bpm maturity model

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ResearchPublication Date: 18 October 2006 ID Number: G00142643

2006 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any formwithout prior written permission is forbidden. The information contained herein has been obtained from sources believed tobe reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. AlthoughGartner's research may discuss legal issues related to the information technology business, Gartner does not provide legaladvice or services and its research should not be construed or used as such. Gartner shall have no liability for errors,omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed hereinare subject to change without notice.

BPM Maturity Model Identifies Six Phases for SuccessfulBPM Adoption

Michael James Melenovsky, Jim Sinur

The business process management maturity and adoption model provides guidance forhow your organization can more easily navigate the challenges of becoming process-managed.


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Publication Date: 18 October 2006/ID Number: G00142643 Page 2 of 14

2006 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

TABLE OF CONTENTS

Analysis ............................................................................................................................................. 31.0 Introduction..................................................................................................................... 32.0 The Six Phases of BPM Maturity Overview............................................................... 3

2.1 The BPM Maturity Model and Its Critical Success Factors............................... 53.0 The Six Phases in Detail............................................................................................ 7

3.1 Phase 0: Acknowledge Operational Inefficiencies ............................................ 73.1.1 Triggers ............................................................................................. 73.1.2 Critical Success Factors' Status........................................................ 73.1.3 Needed Competencies...................................................................... 73.1.4 Potential Challenges ......................................................................... 7

3.2 Phase 1: Become Process Aware..................................................................... 83.2.1 Triggers ............................................................................................. 83.2.2 Critical Success Factors' Status....................................................... 83.2.3 Needed Competencies...................................................................... 93.2.4 Potential Challenges ......................................................................... 9

3.3 Phase 2: Establish Intraprocess Automation and Control................................. 93.3.1 Triggers ............................................................................................. 93.3.2 Critical Success Factors' Status........................................................ 93.3.3 Needed Competencies.................................................................... 103.3.4 Potential Challenges ....................................................................... 10

3.4 Phase 3: Establish Interprocess Automation and Control............................... 103.4.1 Triggers ........................................................................................... 103.4.2 Critical Success Factors' Status..................................................... 103.4.3 Needed Competencies.................................................................... 113.4.4 Potential Challenges ....................................................................... 11

3.5 Phase 4: Establish Enterprise Valuation Control ............................................ 113.5.1 Triggers ........................................................................................... 113.5.2 Critical Success Factors' Status...................................................... 113.5.3 Needed Competencies.................................................................... 123.5.4 Challenges....................................................................................... 12

3.6 Phase 5: Create an Agile Business Structure ................................................. 12

3.6.1 Triggers ........................................................................................... 123.6.2 Critical Success Factors' Status..................................................... 133.6.3 Needed Competencies.................................................................... 133.6.4 Potential Challenges ....................................................................... 13

LIST OF TABLES

Table 1. Expected Percentage of Organizations That Have Mastered Maturity by Phase............... 5

LIST OF FIGURES

Figure 1. The Six Phases of BPM Maturity ....................................................................................... 4Figure 2. BPM Maturity Framework................................................................................................... 6


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ANALYSIS

1.0 Introduction

Most businesses have a limited, explicit understanding of end-to-end business processes, and if

any understanding exists, it is often tucked away within disparate groups across the organization.It's rare to find an organization that has linked its scattered process competencies together into acomprehensive strategy.

This is changing as business process management (BPM) gains momentum. Gartner has createda six-phase BPM maturity model that involves understanding the six phases of BPM maturity andwhere your organization stands on addressing critical success factors defined in a BPM maturityframework. This research details the six phases, including:

A description of the typical triggers that herald an organization's transition from onephase to another

The characteristics of the critical success factors for each phase

Needed competencies Potential challenges

2.0 The Six Phases of BPM Maturity Overview

Figure 1 identifies the six phases of BPM maturity.


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Figure 1. The Six Phases of BPM Maturity

0

Acknowledge

OperationalInefficiencies

Directly LinkProcess

Model and

Rules toExecution

2

Intraprocess

Automationand Control

CompareAlternatives

Driven byVarious

OptimizationTechniques in

Real Time

Craft ProcessAutomationand ControlAcross theEnterprise,Customersand Trading

Partners

3

Interprocess

Automationand Control

Create aBusiness

PerformanceFramework

ThatDynamically

Links theValuation ofthe Businessto ProcessExecution

4

Enterprise

ValuationControl

Innovate NewBusinesses,Products and

ServicesThrough an

AgileBusinessStructure

5

Agile

BusinessStructure

Model andAnalyzeBusiness

Processes

1

Process

Aware

Measureand Monitor

BusinessActivities

EstablishProcessPerformance

MetricsIntegrate

Activity-BasedAccountingWith Process

Steps

IdentifyProcess

Owners andGovernance

Structure

RealignProcess

With MarketStrategy

Goal-DrivenProcesses

Maturity

Sophisticated

Immature

Phase of Maturity

Generally, Where We Are Today

142643-2

Source: Gartner (October 2006)

The journey toward a fully process-driven organization begins in Phase 0 with acknowledgment

that some business improvement opportunities cannot be addressed by conventionalapproaches. The need to seek fundamental operational change results in Phase 1, becoming"process aware." As the organization becomes more process aware, it enters Phase 2 when itbegins automating specific processes to gain better control. Eventually, the boundaries ofindividual processes expand, and in Phase 3, the organization must integrate these processeswith each other, as well as those of trading partners and customers. Competencies grow aroundmanaging the relationships between major business processes and, by Phase 4, the expertiseexists to dynamically link strategic goals to process execution. This, ultimately, leads to thecreation of an agile business structure (Phase 5) the highest level of maturity.

The curve embedded in the maturity model represents the amount of effort, and subsequentbenefit that will accrue in each phase. As you approach the more advanced phases, thesteepness of the curve shows that more work is required, but more return value is expected. Thisis a hallmark of maturity: wisdom comes from investment, and wisdom begets increased benefit.

The majority of organizations are in the earlier phases of BPM maturity. Table 1 shows Gartnerestimates regarding the percentage of organizations mastering each phase by the end of 2006,and how these percentages will evolve by 2008. Although many organizations will be deep intolearning the disciplines of Phase 2 by the end of 2006, few will have mastered the processautomation and control competencies. Therefore, the percentage of enterprises mastering any


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particular phase will be much smaller than the percentage experiencing or experimenting with thesame phase. Further, mastery of the more advanced phases will remain elusive well beyond2008. We set the bar high when we created this maturity model.

Table 1. Expected Percentage of Organizations That Have Mastered Maturity by Phase

Timeline Phase 0 Phase 1 Phase 2 Phase 3 Phase 4 Phase 5

Organizations by End of2006

82 16 2 0 0 0

Organizations by End of2008

55 33 8 2 0 0

Source: Gartner (October 2006)

2.1 The BPM Maturity Model and Its Critical Success Factors

The BPM maturity model is based on the belief that superior process management leads torealizing a truly agile business structure (see "Achieving Agility: BPM Delivers Business AgilityThrough New Management Practices").The competencies gained along the way to becomingagile create greater visibility into how the organization delivers value, innovates customer serviceand gains operational productivity and effectiveness. Each phase of maturity builds on theprevious phases, but also allows for initiatives that grow competencies for later phases to occurduring earlier phases. The object then becomes managing the "weakest link" when balancing thecritical success factors of organizational process management.

In addition to the six phases of maturity, the other important dimension is the organizationalfactors that must be balanced within and between phases. Figure 2 (adopting conceptsdeveloped at the Babson College Process Management Research Center) displays six criticalsuccess factors that an organization must evolve during each phase as it becomes process-driven.


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Figure 2. BPM Maturity Framework

Strategic

Alignment

Culture and

Leadership

People

Governance

Methods

Information

Technology

Acknowledge

Operational

Inefficiencies

Process

Aware

Intraprocess

Automation

and Control

Interprocess

Automation

and Control

Enterprise

Valuation

Control

Agile

Business

Structure

Critical Success

Factors

Phases of Organizational Maturity

Phase 0 Phase 1 Phase 2 Phase 3 Phase 4 Phase 5

142643-1 Source: Gartner and Babson College Process Management Research Center (2006)

As the organization transcends through each phase of maturity, the achievement of its criticalsuccess factors must also evolve. Leading organizations take a balanced approach to managingthe six critical success factors. Managed together, they represent the framework from which BPMcompetencies are built. The six success factors are:

Strategic alignment: The continual tight linkage of organizational priorities and enterprise

processes, enabling the achievement of business goals.

Culture and leadership: The collective values and beliefs that shape process-relatedattitudes and behaviors.

People: The individuals and groups who continually enhance and apply their process-related expertise and knowledge.

Governance: Relevant and transparent accountability, decision making and rewardprocesses to guide actions.

Methods: The approaches and techniques that support and enable consistent processactions and outcomes.

Information technology: The software, hardware and information management systemsthat enable and support process activities.

The remainder of this document provides an overview of the process competencies gained duringeach maturity phase and the impact on each critical success factor. Also described are thetriggers that move the organization into new phases; competencies that are to be gained during aphase; and the likely challenges that will arise.


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3.0 The Six Phases in Detail

3.1 Phase 0: Acknowledge Operational Inefficiencies

The primary motivation of Phase 0 is to uncover causes of inefficiencies and poor performance.

3.1.1 Triggers

Organizational process orientation can be triggered by many different initiatives. The commondenominator is usually an organization realizing that any significant productivity/performancegains will hinge on examining processes as a whole, rather than automating functional tasks. Inmany cases, this realization is driven by monitoring business activities and creating metrics thatenable more-factual approaches for improvement. During this phase, it's common to findorganizations monitoring specific business activities, examining what is happening and seekingpotential trouble spots. However, analyzing metrics around specific activities begs the question,"How do we improve these metrics?" This simple question represents a trigger that moves theorganization to the next phase of becoming "process aware." The analysis generally leads tounderstanding the broader business process.

3.1.2 Critical Success Factors' Status

Strategic alignment: The organization is aligned around a functional area, product lineand/or geography.

Culture and leadership: The culture is a functional hierarchy, and leadership is focusedon local operational metrics.

People: Generally concerned with the health of the organization and meetingexpectations of their immediate management. Little understanding of end-to-endprocesses occurs.

Governance: The governance structure is mostly focused on department, division andglobal organization performance metrics. This promotes incentive metrics that compareone functional unit with another, fostering internal competition across functions.

Methods: The IT organization normally deploys solutions through a traditional "waterfall"method, seeking out best-of-breed applications to meet functional requirements.Business leaders think in terms of re-engineering and organizational transformation.

Information technology: This is a built-to-last architecture, rather than a built-for-changearchitecture, with various adaptations of ERP implemented and an application-centricapproach to solutions. Advanced enterprises are experimenting with monitoring usingbusiness activity monitoring (BAM). Business intelligence technologies are common.

3.1.3 Needed Competencies

Gaining experience around monitoring and analyzing business activities and key performanceindicators represents a foundation for process management. This includes overcoming thechallenges of knowing when to measure, how often to measure and distilling the correct analysis.

Within some areas of the business, capturing real-time information and reporting throughdashboards to the line-of-business manager provides needed exposure.

3.1.4 Potential Challenges

It's commonplace during this stage that the IT organization still contends that businessapplications represent business process flows and that reconciling information across the


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organization is a higher priority. In this case, business analysts collect application requirementsfrom the lines of business, write up functional specifications and hand off to developers forcreating technical specifications, then coding, testing, production and maintenance mode.

3.2 Phase 1: Become Process Aware

The primary motivation of Phase 1 is to create a culture that wants to understand its existing

processes and learn where to improve them.

3.2.1 Triggers

The signal that your organization is becoming "process aware" typically starts with the modelingof end-to-end business processes. The modeling work may be focused on improving a specificprocess or be driven by strategic planning where a process architecture group is formed.

As organizations mature through this phase, several things occur: Process modeling becomespervasive, measurements of business process are established, global process owners areidentified and initial forms of process governance are put in place. Process modeling gains broadorganizational support as improvements link poor performance results to weak processes.Organizations are just discovering their processes, and during this phase, simple discoveries fallto the bottom line quickly. Using a term coined by General Electric, "work-out sessions" flush out

process disconnects and bottlenecks, and creates explicit roles and responsibilities. Many of thechanges become habit. This early stage of BPM quite often pays for itself without significantinvestment in process automation technology.


Strategic alignment: The organization adds a new dimension of "process" to theestablished dimensions of function, product line and geography, and includes BPM inorganizational planning and budgeting. Strategic alignment around processes areconsidered, and debates rage on where process modeling should reside in theorganization.

Culture and leadership: Culture is being stretched, with mixed messages around theimportance of process. Leadership emphasizes the need to re-engineer and improve

existing processes.

People: Some have attended process modeling "work-out sessions" and begin to seebenefits of visualizing the end-to-end process.

Governance: The governance structure is now a matrix with global process owners inplace. Employee performance metrics may include process improvement objectives.

Methods: Business management is leveraging Six Sigma, Lean and Value StreamMapping methods for process improvement initiatives

Information technology: The advanced IT organization is laying out plans for a service-oriented architecture, launching proof-of-concept initiatives, aligning the IT departmentaround processes and investigating in BPM technologies as they relate to system-to-

system processes. The organization is investing in process discovery technologies, suchas business process analysis, and starts building a business process framework andarchitecture. Rules start to be separated from processes and managed.


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At this stage, organizations should embrace four to eight major business processes that delivercustomer value and support corporate goals. Each process is an asset and requires a seniorexecutive as owner. A business architecture group that can seek redundancies and disconnectsacross the organization becomes an important asset to develop. Process modeling andfacilitation skills will be at a premium.


For many organizations, gaining senior management active participation is a challenge becauseof a need to prioritize and fund business process improvement projects. Crafting a justification forprocess orientation may get relegated to a pilot project. Also, learning a comprehensive methodfor process discovery, modeling and analysis can slow down progress if not resolved early on inthe phase.

3.3 Phase 2: Establish Intraprocess Automation and Control

The primary motivation of Phase 2 is to automate and instrument processes for continuousimprovement.

3.3.1 Triggers

The trigger that moves an organization into Phase 2 is typically the need for increased visibility,control and speed. This phase moves beyond the acknowledgement of inefficiencies and thecreation of awareness and opens the door to the execution (automation and control) of explicitbusiness processes reversing process inefficiencies and translating the new processawareness into software-based action. Process automation and control is most often typicallyimplemented from the subprocess level up to the broader business process and involves enablingtechnologies such as the use of a BPM suite. As the organization realizes further productivitygains, the notion of continuous process improvement only accelerates investments in BPM-enabling technologies. This spawns a stronger focus on process owners, who become the"lightening rods" for process improvement and rapid change.


Strategic alignment: The successful organization has committed itself to align aroundglobal business processes and has linked them to organizational goals. For example,the IT department is 50% to 70% realigned on these global processes.

Culture and leadership: Culture is about process ownership. Leadership seekscontinuous improvement and is considering the adoption of a new process valuesystem.

People: Employees are skilled in communicating process issues and have gained acollaborative approach to solutions. Some, in advanced organizations, will beginlearning more-sophisticated optimization techniques that start with the visualization ofresults and move to dynamic comparisons of alternatives.

Governance: The governance structure is more explicit, with multiple levels in theorganization capable of resolving process and policy discrepancies. Incentive structuresare aligned around continuous process improvements.

Methods: The IT organization applies BPM technologies using iterative methods thatbusiness process owners drive. These methods are a collection of best practices drawnfrom Six Sigma, Lean and other methodologies.


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Information technology: If a competency center does not already exist, then the ITorganization creates one to assist business managers with automating processes andbegins laying out plans for policy-driven services that can respond to the continualoptimization needs of business. Advanced IT organizations realize that BPM-enablingtechnologies manage the end-to-end processes and leverage the dynamic configurationof services, and that moving activities from humans to rule-driven services puts them

into a stronger partnership with the process owners. Rule optimization and real-timeinfrastructure, service inventory and dynamic service assembly highlight some of theinfrastructure enhancements of the most mature of this phase.


The creation of a BPM center of excellence or competency center is needed before multiplebusiness process management suite (BPMS) deployments take root across the organization (formore information on BPMS, see "Business Process Management Suites Enhance the Controland Management of Business Processes"). The competencies normally include sharing bestpractices, providing coaching and facilitating, and generally acting as a guide to the business onhow to automate, optimize and control processes.


New methods are required for deploying process automation and control technologies. Theseprocess-focused technologies are designed for dealing with constantly changing businessprocess conditions. Therefore, their deployment should not follow a typical "waterfall" applicationdeployment approach.

3.4 Phase 3: Establish Interprocess Automation and Control

The primary motivation of Phase 3 is to optimize the relationships between business processesacross functional barriers, partners and customers.

3.4.1 Triggers

The trigger that moves an organization into phase three is the need to more explicitly establishlinks between business processes across the organization with trading partners and customers.

Competitive pressures will loom over process owners to resolve cross-process inefficiencies andgain greater control and automation of broader intercompany processes. This means pressure forgreater productivity and increased quality and agility beyond the existing definition of the end-to-end process.


Strategic alignment: Strategic alignment begins to take on two further dimensions theintegration of discrete business processes with each other and with suppliers andcustomers.

Culture and leadership: Culture is based on new values of respect for other opinions,collaboration and consensus building. Leadership seeks continuous improvementthrough transparency and broader visibility.

People: Employees are able to anticipate the impact of change beyond the processesthey participate in and the constituents affected by the processes. Collaborationbecomes second nature as resistance to change is deemed inappropriate.


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Governance: The governance structure includes incentives for suppliers and customersto collaborate to improve processes. Executive councils, made up of key customers andsuppliers, are put in place to reconcile differences between conflicting goals.

Methods: New methods and enhancements to approaches, such as value chainanalysis, are adopted to support intercompany processes.

Information technology: Collaborative infrastructure, such as e-rooms and knowledgemanagement technologies, are integrated into the support of process management. Theadvanced IT organization focuses on creating agile services linked to self-adapting (real-time) agile infrastructure. Event-driven technologies and BAM become critical formanaging and monitoring composite processes and the process-connected valuechains.


Anticipation of value chain impact will be the rare skill. Inclusion of multiple process owners andprocess stakeholders in planning, simulation and implementation phases will be the trainingground for learning the planning skills necessary to pull off frequent change in complexprocesses.


The automating of specific business processes will take time, and along the way, new challengeswill emerge. For example, automating processes from the ground up can create "islands-of-automation." Also, at some point, further process improvements lack direct customer value; as away to regain value, the definition of the end-to-end business process expands. The expandeddefinition of a process drives the need for automation and control over other related businessprocesses as well as other outside organizations processes. Getting all participants (inside andoutside the organization) to agree to testing and accepting the planned changes will be difficult asrapid process change rolls out in waves. A fallout will require new steps to avoid unwanted effectsof process change (cultural and technical).

3.5 Phase 4: Establish Enterprise Valuation Control

The primary motivation of Phase 4 is to link process results to desired operational and strategicoutcomes.

3.5.1 Triggers

This phase is entered when senior leadership has visibility into, and control over, the broadervalue chain coordinating partners and customers. The leadership team can set goals for thesebroad business processes that are directly linked to organization strategy. Changing strategy willdynamically affect processes, and changing processes will alter strategy.


Strategic alignment: Strategic alignment explicitly links strategic goals to complexprocess webs. In this phase, the linkage is much more automated so that corporate

goals more directly drive process performance and changes. The linkage between goalsand execution is much more explicit.

Culture and leadership: The culture of the organization places greater trust in thecomplex decision support capabilities of the system of processes, rules and services.Leadership embraces principles of simulation and the results of simulation and has


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developed a sizable "war chest" of alternative business scenarios that add to the agilityof the organization.

People: Employees are more in tune with system recommendations and analysis fordealing with process changes. Workers gain experience with linking goals to processesand smoothing out exceptions and anomalies.

Governance: The governance structure becomes more streamlined in dealing withconstant and rapid change. Supporting the governance are real-time optimizationsimulations and system suggestions for correcting organizational challenges that standin the way.

Methods: New methods will evolve around creating and managing goal-seekingprocesses and creating proper visual tracking solutions.

Information technology: The advanced IT organization focuses on creating self-adapting,agile-infrastructure-driven goals. For example, many strategic processes will be goaland heuristic driven. A more holistic policy management system becomes dynamic. ITwill be expected to support various business scenarios without negative technicalimpact.


Innovation becomes dependent on simulations of market conditions, constituent response,competitive reactions, cost-effective execution and freeing up time from employees performingmundane tasks to shift to higher-value planning. Building flexible processes will be a rare skill andthe organization must master reacting to and embracing system-generated suggestions forchange.

3.5.4 Challenges

Under a goal-directed flow approach, a visual model of the actual process is not available exceptat audit trail time. Conceptualizing variable processes will need some significant R&D. Asmanagement attempts to steer the organization to new goals and directions, the process changescan become a bottleneck, as IT applications are today. There may be too many exception paths

as well. The cultural changes that this phase requires may be well beyond the grasp of manyorganizations.

3.6 Phase 5: Create an Agile Business Structure

The primary motivation of Phase 5 is the creation of best-in-class processes that stay sharp in theface of change.

3.6.1 Triggers

Agility is the ability of an organization to sense environmental change and to respond efficientlyand effectively to it. Enterprises will see BPM deliver many benefits of agility long before theyreach this final phase of maturity (see "Achieving Agility: BPM Delivers Business Agility ThroughNew Management Practices"). However, this phase requires more than achieving a few benefits

of agility it is the creation of an agile business structure and, therefore, remains the mostelusive phase. This phase is one of comprehensive business agility.

Among the triggers for entrance to the final phase is the pressure to expand future growth(measured as earnings in for-profit enterprises; perhaps as services provided for nonprofitorganizations). This forces senior leadership to seek new opportunities beyond the tradition base,


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often requiring the penetration of new markets. Process owners are pressured by intense processcompetition in an environment that is being bombarded with change.

Becoming an agile business involves more than your ability to react quickly to challenges. Inmany cases, being agile means anticipating or creating opportunities. During this phase ofprocess maturity, the organization has visibility and control over many key market or ecosystemdynamics and, as a result, becomes highly innovative around capturing new opportunities.

Knowledge of how customers, clients, competition and partners are incorporated into the rulesand policies guide the end-to-end process. Employees are comfortable with change and becomeuncomfortable when things are status quo.


Strategic alignment: The ability to maintain organizational equilibrium while changingspeeds and direction becomes the norm. Directional shifts in strategy automaticallycause the organization to seek out best-in-class processes in the market, and processeswill rapidly adapt around changing conditions. Process management becomes theorganization's primary asset.

Culture and leadership: Culture is fined-tuned to overcome resistance to change.Leadership is about empowering the front-line employee with decision-making authority,

with a clear link between organizational strategy and employee performance goals.

People: Employees are comfortable with constant change. Decision making has beenhighly decentralized, with roles and responsibilities clearly understood.

Governance: The governance structure is more decentralized. Senior management'schanges in strategy will be clearly visible to the organization's rank and file as theexplicit goal-to-execution linkage removes barriers.

Methods: New methods will emerge to support creating goal scenarios to addresssettings of intense competition. Complex events will be mined to indicate the emergenceof a potential scenario/opportunity. Creation of business process scenarios, policies andrules to guide goal-driven processes will become the standard mode of strategicoperation.

Information technology: The applications of advanced technologies that are smart andself-adapting will take root here. The IT organization focuses on leveraging real-timeevents and rules management. Approaches and technologies, such as "surroundsimulation" and the management of "swarming agents," are being used to the advantageof many organizations.


By this time, the organization has gained vast experience innovating new business models andcrafting new products and services. Building real-time "war game playbooks" based of meticulousscenario simulations highlight the organization's ability to be agile.


The challenges of this phase will be unlike any the organization has seen in any prior phases ofthe maturity model. Simulating process dynamics to "practice" before real conditions occur will bea constant area for improvement. Learning to recognize complex events and managing swarmingagents acting in behalf of the corporation, while responding with pre-built policies, will likewise bea new challenge requiring advanced analytical skill sets.


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