Business of BPM

Management Frameworks

I have used this site a few times to look up concepts.  It is called Value Based Management.  It is a data dump of lots of theories.  One theory that I have been particularly interested in lately is called Blue Ocean Strategy.  I have not read all the press on it, but as one friend explained it to me, it is about collaborating with your clients to expand your market.  Rather than go out into new markets seeking new clients (which is the Red or Bloody Ocean), you focus on developing new growth through your client base.  This website above explains it a little different, but you can always go to the official website or read the book to get all the details.

Here is one of their tools called the Four Actions Framework:
To break the trade-off between differentiation and low cost and to create a new value curve, there are four key questions to challenge an industry's strategic logic and business model:              

• Which of the factors that the industry takes for granted should be eliminated?
• Which factors should be reduced well below the industry's standard?
• Which factors  should be raised well above the industry's standard?
• Which factors should be created that the industry has never offered?

Lean and BPM

I am a big believer in the Lean approach to continuous improvement.  The first of a two part article on Lean Tools for BPM was posted on BPMEnterprise.  It is worth a read. 

More on Six Sigma and BPM

This continues to be a hot discussion topic. I pulled some data from several sources last night for a client and thought I would post it here.

First, here are a couple of key items around BPM and Six Sigma (or Lean):
(several of them from article "Can Six Sigma and Business Process Management Co-Exist?")

1. Six Sigma (or Lean) and BPM are enablers for the other. BPM benefits by taking a continuous process improvement approach. Six Sigma or Lean benefit by using technology to automate what they “fix” and for ongoing measurement.
2. Six Sigma is a process (e.g., DMAIC) which standard deliverables and exit questions at each phase. BPM can provide a “project management” tool and scoreboard for BPM.
3. Six Sigma is focused on the subprocess and can lead to local process optimization without end-to-end process optimization.
4. BPM strength is automation of processes through modeling and creation of dashboards. It’s weakness is in detailed analysis of data for difficult problems. Six Sigma fills this gap.
5. Six Sigma provides a rigorous approach to data collection and analysis but it’s weakenss is in monitoring process improvements to make sure they are applied. BPM can provide this systemic solution to codify the improved process.
6. For a Six Sigma company, BPM can offer a Lean type offering that focuses on solutions where quality is not the issue but there are opportunities to eliminate NVA activities or Muda (i.e., waste).

I think the two tables below also do a good job of comparing the two.

Adapted from Lombardi white paper on Six Sigma and BPM:

Adapted from Appian white paper on Six Sigma and BPM:

BPM and Six Sigma

Quality and Six Sigma have been around for a long time.  For many of us, they should now be one strategy that we employ when appropriate.  A basic approach used by many is the DMAIC framework which stands for Design, Measure, Analyze, Improve, and Control.  I think it is important to understand the link between BPM and Six Sigma.

BPM Basics does a good job of mapping the DMAIC tasks to the typical functionality of a BPM system.  (http://www.bpmbasics.com/literature/sixsigma.html)   I have met with several Six Sigma experts and their feedback has been that the solutions map very well to the "AIC" components:

• Analyze - By modeling your processes in a BPM environment, you can leverage some of the simulation tools that exist.  Additionally, for future improvements, the data and process history helps drive you right to the root cause of issues.
• Improve - Because these tools allow you to make real-time changes, you are able to improve the process as you go.  Some tools such as Lombardi even offer suggested process improvements based on how the process is actually used (e.g., this decision is always yes so you should eliminate the step).
• Control - This is a big strength of the BPM tools.  Reporting is called BAM (Business Activity Monitoring) in the industry and presents a process dashboard based on the metrics you build into the process.  Additionally, because the process is automated using rules, you have instantaneous control over the process and tracking of exceptions.

Training on BPM and Six Sigma is available at http://www.bpminstitute.org/training/bpm-and-six-sigma.html.

There is also an upcoming webinar on Six Sigma and BPM by Appian http://www.appian.com/Campaigns/web011807.html.

Another white paper on BPM and Six Sigma.