Centers of Excellence: The Path to Process Innovation Success
Information Management Magazine, September 1, 2008
Business process management (BPM) delivers enormous financial and competitive returns by transforming rigid, inefficient and costly processes to create fluid, nimble and adaptive organizations. The creation of BPM centers of excellence (CoE) directly impacts the level of success attained through BPM initiatives. A recent report from research firm Forrester noted that "almost half (49 percent) of the enterprises that reported clear and measurable benefits from their BPM efforts had a BPM COE in place; only 10 percent of the group reporting mixed results had a BPM COE in place.1
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BPM is more than just a collection of technologies; it is a business management methodology that covers how people work with people, how systems work with systems and how the two camps work together. Reinventing business processes is not a single point of destination; it is a journey of continuous process improvement. A BPM CoE is the guiding entity that keeps all required components of the organization in line with the BPM journey vision. An effective CoE includes a process visionary who understands how the processes of the firm currently drive bottom-line profitability and performance as well as how they can be improved. An effective CoE also includes a BPM project manager, a BPM tool expert, an enterprise architect and several domain project experts, who are businesspeople called in to provide expertise on projects in their respective areas.
What is a BPM CoE?
A BPM CoE is a collection of methodologies, tools and techniques used by an organization’s experienced BPM staff to improve BPM projects by achieving higher ROI and minimizing the cost of reengineered solutions. The idea is to provide a layer of process maturity over and above traditional technological process maturity. This layer insures that process rigor is introduced into BPM project initiatives, just as it is in other areas of business. For example, process quality assurance in manufacturing orchestrates all the resources organized around production to minimize defects, enhance production schedules and minimize costs. Typically, a BPM CoE will orchestrate people and processes across two departments within an organization: business and IT. While IT departments are usually involved in any technological aspects of the organization, their traditional relationship with business departments has been cyclical, on a project by project basis, with defined start/end cycles. This is the very nature of projects and sponsorship - there is heavy engagement at the start of the project but less during construction and after completion. During that time, requirements always change (because the business units have constantly changing needs), and IT usually views this in the context of projects, budgets, schedules and resources constraints. It is not hard to see why conflicts arise. Usually, business units have to accept continuous enhancement cycles (or enhancement packs) where a bundle of business enhancements are translated into mini projects after the original project team disbanded, the business analysts left the project, or the technology resources or partners are no longer available. This greatly increases the risk and cost associated with process innovation and improvement. Figure 1 below provides an example of a typical technological project (BPM or otherwise).
In contrast, a BPM CoE is continuous in nature. It helps avoid the crests and troughs of regular projects (regardless of methodology used) by ensuring that a governance group exists from all touchpoints of a business process. The constituents are from business units and IT departments with a focus on business process construction and improvement through a thorough change management plan that follows best practices in using BPM systems, BPM design and construction, and BPM transition and deployment among environments ( such as development, staging, production, BPM training and a BPM business support plan). Figure 2 below provides an example of a BPM initiative from a BPM CoE lens.
Why Companies Need a BPM CoE
Business Process Management Systems (BPMS) are now considered mainstream technology for enterprises seeking additional business benefits through technological advantage. These advantages vary from cost cutting, efficiency gains and even system replacement to replenish outdated and out powered technological infrastructures. The process involves commitment from several departments and a dynamic that is ever changing between business and IT. Thus, companies rely on process consultants to take on BPM initiatives of high importance to the enterprise. The project cycle is typically heavy on the professional services component, where responsibilities include analysis, design, implementation, control and execution of the project. The heavy lifting to bring the BPM initiative to fruition is left to experienced and expert process consultants. While this can work, it leaves several components of successful implementations to the process consultants, without much involvement from the enterprise. This can leave a big gap once the BPM implementation is successful and the system is operational and in maintenance mode, jeopardizing the ability to leverage that initial BPM success to other areas and systems in the business.
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