Establishing a Business Process Management Center of Excellence - Impact 2012

Establishing a BPM Center of
Excellence

Best Practices & Case Study

Howard Webb
Director, BPM Advisory Services
Prolifics

Howard Webb
 Director of BPM Advisory Services – Prolifics

 Over 25 years as a consultant, trainer, facilitator, and
speaker on the topics of Business Process Management
(BPM), data architecture, and project management

 Founded the Midwest BPM Users Group

 Published articles on BPM and enterprise architecture

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Prolifics at a Glance
Who Are We?
A Corporate Group of 1,200 Employees Worldwide specializing in the expert delivery of end-to-end IBM Solutions

Over 30 years in business, Prolifics
is an end-to-end systems integrator
specializing in IBM technologies
New York Orlando
Boston San Francisco
Philadelphia London Application Testing
Washington DC Hamburg Santa Clara, CA USA
Off-Shore Development Center
Hyderabad, India

S t a b i l i t y, L o n g e v i t y & G r o w t h Solution Leadership

$70
Gross Revenue (millions)

 SOA solutions and appliances for connectivity
$60  Business Process Management for business optimization
$50  Portal, Collaboration and Content Management
$40  IT Security for Applications and the Enterprise
$30  Monitoring and Managing Applications
$20  Testing, Governance and Methodology
$10  Information Management for Data Cleansing, BI & Dashboards
$0  Technology Migrations to the IBM Software Platform
2004 2005 2006 2007 2008 2009 2010

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Prolifics’ Customers
Healthcare

Financial Services Government

Retail & Distribution Utilities

Insurance Education

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WHAT IS BUSINESS PROCESS
MANAGEMENT?

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Business Process Management
Some definitions…

A top-down methodology

A systematic approach for improving a specific
process

A set of software technologies

The same thing as business process reengineering

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Business Process Management

“Business Process Management (BPM) is a holistic
management approach that encompasses all aspects of
a business including Strategy, People, Processes and
Technology, in order to delivering value to customers
and other stakeholders.”

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It requires coordination to
keep the Journey moving
forward smoothly.
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Challenges
 Limited resources

 Competing priorities

 Standardization (methods, technologies)

 Increasing demands from both the business and customers

 Management demand to show ROI

 Gain process maturity and foster an environment of continuous
improvement

 Struggling with complexity and change
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Complexity
 “Change is linked to complexity. Complexity increases both
when the rate of change increases and when the amount of
things that are changing around us increase.”
Theodore Modis

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WHAT IS A BPM CENTER OF
EXCELLENCE?

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The BPM Center of Excellence
 A centralized organization focused on the enterprise-wide
coordination of process activities

 The Hub for all things BPM

 A Steward of methods and standards

 A link between strategy and execution

 Agent of change

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The Need for Coordination
 The only way organizations can deliver value to their customers is
via cross-organizational business processes

 Business strategy is therefore delivered and executed by means
of business processes

 To ensure the business strategy is being delivered as desired,
process initiatives must be coordinated, managed and controlled

 Few organizations have a centralized structure dedicated to this
objective

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Traditional Management Model  Redundant activities/duties
 Misaligned incentives/
compensation
Departmental Silo  Isolated measurement
Perspective model
 Limited reuse
Traditional  Multiple breakpoints
Hierarchical
Management
 Multiple moments of truth
 No cross-organization
Corporate control

Dept A Dept B Etc.

Process-Oriented Model  Begin and end with the
customer experience in mind
 Incentives based on end-to-
Cross-Departmental end process performance
Perspective  Fewer handoffs, fewer
breakpoints
 Few moments of truth
 Process measures providing
visibility
Corporate

Function A Function B Etc.

Process 1

Process 2

Customer Process 3 Customer

Poorly Coordinated BPM 

Redundant standards
Competing priorities
Program  Sub-optimized operations
 Inefficient use of technology
Process Silo Perspective  More handoffs, more
breakpoints
 Multiple moments of truth
 Limited or no cross-
organization control
Corporate

Dept A Dept B Etc.

Sub-Process

Sub-Process

Sub-Process
Customer Customer

The Customer Experience
 Discontinuous thinking leads to disjointed customer
experiences…
How many people or departments did I have to talk to just to get
my issue resolved?

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Current Trends
“Broadly speaking, investing in better coordination and management of process work
has been on the rise, while incremental approaches are slowly declining, or at least
being integrated into larger, organization-wide BPM initiatives..”

bpm six sigma Lean six sigma business architecture
*BPTrends, 2012, The State of Business Process Management, Celia Wolf, Paul Harmon : www.bptrends.com

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Operating Model

Maturity

Influencing Directing
 Leading by example  Setting policy
 Gaining support  Determining what projects to
 Small, early successes do
 Have a seat at the Strategy
table

 Where your COE falls on this spectrum depends largely upon
your environment
 How much power and authority the COE is granted
 Not likely to start as a Directing model

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Structure

BPM COE Management
Process Process
Management Improvement
 Strategic organizational perspective  Process modeling
 Coordination of activities  Facilitation
 Track and monitor benefits, ROI  Coaching
 Support the use of tools and  Project management
technologies  Business analysis
 Development of standards, methods  Data analyst
and techniques
 Integrate with Project Office
 Customer surveys
 Process maturity assessments

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Staffing
BPM COE Management
 Office administration
 Communications coordination

Process Process
 Business Architect  Project manager
 Customer segmentation  Process modeler
 Delivery channels
 Revenue streams
 Data analyst
 Trainer/coach  IT analyst
 Methodologist  Facilitator
 Business Rules Specialist  Statistician

Some roles can be virtual, tapping expertise as needed.
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Funding
BPM COE Management
 Centrally Funded

Process Process
 Centrally Funded  Project Funded

Without central funding, staff could be „reallocated‟ to
other duties or continually be searching for funding.

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Positioning the COE
Location of the BPM Group 2011 Survey results
We do not have a formal BPM Group 36%
Our BPM Group is at the Executive 18%
level
Our BPM Group is at the Divisional or 16%
Departmental level
Our BPM Group is located within IT 15%
Our BPM Group is located within HR 1%
or Training
Our BPM Group is located within 4%
Finance
Our BPM Group is located within 5%
Quality Control
Other 6%

*BPTrends, 2012, The State of Business Process Management, Celia Wolf, Paul Harmon : www.bptrends.com

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BPM Maturity Model

Assessment Criteria

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Role-Based Organizational Structure
Service Catalog

RACI Chart

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Discipline Roadmaps

BPM COE Intranet

Three Year Roadmap

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CASE STUDY – HORIZON
HEALTHCARE

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Who is Horizon Healthcare Services?
 Horizon is New Jersey’s oldest and largest health insurer.

 Horizon traces its history back to 1932, when Associated Hospitals
of Essex County, Inc. began selling multi-hospital pre-payment
plans for $10 a year covering 21 days of in-patient care.

 The company was one of the first health insurance companies in
the nation and also one of the first Blue Cross Plans.

 Today, it serves more than 3.6 million members.

 In 2010, the company processed more than 57.6 million claims
totaling more than $13 billion for its members.

 The company has more than 4,800 employees and is
headquartered in Newark with offices in Harrison, Wall Township,
Mt. Laurel, and West Trenton.

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Why Horizon Decided to Get Involved in BPM
Journey to Agility

The Horizon Multi Year Strategy

Competitive Pricing Responsive Agile

Cost Reduction Standardization Event Driven

 Horizon defined a comprehensive systems strategy and plan to achieve the following
goals:
 Complexity reduction
 Sources of truth for core business information
 Flexible and agile platforms to respond quickly to change
 Business model shift to self-service and the Internet

 Catalyst for change
 Industry trends requiring faster business response
 Shift to the individual consumer
 Shifting demographic to technology sophisticated customers
 Increasing healthcare costs forcing operational excellence
 Increased reliance on business partners
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What Horizon Expects from BPM?

From Here To Here

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Key Considerations
 Executive Sponsorship is Key
 Startups take vision and investment
 BPM is a big investment … Hardware, Software, People,
Project Costs
 It’s a business ... financial benefit to the Organization needs
to be documented
 Communication … do it early … do it often
 Surprises … Communicating the Reference Architecture to the
Business is important
 Your peers don’t know what you have not shared with them …
until you tell them three times
 You don’t know what your team has not told you …
 Communication will create demand … do you have the
capacity?
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Key Considerations
 Demand comes quickly … get your capacity ready
 Recruit … Recruit … Recruit … get help
 You need a diverse set of skills …
 Setting up a new business takes a LOT of energy …
Plan for change … and stress
 Work to stay aligned to your plan (“Plan your work and work
your plan”)
 Work to get others aligned to your plan … communicate
 Setting up the Infrastructure and Base Platform installs is a
massive project
• Development, Test, Pre-Production, Production

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Good Things Happen Along the Way
 BPM & SOA lead to reuse

Reuse sometime pops up unexpectedly … especially when
focused on core processes

 Example … Our pilot had to do with managing the process and data
for customers with multiple insurance policies.

 Currently using two claim systems but working to converge to a single
one.

 We reused knowledge, services, and processes to accelerate and
ensure consistency for the migration.

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Horizon BPM Success Stories
BPM & Web 2.0 Mash-Ups = Consolidation
Cycle Time Improvements of 20x 20 Letter Systems to 1

CRM & SOA = First Call Resolution

BPM Automations Integrated Medical Record Management
10% Increase in FPR Timely Resolution of Complex Claims

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Summary
 Cross-organizational coordination of process initiatives is critical to
success

 Implement your Center of Excellence sooner vs. later

 Properly staff and fund the Center of Excellence with the
appropriate roles and skills

 Don‟t burden individual process improvement teams with defining
standards and methods

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Next Steps
 BPM Readiness Assessment

 Setting Up and Configuring A BPM COE in Your Environment

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For more information:
Contact: Howard Webb
Email: hwebb@prolifics.com
Phone: 646.380.2948

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Establishing a Business Process Management Center of Excellence - Impact 2012

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