Certified Business Process Professional (CBPP®) Study Session Part 3 Sept. 1, 2010 The BPM CBOK® is the “WHAT” of BPM, not the “HOW” or methodology. Before anyone can embark on BPM, they must first know the WHAT, then they will need to learn the HOW of BPM. There are many vendors and consultants out there who can show you HOW to do BPM, but until now, no organization or individual has established the knowledge foundation for the skills and competencies of BPM until ABPMP’s BPM CBOK® Without the WHAT, it is difficult for people to understand the HOW (methodology) of putting it all together into a comprehensive, sustainable whole.

Part 3 of Certification Overview Process Performance Management Tony Benedict President ABPMP Process Improvement Methodologies Gabrielle Field VP Certification, ABPMP Today’s session will cover your questions on the key concepts for these topics We will review sample questions to prepare for the exam format

House Keeping Only the “call in option” is available today to increase the recording quality of the webinar An On Demand version of this will be available through the ABPMP website A PDF of the slides will also be available for this webcast with the On Demand version

BPM CBOK® Knowledge Areas Enterprise Process Management Process Management Organization Business Process Management Business Process Management Technologies Process Modeling Analysis Design Transform Perform Mgt

5.0 Process Performance Management 14 Questions 10% of the Exam 5.0 Effective Process Measures Understand the role and objectives of measurements and metrics in the Process Performance Management Describe fundamental metrics dimensions and characteristics of effective metrics Describe the concept of "value added" versus "non-value added" measurement approaches 5.1 Importance and benefits of (cross-functional) performance management Understand the benefits of cross-functional process improvement efforts versus isolated functional area improvements Understand the reasons for continues process monitoring and control 5

5.0 Process Performance Management 14 Questions 10% of the Exam 5.2 Alignment of business process and enterprise performance Understand the difference between functional and cross-functional (enterprise level) metrics Understand the difference between the key approaches to process improvement methods; explain the key differences in the tools used by each Decision support for process owners and managers Describe the reasons for planning for monitoring and controlling of business processes Describe the role of business intelligence in decision support for process owners and managers 6

Importance of Performance Measurement Aligning process performance to organizational goals is primary reason for process management “If you can’t measure it, you can’t manage it” Focusing on process & associated process performance metrics vs. just financial metrics yields greater overall performance improvements

Key Process Performance Definitions Time – measurement of process duration Cycle time – time it takes from start of process to completion Cost – measurement of monetary value Resource cost – monetary value of resources (human or non-human) required to complete process Opportunity cost – value lost from process by not getting the resultant output of the process Capacity – amount or volume of a feasible output Usually includes associated revenue Can also include throughput

Key Process Performance Definitions Quality – usually expressed as percentage of actual to optimal/maximum in process terms Satisfaction – measurement of customer satisfaction Variation – measurement of the amount, extent, rate or degree of change; usually expressed as the difference between the actual & target/expected result Value Added – required to generate the output required by the customer or when the customer is willing to pay for the process that generates the output; or to maintain quality & consistency, continuity or transport

What to Measure First understand the desired result Quality information comes from inputs/outputs & entire process Cost information comes from resources needed to perform the process & outputs Capacity information comes from outputs Time information comes from entire process (supplier to customer) Can be broken down between supplier & input & output & customer

Audience Survey Sample Question #1 Process modeling: What is the purpose of “as is” process modeling?                              A)           To support audit requirements                         B)            To define the current activities and rules                                 C)            To compare against a "to be" model                                 D)           To identify poor performance                                                       

Audience Survey Correct Response #1 Process modeling: What is the purpose of “as is” process modeling?                                                    B)            To define the current activities and rules                                                                                     

Audience Survey Sample Question #2 Process modeling: What does a process model depict? A)           Sequence of process activities using standard and custom symbols B)            Job procedures of people involved in an activity for process costing  C)            Legacy application interfaces that capture activities D)           Workflow standards to track the volume of handoffs                                                

Audience Survey Correct Response #2 Process modeling: What does a process model depict? The sequence of process activities using standard and custom symbols

Audience Survey Sample Question #3 Process measurement: Which of the following is a process improvement methodology characterized by statistical process control techniques to reduce variation? A) Six Sigma B) Lean C) Activity Based Costing (ABC) D) Total Quality Management (TQM)

Audience Survey Questions Correct Response #3 Process measures: Which of the following is a process improvement methodology characterized by statistical process control techniques to reduce variation? Six Sigma

5.0 Process Performance Management 14 Questions 10% of the Exam 5.2 Alignment of business process and enterprise performance Understand the difference between functional and cross-functional (enterprise level) metrics Understand the difference between the key approaches to process improvement methods; explain the key differences in the tools used by each. Decision support for process owners and managers Describe the reasons for planning for monitoring and controlling of business processes Describe the role of business intelligence in decision support for process owners and managers 17

Activity-Based Costing Accounting methodology that assigns costs to activities rather than products/services Provides data about how costs are actually consumed in a process Used to discover opportunities for cost/efficiency improvement Focuses on overhead, traces rather than allocates each expense to a particular cost object Makes indirect expenses direct Use when overhead/cost of errors is high, inefficiency is identified or competition is stiff

Wastes Identified in Lean Value Stream Mapping

Statistical Methods – Six Sigma Science of collecting, analyzing, presenting & interpreting data Used to understand & reduce or eliminate variability in processes for improvement Focuses on data (inputs that drive the outputs) and processes primarily responsible for driving inputs Use when error rate is high or outputs are inconsistent

Critical Success Factors Focus on people as much as the process Education – make sure everyone knows the entire process & not just their part Everyone has same understanding of the “process” Everyone understands why process is important – tie to operational performance metrics for the company & tie compensation to the improvements Engage those who design and approve process activities as well as those who perform the work Attempt to “over communicate” the goals & objectives (performance metrics) of the process

The Process Organization 7.0 Enterprise Process Management 8.0 Next Steps: Review Chapters 8 and 9 of the BPM CBOK® Next Webinar Topic: The Process Organization 7.0 Enterprise Process Management 8.0 September 15, 2010 Jon Strickler, ABPMP Denver Chapter