the future of business process technology (including ... · enterprise teams need a way to think...

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The future of business process technology (including techniques)

Mark P. McDonald Ph.D.Group Vice President

Gartner Executive Programs

www.blogs.gartner.com/mark_mcdonald

Email: [email protected]

Association of Business Process Management Professionals

Northbrook, June 2009

Tuesday, June 23, 2009

http://www.blogs.gartner.com/mark_mcdonald

http://www.blogs.gartner.com/mark_mcdonald

Volatility

Uncertainty


© 2009 Gartner, Inc. All Rights Reserved. 3

Volatility

Uncertainty

High

HighLow

Low

Concentrate on internal operations and strategy execution as these factors determine earnings and competitiveness

Cut costs and preserve cash as economic conditions will overwhelm the enterprise strategy and execution capabilities.

Improve operational productivity to lower breakeven levels and reduce risk and exposure to market conditions.

Restructure the enterprise to raise its effectiveness, productivity and flexibility to respond to a range of possible economic conditions.

© 2009 Gartner, Inc. All Rights Reserved.



• Economic challenges and technology resources• New ways of approaching the issue• Examples and results• Recommendations and actions


The recent future has involved applying the same techniques at different levels “up the stack”

Technology Infrastructure

Applications & Software

Business Process Reengineering

Total Quality Management

Scorecards & Performance Management

Enterprise and Strategy Management


Economic and technical changes shape the requirements the future


Competition increases as geographic barrier fall bringing more competitors and requiring more change to remain competitive.

Reducing the time required to bring new products and services to market as web services increases customizability.

Competition increases as geographic barrier fall.

Markets become more segmented and specialized as companies seek to define competitive niche’s and customers choose

Use of services components increases operation complexity.

The number and importance of relationships increase through use of offshore suppliers, outsourcing and other arrangements.

Pricing power erodes as global competitors have different capabilities and cost structures

Enabling access to the capabilities of other companies through B2B commerce.

The value of core competencies decreases as you gain access to the capabilities available in the market.

Geographic and market barriers to entry offer decreasing protection from poor performance levels.

Increasing exposure of back office systems to customers and trading partners increases attention on accuracy and performance.

Reduced time for internal improvement as the availability of market substitutes increases.

These trends are creating new enterprise management requirements.

Global trade and logistics

Information and communications

technologies

Vertical vs. horizontal integration

Increasing

Change

Increasing

Complexity

Changing nature of vertical integrationEnvironmental

Forces

Trends

Decreasing tolerance for error

Flexibility: the need to respond quickly to changes in customer and market conditions faster at a lower cost and risk

Consistency to mange complex systems by solving recurring issues in the same manner.

Integration to bring together services sources across a network into a coherent customer value proposition.

Enterprise management requirements

Performance in terms of enhancing the enterprise’s operating profile through strategic and tactical improvements. .


Enterprise teams need a way to think about and manage all aspects of the business.

Dynamics

Tactics

StrategyEnterprise Wide

Local Operation

Business Unit

Management Perspective

Operate Improve Integrate Create Transform

Executive Perspective

Operate Improve Integrate Create Transform

Enterprise Wide

Local Operation

Business Unit


Business expectations for IT focus on current operations and performance.


Enterprise architecting occupies a specific space in enterprise management.

Strategy

Bu

sin

ess

Pro

ce

ss

Culture

Org

an

ization

Info

rma

tio

n

Techn

olo

gy

Pe

rfo

rman

ce

Implementation

Architecting


Technologies are making enterprise management possible.

• Internet – global ‘public’ infrastructure and communications.

• ERP – enterprise wide transaction processing engine

• Portals – separating presentation/interaction logic from business rules and data logic

• Social computing – engaging individuals in the creative process

• BI/Analytics – driving operational data and modeling ahead of financial data and modeling


Time to mainstream

Emerging Trend Radar Screen

Consumerization

Green IT

Web Platforms

3D Printing

Mobile Robots

Open Source

Voice/Data Convergence

Service-Oriented Architecture

RFID

Web 2.0 Business Models

Collective Intelligence

Augmented Reality

Sensor Mesh Networks

Semantic Web

Real World Web Tera-architectures

Behavioral Economics

Globalized Microbusiness

Web 2.0 Workplace Technologies

Social Software

Virtual Worlds

Environmental Interfaces

Electronic PaperSaaS/Alternate Delivery Models

Human Augmentation

Radical Healthcare Innovation

Telepresence Collaboration

Portable Personality

less than 2 years to mainstream

adoption

2 to 5 years

5 to 10 years

more than 10 years

Societal

Technology

Business

Mashups

Crowdsourcing

Aging Population/

Single Living Challenges

China and India Impact

Social Computing


New ways of approaching the issue

Way of Thinking = CultureW

ay o

f Mod

elin

g

Way of Managing

Way of Working


Way of Thinking

Strategy

CultureBusinessProcess

HumanCapital

InformationTechnology

Facilities &Equipment


CapabilityTechnical

InfrastructurePerformance

Enterprise

BusinessProcess

HumanCapital

Application Facilities &Equipment

Culture

Hardware SystemsSoftware

NetworkCommunications

Value Network

Trading Partner

Strategy

Capability Interface

Way of Thinking


Way of managing

Source: Architecting the Enterprise: an approach for designing performance, integration, consistency and flexibility (2005) McDonald


CapabilityBlueprint

Value NetworkModel

Strategy

Value Network

Enterprise

Capability

Elements

CapabilityDiagram

Value NetworkActors

A way of modeling


CDW• Customer Sales & Service• Product Management• Marketing• Order Fulfillment• Service Fulfillment• Warehouse Operations• Supplier Management• Planning and Management

Small &Medium

Businesses

Complementors (partial)

Suppliers (partial) CustomersMarkets

Intermediaries

UPS FederalExpress

• Shipping• Reverse Logistics

IBM

Toshiba

Microsoft

Others ...

IBM Microsoft• Joint Marketing and

Promotions• Incentives and

Rebates• Leasing and

Financing

Based on an analysis of CDW

Toshiba FirstCorp

• Order fulfillment• JIT Re-supply• Product Planning• Product Support

The value network diagram models the scope of the enterprise


The capability diagram defines an enterprise’s internal structure and operations.


Way of working

Customer/MarketProductResult

TechnologyFacilities &Equipment

Rules &Metrics

Information

Process

HumanCapital

Organization

Applications

Capability


The way you work


The result is a digitized platform that drives enterprise performance

Infrastructure

Transactional

Personnel

Facilities

Strategic Managerial

Customer ExperiencePr

oduc

t Man

agem

ent

Business Process M

anagement

Management

CoreElements

BusinessProcess

Peer

Net

wor

kEn

d U

ser C

onte

nt Value Netw

orkSuppliers, Trading Partners, Interm

ediaries


The challenge for CIOs and BP Managers is in harnessing enterprise drivers

Product

Customersand

Markets

Process

Organization

Application, infrastructure and operational complexity rises as

individual market decisions accumulate and increase IT operational burden without offsetting business benefits.

Proliferation of data, applications packages,

operations, and cost required to support marginally dissimilar organizations, products and processes created by M&A , geographic, market or other

needs.

Organizational and decision making distributed at the extremes in the belief that

responsiveness is a function of size and proximity of IT

resources balanced against centralized IT control.

Complexity

Cost

Redundancy

Diffusion

Agility

Efficiency

Speed @Scale


Enterprise management requires new approaches for the business and IT

29

Information Process Behavior

Technology


Tokio Fire and Marine

Proven Practices•Product simplification & rationalization•Re-engineering customer, agent and internal processes•Straight through processing and automatic revenue generation


Chiquita Brands International

32

Proven Practices•Driving information across a time sensitive supply chain.•Market responsive demand planning


BNSF

33

Proven Practices•Custom service across a common network•Separating information •Modular processes


Hong Kong Housing Authority

34

Proven Practices•Improving operational and capital efficiency through changing behavior•Creating coordination rather than exerting control.


IT is the nervous system enterprise management.


Companies achieve different levels of enterprise management


Move from managing disparate services to driving enterprise performance.

Enterprise

Business Unit

Business Unit

Business Unit

Shared Services

• Customer• Market• Product• Service• Information• Applications



Organizational View Operational View

ConvergedEnterprise

Offerings Customers Outcomes

Business architecture

Management Infrastructure

Business Unit

Business Unit

Business Unit


Enterprises will need to reorganize resources in new ways and to new ends.

38

EnterpriseCapability

Organization

Enterprise Development

Capability Operations

CapabilityTransformation

Business Process

Chief Capability

Officer

Workforce Performance

Capability Management Office

Information & Analytics

Capability Development

CapabilityPerformance

• Performance Monitoring

• Program Management Office (PMO)

• Communications• Deployment

Management

• Competency Design

• Workforce Performance Intelligence

• Workforce enablement, training and support

• Infrastructure & Operations

• Communications• Data Center

Operations• Customer

Service Center• Vendor

Management

• Business Intelligence

• Analytics • Data Protection

and Privacy

• Application Development

• Business Process Improvement

• Job Design• Competency Design

CapabilityGovernance

CapabilityServices

Relationship & Requirements

CFO

• Corporate Planning and Development

• Enterprise Architecture

• Security & Risk Management

• Business Continuity

CEO

CapabilityOwners

CapabilityOwners

• Business Relationship Managers

• Business Analysts


Thoughts and Recommendations

• Don’t just climb the stack• Management does not

necessarily lead to results.• An enterprise is a social

technical system• You can achieve

performance, integration, consistency and flexibility.

• The technologies for new management models exist

• Don’t get caught up in architecture


the future of business process technology (including ... · enterprise teams need a way to think...

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