Does the OMG Have Any Business Getting Involved in ... OMG BPM Keynote Harmon.pdfCMMI - A Business Process Maturity Model • CMMI – Capability Maturity Model - Integrated • Originally

© 2007, Business Process Trends www.bptrends.com 1

Does the OMG Have Any Business Getting Involved in

Business Process Management?

Paul Harmon

Executive EditorBusiness Process Trends

OMG BPM Think Tank, Burlingame, CA July 2007


Trends in Business Process Management

• What is BPM• Enterprise Level Concerns• Process Level Concerns• Implementation Level Concerns• Summary


What is Business Process Management?

BPM is, at the moment, the generic term for a corporate concern

with how work gets done and with all aspects of changing or

improving how work gets done


Business Process Change is a Perennial Management Concern


What Do People Think BPM Means

100%348Total

54%187A management philosophy that focuses on organizing the business around its business processes

23%79A set of software technologies for automating and managing runtime business processes

6%21A cost-saving initiative focused on increasing productivity

18%61An approach to process redesign or improvement

Which of the following best describes what BPM means to you?

BPTrends Survey: July 2007. 356 Responses from throughout world.


BPM Must Include All The Different Perspectives


BPM Requires an Enterprise Perspective

Enterprise Level

Business Process Level

Implementation Level

.

Human Resource Development

Job DesignTraining Knowledge Management

Specific Activity

Business Process

Physical Plant and

IT Development

BPMS, BAMProcess Automation

Hardware Used

A Mix of IT and HR

Development

Architecture, Measurement, Management

Process Change Projects

ERP Implementation





Enterprise Level Concerns

Enterprise Level

Process Level


• Change strategy or core business model (Reengineering)

• Coordinate & prioritize process change efforts• Standardize business processes throughout the

company/world• Create BPM group or Center of Excellence to lead &

standardize efforts• Audit company to determine where it ought to focus

its process change efforts• Create a business process architecture• Create a process performance measurement system• Create a process management / governance system


Business Frameworks are Instant Architectures

• The Supply Chain Council’s SCOR• The best example of a popular horizontal BP

architecture is provided by the Supply Chain Council’s SCOR framework

• Created in past 5 years by consortium of some 700 companies

• Defines a top-down approach to organizing the BP architecture of a corporate supply chain process

• www.supply-chain.com


SCOR MODEL: Level 1

SupplyChain

DeliverMakeSource

Plan

Return


Other Business Process Frameworks

• Value-Chain Group’s VRM• TeleManagement Forum’s eTOM• ACORD Insurance Framework (Being developed)• OMG Finance Task Force Framework (Being developed)• OCG’s ITIL (Info. Tech. Infrastructure Library)• ISACA’s COBIT (Control OBjectives for IT)


VRM Establishes a Value Chain


VRM Also Defines Management & Support Processes


Michael Porter’s Value Chain M

arginS

uppo

rt P

roce

sses

Cor

e B

usin

ess

Pro

cess

es

From Michael Porter, Competitive Advantage, Harvard, 1985


An Aside on the Meaning of Process

Value Chain

Business Process Business Process Business Process

ProcessProcess Process

Sub-Process Sub-ProcessSub-Process

Sub-Sub-Process

Activity Activity

Sub-Sub-Process


Value Chains vs. Value Nets

• Value Chains tend to emphasize a set way of doing things that occur within a single enterprise

• The emphasis on Value Chains is an emphasis on tight integration (fit) and efficiency

• Value Nets (which IBM terms Component Business Models) emphasize that some companies assemble business processes in response to changing customer requests

• The emphasis on Value Nets is on flexibility and the ability to respond differently in different situations


IBM’s Component Business Model Architecture

Stra

tegy

Tact

ics

Ope

ratio

ns

Channel Strategy

Financial PlanningMarketing Management

Information Systems

Human Resources

Supply Chain Management

Manage Customers Merchandising Supply Chain Administration

Strategic Planning

Alliances

Store Sales

Inventory

Store Display

Store Design Real Estate

Store/Channel Strategy

Customer Relationship Mang.

Customer Satisfaction

Space ManagementVendor Management

Distribution Planning

Customer Accounts

Credit Planning

Finance

Back Office Accting

Procurement

Warehousing

Distribution

Transportation

Store Management

Customer Communications

Customer Support

Inventory


Most Companies Can Divide Their Processes


Most Companies Will Need Both Approaches


CMMI - A Business Process Maturity Model

• CMMI – Capability Maturity Model - Integrated• Originally developed by the Software Engineering

Institute at Carnegie Mellon University for the US Dept. of Defense to help them evaluate software contractors

• CMMI is derived from SEI’s original Capability Maturity Model (CMM)

• CMM emphasizes that organizations go through stages• A stage represents the achievement of a set of related

capabilities• In reality organizations don’t go through neatly defined

stages, but it’s a very convenient half-truth


SEI Capability Maturity Model Integrated (CMMI)


About 4% of Today’s Companies Are Really Process-Centric


Core Processes, Support and Management Processes

Business Process (Pack Widget)

“Customer” Process(Ship Widget)

“Supplier” Process(Assemble Widget)

Support Processes(IT, HR)

Day-to-Day Management of the

Pack Widget Process

Work Unit

Senior Management(Processes)

Business Process Group

Management of Project to Improve Work Unit Process


Day-to-Day Management Processes


Level 2 BPMM “Process Areas”

Business Process Maturity Model





Process Level Concerns

• Redesign business processes• Improve business processes• Document business processes• Comply with government reporting requirements• Change company culture so that managers know

how to manage processes effectively• Change company culture so that managers &

employees focus on the need for constant process improvement

• Train business analysts to analyze business problems & generate requirements documentation

• Make process descriptions available on-line and training managers to read process diagrams

Enterprise Level

Process Level



There Are Different Types of Process Projects


Specific Process Are More or Less Complex


Revisiting the MDA Architectural Levels

Abstract Model of a Specific Company's

Process

Concrete Model of a Company Application

J2EE/EJB Profile

EJB code

Business Analysts Create Models of Business Processes


An BPMN DiagramBooks-OnLine: Order Fulfillment Process

Customer

Company Web Portal

Order System

Exceptions Clerk

Receive Order

Ship Order

Packaging Fill Order

Shipping

Review Order order accepted Send

workorder to shipping

Place Order

order rejected

order incomplete: Ask customer for more information

Recieve Books

Close Order

books

Revise Order

order requires special processing

Re-Review Order

Credit Card Approval Center

Review-Approve Charge

credit card approval


We Need Some Business-Specific PIM Syntax


And Some Business-Specific PIM Notation


A Model of Your Customer’s Process

Customer

Your Company

Review Options

Receive Orcer

Revise Order

Search for Sellers

Place Order

Inquire About Order

Exchange Order

Customer visits our Website and downloads

product description

If customer decides to phone for additional information, he/she gets answering system

that routes him/her through 3-4 levels of choices to get to automated answer, or 5 levels to get to a customer representative. (Usually a 6 minutes wait for Cust. Rep.)

Customer visits our Website and enters order and credit card information. Customer

gets email documenting order.


Six Sigma and LEAN





Implementation Level Concerns

• Automate business processes (bpms)• Develop training courses to teach skills required by

new processes or by process changes• Change locations of operations to facilitate

smoother supply chain flows, etc.• Automate day-to-day execution & monitoring of key

business processes (BPMS)• Install business intelligence/analytics to support

real-time monitoring & better managerial decision-making

• Create knowledge management system• Organize an “Enterprise Architecture” to keep track

of IT resources used by organization


Process is Where Business Managers and IT Meet

What will each bring to the meeting?


An Overview of a BPMS Product

Knowledge

Utilities

Engines

Process Modeling

Environment

Rules Engine EAI EngineWorkflow Engine

Middleware/Application Server

Development Environment

Management Environment

Developers

Employees Software Applications

Process Managers

Eg. J2EE Server:

WebSphere

Eg. Windows .NET Server:

BizTalk

Eg. ERP Server: NetWeaver

Specific Rule Sets or

Ontologies

Specific Business Models

Complete Process

Frameworks

BPM Repositories/Databases

Process Monitoring

Environment


The Range of BPMS Products

• Integration-Centric– BEA, IBM, Microsoft, Oracle, SAP, Sun, TIBCO

(BusinessWorks), webMethods• Employee-Centric

– Appian, Fuego, Global 360, FileNet, HandySoft (BizFLow), Lombardi, Metastorm, Savvion, TIBCO (Staffware), Ultimus

• Document-Centric– Adobe, Captaris, Documentum, DST Systems, EMC, FileNet,

Global 360, Open Text• Decision-Centric

– PegaSystems, CA• Monitoring-Centric

– IBM, TIBCO, Lombardi/Cognos


BPMPS, Data Warehouses, BI, Analytics & Dashboards

The Other BPM:Business

PerformanceManagement


BPM and SOA: A Necessary Conjunction?

Figure Modified After a BPTrends Column by Mike Rosen, Jan. 2006


Market Consolidation

• 4-07 Software AG (Platform) buys webMethods (Documentation)• 8-06 IBM (Platform) buys Filenet (Documentation) • 3-06 BEA (Platform) buys Fuego (BPM engine)• 12-05 Intalio (BPM Engine) buys FiveSight (BPEL)• 10-05 Metastorm (Workflow) merges with CommerceQuest (EAI)• 9-05 Fair Issac (Rules) buys RulesPower (Rules)• 7-05 Seagull Software (Middleware) buys Oak Grove Systems

(BPM engine)• 6-05 Sun (Platform) buys SeeBeyond (EAI)• 4-05 TeleLogic (Modeling) buys Popkin (BP modeling)• 6-04 Oracle (Platform/Database/ERP) buys Collaxa (BPEL)• 6-04 TIBCO (EAI) buys Staffware (Workflow)• 4-04 Adobe (Documents) buys Q-Link (Workflow)• 9-02 IBM (Platform) buys Holosofx (BP Modeling)


The BPMS Market Today


Aligning Processes and Business Rules

Specific

Activity

Business Process

Physical Plant and

Human Resource ArchitectureIT Architecture

Data

ArchitectureApplication

Architecture

Network

Architecture

Application

Designs

and Code

Database

Designs and

Data

Management

Systems

Technology

Architecture

Hardware Architecture

JobDesignActivity

Measurement

PlanActivity

Management

Plan Job Aids,

Training

Programs,

Knowledge

Management

System

Activity/

Performance

Monitoring

SystemPlans, Budgets,

Hiring, Resource

Allocation,

Feedback,

Consequences

Human-IT

Interface

Model

Screensand

Reports

Logical

Level

Physical

Level

Hardware Used

HumanResource

Architecture

ITArchitecture

Rules Embeddedin SoftwareApplications

Rules Embeddedin Manuals and

ProcessDocumentation

Specific Setof Rules

Organization GoalsOrganization Policies

Organization Ontologyand SpecificBusiness Rules

Implementation(Uses of Rules)

Strategy or EnterpriseLevel

Organization Performance

BusinessRulesLevel

BP Architecture

BP Analysis& Redesing

ImplementationLevel

BusinessProcess

Level

The Business Rules ManagementPerspective

The Business Process ManagementPerspective

Strategy and Goals

Strategy or EnterpriseLevel

Organization Compliance


Today’s Reality: Multiple ERP Instances


Standardizing Processes to Standardize Instances


Air Products Wants a Single Instance of SAP Worldwide


Tomorrows’ Reality: A Set of ERP Modules Managed by BPMS





Some BPM Standards


So What Business Does the OMG Have in BPM

• As a software standards organization it has a large role to play in BPMS, SOA and other software standards

• As a modeling standards organization it has a role to play in standardizing modeling notations and software tool interfaces

• Does it have a role in BPM methodologies?• Does it have a role in business process audits or

management training?• Does it have a role to play in standardizing business

process frameworks?• Can the OMG move beyond software standards and

embrace real business process management?


For More Information

www.bptrends.comThe most comprehensive free source of information and

analysis on trends, directions and best practices in Business Process Management

There are whitepapers and surveys available that provide more information on everything I’ve discussed

[email protected] editor