Published on January 26, 2009
From Business Strategy to IT Services: The Role of Business Process Management in Business Architecture Hugh Ma Principal Diamond Management & Technology Consultants firstname.lastname@example.org November 13, 2007
What you can expect to learn • What is Business Architecture? • Why is Business Architecture important to BPM? • What are the components of Business Architecture? • What is the Operating Model and why is it a key to success? • Learn how Functional Models describe “what” an organization does and enable BPM to accurately define “how” those things are done Page 2 © 2007 Diamond.
The promise of BPM centers on optimizing and automating core functions Companies that outperform their peers do so because they have an automated and efficient foundation Business Process Management is a critical tool for delivering that foundation Page 3 © 2007 Diamond.
Dynamic innovation is built on a stable foundation • Stable operations allows the business to focus on new opportunities and ideas • Streamlined processes support speed to market • Lower operating costs free up the funds needed to explore new opportunities Page 4 © 2007 Diamond.
It’s important to optimize and automate but not at the cost of innovation • BPM enables optimized and stable processes at the cost of reduced agility • Innovation requires agility and needs to prove itself before being added to the core • New products and markets frequently require operations that change rapidly and don’t lend themselves to BPM Page 5 © 2007 Diamond.
BPM practitioners need to be aligned to business strategy more than ever What are the core functions for our business? What capabilities make up those functions? Are we getting the benefits we expected? Page 6 © 2007 Diamond.
Symptoms of a problem we all face • Your Organization may be Process Oriented, but is it Process Driven? • The BPM Cycle of Change: Managing People from Denial to Commitment • Gaining Traction for BPM in an Organization • Fifteen days to 45 Minutes: Dramatic Process Improvement by Changing the quot;Right Stuffquot; • Business Innovation: A Balanced Approach to Creating Value and Agility • People, Process, Technology: Why Can't They All Get Along? Page 7 © 2007 Diamond.
Every BPM implementation faces a host of questions These risks and challenges to implementation are symptoms: – Business strategy hasn’t been translated into tangible actions – The operational model isn’t clear – The high level functions haven’t been clearly identified – Organization hasn’t been aligned to the core functions Page 8 © 2007 Diamond.
Business Architecture gives you a roadmap to know what processes are core • Translates broad business strategy into tangible capabilities • Identifies the metrics and benchmarks that will show progress • Provides a big picture view of how people, process, and technologies come together to build a core foundation Page 9 © 2007 Diamond.
So what is Business Architecture? Operational Business Strategic Business Architecture Architecture Identifies the Identifies Capabilities Operational Model, needed to deliver the business strategy and Functions and People the Metrics that show that capabilities must be progress implemented within Page 10 © 2007 Diamond.
Strategic Business Architecture A comprehensive statement covering Strategic Business Architecture the major functions and operations of Mission a business An inspirational, forward-thinking view Guiding Principals Vision of what the program wants to achieve The top priorities that would achieve Goals the vision A set of realistic outcomes tracked by KPI Objectives KPI KPI performance indicators A description of what it takes to Capabilities achieve the objectives Page 11 © 2007 Diamond.
Operational Business Architecture A comprehensive high level Operational Business Architecture view of the business that shows how functions, people, and technologies come together Operational Model Top-Down functional view of the business that identifies the groups of core processes that Functional Organizational Model Model make up the organization A depiction of organizational boundaries and how that relates to operational functions Page 12 © 2007 Diamond.
Understanding your Operational Model is key to identifying core functions High Business Process Integration Coordination Unification Diversification Replication Business Process Standardization Low High Page 13 Source: Jeanne Ross (MIT CISR) - Enterprise Architecture as Strategy, Diamond. © 2007 Diamond.
Business Architecture delivers the business clarity you need to succeed Strategic Operational Business Business Architecture Architecture Core Processes delivering Key Capabilities that BPM can Prioritized Functions and optimize and Capabilities People automate Page 14 © 2007 Diamond.
Business Architecture starts with partnership • Collaborate with senior management to understand the business strategy and operating model • Often one or both are not well defined or documented • Frequently, we must be the ones to reach out and facilitate the conversations needed Page 15 © 2007 Diamond.
Business Architecture provides a structure to frame the conversation • Strategic Business Architecture provides a framework for articulating strategy and driving it into tangible capabilities • Operational Business Architecture provides a framework for understanding the functional and organizational implications of strategy Page 16 © 2007 Diamond.
Engage the Business early Business BPM Project Business Strategic Planning Execution Operations Planning Use enterprise Ensure the and business unit BPM Analysis organization is Run the direction and and prepared for Business goals to drive Implementation change BPM plans Project Unit 1 Goals Project Filter Enterprise Project Unit 2 Gals Goals Project Unit 3 Goals Project Multi-Year Plan Budget Cycle Project Cycle Continuous Page 17 © 2007 Diamond.
Start Bottom Up to Go Top Down • Start with operational model and capabilities, not requirements – Requirements are good for implementation but bog down the planning process – Capabilities provide a manageable level of detail for prioritization and release planning • Start with functions, not with processes – Process engineering requires a tremendous amount of detail – Functions allow coarse-grained prioritization and justification for follow-on detailed process work Page 18 © 2007 Diamond.
Key Takeaways • Adopt a holistic model for functional identification – Work with the business to understand what is core – Engaging the business ensures all parties understand how organizational structures align (and don’t align) to functions – Be a part of planning at a business strategy phase to capture the true capabilities needed by the business • Use Business Architecture methods to identify core business functions – Engage the business to determine the prevalent operating model – Helpful to identify business domain specific processes separate from enterprise-wide shared business processes Page 19 © 2007 Diamond.
Thank You Questions?
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