Establishing a BPM Center of Excellence

Best Practices & Case Study

Howard WebbDirector, BPM Advisory ServicesProlifics

INTRODUCTIONS

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Howard Webb

Director of BPM Advisory Services – Prolifics

Over 25 years as a consultant, trainer, facilitator, and speaker on the topics of Business Process Management (BPM), data architecture, and project management

Founded the Midwest BPM Users Group

Published articles on BPM and enterprise architecture

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ABOUT PROLIFICS

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Prolifics at a Glance

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W h o A r e W e ?

S t a b i l i t y, L o n g e v i t y & G r o w t h S o l u t i o n L e a d e r s h i p

Off-Shore Development CenterHyderabad, India

Application TestingSanta Clara, CA USA

SOA solutions and appliances for connectivity Business Process Management for business optimization Portal, Collaboration and Content Management IT Security for Applications and the Enterprise Monitoring and Managing Applications Testing, Governance and Methodology Information Management for Data Cleansing, BI & Dashboards Technology Migrations to the IBM Software Platform

A Corporate Group of 1,200 Employees Worldwide specializing in the expert delivery of end-to-end IBM Solutions

New YorkBostonPhiladelphiaWashington DC

OrlandoSan FranciscoLondonHamburg

Over 30 years in business, Prolifics is an end-to-end systems integrator specializing in IBM technologies

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Prolifics’ Customers

G o v e r n m e n t

E d u c a t i o n

R e t a i l & D i s t r i b u t i o n U t i l i t i e s

I n s u r a n c e

F i n a n c i a l S e r v i c e s

H e a l t h c a r e

WHAT IS BUSINESS PROCESS MANAGEMENT?

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Business Process Management

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A top-down methodology

A systematic approach for improving a specific process

A set of software technologies

The same thing as business process reengineering

Some definitions…

Business Process Management

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“Business Process Management (BPM) is a holistic management approach that encompasses all aspects of a business including Strategy, People, Processes and Technology, in order to delivering value to customers

and other stakeholders.”

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BPM IS A JOURNEY …

You never arrive.

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AS SUCH…

It requires coordination to keep the Journey moving forward smoothly.

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BUT HOW DO WE DO IT?

Challenges Limited resources

Competing priorities

Standardization (methods, technologies)

Increasing demands from both the business and customers

Management demand to show ROI

Gain process maturity and foster an environment of continuous improvement

Struggling with complexity and change13

Complexity

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“Change is linked to complexity. Complexity increases both when the rate of change increases and when the amount of things that are changing around us increase.” Theodore

Modis

WHAT IS A BPM CENTER OF EXCELLENCE?

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The BPM Center of Excellence

A centralized organization focused on the enterprise-wide coordination of process activities

The Hub for all things BPM

A Steward of methods and standards

A link between strategy and execution

Agent of change

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WHY ESTABLISH A BPM COE?

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The Need for Coordination

The only way organizations can deliver value to their customers is via cross-organizational business processes

Business strategy is therefore delivered and executed by means of business processes

To ensure the business strategy is being delivered as desired, process initiatives must be coordinated, managed and controlled

Few organizations have a centralized structure dedicated to this objective

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Traditional Management Model Redundant activities/duties

Misaligned incentives/ compensation

Isolated measurement model

Limited reuse Multiple breakpoints Multiple moments of

truth No cross-organization

control

Corporate

Dept A Etc.Dept B

Departmental Silo Perspective

TraditionalHierarchical

Management

Process-Oriented Model Begin and end with the customer experience in mind

Incentives based on end-to-end process performance

Fewer handoffs, fewer breakpoints

Few moments of truth Process measures

providing visibilityCorporate

Function A Etc.Function B

Cross-Departmental Perspective

Customer

Process 1

Process 2

Process 3Customer

Poorly Coordinated BPM Program

Redundant standards Competing priorities Sub-optimized

operations Inefficient use of

technology More handoffs, more

breakpoints Multiple moments of

truth Limited or no cross-

organization control

Corporate

Dept A Etc.Dept B

Process Silo Perspective

Sub-Process

Sub-Process

Sub-ProcessCustomerCustomer

The Customer Experience

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Discontinuous thinking leads to disjointed customer experiences…

How many people or departments did I have to talk to just to get my issue resolved?

Current Trends

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“Broadly speaking, investing in better coordination and management of process work has been on the rise, while incremental approaches are slowly declining, or at least

being integrated into larger, organization-wide BPM initiatives..”

*BPTrends, 2012, The State of Business Process Management, Celia Wolf, Paul Harmon : www.bptrends.com

bpm six sigma Lean six sigma business architecture

Operating Model

Leading by example Gaining support Small, early successes

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Influencing Directing Setting policy Determining what projects

to do Have a seat at the Strategy

table

Where your COE falls on this spectrum depends largely upon your environment

How much power and authority the COE is granted Not likely to start as a Directing model

Maturity

Structure

Strategic organizational perspective

Coordination of activities Track and monitor benefits, ROI Support the use of tools and

technologies Development of standards,

methods and techniques Integrate with Project Office Customer surveys Process maturity assessments

Process modeling Facilitation Coaching Project management Business analysis Data analyst

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BPM COE Management

Process Management

Process Improvement

Staffing

Business Architect Customer segmentation Delivery channels Revenue streams

Trainer/coach Methodologist Business Rules Specialist

Project manager Process modeler Data analyst IT analyst Facilitator Statistician

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BPM COE Management

Process Management

Process Improvement

Some roles can be virtual, tapping expertise as needed.

Office administration Communications coordination

Funding

Centrally Funded Project Funded

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BPM COE Management

Process Management

Process Improvement

Centrally Funded

Without central funding, staff could be ‘reallocated’ to other duties or continually be searching for funding.

Positioning the COELocation of the BPM Group 2011 Survey results

We do not have a formal BPM Group 36%

Our BPM Group is at the Executive level

18%

Our BPM Group is at the Divisional or Departmental level

16%

Our BPM Group is located within IT 15%

Our BPM Group is located within HR or Training

1%

Our BPM Group is located within Finance

4%

Our BPM Group is located within Quality Control

5%

Other 6%

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*BPTrends, 2012, The State of Business Process Management, Celia Wolf, Paul Harmon : www.bptrends.com

OTHER CONSIDERATIONS…

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BPM Maturity Model

Assessment Criteria

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Role-Based Organizational Structure

RACI Chart

Service Catalog

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BPM COE Intranet

Three Year Roadmap

Discipline Roadmaps

CASE STUDY – HORIZON HEALTHCARE

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Who is Horizon Healthcare Services? Horizon is New Jersey’s oldest and largest health insurer.

Horizon traces its history back to 1932, when Associated Hospitals of Essex County, Inc. began selling multi-hospital pre-payment plans for $10 a year covering 21 days of in-patient care.

The company was one of the first health insurance companies in the nation and also one of the first Blue Cross Plans.

Today, it serves more than 3.6 million members.

In 2010, the company processed more than 57.6 million claims totaling more than $13 billion for its members.

The company has more than 4,800 employees and is headquartered in Newark with offices in Harrison, Wall Township, Mt. Laurel, and West Trenton.

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Why Horizon Decided to Get Involved in BPM

Horizon defined a comprehensive systems strategy and plan to achieve the following goals:

Complexity reduction

Sources of truth for core business information

Flexible and agile platforms to respond quickly to change

Business model shift to self-service and the Internet

Catalyst for change

Industry trends requiring faster business response

Shift to the individual consumer

Shifting demographic to technology sophisticated customers

Increasing healthcare costs forcing operational excellence

Increased reliance on business partners

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AgileCompetitive Pricing

Event DrivenStandardization

Responsive

Cost Reduction

The Horizon Multi Year Strategy

Journey to Agility

What Horizon Expects from BPM?

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From Here To Here

LESSONS LEARNED

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Key Considerations

Executive Sponsorship is Key Startups take vision and investment BPM is a big investment … Hardware, Software, People,

Project Costs It’s a business ... financial benefit to the Organization

needs to be documented Communication … do it early … do it often

Surprises … Communicating the Reference Architecture to the Business is important

Your peers don’t know what you have not shared with them … until you tell them three times

You don’t know what your team has not told you … Communication will create demand … do you have the

capacity?

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Key Considerations

Demand comes quickly … get your capacity ready Recruit … Recruit … Recruit … get help You need a diverse set of skills …

Setting up a new business takes a LOT of energy … Plan for change … and stress Work to stay aligned to your plan (“Plan your work and

work your plan”) Work to get others aligned to your plan …

communicate Setting up the Infrastructure and Base Platform installs

is a massive project • Development, Test, Pre-Production, Production

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Good Things Happen Along the Way

BPM & SOA lead to reuse

Reuse sometime pops up unexpectedly … especially when focused on core processes

Example … Our pilot had to do with managing the process and data for customers with multiple insurance policies.

Currently using two claim systems but working to converge to a single one.

We reused knowledge, services, and processes to accelerate and ensure consistency for the migration.

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BPM & Web 2.0 Mash-Ups = Cycle Time Improvements of 20x

Consolidation20 Letter Systems to 1

BPM Automations10% Increase in FPR

Integrated Medical Record ManagementTimely Resolution of Complex Claims

Horizon BPM Success Stories

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CRM & SOA = First Call Resolution

WRAP UP

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Summary

Cross-organizational coordination of process initiatives is critical to success

Implement your Center of Excellence sooner vs. later

Properly staff and fund the Center of Excellence with the appropriate roles and skills

Don’t burden individual process improvement teams with defining standards and methods

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Next Steps

BPM Readiness Assessment

Setting Up and Configuring A BPM COE in Your Environment

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For more information:Contact: Howard WebbEmail: hwebb@prolifics.comPhone:   646.380.2948

And visit these useful links on the Prolifics Web site:

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