Building A BPM Center of Excellence

A Con Ed Case Study

by

Frank La Rocca

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 The Implied Business Process

Warehouse Stock
Customer Strategic Contract Buyer A/P Delivery Inspector
Person
Negotiator

Application Function & Data

A/P Oustide
ARIBA PMS MMS Contracts Compass Contractor
Billing

Customer Services Warehouse Payments Terms & Construct Billing

Data Items Conditions Data Data

Characteristics:
•Process in the people; different people = different process
•Process is not explicit, not standardized, not always managed by business goals
•Fragmented; no real beginning, or end to a process or transaction

Today’s Agenda

ƒ Setting the stage:

ƒ Why BPM?
ƒ Why a Center of Excellence?
ƒ Abraham Maslow’s Hierarchy of BPM?
ƒ BPM Center of Excellence
ƒ Con Edison Case Study
ƒToday, Tomorrow and the Next Day
ƒ Roles and Responsibilities
ƒ Lessons Learned

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 Setting The Stage: Why BPM?

ƒOver time, business processes become inefficient

ƒThose that manage rarely have time to step back and see the big picture
ƒAs business needs and rules change, quick fixes are often introduced
ƒ“Business as usual” sets in
ƒMost processes too large for the human to process in its entirety

ƒAcquisitions & mergers often leave legacy processes behind

ƒMultiple systems and data proliferation
ƒIncomplete system integration
ƒNon standardized processes and terminology

ƒFrequently, the business process exists only in the brains of the

employees who run the process

Setting The Stage: Why a Center of Excellence?

ƒBPM is a discipline;
ƒ requires many diverse and specialized skills
ƒ requires practice
ƒ fosters continuous improvement

ƒIt is good to have some distance from the process

ƒUn biased view

ƒAt some point, all processes “connect” and each should be

modeled within a standard framework
ƒHelps prioritize business process engagements

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Abraham Maslow’s BPM Heirarchy?

Client
„ Allow client to manipulate, customize and configure process real time
Process
Manipulation
„ Develop Process Management Dashboards
Process
„ Monitor KPIs, situations, process information, events & activities in real-time
Monitoring „ Aggregate and correlate information from disparate sources
„ Develop optimized processes using simulation & “what if” techniques
“To be” process
„ Move from function based activities to process based activities
Modeling with simulation „ Ensure alignment of process execution with business objectives
„ Identify gaps, waits, overlaps, re-work, & manual handoffs
“As Is” Modeling with Detailed “you can’t optimize what you can’t see”
Process Attributes „ Drive process standardization

„ Transition from process mapping to process modeling

„ Establish enterprise process repository
Corporate Repository of Process Models
„ Develop enterprise process model techniques and tools
„ Provide process governance & definition
„ Support compliance initiatives

BPM Center of Excellence

Vision:
Promote and facilitate Business Process Management by developing
the skills, standards and techniques that will facilitate process
standardization and consolidation across the enterprise
Objectives:
• Develop guidelines & procedures for documenting and analyzing business processes
• Establish standards for modeling tools and design repositories (IBM WebSphere)
• Institute governance mechanisms
(PMO Touch Points, Design Reviews, etc.)

Charter:
•Provide end to end process visibility
•Improve the efficiencies of business processes
•Provide facilitation and coaching
•Maintain a corporate business process knowledge base
•Develop and maintain a business rules and process architecture

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 Case Study

Con Ed
Procurement Process

Business Process Improvement: Purchasing Example

What have we done? Results

• “As-Is” process fact gathering
○ Identify processes in scope • 10 Processes identified
○ Identify and gather all involved parties • 15 Detailed process interviews
○ As we modeled the process, we captured:
• 6 full day workshops held with
• The process flow and sequence ~ 50 Con Edison Employees
• Departments and roles • “Buy in” from all participants
• Decision point percentages • All processes modeled and
• Cycle time, duration and cost stored in corporate repository
• Opportunities for improvement • Detailed process analytics
available
•“To-Be” process scenario planning
○ Unencumbered by “because we always do it that way”
○ Addresses opportunities, streamlines processes
○ The tool enables multiple “what if” scenarios

•The Tool: Websphere Process Modeler

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As-Is Process Maps “walked” to Identify Improvement Opportunities

1 Unnecessary rework within the process, redundant/repeated process steps

2 Avoidable waits & delays that extend cycle time
3 Excessive process cost with significant manual process elements
4 Non-value added work performed by procurement, key stakeholders and suppliers
5 Multiple and redundant tools use -opportunity for broadly leveraging existing/best of breed tools
6 Inefficient or excessive amounts of hand-offs between roles and organizations
7 Redundant or excessive internal customer and supplier touch points
8 Clear opportunities for process improvement using automation
9 Opportunity to increase e-document exchange with increased use of e-tools and simplification of the process flow

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Process Opportunity Matrix

„ Process 1
„ Process 2
„ Process 3
„ Process 4
„ Process 5
„ Process 6
„ Process 7
„ Process 8
„ Process 9

1 Unnecessary rework within the process, redundant/repeated process steps

2 Avoidable waits & delays that extend cycle time
3 Excessive process cost with significant manual process elements
4 Non-value added work performed by procurement, key stakeholders and suppliers
5 Multiple and redundant tools use -opportunity for broadly leveraging existing/best of breed tools
6 Inefficient or excessive amounts of hand-offs between roles and organizations
7 Redundant or excessive internal customer and supplier touch points
8 Clear opportunities for process improvement using automation
Opportunity to increase e-document exchange with increased use of e-tools and simplification of the
9 process flow

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Sample As-is Process Scorecard

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Sophisticated ‘What If’ Scenario Planning

Policy,
People and
Procedure,
Capabilities
Governance

Opportunities

Technology

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 My Vision for Process Modeling

Today,
Tomorrow
&
the Next Day

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Today: Illustration of an Implied Business Process

Warehouse Stock
Customer Strategic Contract Buyer A/P Delivery Inspector
Person
Negotiator

Application Function & Data

A/P Oustide
ARIBA PMS MMS Contracts Compass Contractor
Billing

Customer Services Warehouse Payments Terms & Construct Billing

Data Items Conditions Data Data

Characteristics:
•Process is not explicit, not standardized, not always managed by business goals
•Fragmented; no real beginning, or end to a process or transaction
•Process in the people; different people = different process
•Underlying architecture “is what it is” or ad hoc

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Tomorrow: Illustration of a Procedural Business Process

Warehouse Stock
Customer Strategic Contract Buyer A/P Delivery Inspector
Person
Negotiator

Application Function & Data

A/P Oustide
ARIBA PMS MMS Contracts Compass Contractor
Billing
Customer Services Warehouse Payments Terms & Construct Billing
Data Items Conditions Data Data

Characteristics:
•Process is explicit, standardized, understood by people, can be used for training, etc
•Process is documented, but compliance is on the honor system
•Developing a vision for underlying architecture

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And the next day: Illustration of an Executable Business Process

New Business Processes Layer

Characteristics
ƒ Explicit Enterprise-Wide
Business Process
ƒ Maximum Reusability
ƒ Agile
ƒ Maximized use of Best of Web Services
Breed Components
ƒ Extended Life of Application
Assets
ƒ Easily Reengineered Function Library Purchased
Package
Components
Business Process Solutions
Legacy App ERP Solution
ƒ Insulates the Business Best of
from the Technology PMS
Breed
ARIBA
Function
ƒ Enables Incremental FunctionX

On-Demand Replacement MMS

Oracle
Developed
ƒ Facilitates Real-Time Components
FunctionY
Function3 FunctionC
Monitoring
ƒ Underlying architecture re- Function4 Compass FunctionZ
FunctionD
engineered

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Next Steps for BPI COE

ƒ Continue to sell BPM by delivering with each engagement

ƒ Pilot our first Monitoring initiative
ƒ Continue to develop, build & staff organization
ƒ Use consultants to “train the trainer”
ƒ Build Supporting Infrastructure (repository, publishing server etc.)
ƒ Develop Con Ed Process Modeling Methodology and Standards
ƒ Develop Process Architecture (enterprise process model,
standards, etc)
ƒ Developing Supporting Technology Plan (working with IT)
ƒ Develop top down process selection methodology
ƒ Select next process

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BPI: CoE Roles and Responsibilities

The BPM CoE Director/Manager will review and approve the operating model of the CoE and ensure feedback collected is
incorporated and a continuous improvement culture is developed. The BPM CoE manager will be a champion and advocate
of business process orientation.

The Business Process Architect will ensure a corporate process model is constructed by using the results of the various BPM
initiatives. The business process architect will apply consistency and standardization to the process hierarchy, process
definitions, and process relationships. The process architect will determine if existing standards need to revisions or new
standards need to be incorporated into the current operation. The process architect will identify potential business services
and ensure existing business services are incorporated in process models targeted for implementation.

The Business Process Modeler will model the end-to-end business processes using a process modeling tool selected by the
CoE. This role is also responsible for working with the Subject Matter Expert (SME) to model the steps of the process, the
dependencies (the order of the steps), what resources are needed for each activity (human and/or non-human), and the inputs
and outputs of each activity. The Business Process Modeler works with the Business Analyst in the business unit to
understand the impacts on the process design, organizational roles and structures, exception processing, and other
measurements that need to be tracked. The Business Process Modeler is an expert in process modeling and use of the
standard modeling tools used by the CoE.

The Business Process Facilitator acts in a consulting role by consulting to the business on identifying all activities involved in
the process and ensuring modeling and analysis. The facilitator will also be responsible for identifying workshop participants,
securing workshop materials and conducting workshops for modeling the as-is processes and leading the business to a best
practice to-be process model. The facilitator may assist the team assembled for workshops in further understanding of BPM
and will use a variety of techniques to achieve the best possible results for the business.

Supporting Roles: Process Owner, SME’s, Business Analysts

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 Lessons Learned

• Each engagement is unique and not a “textbook” engagement,

however, each presents an opportunity to take us one step
closer to our BPM vision
○ Enhance our standards and methodology
○ Grow our experience base
○ Learn from our mistakes

• Each client has different expectations and different goals

• Challenges
○ High demand for our services
○ Not fully “open for business”
○ Managing client expectations and competing approaches
○ New analytical roles for current staff
○ Selecting the next “best” process

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Lessons Learned
ƒ Start Small and Continually Refine Practice With Each
Engagement

ƒ Demand for BPM CoE Services will exceed most optimistic

forecasts

ƒ Planning and managing rollout is key

ƒ With Experience and Breadth More Things Become Important

ƒ Glossaries, impact analysis

ƒ Neutral Facilitation is a Key to Collaboration and Overcoming

Parochial Views

ƒ Well executed modeling builds teams, common culture and

buy-in
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