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BPM and Cloud – The Many Perspectives

The relation between BPM [Business Process Management] and Cloud is significantly determined by the perspective one takes; and the possible impact and resulting potential depends on the perspective…

Following are the many perspectives:

1) BPM Product Capabilities provided on a Cloud – From a product vendor perspective, this capability enables vendors to provide their BPM related products / solutions on new commercial models [For e.g.: Usage based, Subscription based, etc. as opposed to Product license based models]. This definitely provides a new set of customers who can leverage the BPM product capabilities and also opens new service opportunities related to Training, Consulting, Support and Hosting. An example of this is Intalio’s BPM SaaS service, Appian’s Cloud BPM, Pega’s Cloud offerings, etc. From a customer perspective, this translates into lower TCO [Total Cost of Ownership] and rapid environment set-up for development and deployment

2) BPaaS [Business Process as a Service] – This is the capability of defining and deploying ready-to-use business processes for specific requirements and providing these business processes as a service. The long term success for BPaaS providers depends on the ability to identify processes which are relevant for a large addressable market space / customer segments, have the potential to significantly scale-up in volume, can be rapidly generalized, standardized & customized and which can be rendered in alternate commercial models. An example of BPaaS is NetOxygen’s Hosted / SaaS LOS [Loan Origination System]

3) Leveraging BPM for “Cloud” enablement – The other area where BPM can be leveraged is in actual definition and execution of business processes for Cloud enablement. Typically, enterprise cloud initiatives require a fundamental change in the way IT implementations are done. These changes impact multiple teams within the organization (For e.g.: Asset Procurement Group, Software License Group, Release Teams, Development teams, etc.) and external groups (For e.g.: Product Vendors, IT Service providers, customers, etc.). A promising area for BPM is the ability to define enterprise level business processes for standard and rapid cloud enablement initiatives. For e.g.: Standard processes for hardware provisioning, software provisioning, etc. The ability to provide these services in a BPaaS model is another area which has promise.

4) BPM Cloud Services – An opportunity to provide BPM Cloud Services related to any of the areas listed above to product vendors, cloud solution providers, cloud service brokers or IT service providers. The range of services can include Training, Testing, Production Support, Migration to a cloud, Consulting, Hosting, etc.

What is your perspective?

Originally published @ http://www.wipro.com/blog/BPM-and-Cloud-%E2%80%93-The-Many-Perspectives

Enterprise BPM by Charles Bennett (Part 3)

Some Trivia Shared in the Workshop

• Since 2005, more than 180000 business books have been written

• In Europe, average life expectancy of an organization is 13.5 years

• In 2011, GE lost 45% of its brand value

• British Airways known to have the maximum loss of baggage in airports – One of the key reasons was passenger and baggage volume at specific times of the day. One of the approaches to address this was to look at the customer as a business traveller; & not just as an air passenger. This provides opportunities for modifying the start and end point of a process and provides ample opportunities for cost optimization, improvement of service and revenues

• P/E ratio average is about 12. 20 is a very good ratio for any organization

• Original organization structure defined by Adam Smith in 1770. This top down hierarchical structure achieved 2400% improvement in organizational productivity

• Leaders who have not taken voice of customers for defining their products, services and solutions – Henry Ford  (Ford) , Steve Jobs (Apple), Jeff Bezos (Amazon), Richard Branson (Virgin), McDonalds – Focus on outcome based thinking

• BMW : Focus is on customer experience – Mission Statement “Give joy to customer”

• Times UK – Lost 30% of its readership just by changing Terms and Conditions

• America is a primarily services economy
o If a customer has a request, look at how it can be serviced
o If many customers have a request, look at how it can be standardized

• Google acquired Motorola Mobility for 12.3 Bn$

• Price point is independent of manufacturing cost and quality of building blocks that make a product
o Nokia Mobile 2011 Release – End-to-end cost of manufacturing – 122$ (Far more superior technology, Lighter, Advanced Features, etc.)
o Apple iPhone – End-to-end cost of manufacturing – 43$
And yet, customers prefer the Apple iPhone – Key reasons being customer experience and brand loyalty

• OTIS Elevators studies and looks at new ideas / innovations in the Japanese auto industry and NASA – Important to look at completely different industries to identify

• If you are planning to visit the UK and happen to come from one of the many countries that drive on the wrong side of the road, the following advice, direct from the Ministry of Transport, is for you: “Visitors are informed that in the United Kingdom traffic drives on the left-hand side of the road. In the interests of safety, you are advised to practice this in your country of origin for a week or two before driving in the UK.” (Src: http://users.telenet.be/worldstandards/driving%20on%20the%20left.htm )

• The width of a space shuttle was historically determined by the width of a train which would transport from the shuttle from the factory to the launch site.. For full story, refer http://www.astrodigital.org/space/stshorse.htmlhttp://www.naciente.com/essay94.htm.  And this width of a space shuttle continues to exist even today. What’s important to note is that the decisions of yesteryears which were driven due to practical and operational constraints decades ago continue to exist because we don’task the question WHY often enough…

• Important to understand the difference between (Examples below in context of a car)
Invention – E.g.:  Combustion Engine
Innovation – E.g.: Car body and design
Disruptive Change – E.g.: Mass production of a car to make it affordable

Enterprise BPM by Charles Bennett (Part 2)

BPM RELATED DATA & FACTS
• Only 1% of global organizations are looking at business process from the “right process perspective”
• 17 out of the top 20 organizations are really looking at processes from the customer perspective – Examples are South West Airlines, BestBuy, Apple, Zara, etc.
• Zara customer experience is the process : Takes 1/40th of industry average from start to finish for producing a piece of garment
• In most organizations, 25 – 50% of costs are redundant (non-contributory)
• For 1 bad reference in a customer forum, you need at least 10 good references to neutralize / negate the impact
• In 2011, 70% of BPM projects have not achieved the results they wanted to and have failed

POINTS OF NOTE
• Processes are the DNA of any organization
• First step in gaining control of business is to know and understand business processes
• An optimized process has minimum points of failure (POF)
• Customer centric BPM solutions aim to focus on cost model, service model and revenue model
• Truly customer centric processes focus on identifying and servicing customers based on successful customer outcomes (SCO).  End goal of any process should be to deliver “Successful Customer Outcomes” (SCO)
• Prosumer – Educated customer who is knowledgeable than the provider itself
• For definition and execution of an optimized process, following are important:
o Process Diagnostics
 Identify Moment of Truth (Customer Touch-points)
 Identify break points (Internal system hand-offs) – As a general guideline, for every Moment of Truth there are 4 break points in any system
 Identify business rules (Decision Points)
o Risk Assessment & Prioritization based on
 Impact to customer – High, Medium, Low
 Impact to organization – High, Medium, Low
o Action Plan
• Process Goals should be SMART (Successful, Measureable, Attainable, Relevant, Time Bound)
• Any customer Moment of Truth has the potential to be:
o Magic (Positive)
o Misery (Negative)
o Indifferent
• Points of Failure = Sq.(Moment of Truth – 1) + Break Points
• Steve Towers Blog (Founder & CEO of BPGroup) @ http://successfuloutcomes.blogspot.com

Enterprise BPM by Charles Bennett (Part 1)

I had the opportunity to attend the Enterprise BPM Worskhop By Charles Bennett from BPGroup  (http://www.bpgroup.org/). Event Details @ (http://www.icmgworld.com/shop/pc/viewPrd.asp?idproduct=645&idcategory=37#details)

Focus of the workshop was on process management, process improvement, process alignment and innovation. The application of how process diagnostics (Customer Moment of Truths, Break points and Business rules) can be leveraged to deliver Successful Customer Outcomes (SCO) was discussed along with case studies and industry examples.

In this 3 part series, I will write about

1) BPM Related Data and Points of Note 

2) Trivia shared during the Session

Below is a picture of Charles & Me at the workshop…

BPM in the Kitchen…

One of the primary activities done in the kitchen is cooking. And cooking is a process. In fact, a creative process. Hence, one of the best applications of the principles of BPM [Business Process Management] is while cooking..

In this blog, I have attempted to list the application of the key BPM principles which I have applied over the years while cooking

DEFINE THE PROCESSES

One of the easiest and most powerful applications of BPM is to define the processes for cooking. The process can be defined in your head or on paper; but it’s important that it is well defined.

 (i) Identify the end-to-end process flow. Each step in the process needs to have clear inputs, outputs, tasks and actors. Also, the dependencies between the various processes should be explicitly highlighted.

[1] Have a high level end-to-end process view beginning from procurement of ingredients for cooking and ending at optimal utilization of these ingredients

[2] Have the second level of process definition for a day which includes all the cooking required to be done in a day. This should include all meals like breakfast, lunch and dinner.

[3] Have the final level of process definition for a specific meal like dinner

(ii) What really helps is to break up the process into sub-processes and identify

[1] The sub-processes which can be completed prior to the actual cooking. For e.g: Chopping vegetables

[2] The sub-processes which can be scheduled to be completed in parallel. For e.g.: Boiling vegetables and preparing the gravy for the vegetable

[3] The sub-processes which can be delegated to others / outsourced. For e.g.: Ask someone to chop the vegetables for you OR buy chopped vegetables

(iii) Plan and Schedule the execution of these sub-processes / processes

AUTOMATE WHERE POSSIBLE

Once you have a clear process definition, identify steps or tasks that can be automated. For e.g.: Use a blender or mixie to make a puree / paste. Eliminate manual tasks and aim for automation. With the range of cooking appliances in the market today, selection of the right one for you could be the challenge. Do keep in mind that automation using an appliance does have other implications – For e.g.: Additional shelf space to store the appliance, Additional maintenance time and effort for cleaning, Additional costs in terms of electricity consumption, etc. The final decision for the extent of automation is a personal choice based on your individual requirements and preferences

EXECUTE THE PROCESS

The next step is to actually execute the process that you have defined. And this is the most important step as the real cooking is done here. And how efficiently you are able to cook depends on your plan, process definition and experience. Of course, nothing like the Midas Touch to bring out the “PERFECT” dish. And in this, no process can really help!

PLAN FOR PROCESS DEVIATIONS

In reality, there will be deviations to the process. For e.g.: Some of the ingredients are not available, Blender is not working, etc. It is good to think about possible process deviations and plan for them in advance. Of course, this will directly link to experience. With experience, one will be able to handle and adapt to most process deviations. While you cannot always be prepared for all deviations, the one mantra to handle any process deviations is presence of mind

DEFINE KPI’s & MEASURE THEM

One of the most powerful ways to get better at cooking is to define KPI [Key Performance Indicators] and measure them. The KPI definition should be linked to an individual’s context – There can be KPI’s around Process efficiency, Turn Around Time (TAT), productivity, etc.. For e.g.: Cook a balanced healthy meal in 40 minutes, Or Chop vegetables in 20 minutes. Once defined, do track and measure the KPI’s periodically. This will give a view of the process performance

FOCUS ON CONTINUOUS IMPROVEMENTS

Once you have measured the KPI’s, the last step is to focus on improvements. It’s important to optimize the process to improve efficiency and productivity. And for this – Identify steps which can be eliminated, Identify if the right person is assigned the right task – in terms of skills, capability, etc. (check your rules) and lastly Identify steps which can be made more efficient and how to do this..

And most importantly, Enjoy Cooking…. Happy Cooking!!

NOTE: All the above are based on personal experiences and are supported by years of data, real-life application and statistical analysis.

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