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New York State
Agency
Office of Continuous Improvement
Business Process Management
Overview
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Revised: March 13, 2007
Managing Changes to Business Processes
Introduction
The Agency’s Information and Management Systems (IMS) Division undertakes numerous business process change efforts, through business process management. Business process management (BPM) is the discipline of maintaining effective and efficient processes across the enterprise. These projects can often be intertwined with technological improvements. This paper describes the IMS standard approach for all business process management projects.
A business process is comprised of repeatable, successive activities that occur in a particular order. In general, the ultimate goal of any process is to attain smooth and uninterrupted service. People and computers both perform business processes, often together. The introduction of new technologies, new business requirements, or other modifications, can cause processes to change, to be re-evaluated and improved upon. Business process management projects demand a level of rigor and expertise similar to that needed for application development projects, and should follow a repeatable lifecycle, with known process steps and deliverables.
What criteria characterize a well-defined process? The following criteria provide an indication as to whether or not the process is sufficiently designed and implemented.
Criteria for the well-defined business process:
1. There are adequate controls in the current process.
2. There is adequate back-up to resolve short term staffing shortages.
3. There is a balanced set of performance measures available.
4. There are few “handoffs” in the process (“touch it once” principle)
5. The process is effective and contributes to meeting the mission and vision of the organization.
6. There is adequate quality assurance and quality control for the process.
7. Required data is captured one time, at the source.
8. Work products are transformed at each step in the process.
9. Most of the steps in the process add value.
The Agency strives to manage each BPM initiative using a standard, repeatable approach. The benefits to following a standard approach include the development of a predefined set of deliverables, the use of a common set of tools and techniques across all change projects, and a set of expected behaviors and outcomes. Many methodologies address how to accomplish the change process, often recommending specific tools and techniques in developing deliverables. The following information below does not prescribe a set of tools and techniques; instead the subsequent information describes a general approach that may incorporate multiple tools and techniques.
Business Process Management Project Phases
Each phase of the business process management project represents a distinct effort designed to elicit specific information that will provide the project with the information required to move forward to subsequent stages. While these phases can be modified, combined, or eliminated for a given project, the team bears the onus of ensuring that the primary deliverables are developed or are noted as not required or indicated based on the project plan.
BPM projects are fluid environments, and the BPM project phases may overlap or run in parallel depending on the ebb and flow of deliverable development. In other words, it should not be inferred from the graphic or the text illustrating these phases are wholly sequential, with one phase being completed before another starts. There is, however, a flow to the deliverables that involves the progressive elaboration of information. As the graphic illustrates, the progressive development of the deliverables will inform the next stage of deliverables.
Following is a brief description of each project phase and its corresponding primary deliverable.
1. Current Environment Analysis. Usually occurring early in a project, the purpose of the current environment analysis is to document and have stakeholders agree upon the As-Is processes. During this step, the project team should document the current processes, and any notable variances that occur. This phase should yield information about what works well and what is not working. Once the current environment is documented and agreed to, the project team is in a position to use this information in the gap analysis.
Primary Deliverable: Current Environment Report
2. Best Practice Research. Along with understanding the current environment, the project team will identify and catalog industry best practices. Best practice research may utilize other government entities, organizations with similar business practices, and even membership organizations that promote best practices.
Primary Deliverable: Best Practice Research Report
3. Target Environment Definition. The project team should engage in envisioning the future state of the processes. As with the current environment analysis, the project team should strive to achieve consensus among the critical stakeholders. During this phase, the team will define the high-level vision and any detailed requirements of the vision critical to describing the future state. For example, if the envisioned state includes technology enhancements, the team may want to develop high-level business requirements.
Primary Deliverable: Target Environment Report
4. Process Construction. The objective of process construction is to create the basic elements to be utilized in the final, implemented process. This phase results in the creation of processes, process maps, performance measurement detailed designs, and initial user materials. During process construction, the initial processes and systems are tested and validated through various means, which can include simulations, prototypes, and pilots.
Primary Deliverable: Detailed Design, Initial User and Training Materials
5. Implementation. During implementation, the plan is executed. The implementation may result in an increase in project team members, as the initiatives may utilize a broader range of expertise than was needed in the planning phase of the project. If the project is characterized by planning for future changes, reengineering research, or the formulation of a series of recommendations, then the implementation phase may include documenting the project results. Alternately, if the project scope includes implementing changes, then the implementation phase may include developing the deliverables that were set forth during planning.
Primary Deliverable: New and/or Improved Processes and Systems
6. Transition to Continuous Improvement. Upon completion of the implementation, the project team should transition to continuous improvement. Continuous improvement involves identifying necessary improvements to the target environment after the target environment has been realized.
Primary Deliverable: Documented Process Improvements
Business Process Management Project Types
The term “business process management” is offered as a broad concept and meant to encompass a range of change initiatives. The project team charged with making changes to business processes will first have to clarify the type of changes envisioned – are they improvements to existing processes, a complete overhaul of existing processes or the definition of new processes? While it may be difficult to label a proposed change as one type or another, the team should strive for consensus in determining which type of project is being undertaken to ensure that a common approach is being applied to the project. The three project types are:
¨ Business Process Improvement (BPI) suggests incremental modification of existing processes. In BPI projects, more emphasis is given to understanding the As-Is environment so that improvements can be made to achieve certain business goals.
¨ Business Process Reengineering (BPR) is a process of replacing substantial or entire existing processes. This type of effort may focus more on the To-Be environment in creating a “clean-slate reengineering.” BPR projects may often include As-Is analysis activities in order to develop a business case for change.
¨ Business Process Engineering (BPE) is an effort to create, from scratch, a new set of processes that have never existed before. This type of project may focus on industry best practices and the To-Be environment, as there will be no current processes from which to conduct an As-Is environment analysis.
These three project types generally involve both planning and executing the envisioned changes as part of the scope. The following graphic illustrates the three basic project types.
A BPM initiative may include some or all project phases listed on pages 2 and 3. Depending upon the specific type of effort – BPE, BPR, or BPI, some of the project phases may be minimized or omitted completely as a discrete area of work. Decisions about which specific phases and deliverables to include in the project should be based on the scale and scope of the project and the output requirements.
The following table describes typical phases utilized in a particular project type. These are guidelines, based on past experience and best practices.
Project Type / Typical PhasesBusiness Process Engineering / · Best Practice Research
· Target Environment Definition
· Implementation Planning
· Implementation
· Transition to Continuous Improvement
Business Process Reengineering / · Current Environment Analysis
· Best Practice Research
· Target Environment Definition
· Gap Analysis
· Implementation Planning
· Implementation
· Transition to Continuous Improvement
Business Process Improvement / · Current Environment Analysis
· Target Environment Definition
· Gap Analysis
· Implementation Planning
· Implementation
· Transition to Continuous Improvement
The governance function at the Agency will often drive the pace and scope of a BPM effort. When faced with a question about particular business processes, the appropriate governance sub-committee may approve a reengineering study to gain insight into the problems and alternatives prior to sanctioning actual changes. The reengineering study is a subset of the BPM lifecycle, and involves the early phases and deliverables. The reengineering study, therefore, is a subset of the BPM discipline completely contained within the bounds of BPM and is not a project on its own. This type of effort involves the business analysis of a functional or cross-functional target area. The goal of the reengineering study is to define a set of recommendations that will be implemented under the auspices of a full BPM project in the future. Reengineering studies are undertaken to:
· better understand and prioritize the changes required to the target area; and
· gain stakeholder acceptance of the need for change.
The table below describes the typical phases involved in a reengineering study.
Reengineering Study / · Current Environment Analysis
· Best Practice Research
· Target Environment Definition
· Gap Analysis
The Business Process Management Lifecycle
Having established the BPM project phases, primary deliverables, and project types, the BPM practitioner is better able to understand how these elements work together in typical projects. Not all BPM projects result in changes to business processes for the organization. The performing organization will often undertake a reengineering study to understand the current environment, and achieve consensus on a series of recommendations prior to implementing any particular changes.
The project phases generally correspond to the project management and systems development lifecycle phases as shown below. The dotted lines indicate the correlation between the phases. The purpose of this graphic is to demonstrate that projects progress in relation to the information known to the team, and the deliverables produced.
The Reengineering Study
As discussed previously, the reengineering study results in a series of recommendations – the study results. A reengineering study should not include the Implementation Planning, Implementation and Continuous Improvement phases. All project management phases should be represented in a reengineering study, if the final deliverable of the project is the study results. The study is not necessarily a phase in a change project, but it may be scoped to be a phase such that the recommendations are implemented in later phases.
Staffing requirements will vary depending on the type of project completed - a study or a change project. For example, technical subject matter experts may require a higher-level view of the organization to be effective on a Reengineering Study, whereas on a change project, an additional technician?-oriented team member may make more sense.
Scoping the BPM Project
By accurately determining the scope of the effort needed for the project, the team will better understand and the project’s outcomes and anticipate follow-on work. The team will have chosen project type (BPI, BPR, BPE, or Reengineering Study) and an appropriate set of project deliverables. Next they must work within the chosen project type to determine the proper scope of the engagement.
Governance plays a critical role in determining the scope of the projects. As the gatekeepers for investments, the governance sub-committees must prioritize all projects in their purview and make decisions about which projects go forward during specific timeframes.
For projects that result in changes to the business, there are several paths that lead from planning into implementation:
A. Study, Plan, and Implement. Involves a single project whereby the team examines the processes, develops the required deliverables and executes those plans.
B. Plan, then Implement One. Involves two discrete projects – one to define the target environment, the subsequent one to implement it. The scope of the latter is fashioned around changing a single process or functional area.
C. Plan, then Implement Many. Involves more than two discrete projects – one to define the target environment, the subsequent projects will implement the vision. The scope is chunked into a series of disparate or concatenated efforts.
How does a team decide which path to take in implementing the target environment recommendations? By using a set of criteria, as shown below, the team can determine the correct implementation method to analyze dimensions of the anticipated scope.
· Level of change management required
· Performing organization capacity for change
· External stakeholder capacity for change
· Most effective way to implement technical solution
These methods are further discussed below.
Study, Plan and Implement
This commonly used method results in a scope that is directly related to the BPM effort. The Study, Plan, and Implement scope will drive the team toward two possible deliverables: a Target Environment Report containing a set of recommendations, or an actual change to the processes. If the definition of the implementation scope is followed directly by the implementation of a plan, the project management lifecycle is uninterrupted. If, however, the result of defining the scope is a study, the project management lifecycle will be adjusted to fit the final outcome.