Case study and maturity model for Business process management Implementation Michael Rohloff University of Potsdam, August-Bebel-Str. 89. 14482 Potsdam, Germany michael rohloff@wi. uni-potsdam de Abstract. This paper presents the implementation of Business Process Management in a large international company. The business case illustrates the main objectives and approach taken with the BPM initiative. It introduces a process management maturity assessment which was developed to assess the mplementation of Business Process Management and the achievements. The maturity model is based on nine categories which comprehensively cover all aspects which impact the success of Business Process Management. Some findings of the first assessment cycle are pinpointed to illustrate the benefits and Keywords: Business Process Management Implementation, Maturity Model. 1 Introduction Business Process Management is a management practice which encompasses all activities of identification, definition, analysis, design, execution, monitoring measurement, and continuous improvement of business processes. Consequently Business Process Management encompasses not only the analysis and modeling of business processes but also the organizational implementation, leadership and performance controlling [1, 2, p. 7f. ] Although it is a well-known and largely used practice there is an ongoing discussion on how to best implement Business Process Management. Due to the comprehensive nature of BPM a variety of different approaches exist (e.g. Business Process Reengineering(BPR); Continuous Process Improvement, Workflow Management, reference modeling and implementation of tandard enterprise applications) Facing the importance and vital role of Business Process Management for the transformation and organizational change of enterprises the question arise different organizations perform in their development of Business Process Management. The notion of maturity has been proposed in other approaches to assess an organizations state in terms of implementing a specific program or the quality of a process a prominent and widely used model is the Capability Maturity Model developed by the Software Engineering Institute at Carnegie Mellon University [3]. This model was originally developed to assess the maturity of software development processes Over the years it was extended to other domains. Today the Capability Maturity U Dayal et al. (Eds ) BPM 2009, LNCS 5701, Pp. 128-142, 2009. e Springer-Verlag Berlin Heidelberg 2009
U. Dayal et al. (Eds.): BPM 2009, LNCS 5701, pp. 128–142, 2009. © Springer-Verlag Berlin Heidelberg 2009 Case Study and Maturity Model for Business Process Management Implementation Michael Rohloff University of Potsdam, August-Bebel-Str. 89, 14482 Potsdam, Germany michael.rohloff@wi.uni-potsdam.de Abstract. This paper presents the implementation of Business Process Management in a large international company. The business case illustrates the main objectives and approach taken with the BPM initiative. It introduces a process management maturity assessment which was developed to assess the implementation of Business Process Management and the achievements. The maturity model is based on nine categories which comprehensively cover all aspects which impact the success of Business Process Management. Some findings of the first assessment cycle are pinpointed to illustrate the benefits and best practice exchange as a result of the assessment. Keywords: Business Process Management Implementation, Maturity Model. 1 Introduction Business Process Management is a management practice which encompasses all activities of identification, definition, analysis, design, execution, monitoring & measurement, and continuous improvement of business processes. Consequently Business Process Management encompasses not only the analysis and modeling of business processes but also the organizational implementation, leadership and performance controlling [1, 2, p. 7f.]. Although it is a well-known and largely used practice there is an ongoing discussion on how to best implement Business Process Management. Due to the comprehensive nature of BPM a variety of different approaches exist (e.g. Business Process Reengineering (BPR); Continuous Process Improvement, Workflow Management, reference modeling and implementation of standard enterprise applications). Facing the importance and vital role of Business Process Management for the transformation and organizational change of enterprises the question arises how different organizations perform in their development of Business Process Management. The notion of maturity has been proposed in other approaches to assess an organizations state in terms of implementing a specific program or the quality of a process. A prominent and widely used model is the Capability Maturity Model developed by the Software Engineering Institute at Carnegie Mellon University [3]. This model was originally developed to assess the maturity of software development processes. Over the years it was extended to other domains. Today the Capability Maturity
Case Study and Maturity Model for Business Process Management Implementation 129 Model Integration is an approach for the assessment and improvement of product development processes in general. A number of additional maturity models were developed which cover other areas like the CMMI Acquisition Model(CMMI-AM) or the People Capability Maturity Model(P-CMM) for personal management and development to name a few. Today, CMMI is widely used in practice to evaluate and to improve(software)development processes [4, 5, 6,7,8 CMMI uses standardized question catalogues and evaluation criteria to assess an organizations product development process and to work out the strengths and weaknesses. It helps to define improvement measures and to plan the implementation in an organization. The CMMi introduces the concept of five maturity levels defined by special requirements that are cumulative. In recent years a number of maturity models for Business Process Management have been proposed [9, 10, 11, 12, 13, 14, 15, 16, 17]. Most of the models focus on only one dimension for measuring BPM maturity and very few applied studies are known. Exceptions are the Business Process Management Maturity Model(BPMM) of the OMG [9], the Process Audit of Hammer [11 and the maturity model of Rosemann et al. [13, 14, 15, 16 This paper presents the implementation of Business Process Management in a large international company, undertaken as a corporate, company wide project within The next section outlines the objectives and the overall a usiness process management. It introduces the process framework reference process house and the overall structure and content BPM implementation process Section 3 gives an overview of the process management maturity assessment model which was developed in order to assess and to derive improvement measures for the Business Process Management in the company. The assessment process and some results of the assessments are presented to illustrate some benefits of the approach 2 Implementation of Business Process Management 2.1 The business process management initiative at siemens ag The Siemens AG is engaged in different business sectors with a very broad and diverse product and service spectrum. It is a global company with regional representations in more than 190 countries(for a short overview see [18). Over the years the process and IT landscape has developed differently in the business units and regions. With the business Process Management activities a redesign alignment and optimization of business processes and a better process standardization and utilization of synergies is intended Central element of the Business Process Management Initiative was the development of a Siemens Process Framework [19] which consists of a reference process house (RPH) and common methods for process management across the company. These activities, with the development of a reference process house(RPh) in its core, are part of a comprehensive process management initiative [18, 2, 241-252]. The initial company wide activities for process standardization started
Case Study and Maturity Model for Business Process Management Implementation 129 Model Integration is an approach for the assessment and improvement of product development processes in general. A number of additional maturity models were developed which cover other areas like the CMMI Acquisition Model (CMMI-AM) or the People Capability Maturity Model (P-CMM) for personal management and development to name a few. Today, CMMI is widely used in practice to evaluate and to improve (software) development processes [4, 5, 6, 7, 8]. CMMI uses standardized question catalogues and evaluation criteria to assess an organizations product development process and to work out the strengths and weaknesses. It helps to define improvement measures and to plan the implementation in an organization. The CMMI introduces the concept of five maturity levels defined by special requirements that are cumulative. In recent years a number of maturity models for Business Process Management have been proposed [9, 10, 11, 12, 13, 14, 15, 16, 17]. Most of the models focus on only one dimension for measuring BPM maturity and very few applied studies are known. Exceptions are the Business Process Management Maturity Model (BPMM) of the OMG [9], the Process Audit of Hammer [11], and the maturity model of Rosemann et al. [13, 14, 15, 16]. This paper presents the implementation of Business Process Management in a large international company, undertaken as a corporate, company wide project within Siemens AG. The next section outlines the objectives and the overall approach for implementing business process management. It introduces the process framework including the reference process house and the overall structure and content of the BPM implementation process. Section 3 gives an overview of the process management maturity assessment model which was developed in order to assess and to derive improvement measures for the Business Process Management in the company. The assessment process and some results of the assessments are presented to illustrate some benefits of the approach. 2 Implementation of Business Process Management 2.1 The Business Process Management Initiative at Siemens AG The Siemens AG is engaged in different business sectors with a very broad and diverse product and service spectrum. It is a global company with regional representations in more than 190 countries (for a short overview see [18]). Over the years the process and IT landscape has developed differently in the business units and regions. With the Business Process Management activities a redesign, alignment and optimization of business processes and a better process standardization and utilization of synergies is intended. Central element of the Business Process Management Initiative was the development of a Siemens Process Framework [19] which consists of a reference process house (RPH) and common methods for process management across the company. These activities, with the development of a reference process house (RPH) in its core, are part of a comprehensive process management initiative [18, 2, pp. 241-252]. The initial company wide activities for process standardization started in
130 M. Rohloff 2000 with the E-Business initiative "Generic Business Processes". The primary focus was on the definition of the Supply Chain Management processes based on the Supply Chain Operational Model(SCOR). In the following years the process activities where extended to the Customer Relationship Management and the Product Lifecycle Management. Finally, the activities were taken up and consolidated under the leadership of corporate CIO and the development of a comprehensive reference process house covering all business processes was accomplished [ 19]. The primary bjective was to leverage synergies and cost potentials with a common organization and process coordination, and the definition of reference processes Reference models are increasingly used in industrial practice and leave the area of research([20, 21], see the overview in [22, pp. 393f. ], for reference modeling projects see [23]). In practice reference models for processes have particular relevance, e.g [24, 25, 26, 27]. For the development of the Siemens Reference Process House the Supply Chain Operational Model [24] was a fundamental basis. The Siemens Process Framework(SPF, figure 1), with its binding set of principles and definitions for the overarching management of processes, provides the basis for a uniform implementation of process management within Siemens. The core component of the SPF is the Reference Process House(RPH). It contains the definitions of all processes and is structured into the following process categories Management processes Customer Relationship Management(CRM) Processes apply Chain Management (SCM) Processes Product Life Cycle Management(PLM) Processes · Support Processes reference process definitions are fundamental for process standardization and ide a stable basis for process management. They are subject to a cascaded rollout refinement in the business groups and regions. Incorporating process definitions, guidelines for documentation and modeling of processes, and a binding decision structure for process standardization, the framework is the basis for Configuration and design of specific business processes(e. g. CRM, PLM, SCM and end-to-end business process chains Redesign of processes based on commonly defined standards for to-be processes Common language and common understanding of processes Realization of the potentials identified through- faster implementation of standard processes-alignment of applications-standardization and cost reduction cross matrix organization(synergy effects) Comprehensive benchmarking and best practice sharing The process management methods of the Siemens Process Framework represent a comprehensive set of tools(including ARIS [27D), concepts, conventions, and guidelines which are needed for any implementation and operation of process management in the Siemens organization. With the description of all roles and responsibilities required for effective process management on strategic and operational levels the SPF provides a blueprint for process management organization in the groups and regions. It ensures clear communication, decision, and escalation
130 M. Rohloff 2000 with the E-Business initiative “Generic Business Processes”. The primary focus was on the definition of the Supply Chain Management processes based on the Supply Chain Operational Model (SCOR). In the following years the process activities where extended to the Customer Relationship Management and the Product Lifecycle Management. Finally, the activities were taken up and consolidated under the leadership of corporate CIO and the development of a comprehensive reference process house covering all business processes was accomplished [19]. The primary objective was to leverage synergies and cost potentials with a common organization and process coordination, and the definition of reference processes. Reference models are increasingly used in industrial practice and leave the area of research ([20, 21], see the overview in [22, pp. 393f.], for reference modeling projects see [23]). In practice reference models for processes have particular relevance, e.g. [24, 25, 26, 27]. For the development of the Siemens Reference Process House the Supply Chain Operational Model [24] was a fundamental basis. The Siemens Process Framework (SPF, figure 1), with its binding set of principles and definitions for the overarching management of processes, provides the basis for a uniform implementation of process management within Siemens. The core component of the SPF is the Reference Process House (RPH). It contains the definitions of all processes and is structured into the following process categories: • Management Processes • Customer Relationship Management (CRM) Processes • Supply Chain Management (SCM) Processes • Product Life Cycle Management (PLM) Processes • Support Processes These reference process definitions are fundamental for process standardization and provide a stable basis for process management. They are subject to a cascaded rollout and refinement in the business groups and regions. Incorporating process definitions, guidelines for documentation and modeling of processes, and a binding decision structure for process standardization, the framework is the basis for: • Configuration and design of specific business processes (e.g. CRM, PLM, SCM) and end-to-end business process chains • Redesign of processes based on commonly defined standards for to-be processes • Common language and common understanding of processes • Realization of the saving potentials identified through - faster implementation of standard processes - alignment of applications - standardization and cost reduction across matrix organization (synergy effects) • Comprehensive benchmarking and best practice sharing. The process management methods of the Siemens Process Framework represent a comprehensive set of tools (including ARIS [27]), concepts, conventions, procedures, and guidelines which are needed for any implementation and operation of process management in the Siemens organization. With the description of all roles and responsibilities required for effective process management on strategic and operational levels the SPF provides a blueprint for process management organization in the groups and regions. It ensures clear communication, decision, and escalation processes
Case Study and Maturity Model for Business Process Management Implementation 131 Process Management Reference Process House eling Tools mplementation Prader Lifecycle 一百出== Fig 1. Siemens Process Framework (SPF) The main objective of the introduction of Business Process Management is to increase the effectiveness and efficiency of all business processes of the organization From an operational point of view, process management is about having defined processes, measuring their performance, and improving them incrementally as part of daily business. It is also about defining performance goals for processes"top-down based on benchmarking results or strategic goals derived from corporate initiatives, and performing major re-engineering activities on processes to close existing performance or cost gaps. Process standards and a common process framework are a fundamental basis for a systematic design and optimization of results, processes, and non-accoency and effectiveness problems in an organization have their origin in processes. A proper implementation leads to the mastery of processes with regard to lower non-conformance, as well as to high reliability and safety, and results in reduction of process costs, process cycle times, and improvement of quality Process standardization affects the strategic levers operational excellence and active management of synergies and supports the vertical and horizontal strategies of Siemens. This is achieved by the cascaded definition and rollout approach of the Process Initiative based on the Reference Process House. The implementation of Business Process Management based on the Siemens Process Framework results in a number of benefits which where pursued with the Process Initiative. Establish a Process Management Community within the business units and regions to coordinate and optimize local, regional, and headquarter process improvement Provide a common reference framework for supporting and coordinating all process related projects in the business units and regions created by different Present a uniform appearance to customers and business partners through Siemens wide standardized process implementation. Provide standard service levels to the global customers
Case Study and Maturity Model for Business Process Management Implementation 131 Fig. 1. Siemens Process Framework (SPF) The main objective of the introduction of Business Process Management is to increase the effectiveness and efficiency of all business processes of the organization. From an operational point of view, process management is about having defined processes, measuring their performance, and improving them incrementally as part of daily business. It is also about defining performance goals for processes “top-down”, based on benchmarking results or strategic goals derived from corporate initiatives, and performing major re-engineering activities on processes to close existing performance or cost gaps. Process standards and a common process framework are a fundamental basis for a systematic design and optimization of results, processes, and resources. Most efficiency and effectiveness problems in an organization have their origin in non-mastered processes. A proper implementation leads to the mastery of processes with regard to lower non-conformance, as well as to high reliability and safety, and results in reduction of process costs, process cycle times, and improvement of quality. Process standardization affects the strategic levers operational excellence and active management of synergies and supports the vertical and horizontal strategies of Siemens. This is achieved by the cascaded definition and rollout approach of the Process Initiative based on the Reference Process House. The implementation of Business Process Management based on the Siemens Process Framework results in a number of benefits which where pursued with the Process Initiative. • Establish a Process Management Community within the business units and regions to coordinate and optimize local, regional, and headquarter process improvement initiatives. • Provide a common reference framework for supporting and coordinating all process related projects in the business units and regions created by different initiatives. • Present a uniform appearance to customers and business partners through Siemens wide standardized process implementation. • Provide standard service levels to the global customers. Reference Process House Process Management Roles & Responsibilities Level concept Convention & Modeling handbook Modeling Tools & Services Implementation Guide Maturity Assessment Roles Committees Process Management Methods
M. Rohloff Enable best practice sharing across all business units and regions Provide opportunity for shared services and an improved lean IT landscape through rocess standardization 2.2 BPM Process and Implementation Topics Experience shows that business transformations are often a consequence of good process management. Thus, the implementation of process management itself has to be organized as a business transformation program covering all relevant aspects of an organization's development. These aspects have to be addressed by implementation topics which are dependent on each other with regard to their contents. All theses issues are addressed by Business Process Management implementation guidelines (see Process Management Implementation Guide [28]). The following gives a short overview on the different implementation topics Process Management Organization: Establish process management roles& bodies ccording to the Siemens Process Framework and assign the responsible persons Process Documentation Standardization: Develop consistent and organization- wide valid process definitions at least for the portfolio processes. Drive the standardization and alignment of business processes. Establish a process house based on the Reference Process House and where necessary more detailed process definitions addressing at least the portfolio processes. Initiate process improvement initiatives for relevant processes of the process portfolio covering: visualization of derivation of im als design implementation of to-be processes. Process Portfolio Optimization: Select, assess, and prioritize the processes hich have to be standardized and optimized. Target Setting d Incentives: Check and amend target setting and incentive systems. Define process harmonization/ standardization and process performance als Implement process target agreements, define related incentives methods Tools: Provide standard methods and tools required for the operation of ess management and according to the Siemens Process Framework guidelines a rPh database and ARiS tools) Qualification Training: Derive competency development measures for the persons involved in process management. Define and conduct target group specific qualification programs. Verify the success. Communication: Provide target group specific information about objectives content, roles responsibilities, and progress of process management to create awareness and support the implementation Process Performance Controlling: Define key performance indicators(KPI)and metrics for the portfolio processes derived from business goals and strategies Introduce a continuous KPI-based performance measurement and assessment for Process Management Maturity Assessment: Conduct process management maturity assessments of the organization. Derive implement improvement measures Repeat process management maturity the objectives assessments periodically
132 M. Rohloff • Enable best practice sharing across all business units and regions. • Provide opportunity for shared services and an improved lean IT landscape through process standardization. 2.2 BPM Process and Implementation Topics Experience shows that business transformations are often a consequence of good process management. Thus, the implementation of process management itself has to be organized as a business transformation program covering all relevant aspects of an organization’s development. These aspects have to be addressed by implementation topics which are dependent on each other with regard to their contents. All theses issues are addressed by Business Process Management implementation guidelines (see Process Management Implementation Guide [28]). The following gives a short overview on the different implementation topics. • Process Management Organization: Establish process management roles & bodies according to the Siemens Process Framework and assign the responsible persons. • Process Documentation & Standardization: Develop consistent and organizationwide valid process definitions at least for the portfolio processes. Drive the standardization and alignment of business processes. Establish a process house based on the Reference Process House and where necessary more detailed process definitions addressing at least the portfolio processes. Initiate process improvement initiatives for relevant processes of the process portfolio covering: visualization of as-is processes as required, derivation of improvement potentials & measures, design & implementation of to-be processes. • Process Portfolio & Optimization: Select, assess, and prioritize the processes which have to be standardized and optimized. • Target Setting & Incentives: Check and amend target setting and incentive systems. Define process harmonization/ standardization and process performance goals. Implement process target agreements, define related incentives. • Methods & Tools: Provide standard methods and tools required for the operation of process management and according to the Siemens Process Framework guidelines (e.g. a RPH database and ARIS tools). • Qualification & Training: Derive competency development measures for the persons involved in process management. Define and conduct target group specific qualification programs. Verify the success. • Communication: Provide target group specific information about objectives, content, roles & responsibilities, and progress of process management to create awareness and support the implementation. • Process Performance Controlling: Define key performance indicators (KPI) and metrics for the portfolio processes derived from business goals and strategies. Introduce a continuous KPI-based performance measurement and assessment for the processes. • Process Management Maturity Assessment: Conduct process management maturity assessments of the organization. Derive & implement improvement measures. Repeat process management maturity the objectives assessments periodically