1. BPM Governance
Identifying methods for prioritizing, standardizing, measuring and controlling BPM efforts

2. Enterprise BPM Methodology
BA 553: Business Process Management
Session 5
Session 5
Sessions 8 & 10
Build Process Management Capability
Sess. 4
Session 5
Session 8
Session 8
Session 10
BA 563: Process Improvement
“Managing the Process-Centric Organization”, presentation by Paul Harmon.
BA 553: Business Process Management

3. Governance: What, Why, When, How
What is governance?
Governance is derived from a Greek word which means “to steer”
System of policies, rules, and controls
Provides models and methods for direction, coordination, and control of the organization
Why is BPM governance important?
When is BPM governance needed?
When in the BPM lifecycle to implement governance
Governance during phases of process change
How is BPM governance implemented?
Governance critical success factors
Governance frameworks
BA 553: Business Process Management

4. Why is BPM governance important?
BPM Governance Activity
Benefit
Establish governance groups, roles, and responsibilities (session 10)
Identifies ownership of and accountability for BPM activities
Establish BPM annual lifecycle approach (session 8)
Ensures alignment with planning and budgeting lifecycles
Establish methods for BPM project portfolio management
Ensures integration with enterprise project portfolio management
Establish methods for documenting and controlling process architecture (session 5)
Ensures revision control of flowcharts, and integration into value chain
Establish BPM rules, policies and standards (session 10)
Ensures compliance with applicable regulations, and control
Establish BPM measurement approach (session 7)
Ensures alignment with KPIs and identifies decision-making authority
Establish BPM tools, models, and methods
Ensures consistency of BPM efforts and integration with other company activities
BA 553: Business Process Management

5. When is BPM governance needed?
Governance is required through all lifecycle phases of BPM in the company
Governance is required through all process change phases:
Business process strategy phase
Strategic plan
Value chain
KPIs and Business scorecards
Business process design phase
Process architecture
Process redesign project
Desired (“to be”) process performance targets
Business process implementation phase
Comprehensive process change implementation plan, including training and communications plans
Improved process implemented in the organization
Business process control phase
Process performance management system
Process performance measures, impacts on KPIs and strategy
Countermeasure plans to modify process performance
Scheer, A-W. and Brabander, E. (2010), The Process of Business Process Management. In: vom Brocke, J. and Rosemann, M. (eds.) Handbook on business process management, vol. 2. Springer: Heidelberg.
BA 553: Business Process Management

6. BPM Governance: Success Factors
Determine governance authorities and boundaries for each group, e.g., which group has authority over cross-functional processes, which group is responsible for standardizing tools and methods
Establish a schedule for how frequently various governance activities are conducted
Balance benefits of optimizing the performance of a process and optimizing the performance of the organization (don’t sub-optimize)
Align BPM governance approach with organizational management approach and organizational culture
Align the related lifecycles:
BPM lifecycle aligned with company lifecycle
Process lifecycles aligned with product/service lifecycles
BA 553: Business Process Management

7. BPM Lifecycle: One Perspective
Scheer, A-W. and Brabander, E. (2010), The Process of Business Process Management. In: vom Brocke, J. and Rosemann, M. (eds.) Handbook on business process management, vol. 2. Springer: Heidelberg.
BA 553: Business Process Management

8. BPM Governance: Success Factors (Cont’d.)
Do not approach BPM governance as something to be addressed later. BPM governance represents a fundamental transformation of the organization’s culture
Gain an agreement across the organization regarding what constitutes a process. A key attribute is the ability to measure a distinct output from work performed
Identify key executives that take responsibility for the end-to- end performance of the organization’s core processes
Create a center-of-excellence that facilitates the move toward improved process management and provides standards, tools, methods, and best practices across the organization
Presentation by Satyam “Establish Business Process Governance Best Practices” (2006).
BA 553: Business Process Management

9. How is BPM governance implemented?
Select a BPM governance framework:
Assess the organization’s current process capability or maturity (session 11)
Determine the level of management structure that is appropriate for the organization’s culture
Determine the level of centralization that is appropriate for the organization’s culture (example on next slide)
Identify the level of resources (people and budget) the organization can dedicate to BPM at this time
Decide on a governance framework based upon the above items (examples in this presentation)
Establish a BPM growth model, if the current BPM approach is not at the desired level (session 11)
BA 553: Business Process Management

10. Determining the Level of Centralization
Localized Model
Regional Model
Business Unit Model
Enterprise Model
Description
Ultimate decision authority at the local level by process
Localities have lead process owners who make decisions for their locality
Consistency not maintained across the enterprise
Advantages
Enables nimble decision making
Localities have flexibility to design processes to meet their needs
Tradeoffs
Costly solution to build and maintain; loss of efficiencies
Loss of standardization benefits
Most difficult to manage business globally
Description
Ultimate decision authority is at the regional level by process
The regional process owners may meet to gain informal consistency across the enterprise
Local governance bodies make lower level decisions
Advantages
Provides flexibility for regions in process design
Decision making typically faster than Enterprise and BU Models
Tradeoffs
More difficult to manage enterprise globally
Some loss of flexibility to meet business unit needs within a given region
Description
Ultimate decision authority is at the Business Unit level by process
The BU process owners may meet to gain informal consistency across the enterprise
Regional level bodies make lower level decisions
Advantages
Provides flexibility for business units in process design
Decision making typically faster than Enterprise Model
Tradeoffs
Loss of cross Business Unit synergies
Some loss of local control
Description
Ultimate decision authority is at the Enterprise level by process
Enterprise governance body can be led by a single process owner or small board of owners
Regional and/or BU level bodies make lower level decisions
Advantages
Less costly to maintain
Full standardization benefits
Enables global management of the business
Tradeoffs
Some loss of flexibility to meet specific business needs
Greatest change challenge
Open
Strict
Typical Attributes
Exceptions granted as requested
Loose network of process experts (if any)
Local review boards manage exceptions
Decentralized decision making
Typical Attributes
Regional or BU business justified exceptions granted
Regional or BU process expert network
Decision making bodies
Typical Attributes
Exceptions typically granted only for compliance or significant benefit
Corporate process owners
Global review boards
Centralized decision making
BA 553: Business Process Management
Example from Chevron, as discussed in session 6.

11. Example Governance Model
website, accessed 3 April 2010.
BA 553: Business Process Management

12. Lean Sigma Governance Model
Process Owner
VP (or other designated
leadership team member)
Leadership Team
(DRB for the deployment)
Process Improvement
Team Leader
(Lean Sigma Process Advisor)
Lean Sigma
Advisory Council
Project Facilitators
(Black Belts and
Green Belts)
This slide and next: Internal Chevron presentation, 2005.
BA 553: Business Process Management

13. Lean Sigma Process Improvement Cycle
VOICE OF CUSTOMER
Gap Identified
STRATEGIC
PLAN
Output Metrics
BUSINESS UNIT SCORECARD
Oper. Exc.
Improved Metric
BUSINESS
OBJECTIVES
Production
UCL
LCL
Avg
Financials
BUSINESS
MEASURES
Improve
Control
Define
Measure
Analyze
VALUE STREAM
PROCESS FLOW
Tools &
Methodology
PROCESS SCORECARD
Process Metric
UCL
PROCESS MEASURES
Avg
LCL
X's
Y's
BA 553: Business Process Management

14. Process Organization Governance Model
Leader
CEO/President
Process Owner
Chief Process Officer
Process Team
Process Council
Process Office
Steering Committee
Business Transformation
Catalyst
Source: Tom Colman, CPO/CIO Sloan Valve, 2006
BA 553: Business Process Management

15. Process Governance Roles
Burlton, R. (2010), Delivering Business Strategy Through Process Management. In: vom Brocke, J. and Rosemann, M. (eds) Handbook on business process management, vol. 2. Springer: Heidelberg.
BA 553: Business Process Management

16. Governance Model for a Large Organization
Scheer, A-W. and Brabander, E. (2010), The Process of Business Process Management. In: vom Brocke, J. and Rosemann, M. (eds.) Handbook on business process management, vol. 2. Springer: Heidelberg.
BA 553: Business Process Management