SAP BPM best practices: Who should lead BPM initiatives?

July 29, 2010 at 10:52 | Posted in Research | Leave a comment
Tags: Business Process Management, SAP BPM

wah…. BCG huat loh!!!

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Business Process Management (BPM) is an idea that is clearly attractive, but ideas about who owns the BPM building process – business or IT — are still unclear in many organizations.

As Brian Wood — a BPM project manager currently studying IT management at the University of Technology, Sydney — noted, the biggest hurdles come from the way BPM projects tend to “step on operational managers’ toes.”

“Many of them derive a great deal of organizational power from being the sole source of expertise for a process, or associate prestige with the number of direct reports they control,” Wood said. “BPM can be seen to threaten both of these bases of power.”

It’s a platitude that BPM should be a collaborative process. But research by both Forrester and Gartner reveals that, in many cases, organizations either put IT or business in charge. A Gartner survey of BPM conference attendees, in which nearly half of attendees came from companies with more than $1 billion in revenue, revealed that BPM projects were led by IT or by business at nearly the same rate – 29% and 26%, respectively — with 41% reporting that these responsibilities were shared.

Similarly, another survey conducted by Forrester Research focused on who held the budget and the responsibility for BPM across the enterprise. “It ended up that there was a pretty even split between the business and IT sides,” said analyst Clay Richardson.

Who should be in charge of BPM initiatives?

Because BPM is a model-driven approach, IT often finds out about this approach first, and someone who is a senior business analyst will take on the role of BPM champion, Gartner’s Michelle Cantara said.

But the strongest BPM initiatives need to be able to work across functions, because BPM is intended to illuminate the hand-off gaps between functions. And finding business sponsorship, at the highest possible level, is crucial.

“Fundamentally, the business needs to be behind BPM,” Cantara said. “I recommend finding a senior business executive who is receptive to new ideas, has funding authority, is persuasive and is in pain because of some process – and that process is where you should start.”

In implementing BPM, the most important role is the change agent, Richardson said. These people may sit in business or IT, but regardless of their titles, they are the leaders in process change and transformation. “This person is really responsible for going out and identifying process opportunities and evangelizing throughout the organization,” he said.

Next, organizations should appoint a process guru, an individual who understand tools and working with IT and in some cases might have TQM or Six Sigma expertise. “The key is that they balance technical and business capabilities,” Richardson said.

Then there are the process analysts – people who really understand process and can engage the business to scope the process at a lower level and in some cases drive the process improvement project. Richardson said this role derives from that of the traditional business analyst. “To be effective, a process analyst has to be able to define a process solution and shape things around KPIs and metrics,” he said.

There are two additional roles that must be filled in a BPM project, he noted. One is the business analyst, who is often a process analyst wannabee. “They are the ones that can focus on requirements and documentation,” he said. And the final role is that of the operator or manager for the IT systems. “They are responsible for setting up the infrastructure, configuration, and maintenance of software and in some cases creating the solution.”

“It is hard to have a successful BPM program without having people across all these roles,” Richardson said.

Who leads BPM projects is often dictated by the project’s level of sophistication. At the lowest level, which Richardson refers to as the immature level, organizations are either just getting started with BPM or using BPM in a very basic way, typically to assist IT processes or develop applications.

The second level, called aspiring, includes organizations focused on using BPM for innovation, process transformation and enterprise-wide improvement. In those organizations, there is often some sort of centralized team focused on BPM, organized under IT or its own line of business and staffed by a wide range of talent, sometimes even including a VP of process.

The last category, termed mature, includes organizations that have adopted very specific process methodology like Six Sigma and build their operations around these specific methodologies.

Getting it done – BPM best practices

The real trick is finding an executive sponsor who also understands that the decisions he makes must optimize the end-to-end process, not just the outcome for a particular function, Cantara said. That can get tricky when multiple people in an organization share that process. For example, she said, if an executive is the sponsor for a customer on-boarding process for U.S. sales, he actually needs to make decisions that can benefit worldwide sales or some other region.

Another example might be a process that spans different functions. For example, if sales are measured based on the number of units and their associated revenue shipped but the distribution pipeline has been getting packed with products that aren’t selling, it is obvious that some aspect of the process is not visible. “That is where you would want sales and distribution logistics, whoever was in charge, to make a decision to optimize revenue, not just maximize sales. And that gets back to looking across functional gaps and measuring people appropriately,” Cantara said. Aside from simply finding a good executive sponsor, BPM advocates can help themselves by demonstrating success – ideally with something considered important, she said. “Once you have a few significant successes and the sponsors believe it is a better way of improving processes, at that point you have a platform – an argument – that you can take to an executive steering committee where larger investment decisions are made,” she said. Gartner now recommends that companies set up a business process competency center, which includes people with the core technical skills related to BPM.

One of the things that make BPM so valuable is that when businesses embed a process into a software application, it tends to become invisible, and business managers may lose any intuitive grasp of what is really going on. “The idea behind BPM is to give people a visual model that is appropriate and has the appropriate level of detail – the model for strategic planners will be different than for an architect or developer,” Cantara said. “It is like the different views into a database.”