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© 2012 Forrester Research, Inc. Reproduction Prohibited1 © 2009 Forrester Research, Inc. Reproduction Prohibited
Overcoming The Obstacles Of Transformation
Derek Miers – Principal Analyst
Twitter – @bpmfocusApril 18, 2012
© 2012 Forrester Research, Inc. Reproduction Prohibited2
Agenda
Understand the transformational journey.
Engage the business—board room to front line.
Translate strategic intent into effective
processes.
Design compelling customer experiences.
Weave your own organizational change fabric.
© 2012 Forrester Research, Inc. Reproduction Prohibited3
The age of the customer requires transformation.
© 2012 Forrester Research, Inc. Reproduction Prohibited4
“Band-Aid” approach or “Wellness Program”
© 2012 Forrester Research, Inc. Reproduction Prohibited5
BP Maturity Model
Level 1Initial
Basic MgtControl
Level 2Repeatable
Level 3Defined
Level 4Managed
Level 5Optimized
StandardizedProcesses
ProcessMeasurement
Culture of Optimization
InconsistentResults
Work UnitManagement
BusinessManagement
Change Management
Capability Management
© 2012 Forrester Research, Inc. Reproduction Prohibited6
Political challenges abound
Silo’d Functional
Functions supported by processes
Processes supported by functions
From Traditional Line Management
To Processes & Services Management
© 2012 Forrester Research, Inc. Reproduction Prohibited7
Assess BP maturity
Management Area
Immature Aspiring Mature
Strategy
Governance
Structure
Performance
Culture
Wasteelimination
Value innovation
© 2012 Forrester Research, Inc. Reproduction Prohibited8
36%
68%
60%
35%
Value innovation
Customer experience improvement
Cost reduction
Waste elimination
Maturity level 2-3 (n = 136)
Value innovation
Customer experience improvement
Cost reduction
Waste elimination
60%
59%
45%
32%
Maturity level 3-4 (n = 88)
Value innovation
Customer experience improvement
Cost reduction
Waste elimination
58%
50%
46%
46%
Maturity level 4-5 (n = 24)
Mature firms achieve a balanced approach
"What are the primary goals of your business improvement program?"
42%
39%
74%
43%
Value innovation
Customer experience improvement
Cost reduction
Waste elimination
Maturity level 1-2 (n = 77)
Base: 325 business process professionals
Source: Q2 2011 Global Forrester/IQPC Business Process Maturity Online Survey
© 2012 Forrester Research, Inc. Reproduction Prohibited9
Percentage of companies
Base: 154 large North American brands score in Forrester’s Customer Experience Index, 2010
Very few companies deliver an outstanding customer experience
Very
poor
11%
Poor
18%
OK
35%
Good
29%
Excellent
7%
© 2012 Forrester Research, Inc. Reproduction Prohibited10
Improving customer experience is worth many millions
Source: Q4, 2011, “The Business Impact Of Customer Experience, 2012” Forrester report
HotelsWireless
Service
Providers
AirlinesInsurance
$1,364 $1,297 $590 $452
© 2012 Forrester Research, Inc. Reproduction Prohibited11
High-emotion firms out-perform the major indices 11x
© 2012 Forrester Research, Inc. Reproduction Prohibited12
Fill your toolbox wisely
Different tools at different levels
© 2012 Forrester Research, Inc. Reproduction Prohibited13
Develop vision before the “To-Be” processes
Prioritize
Outline processesOutcome metricsRoles and skills
Establish customer
experience vision
Operational process
architecture
Executive engagement
Business services
(Capability set)
Business services
(Capability set)
Business services
(Capability set) Business area
(Capability set)
Business engagement
Baseline(As-Is)
Process definitions (To-Be)
A322+
Process definitions (To-Be)
A322+A322
+A322+
© 2012 Forrester Research, Inc. Reproduction Prohibited14
Executive engagement
Capabilities/services provide the glue
Business Capabilities Business Capabilities
Business Capabilities Business services
(Capability set)
Assess impact/
performancevs. maturity Prioritize
21
3 45
. . .
Outline processesOutcome metricsRoles and skills
Baseline
Holistic service vision
Operational process
architecture
Target operating
model
Business engagement
Process definitions (To-Be)
A322+A322
+A322+
© 2012 Forrester Research, Inc. Reproduction Prohibited15
Executive engagement
Capabilities/services provide the glue
Business Capabilities Business Capabilities
Business Capabilities Business services
(Capability set)
Assess impact/
performancevs. maturity Prioritize
21
3 45
. . .
Outline processesOutcome metricsRoles and skills
Baseline
Holistic service vision
Operational process
architecture
Target operating
model
Business engagement
Process definitions (To-Be)
A322+A322
+A322+
Page 16
Business strategy and customer experience drives the Target Operating Model
Strategy Operating Model
WHERE to playHOW to win
Products
Customers
Markets
WHAT we doHOW it’s done
WHO does what
Capabilities Enablers
People
Process
Technology
Accountability
Governance
Metrics
Culture
© 2012 Forrester Research, Inc. Reproduction Prohibited17
Business Model Canvas
Source: Osterwalder & Pigneur Business Model Generation
#######
Key
Partnerships
Key
Activities
Value
Proposition
Customer
Relationships
Customer
Segments
Key
ResourcesChannels
Cost Structure Revenue Streams
Page 18
DesignDesign
Design
The company now focuses on business transformation
What should we look like?
Systems
Capability/Process
Technology
Structure
Future StateDesign
How can we get there?
Roadmap
Plan
Priority
Resources
Clarify Vision,Strategy & Objectives
What are we trying to achieve?
Business Case
What should we do?
Analysis & Priority
BusinessCase
Design &Implementation
Design
Build
Roll-out
Building the Transformation Plan
Implement the Plan
Current StateAssessment
Where are we today?
ProjectKickoff
Page 9
COMMUNICATIONS + CONTENT
Project Approach
MigrationPlan
Architecture
Prioritization
How can you get there?
Platforms, Systems Management
Network Architecture
Business Processes
Applications
Data Management
ProcessState
InformationState
What should you look like?
OrganizationState
TechnologyState
IT
Information/BusinessVision
Alignment
Vision & Validation
Data Collection SynthesisPlan & Launch
Project Planning and Management
Where are you today?
ProjectScope
Strategy/Goals
CustomerProduct
Capability
TechnologyArchitecture
BusinessMetrics
ResourcesGovernance
Location
PolicyPolicy
Risk Plan
BusinessMetrics
Stakeholder Engagement / Change Management
© 2012 Forrester Research, Inc. Reproduction Prohibited19
Mature organizations have a target operating model
Source: Q2 2011 Global Forrester/IQPC Business Process Maturity Online Survey
Base: 325 business process professionals (percentage answering “yes”)
“Is your organization working on designing its future operating model (target
operating model) independently of the current organizational structure?”
44%
46%
53%
75%Maturity Level 4-5
Maturity Level 3-4
Maturity Level 2-3
Maturity Level 1-2
Large organizations need a target
operating model effort to move
ahead.
© 2012 Forrester Research, Inc. Reproduction Prohibited20
Riskmanagement
Build relationships
Assetprotection
Sell products and services
Manageportfolio
BusinessCapabilities
For business transformation, focus on outcomes
Mortgage Co
InsuranceProvider
White LabelInsurance Service
Partner
BusinessProcesses
IndependentAdvisors
Regulator
Customers
Home Loans
Personal Loans
Home Insurance
BusinessServices
Product Support
Reporting
© 2012 Forrester Research, Inc. Reproduction Prohibited21
Sell products and services
Manageportfolio
Capabilities leveraged by many services and implemented through processes
Build relationships
Home Loans
Personal Loans
Process Claim
Cus
tom
er
Send Claim
Cancel Claim?
Yes
No
Send Cancellation
Receive Notification
Receive Confirmation
Receive Payment
Insu
ranc
e P
rovi
der Receive
ClaimSend
Confirmation
Send Confirmation
Make Payment
OrderRequest
ConfirmationCancellation
Confirmation
NotificationPayment
Assetprotection Home Insurance
InsuranceProvider
White LabelInsurance Srvc
Develop Main Concepts
Edit Outline Text
Develop Partner
Engagement Plan
Develop Offering Outline
Engage Partners
ConceptsCompleted
Partner OfferingCompleted
Text Edited
Partner OfferingComplete
TextEdited
ConceptsCompleted
© 2012 Forrester Research, Inc. Reproduction Prohibited22
A pragmatic start point
Based on a value chain breakdown
– Modified artifacts to reflect strategic objectives
Establish the organizational roadmap for the initiative
– Executives own the decision making
– Provides a way of tracking improvements over time
– Sets the scope for the initial set of projects
Bypasses the organizational politics
– Explicitly avoid existing functional structures and reporting lines
© 2012 Forrester Research, Inc. Reproduction Prohibited23
Executive engagement
Capabilities/services provide the glue
Business Capabilities Business Capabilities
Business Capabilities Business services
(Capability set)
Assess impact/
performancevs. maturity Prioritize
21
3 45
. . .
Outline processesOutcome metricsRoles and skills
Baseline
Holistic service vision
Operational process
architecture
Business engagement
Process definitions (To-Be)
A322+A322
+A322+
© 2012 Forrester Research, Inc. Reproduction Prohibited24
So how can we get everyone engaged?
Start off with the corporate brand.
Think about the services you will deliver to
different customer segments.
Design the customer experience.
Align your processes and systems to support
that experience.
© 2012 Forrester Research, Inc. Reproduction Prohibited25
Marketknowledge
Servicesresourcing
Communication marketing and
sales
Performance measurement
and learning
Governance Relationshipmanagement
Set of Capabilities
Customerexperience
design
Guiderails for service definition (part of change DNA)
Experience
Customer outcomes
SuccessPerformance Improvement
Growth and adoption
Business sustainability
Competitiveadvantage
Happy customers
Engage those involved in service delivery to articulate a holistic vision of the experience
delivered from the service consumer’s point of view
© 2012 Forrester Research, Inc. Reproduction Prohibited26
Source: Alex Osterwalder
© 2012 Forrester Research, Inc. Reproduction Prohibited27
Executive engagement
Capabilities/services provide the glue
Business Capabilities Business Capabilities
Business Capabilities Business services
(Capability set)
Assess impact/
performancevs. maturity Prioritize
21
3 45
. . .
Outline processesOutcome metricsRoles and skills
Baseline
Holistic service vision
Operational process
architecture
Business engagement
Process definitions (To-Be)
A322+A322
+A322+
© 2012 Forrester Research, Inc. Reproduction Prohibited28
Overallarchitecture
Technologyimplications
Initiation
Engage
Programoffice
Steering group
Baseline Vision Implementation
Commission
Exec B
riefing
Roll out planning and monitoring
Consult on individual process & service architectures
Componentize legacy apps
New appdesign
New appdevelopment
Development
Valid
ation
Launch
Behavioral change;
Customer engagement
Roll out monitoringMeasuring benefits
Iteration
Monitoring and improvement
Executives have an ongoing role
Architecture team
Service team 1
Service team 2
Process team 3
…Process team N
Technology team
Engage, communicate, listen, empower, create, convince, and reinforce
Visible leadership, constantly review progress, overcome political obstacles, etc.
Change management
Executive Control Points
Decisio
ns
Busine
ss Briefing
© 2012 Forrester Research, Inc. Reproduction Prohibited29
Aligning corporate change initiatives
Vision(Strategy)
Govern’ce& Plans
StructureIncentivesPerform’ce
Culture(Behavior)
Change
Governance Structure Incentives Culture
Vision Structure Incentives Culture
Vision Governance Incentives Culture
Vision Governance Structure Culture
Vision Governance Structure Incentives
Confusion
FalseStarts
Chaos
GradualChange
BetterSameness
© 2012 Forrester Research, Inc. Reproduction Prohibited30
Develop your own change management fabric
• Long term competitive advantage
• Outside-in approach
• Align with customer needs
• Culture of customer and performance improvement
• BPM’s context
• Executive engagement
• Business case
• Project selection
• Project roles
• Project framework
• Baseline
• Innovation
• Managing risk
• Overcome resistance
• Build an appetite for change
• Establish the foundation
• Dealing with the demand
• Portfolio approach
• Building knowledge and experience
• BPM Center of Excellence (CoE)
• Evolving program structure
• Developing roles and skills
• Multi-disciplinary teams
• Practices, tools, and methods
• Structures for a process-driven org
• BPM fits with:• Value Chain• Business
Capabilities• Business
Services • Lean, Six
Sigma• Balanced
Scorecard
• Modeling approaches
• Deriving processes from business needs
BPM Basics
From Project To Program
BusinessTransformation
Methods &Tools
Building BPM Capabilities
The Journey Of BPM Structure, Methods And Tools
© 2012 Forrester Research, Inc. Reproduction Prohibited31 © 2009 Forrester Research, Inc. Reproduction Prohibited
Thank you
Derek [email protected]
www.forrester.com
Twitter - @bpmfocus