Strategy and Business Process Management: Techniques for Improving Execution, Adaptability, and Consistency

285 Pages·2012·4.49 MB·English

by  Carl F. Lehmann

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“In our latest BPTrends survey, readers indicated that one of their major concerns was m
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look at the ways one can do just that. Pack this book in your backpack as you set out on n Process Management
your process journey.”
—Paul Harmon, Executive Editor, BPTrends S
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“Strategy and innovation meet real-world execution. Carl lays out a concise blueprint of r
techniques from the best practices in BPM and presents them in a way that is immediately a Techniques for Improving Execution,
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relevant and useful to help solve the global challenges facing every business.”
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—Jim Hendrickson, General Manager, Global B2B Cloud Services Product Line, IBM Adaptability, and Consistency
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“Most practitioners struggle to advance their BPM efforts from narrowly defined projects

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into an enterprise program. To achieve enterprise success, leaders should pursue BPM
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as a discipline of disciplines that integrates various management techniques. Carl’s
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book provides pragmatic guidance for creating such a framework.”

—Janelle Hill, Vice President and Distinguished Analyst, Business Process B
Management Research, Gartner u C F. L
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“Carl’s book offers key insights for assembling an organization’s people, business
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processes, and information technology into an adaptive system. His commonsense Foreword by Dale Kutnick
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line of reasoning offers sharp contrast to typical ivory tower process methodologies
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and frameworks. This book provides straightforward guidance for all business and IT s

managers tasked with strategic transformation.” P
—Binu Thomas, Director, Strategic Process Transformation, MetLife
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“Carl has captured the essence of what it takes to achieve game-changing performance c
improvements in today’s increasingly competitive environment. From strategic analysis e
to consistent on-target execution, this book is a must read for the entire management s
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team of any organization.”

—Scott Thorogood, Chairman, Aegean Group M
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“Business Process Management—its principles, disciplines, and enabling technologies—
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will be one of the defining agility and efficiency levers of future business success. Carl
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has delivered a solid and pragmatic prescription for connecting strategy with the reality
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of BPM mechanics and execution.”
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—Herb VanHook, VP of Strategy, Office of the CTO, BMC Software
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K14106 n
ISBN: 978-1-4398-9023-3 t
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Strategy and Business
Process Management
Techniques for Improving Execution,
Adaptability, and Consistency
C F. l
arl ehmann
Foreword by Dale Kutnick
CRC Press
Taylor & Francis Group
6000 Broken Sound Parkway NW, Suite 300
Boca Raton, FL 33487-2742
© 2012 by Taylor & Francis Group, LLC
CRC Press is an imprint of Taylor & Francis Group, an Informa business
No claim to original U.S. Government works
Version Date: 20120127
International Standard Book Number-13: 978-1-4398-9024-0 (eBook - PDF)
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I dedicate this book to my mother Jane for teaching me empathy and
respect, to my father Carl for teaching me common sense and perseverance,
and to my wife Cathy and daughters Kerri and Julia for their steadfast
love and support without which this book would not have been possible.

Contents
Foreword.................................................................................................xi
Preface....................................................................................................xv
Introduction.......................................................................................xxiii
About.the.Author..............................................................................xxvii
Section i Best Practices Used
in Strategic Planning
Prologue:.The.Management.Team.Is.Summoned.................................5
The.CEO.Speaks...........................................................................5
Running.a.Business.versus.Running.a.Business.Well.............8
Using.Best.Practices.to.Align.Strategy.and.Resources...........9
Overview.of.the.Best.Practices.of.Industry.Leaders..............10
Using.Best.Practices.to.Innovate.and.Compete.....................11
chapter 1 How.to.Compete:.Competitive.Strategy..........................13
Competitive.Strategy:.The.Classic.Approach.........................14
Five.Forces.Model.of.Industry.Competition..........................16
New.Entrants..........................................................................17
Intensity.of.Rivalry................................................................18
Pressure.from.Substitute.Products......................................19
Bargaining.Power.of.Buyers.(Customers)..........................19
Bargaining.Power.of.Suppliers.............................................19
Determining.a.Defensible.Position.........................................20
Competitor.Analysis..................................................................22
Building.on.Porter’s.Best.Practices..........................................23
chapter 2 How.to.Focus.Operations:.The.Discipline.of.Market.
Leaders...............................................................................27
New.Rules.of.Competition.......................................................28
Operating.Models......................................................................30
Operational.Excellence.Operating.Model..........................31
v
vi  •  Contents
Product.Leadership.Operating.Model................................32
Customer.Intimacy.Operating.Model................................32
Defining.Value.......................................................................33
Building.on.Treacy.and.Wiersema’s.Best.Practices..............34
chapter 3 How.to.Manage.Performance:.The.Balanced.
Scorecard..........................................................................37
Performance.Measures.from.a.Financial.Perspective..........40
Performance.Measures.from.a.Customer.Perspective.........42
Performance.Measures.from.an.Internal.Business.
Process.Perspective...................................................................44
Performance.Measures.from.a.Learning.and.Growth.
Perspective..................................................................................46
Strategy.Maps..............................................................................49
Summarizing.Kaplan.and.Norton’s.Best.Practices...............54
Building.on.Kaplan.and.Norton’s.Best.Practices...................55
chapter 4 How.to.Adapt:.Adaptive.Enterprise.................................59
Sense-and-Respond.Organization..........................................60
Adaptive.Loop.............................................................................61
Modular.Organization...............................................................63
Commitment.Management.Protocol.....................................64
Building.on.Haeckel’s.Best.Practices......................................66
Section.I.Conclusion:.Strategic.Planning—A.Process,.
Not.An.Event...............................................................................67
Section ii execution—Best Practice
Use of Strategic Resources
chapter 5 How.to.Structure.Organizational.Behavior.for.
Strategic.Execution...........................................................73
Empower.and.Motivate.............................................................73
Workforce.Collaboration..........................................................75
Collaborative.Objectives.......................................................76
Managing.Responsibility.and.Accountability........................79
Contents  •  vii
chapter 6 How.to.Structure.Business.Processes.for.Strategic.
Execution...........................................................................81
Defining.Processes.....................................................................82
Operating,.Support,.and.Management.Processes.............82
Operating.Processes.........................................................82
Support.Processes.............................................................83
Management.Processes....................................................83
Control.Processes.and.Competitive.Advantage..........86
Business.Rules.and.Process.Controls............................88
Core.and.Noncore.Processes...............................................90
Preparing.to.Organize.Processes.as.Assets........................91
Managing.Processes.as.a.Portfolio.of.Assets..........................92
Business.Process.Portfolio.Management...........................93
Business.Process.Portfolio...............................................94
Business.Process.Inventory.............................................94
Introducing.Business.Process.Reference.Models..............95
Evaluation.Dimensions....................................................97
Next.Steps.............................................................................102
Analyzing.Inventoried.Processes......................................103
Managing.Process.Execution.................................................107
Performance.Measurement................................................108
Selecting.Key.Performance.Indicators.........................110
General.Rules.about.Selecting.and.Crafting.KPIs.....111
Measuring.Variance.......................................................114
Using.Trend.Analysis.....................................................116
Using.Benchmarking......................................................118
Performance.Control.via.Event.Management................120
Exception.Management.and.Resolution.
Management.....................................................................121
Enabling.Event.Management............................................123
Improving.Execution.through.Process.Modeling,.
Analysis,.and.Simulation....................................................127
Selecting.Processes.for.Improvement....................................132
Symptomatic.versus.Strategic.Process.Improvement.....133
Symptomatic.Processes..................................................133
Strategic.Processes..........................................................135
Continuous.Process.Improvement.Program..............136
Dealing.with.Complexity........................................................137
viii  •  Contents
Simple.versus.Complex.Processes.....................................137
Assessing.Process.Complexity...........................................140
chapter 7 How.to.Structure.Technology.for.Strategic.
Execution......................................................................141
Preparing.for.Process.Improvement......................................143
IT.Trends.That.Influence.IT.Strategy...............................144
Applications.and.APIs....................................................144
Workflow.and.EDI..........................................................144
ERP...................................................................................145
ETL....................................................................................145
EAI....................................................................................146
Business.Process.Modeling.and.Analysis....................146
Business.Rules.Management.........................................146
Internet.............................................................................147
Open.Source....................................................................147
SOA...................................................................................147
SaaS.and.Cloud................................................................148
BPMS................................................................................149
BAM.and.BI.....................................................................149
Assessing.IT.Readiness............................................................150
IT.Capabilities.Enabling.Process.Change........................150
Overall.IT.Readiness...........................................................152
Crafting.a.Process-Centric.IT.Strategy.................................153
Petitioning.for.Process-Centric.IT.Strategy....................160
Investing.in.Process-Centric.IT.Architecture......................161
IT.Portfolio.Management...................................................161
Objective.Evaluation.and.Financial.Analysis..................165
Objective.Evaluation......................................................165
Financial.Analysis...........................................................166
Competing.for.IT.Budget...................................................167
IT.Portfolio.Budget.Structure............................................168
Funding.Availability.......................................................169
Funding.Sources.and.Accounting.Methods...............169
IT.Budget.Management:.Resource.Perspective...............170
IT.Budget.Management:.Domain.Perspective................171
IT.Budget.Management:.Purpose.Perspective................172
IT.Budget.Management:.Asset.Class.Perspective...........173