PIW Kickoff presentation

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© 2006 IBM Corporation

IBM Software Group

SOA: The Key to Business Flexibility

WebSphere

Process Improvement Workshop


Overview and preparation requirements



Hans Skalle

Workshop Facilitator

612
-
220
-
1880, hskalle@us.ibm.com

SOA: The Key to Business Flexibility

2

WebSphere Process Improvement Workshop


Topics


Background


Why process improvement?


The WebSphere Process Improvement Workshop (PIW)


Overview


Sample Results


Preparation Requirements

2

SOA: The Key to Business Flexibility

3

WebSphere Process Improvement Workshop


Topics


Background


Why business process management?


Business process overview


Introduction to Business Services


IBM’s Services Oriented Architecture (SOA) Lifecycle for
continuous improvement


IBM’s WebSphere BPM suite


The WebSphere Process Improvement Workshop (PIW)


Overview


Sample Results


Preparation Requirements

3

SOA: The Key to Business Flexibility

4

Business processes…


Coordinated chains of activities producing business value and results


Typically consist of:


Human activities (Human Workflow)


Business system activities (such as ERP, or CRM,…)


Combinations of human and system activities


Define how the business runs at an operational level


May be hidden or embedded:


In the organization and culture of a company


In the business systems of a company


Are often poorly understood


Reactively managed, improved





SOA: The Key to Business Flexibility

5

“Three
-
quarters of 160 companies surveyed recently believe they are flying their
business processes ‘blind and without instruments.’ This lack of visibility, often due to
old application software, is inhibiting all levels of management from seeing bottlenecks
in such critical processes as capital risk management, claims tracking, compliance,
inventory management, and customer service.”

Source: AberdeenGroup, The Business Process Management Benchmark Report, October 2006

Companies that have implemented Business Process
Monitoring systems are seeing results…


An average 9% improvement in revenues


A median 12% decrease in process
-
related expenses


A 10% return on assets (ROA)


An 18% return on investment (ROI)


94% are moderately or very pleased with the overall
improvement Business Process Monitoring has delivered

SOA: The Key to Business Flexibility

6

Pressure to grow, innovate and drive costs down


Business Process Management (BPM) is critical

According to Gartner, pressure is coming from global competition, especially around
price, which is commoditizing many businesses, and compliance with regulatory
requirements such as the Sarbanes
-
Oxley Act.

“To meet these challenges, organizations must find ways to better manage their business
processes


that is, the ways in which they operate.”



Gartner's Position on Business Process Management, 2006

Two factors are now enabling BPM:


The advance of BPM technology (BPM Suites) and technology
standards for Services Oriented Architectures (SOA), XML and Web
services.


The spread of Six Sigma and other process improvement methods,
and the availability of process modeling tools for business analysts,
in addition to architects and IT professionals.

SOA: The Key to Business Flexibility

7

Flexibility through Business Services

Business process logic will no longer be deeply embedded in application
code, where it is locked away and expensive to change. Instead, process
logic will exist in the form of
high value business services that are
reusable
. Processes using these services will be much more flexible and
cheaper to maintain over time, allowing businesses to achieve dramatic
results in responsiveness, cost effectiveness and profitability.

Service Components
are reusable building
blocks

Flexible, componentized
business processes

SOA: The Key to Business Flexibility

8

Improving performance


Service
-
driven realignment

Div B

Div C

Div A

SALES

FINANCE

SUPPLY CHAIN

Corporate

Billing

A/R

Orders

OTC

CUSTOMER

Component reuse
within

and
across

processes drives costs down even more over time

Examples: Credit authorization

As we create the future
-
state model we’ll look for opportunities to use Business
Services to improve performance

Reusable Business Services

Customer self
-
service

SOA: The Key to Business Flexibility

9

IBM’s Services Oriented Architecture (SOA)
framework for continuous improvement


Multi
-
dimensional framework designed
to enable and sustain continued high
performance


Managed interactions between people,
processes and information


Model
-
driven implementation cycle


Governance framework supported by
Registry and Repository


Enables the gap between business and
technical design to be bridged


The WebSphere suite includes tools to
measure and report process
performance, supporting data
-
driven
process management

SOA: The Key to Business Flexibility

10

Supporting continuous improvement and innovation

The WebSphere BPM suite

WebSphere Business
Modeler

WebSphere Integration
Developer

WebSphere Process
Server

WebSphere Business
Monitor

Simple to use process modeling
for the business analyst to help
maximize process and business
resource re
-
use

Easy
-
to
-
use graphical tools to
simplify and speed the assembly
of composite applications

Flexible deployment of
business processes, making
plug
-
and
-
play of components
a reality

Real
-
time visibility into process
performance enabling process
intervention and continuous improvement

“IBM has the broadest SOA platform…”

Source: Forrester Research, Dec 21, 2005

SOA: The Key to Business Flexibility

11

WebSphere Process Improvement Workshop Kickoff


Topics


Background


Why business process management?


The WebSphere Process Improvement Workshop (PIW)


Overview


Activities and scope


The PIW process


Sample results


Preparation Requirements

11

SOA: The Key to Business Flexibility

12

IBM Process Improvement Workshop (PIW)


Scope

Consulting

Services
Engagement

WebSphere

PIW

Goals:


Demonstrate Modeler
value, capability


Demonstrate five
-
step improvement
method

Scope:


Business (vs.
technical) modeling


Sub
-
process (limited
to +/
-

20 tasks)

Simple

Complex

2
-
3 days

+/
-
1 week

On
-
site:

Elapsed:

SOA: The Key to Business Flexibility

13

What to look for in the current and future states



Current state process


Bottlenecks and constraints


Rework, errors and exceptions


Missing, incomplete information


Fragmented processes held
together through spreadsheets, re
-
keying, informal workarounds


Numerous approvals and audits


Sequential activities creating delays


Paper
-
based processes


Lack of measures, performance
indicators


Decisions based on feelings vs.
facts


Processes that are too slow, too
costly to be competitive

Future state process

Improved
process


Streamlined with automated workflow


Exception
-
based including alerts and
escalation (out of bounds conditions
and time triggered)


Improved access to accurate
information through integration


Rules
-
driven approvals and routing


Use of managed parallel activities


Dashboard monitoring and decision
-
making based on real
-
time Key
Performance Indicators, results


Improved ability to respond to and
implement required regulatory
controls


Reusable business services

SOA: The Key to Business Flexibility

14

Placing the scope of the PIW on the prioritization and
evaluation matrix

Initiative A

Initiative B

Initiative C

Initiative D

Scope of
PIW

Associated with a
key, meaningful
initiative

Lower
effort

Lower, non
-
strategic value

Higher strategic value,
linked to key initiative

Greater
effort

Payback

Simulation may be used to
assist with the calculation
of payback and positioning

Reengineering project

SOA: The Key to Business Flexibility

15

WebSphere Business Modeler


Five steps to
continuous process improvement

15

SOA: The Key to Business Flexibility

Define and Align
Objectives

Assess and
Analyze

Model Current State
and Gather Data

Cycle of
Improvement

Model Future State,
Evaluate Options

Implement and
Manage


Link to core process and/or
key initiative


Define improvement objective
(e.g. “Reduce process cycle
time by…”)


Model exception
paths including
required corrective
action


Gather and load
cost and time
(duration) data


Classify activities (e.g. value add vs. rework)


Develop a simulation test plan


Simulate “As
-
Is” process to identify
bottlenecks and high cost areas


Prioritize improvement opportunities


Look for opportunities to
automate (e.g. workflow,
integration vs. re
-
keying)


Model alternatives and rank by
payback (use a simple matrix)


Gather feedback on the
proposed process


Develop pilot and
implementation
plans


Create measures


Assign technical
attributes


Implement, Monitor
performance

SOA: The Key to Business Flexibility

16

WebSphere Process Improvement Workshop process

Onsite Workshop

Pre
-
Workshop
(approx 1


2 wks)

Post Workshop

Workshop
Facilitator

Customer
LOB SMEs

Create draft current
-
state model, project
tree, Exec ppt

Workshop
Facilitator

Provide documentation
(Visio, procedures,
forms, input sheet)

Identify process, set
expectations
regarding scope

Execute next steps

IBM Sales Representative

Customer

Prepare Executive
presentation, next
steps summary

Workshop Facilitator

IBM
Representative

Discuss workshop
value, process and
determine dates

Possible next steps:


Proof of Technology lab


Additional workshop(s)


Software Investment

You are
here

Workshop Facilitator

Customer Representatives

Conduct Process
Improvement
Workshop

2 to 3
Days

SOA: The Key to Business Flexibility

17

Day One

Conduct Process Improvement Workshop


Day One

Deliver kickoff
presentation to level
-

set expectations

Approx 2 Hours

Review current state
and agree on/refine
scope

Approx 2 Hours

Model current state
using WebSphere
Business Modeler

Approx 4 Hours

Current State

Day One: Establish boundaries,
model and/or review the current state

SOA: The Key to Business Flexibility

18

Day One

Conduct Process Improvement Workshop


Day Two

Deliver kickoff
presentation to level
set expectations

Approx 2 Hours

Review current state
and agree on/refine
scope

Approx 2 Hours

Model current state
using WebSphere
Business Modeler

Approx 4 Hours

Current State

Day Two

Review current state
and brainstorm future
-
state improvements

Approx 1 Hours

Create future
-
state
process model

Approx 4 Hours

Compare current
-

and
future
-
state models
(simulation)

Approx 2 Hours

Future State

Day Two: Brainstorm
improvements, model
the future state

SOA: The Key to Business Flexibility

19

Conduct Process Improvement Workshop


Day Three

Day One

Deliver kickoff
presentation to level
set expectations

Approx 2 Hours

Review current state
and agree on/refine
scope

Approx 2 Hours

Model current state
using WebSphere
Business Modeler

Approx 4 Hours

Day Two

Review current state
and brainstorm future
-
state improvements

Approx 1 Hours

Create future
-
state
process model

Approx 4 Hours

Compare current
-

and
future
-
state models
(simulation)

Approx 4 Hours

Current State

Future State

Day Three

Package results,
create Executive
Presentation

Approx 4 Hours

Deliver Executive
Presentation

Approx 2 Hours

Agree on next
steps

Approx 1 Hour

Next Steps

SOA: The Key to Business Flexibility

20

WebSphere Process Improvement Workshop Kickoff


Topics


Background


Why business process management?


The WebSphere Process Improvement Workshop (PIW)


Overview


Sample Results


Preparation Requirements

20

SOA: The Key to Business Flexibility

21

Sample Results

Customer background


Had used Visio to document processes


Inconsistent from modeler to modeler


No ability to simulate


Some modeling standards in place


Various symbols used for Task attributes


Six Sigma company


First major Six Sigma initiative


Worked with a newly formed Six Sigma project team


User of Six Sigma’s Design, Measure, Analyze, Improve, Control
(DMAIC) methodology


Very talented team


Strong engineering and manufacturing backgrounds


Experienced with statistical process analysis

SOA: The Key to Business Flexibility

22

Sample Results

PIW Activities


Pre
-
workshop Activities


Customer provided VISIO diagrams, documentation


Imported prior to the on
-
site workshop


On
-
site Activities


Refined and validated current state process flow


Resolved VISIO symbols that did not map to BPML constructs


Added model attributes including time and cost


Conducted simulation and analysis using basic techniques


Analyzed standard time and cost reports


Identified problem areas, constraints


Identified improvements based on problem areas


Created the proposed future state process model


Ran simulations and conducted comparative analysis


Analyzed standard time and cost reports


Analyzed Comparative reports


Created and delivered executive presentation to sponsors

SOA: The Key to Business Flexibility

23

Process Improvement Workshop


Visio import

Minor Visio clean
-
up was
required for import

Model was completed
by resolving and adding
required BPMN
components

SOA: The Key to Business Flexibility

24

Process Improvement Workshop

attributes added

SOA: The Key to Business Flexibility

25

Process Improvement Workshop


current state
simulation

SOA: The Key to Business Flexibility

26

Process Improvement Workshop


evaluated
improvement options


Potential Areas of Improvement


Consolidate / Eliminate Tasks


Maximize the use of Parallel paths


Increase probability of most desirable paths


Reduce task durations


Modify resource requirements


Automate tasks or sub
-
processes



Implemented in the To
-
Be model

SOA: The Key to Business Flexibility

27

Process Improvement Workshop


Process
Comparison

SOA: The Key to Business Flexibility

28

WebSphere Process Improvement Workshop Kickoff


Topics


Background


Why business process management?


The WebSphere Process Improvement Workshop (PIW)


Overview


Sample Results


Preparation Requirements

28

SOA: The Key to Business Flexibility

29

Typical Process Improvement Workshop Timeline

Week 1

Prep Work (checkpoint
calls as required)

Workshop
(2
-
3 days)

Deliver Executive
Presentation*

Week 2

Week 3

Week 4

Kickoff
Call

Complete
Data
Collection

Complete

Current
-

and Future
-
state Process Models

*Note: Executive Presentation typically delivered on the last day of the workshop or shortly after.

SOA: The Key to Business Flexibility

30

Pre
-
workshop preparation requirements and timeline

Timeframe

Customer

IBM

Day 1
(approx. 1 hr)

Sponsor organizes initial Preparation
Kick
-
off call

Meet with Sponsor and discuss
objectives of initial Prep kick
-
off call
and determine required attendees

Week 1


Day 1
(approx. 1 hr)

Sponsor and key participants attend
the PIW Preparation Kick
-
Off

Conduct Preparation Kick
-
off meeting.
Review workshop methodology, set
expectations and determine timeline.

Week 1
(approx. 4
-
8 hrs)

Identify applicable business processes
and select one simple process

Provide guidance on scope

Week 1 thru 2
(approx. 4
-
8 hrs)

Sponsor arranges room, invites key
stakeholders for Executive
Presentations, and schedules process
SMEs for workshop

Prepare Executive Kick
-
off
Presentation.

Week 1 thru 2
(approx. 3
-
5 days)

Process SMEs gather and provide
process documentation (Visio, forms,
procedures).

Draft current state model in
WebSphere Business Modeler. Provide
guidance for data collection. (optional
Data Collection worksheet)

End of Week 2
(approx 2 hrs)

Review draft current state model

Refine draft process model prior to
workshop

SOA: The Key to Business Flexibility

31

Process Improvement Workshop Resource
Involvement

Customer


Executive Sponsor


interested in the outcome, attends the PIW Kickoff and
final Executive presentation


Client Lead
-

coordinates customer activities, active in preparation of executive
presentation


Process SMEs


familiar with business process, conducts data collection for
one simple business process, participates in workshop


Key Stakeholders


interested in the outcome, attends the PIW Kickoff and
final Executive presentation, influences decision to move forward

IBM


WebSphere Sales Rep


opportunity owner and manages client relationship


PIW Lead


manages PIW process and workshop, delivers PIW Executive
Presentation (may also be Modeling Specialist)


PIW Modeling Specialist


assists client with data collection and selection of
one simple business process, facilitates discussion and creates As Is and To
Be models during workshop, conducts demo during Executive Presentation

SOA: The Key to Business Flexibility

32

Backup

SOA: The Key to Business Flexibility

33

Insurance Industry “New life policy” process


example


Insurance company, high cost, slow turn around for new business life policies


Paper based process, dependent on the resources constrained agents


Expensive High Underwriter involvement


Very Static and prone to losing documentation


Modeled future
-
state process


Added portal at the front
-
end


Converted paper requests to electronic format


Process streamlined and automated


Business Value


The weighted average cost for this process


As
-
Is $16.75

To
-
Be $14.72


The duration for the process


As
-
Is 7 hours

To
-
Be 3.5 hours

SOA: The Key to Business Flexibility

34

Cross Industry Customer Record Update Process


example


Management is concerned about the accuracy and timeliness of the
process and the eventual impact to business productivity


Sales, credit, and customer service use separate applications, using
manual entry


Improved process


WebSphere Process Server and adapters to automatically detect new
customers in SAP R/3, new data is sent to the appropriate applications,
including the supplier


Business Value


Information is available in real
-
time and is accurate


The weighted average cost for this process:


Current: $44



Future: $22


The duration for the process:


Current: 4 hours




Future: 4 minutes

SOA: The Key to Business Flexibility

35

Activities


Establish process boundaries and link the process to business goals and benefits


Model the activities that make up the current
-
state process including decisions, failure
points and exception paths


Document inputs/outputs, resources, roles, along with duration and revenue/cost values.


Identify changes to the process that would result in an improved, workflow
-

and/or
services
-
enabled alternative and model the future
-
state process


Develop simulation test cases and perform static and dynamic analysis


Discuss Key Performance Indicators (KPIs) and implementation attributes

Deliverables


Current
-

and future
-
state simulation results, process diagrams

Participants


Customer: LOB executive sponsor, business process SMEs, IT architects


IBM: Process modeling experts, technology specialists

A three
-
day educational and problem
-
solving work session

during which we

document a current business process,
define a high level technology
-
enabled alternative process,
and compare the two using WebSphere Modeler’s
advanced simulation capability


WebSphere
Process
Improvement
Workshop

SOA: The Key to Business Flexibility

36

WebSphere Business Modeler


Five steps to

36

SOA: The Key to Business Flexibility

New

process design

New Process

Design Cycle

Define Requirements
and Align Objectives

1

Evaluate Building
Blocks for Reuse

Create Process
Model(s) and Test
with Simulation

(Pilot) Implement
and Manage

Establish Key
Measures, Examine
Best Practices

4

5

2

Goal: Use the building
blocks


global tasks,
sub
-
processes, services


to design and “wire
together” new processes

3

SOA: The Key to Business Flexibility

37

Business Process Management combines business
expertise and enabling software

Expertise that Delivers BPM


Process Knowledge


Industry Methods and Models


Business consulting expertise

Software that Enables BPM


Tools, Rules


Dashboard, Forms


Repositories

Business Process Management

Business Process Management is a differentiating business capability
combining
software capabilities

and

business expertise

… through people,
systems, and information
to accelerate process improvements and
facilitate business innovation