Business process change : a business process management guide for managers and process professionals

Business Process Change: A Business Process Management Guide for Managers and Process Professionals, Fourth Edition, provides a balanced view of the field of business process change. Bestselling author and renowned expert in the field Paul Harmon offers concepts, methods, cases for all aspects, and phases of successful business process improvement. Students and professionals alike will benefit from the comprehensive coverage and customizable, integrated approach to broad business process management that focuses on improving efficiency and productivity. In this updated Edition, particular attention is paid to the impact of disruptive technology on business and the need for agile transformation.

Author Notes

Paul Harmon is the editor of the "Component Development Strategies" newsletter & Senior Consultant with the Cutter Consortium. He has coauthored many books, including "Understanding UML: The Developer's Guide", "The Object Technology Casebook" (Wiley), & the international bestseller "Expert Systems: Artificial Intelligence for Business" (Wiley).

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Michael RosemannThomas Davenport

Foreword to fourth edition	p. xv
Foreword to third edition	p. xvii
Preface to the fourth edition	p. xix
Introduction	p. xxiii
Chapter 1 Business process change	p. 1
Organizations as Systems	p. 2
Systems and Value Chains	p. 2
The Six Sigma Movement	p. 6
Business Process Change in the 1990s	p. 7
The Role of IT in BPR	p. 9
The Misuses of BPR	p. 10
Lean and the Toyota Production System	p. 11
Other Process Change Work in the 1990s	p. 11
The Internet	p. 13
A Quick Summary	p. 14
Business Process Change in the New Millennium	p. 15
What Drives Business Process Change?	p. 17
Notes and References	p. 18
Part I Organization-wide concerns
Chapter 2 Strategy, value chains, business initiatives, and competitive advantage	p. 27
Defining a Strategy	p. 28
Porter's Model of Competition	p. 30
Industries, Products, and Value Propositions	p. 33
Strategies for Competing	p. 34
Porter's Theory of Competitive Advantage	p. 36
Porter's Strategic Themes	p. 39
Treacy and Wiersema's Positioning Strategies	p. 41
The Balanced Scorecard Approach to Strategy	p. 43
Business Models	p. 47
Business Initiatives	p. 47
Summary	p. 47
Notes and References	p. 49
Chapter 3 Understanding your organization	p. 51
A Comprehensive Business Process Method	p. 51
Strategy and Enterprise BPM	p. 54
Understand the Enterprise	p. 55
The Traditional View of an Organization's Structure	p. 55
A Case Study of Organization Transformation	p. 57
The Systems View of an Organization	p. 60
Models and Diagrams	p. 61
Organization Diagrams	p. 62
Organizations and Value Chains	p. 63
Systems and Processes	p. 67
Notes and References	p. 68
Chapter 4 Business architecture	p. 69
The Supply Chain Council's Supply Chain Operations Reference Framework	p. 72
Business Architecture: The IT Approach	p. 74
Business Process Architecture	p. 79
Creating a Business Process Architecture Model	p. 82
Step 1 Kickoff Meeting	p. 83
Step 2 Scope the Project	p. 84
Step 3 Define Life Cycle Processes	p. 85
Step 4 Organizing and Consolidating the Level 2 Processes	p. 86
Defining an Architecture Using a Framework	p. 90
The Supply Chain Council's SCOR Framework	p. 91
Developing a Supply Chain Architecture
With a SCOR	p. 92
The Extension of a SCOR	p. 95
Another Approach	p. 98
Summary	p. 101
Notes and References	p. 102
Chapter 5 Measuring process performance	p. 103
Key Measurement Terms	p. 103
Internal and External Measures	p. 105
Leading and Lagging Indicators	p. 107
Developing a Comprehensive Measurement System	p. 108
Balanced Scorecard and Process Measures	p. 109
Aligning Process Measures	p. 112
Deriving Measures From Business Process Frameworks	p. 115
A Process-Driven Approach to Defining Measures	p. 118
Putting It All Together	p. 122
Notes and References	p. 123
Chapter 6 Process management	p. 125
The Process Perspective	p. 125
What Is Management?	p. 127
Functional Managers	p. 127
Process Managers	p. 131
Functional or Process Management?	p. 134
Matrix Management	p. 135
Management of Outsourced Processes	p. 137
Value Chains and Process Standardization	p. 138
Setting Goals and Establishing Rewards for Managers	p. 140
Management Processes	p. 141
PMI's Project Management Maturity Model	p. 141
SEI's CMMI Model	p. 141
SCC's SCOR Framework	p. 145
The ITGI's COBIT Framework	p. 146
Documenting Management Processes in an Architecture	p. 148
Completing the Business Process Architecture Worksheet	p. 149
Notes and References	p. 149
Chapter 7 An executive-level business process management group	p. 151
What Does a BPM Group Do?	p. 151
Create and Maintain the Enterprise Business Process Architecture	p. 152
Identify, Prioritize, and Scope Business Process Change Projects	p. 153
Help Create, Maintain, and Manage the Process Performance System	p. 160
Help Create and Support the Process Manager System	p. 161
Recruit, Train, and Manage Business Process Change Professionals	p. 162
Manage Risk/Compliance Reporting and Documentation	p. 162
A Case Study: Boeing's GMS Division	p. 163
Senior Management's Commitment	p. 163
Starting With a Vision and a Plan	p. 164
Modeling the Company and Its Processes	p. 165
Process Owners	p. 167
Defining Process Measures	p. 169
Boeing GMS Process-Based Management System	p. 170
PBM, Process Redesign, Six Sigma, Lean, and Balanced Scorecard	p. 171
ISO 9000, CMMI, and Sarbanes-Oxley	p. 172
The Success of the Transition to Process-Based Management	p. 173
Summary	p. 174
The BPM Group	p. 174
Notes and References	p. 174
Part II Process-level concerns
Chapter 8 Understanding and scoping process problems	p. 179
What Is a Process?	p. 179
Process Levels and Levels of Analysis	p. 181
Simple and Complex Processes	p. 182
Business Process Problems	p. 185
The Initial Cut: What Is the Process?	p. 187
Stakeholders	p. 189
Refining an Initial Process Description	p. 189
Output Problems	p. 192
Input Problems	p. 193
Problems With Controls	p. 194
Problems With Enablers	p. 195
Creating a Business Case for a Process Change Project	p. 199
Notes and References	p. 201
Chapter 9 Modeling business processes	p. 203
Process Flow and Process Management Problems	p. 204
Day-to-Day Management Problems	p. 205
Process Flow Diagrams	p. 206
Flow Diagramming Basics	p. 208
More Process Notation	p. 214
As-Is, Could-Be, and To-Be Process Diagrams	p. 221
Case Management	p. 225
Notes and References	p. 229
Chapter 10 Modeling activities	p. 231
Analyzing a Specific Activity	p. 232
Analyzing Human Performance	p. 236
Activity Standards	p. 237
Activity Support	p. 237
Consequences	p. 238
Feedback	p. 239
Skill, Knowledge, and Capability	p. 240
Managing the Performance of Activities	p. 241
Automating the Enter Expense Reports Activity	p. 241
More Complex Activity	p. 243
Empowering Employees	p. 246
Analyzing a Completely Automated Activity	p. 247
Decision Management	p. 249
Knowledge Workers, Cognitive Maps, and Decision Management	p. 253
Business Rules and Knowledge Rules	p. 258
Business Rules for Software Development	p. 258
Rule-Based Systems for the Capture of Expertise	p. 260
Risk Management and Compliance Issues	p. 260
Business Rules Used in Business Processes	p. 261
Notes and References	p. 262
Chapter 11 Managing and measuring a specific business process	p. 267
Representing Management Processes	p. 268
The Management Process	p. 269
Plan Work	p. 271
Organize Work	p. 273
Communicate	p. 274
Control Work	p. 275
The Project Management Institute's Approach	p. 277
Evaluating the Performance of the Process Manager	p. 278
Continuous Measurement and Improvement	p. 278
Management Redesign at Chevron	p. 280
Notes and References	p. 281
Chapter 12 Incremental improvement with Lean and Six Sigma	p. 283
Six Sigma	p. 283
The Six Sigma Concept	p. 286
The Six Sigma Approach to Process Improvement	p. 289
Six Sigma Teams	p. 290
Phases in a Six Sigma Improvement Project	p. 290
Define	p. 291
Measure	p. 295
Analyze	p. 299
Improve	p. 303
Control	p. 303
Lean	p. 304
Flow Kaizen	p. 306
Process Kaizen	p. 307
Management, Teams, and A3 Pages	p. 308
Summary	p. 310
Notes and References	p. 312
Chapter 13 A comprehensive redesign methodology	p. 315
Why Have a Methodology?	p. 319
How Does It All Begin?	p. 319
What Happens?	p. 320
Who Makes It All Happen?	p. 320
Phase 1 Understanding the Project	p. 322
Major Activities	p. 323
Outcome	p. 325
Phase 2 Analyze Business Process	p. 325
Major Activities	p. 326
Outcome	p. 330
Phase 3 Redesign Business Process	p. 330
Major Activities	p. 330
Outcome	p. 332
Phase 4 Implement Redesigned Process	p. 333
Major Activities	p. 333
Outcome	p. 335
Phase 5 Roll Out the Redesigned Process	p. 335
Major Activities	p. 336
Outcome	p. 337
Agile Methodologies	p. 337
Summary	p. 340
Notes and References	p. 342
Chapter 14 Rental Cars-R-Us case study	p. 343
Rental Cars-R-Us	p. 343
Phase 1 Understand the Project	p. 344
Phase 2 Analyze the Business Process	p. 352
Start With a Second Look at the Customer Process	p. 356
Does It All Flow Smoothly?	p. 361
Phase 3 Redesigning the Rental Process	p. 361
Phase 4 Implement the Redesigned Business Process	p. 364
Phase 5 Roll Out the New Rental Process	p. 365
Manage the New Rental Process	p. 365
Notes and References	p. 366
Part III Implementation-level concerns
Chapter 15 Software tools for business process work	p. 369
Why Use Business Process Software?	p. 369
Variety of Business Process Tools	p. 370
Professional BP Modeling Tools	p. 374
Modeling and Management Screens	p. 376
Business Process Management Suites	p. 376
Process Diagrams and BPMS Engines	p. 381
What Features Might a BPM Suite Include?	p. 383
BPMS, SOA, and the Cloud	p. 385
Choosing a BPMS Product	p. 387
Some Leading BPMS Vendors	p. 387
Creating a BPMS Application	p. 389
Notes and References	p. 390
Chapter 16 Enterprise resource planning-driven redesign	p. 393
Processes, Packages, and Best Practices	p. 394
A Closer Look at SAP	p. 395
Implementing an ERP-Driven Design	p. 402
Case Study: Nestle USA Installs SAP	p. 405
Using BPMS to Improve ERP Installations	p. 407
Enterprise Resource Planning and Business Process Management Suite	p. 412
Notes and References	p. 414
Chapter 17 Al-driven process change	p. 417
Artificial Intelligence	p. 417
IBM's Watson Plays Jeopardy!	p. 420
Google's AlphaGo	p. 422
AI Technologies	p. 426
Knowledge-Based Approaches	p. 426
Neural Networks	p. 429
Combined Approaches	p. 431
Developing and Deploying AI-Based Processes	p. 432
The Analysis and Redesign Phases of a Project	p. 435
A Quick Review	p. 437
Notes and References	p. 438
Chapter 18 The future of business process management	p. 441
Appendices
Appendix 1 Business problem analysis checklist	p. 457
Appendix 2 Core business process modeling notation	p. 467
Appendix 3 Business process standards	p. 475
Appendix 4 Processes and capabilities	p. 483
Appendix 5 Process analysis diagrams used in this book	p. 489
Index	p. 491

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