer before you see the impact to the bottom line as the P & L projections are
usually in terms of quarters or years).

Agile home ground:

Senior developers
Requirements change often
Small number of developers

Waterfall home ground:

Junior developers
Requirements do not change often
Large number of developers
Business Process Management – Summary and Discussion

THANK YOU!
Shawnmaynard@hotmail.com
250-893-9041
Some good references:
1. User Stories Applied – Mike Cohn
2. Agile Estimating and Planning – Mike Cohn
3. Project Portfolio Management – Ginger Levin
4. PMI OPM 3 – PMI institute
5. Business Process Improvement – James Harrington
6. Managing Agile Projects – Kevin Aguanno
7. Lean Software Development – Mary/Tom Poppendieck
8. Fit for Developing Software – Ward Cunningham