BPMS

Date: Nov 2009

Operational Excellence BPMS

Business Process Management System (BPMS)
A nine step model enables companies to model, deploy and manage mission-

critical business processes, that span multiple enterprise applications, corporate departments. BPMS is usually used for lesser mature processes to make them Repeatable and Reliable.

Source :http://www.isixsigma.com/dictionary/BPMS-536.htm

Operational Excellence Process Focus

Every business operates with a Process Management System at the

base.
BPMS is a framework to map and establish Customer Centric Efficient

processes.
Creating a BPMS is a process, it is a way of working and not a one

project/deliverable.
To identify improvement opportunities

BPMS
The 9 Step Process
Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9

Create Process Mission

Document Process

Document Customer and Process Requirements

Identify Output and Process

Build Process Management

Establish Data Collection Plan

Process Performance Monitoring

Develop Dashboards with Specific targets

Identify Improvement Opportunities

Vision
Strategy

Execution

BPMS
Step 1 1:

Create Process Mission

Discussion
What do you think is the purpose of establishing a process mission?

BPMS
1

Create Process Mission

The structure for developing a Process Management System comes from knowing the reasons for establishing the project. The process mission describes the reason the process exists, the rationale for doing this project, and an initial assessment of the process goals to be accomplished.

Four Key Elements of a Process Mission

Purpose Importance Boundaries

Process Goals

BPMS
1

Create Process Mission

Discussion
What are process goals? Should processes have goals? Suggest some examples? Where should I start?

BPMS
1

Create Process Mission

Four dimensions to help think through process goals

E2E Process
Client Expectation (eg. Payables are accurately paid on time) Stake-holders (eg vendors, end consumers, field engineers etc) desire from this process

Transition Project Goals

Timeliness Cost Etc

Genpact part of the Process

Effectiveness CTQs Or Defect Occurrence Efficiency

Financial
Contract Terms (penalties etc) Process Cost drivers (from Genpact profit perspective) Business Impact: Impact on clients financials.

What should the goals of this process be going forward?

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BPMS
2

Document Process

Discussion
What is the purpose of documenting the process? What tools would I require?

BPMS
2

Document Process

To manage the process effectively, it is important to understand the elements that both influence and contribute to the process. Things to be done as part of documentation are:

1. Scoping ( Process Boundary )

Documentation of the Process

SIPOC E2E Process ( High Level)

2. Process Mapping Genpact part of the process (Detailed )

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Traditional Flowchart Cross functional Map

BPMS
2

Document Process

1. Scoping ( Process Boundary )

Process:

Process Owner:

Process Starts With: Process Ends With: Process Unit:

Process Includes: Process Excludes:

Supplier

Input

Step #

Sub process (Steps)

Output

Customer

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BPMS
2

Document Process
Graphic Display Of Steps, Events, And Operations That Constitute A Process
Requirements Boundary Requirements Boundary

Tools in Process Mapping ( SIPOC )

Requirements

C
Customers

O
Outputs

P
Process

I
Inputs

S
Suppliers

Measures

Measures

Process Map
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BPMS
2

Document Process
Traditional Flow chart

Sub Process Mapping Techniques

Lift Receiver

Dial #

Ring

Answer ? No

Yes

Say Hello

Have Conversation

Hang Up

Hang Up

Key:

Start End

Task

Review Or

Direction

Decision

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BPMS
2

Document Process
Horizontal Deployment Or Cross-Functional Map

Sub Process Mapping Techniques

MMP Billing Parts

Customer Request quote No

Check In Parts ERP

Price Available Yes

Yes

Email quote to customer

Customer places order

NO

End

GE CS CPM/Biller

Receive PO from customer

Place Demand by populate relevant excel template

Charge in VAL

Validate charge by matching with Customer PO

Transaction moved to ABE

Validate Invoice in ABE

Receivable created

Invoice printed and mailed to customer

End

GENPACT SC Team

Raise SC case to obtain quote

Provide quote for part

CSPO no. created

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Parts

Sales Order no. created

Parts Shipped

Cost of part billed to CS

BPMS
3

Document Customer Requirements

Before we can start documenting it is important to understand Who is a customer.

Customer Client External

End-Use Consumers Brokers Regulators

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BPMS
3

Document Customer Requirements

Discussion
What specific attributes matter most to the customers of this business?
How do you know? Do different attributes have different priorities to different customer segments?

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BPMS
3

Document Customer Requirements

Convenience Treatment And Interaction Reliability/Accuracy Service Tangibles Quality Speed/Timeliness Failure Recovery

Price

Critical to Quality ( CTQs)

Product Quality

Low Original Price Total Costs Value Ratio Frequent Buyer Plans Discounts/Sales Terms, Tax

Reliability Durability Usability/Features

Prestige Serviceability Failure Recovery

This is the Aha point.. If you get it right, you are set!
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BPMS
3

Document Customer Requirements

Discussion
How do you translate customer needs into customer requirements?

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BPMS
3

Document Customer Requirements

Translating Customer Needs to Customer Requirements

Your Outputs Voice of The Customer But Customer Needs are Stated in the Language of the Customer Key Issues Customer(s) Requirements Key Issues Must Be Translated into Customer Requirements

Outputs of Your Process are Designed to Satisfy Customer Needs Profitably

Clarification of the Customers Language Identifies the Key Issues

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BPMS
3

Document Customer Requirements

Customer Needs to Customer Requirements Example

Voice Of The Customer After Clarifying The Key Issue(s) Is Customer(s) Requirements

I Hate Filling Out This Form!

Form Takes Too Long To Complete

The Form Takes Less Than Five Minutes To Complete

I Dont Understand Banking Jargon.

Ambiguous Instructions

Users Understand The Instructions On The Form When Read For The First Time

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BPMS
4

Identify Output and Process Measures

Y is a function of X

Response
Y Dependent Output Effect

Y=

f (X)

Predictor

X1...XN Independent Input or Process Cause

Symptom
Monitor

Problem
Control

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BPMS
4

Identify Output and Process Measures

Process

Input Variables (Xs)

Outputs (Ys)

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Process Variables (Xs)

Process Impacts Output

BPMS
4

Identify Output and Process Measures

Input Measures
The key quality and delivery requirements placed on your suppliers.

Process Measures
Measures that are internal to your process. They include quality and delivery measures important to your internal customers as well as waste and cycle time measures. They are correlated to the pertinent output measures.

Output Measures
Output measures are measures used to determine how well customer needs and requirements are met.

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BPMS
4

Identify Output and Process Measures

Discussion
Why start our measurement work with output measures?

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BPMS
4

Identify Output and Process Measures

An output measure expresses the voice of the process because changes in

input or process conditions drive changes in output measure.

A good output measure serves as the translation of the voice of the customer. Changes in the values of a good output measure should predict changes in the

degree to which the process meets the customer need.

As changes are made upstream (to the process or to the inputs to the process),

the degree of harmony between these process changes and the voice of the customer is captured by the performance of the output measure.

We want a method to reliably develop good output measures.

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BPMS
4

Identify Output and Process Measures

Almost all measures can be broken down into:

1.Accuracy/Reliability
2.TAT/Cycle Time 3.Productivity/Financial 4.Customer Satisfaction

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BPMS
4

Identify Output and Process Measures

Process Name
Customer Acquisition

Process Level
1

Accuracy/Reliability Default Rate Response Rate

Time / Speed
Cycle Time

Financial
Cost/New Customer Net Revenue/New Customer Cost/Segment Net Revenue/Segment Cost/Iteration

Customer Satisfaction
# Of Internal Customer Complaints

Segmentation

Hit Rate/Segment Response Rate % Of Viable Prospect % Errors % Yield/List

Cycle Time

Refining Solicitation Model

List Analysis

Cycle Time

Cost/List Net Revenue/List Call Center Cost/Activation Processing Cost/Activation % Complaints/ Total Calls

Card Activation

% Handled On First Call % Processing Errors

Response Time

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BPMS
4

Identify Output and Process Measures

Contractual metrics (OUTPUT + PROCESS) 1. CPS 2. PS 3. Other MSA/ SOW Terms

1.

Process Mission Metrics (OUTPUT) Eg. AP = Paid accurately on time.

Critical to Customer

Critical to Contract

1.

Process Metrics (PROCESS + INPUT) The one we are used to.

Critical to Delivery

Critical to Profitability

1.

Key Levers and assumptions that will enable us to make the required profit.

Measurement = The Driver for Stability and Improvement

Measurement of the right things + measuring them right!

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BPMS
5

Build Process Management System

How will you manage your process?

Process Management System

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BPMS
5

Build Process Management System

Process Management System

Process Description:

Process Customer:

Customer Valid Requirements:

Process and/or Quality Indicators Process Control Control Charts Limits AND Quality Specs/ Indicator Charts Targets

Outcome Quality Indicator(s):

Misc. Information Include: Abbreviations Procedures Remarks, etc.

Process Flowchart
Position Step/ Time

CHECKING
Checking Item What to Check Frequency When to Check Responsibility Who Checks Contingenc y Plan Action Reqd for Exception

Rev #

Date

Revision Description

By

Appr

92-00242 J

Approved: _____________________________________ 30

Date: ______________________

BPMS
6

Establish Data Collection Plan

Develop Operational Definitions And Procedures

Operational Definitions New Data Types Of Data Collecting And Recording Data Sampling

Plan For Data Consistency And Stability

Begin Data Collection

Continue Improving Measurement Consistency

Creating Monitoring Procedures

Validating Measurement Systems Making Data Collection Activities Error-Proof

Training Data Collectors

Mostly we do not do this. We think it is a waste of time. But if we do not do this, we waste a lot more time!
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BPMS
6

Establish Data Collection Plan

Step A: Develop Operational Definitions

1.Define what you are trying to evaluate. 2.Decide how you will attach a value to what you are trying to measure. 3.Decide if you need to collect new data. 4.If so, decide how you will collect the data.

5.Decide how you will record the data.

6.Determine how frequently you will collect data. 7.Learn whether your customer collects similar data, if yes, how it compares. 8.If using statistical sample, determine appropriate sample size.

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BPMS
6

Establish Data Collection Plan

An operational definition is a precise description that tells how to get a value for the characteristic you are trying to measure. It Includes what something is and how to measure it. Purpose
To remove ambiguity - everyone has the same understanding

To provide a clear way to measure the characteristic

Identifies what to measure Identifies how to measure It Makes sure that no matter who does the measuring, the results are the same

Features
What: must have specific and concrete criteria How: must have a method to measure criteria Must be useful to both you and the customer
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BPMS
6

Establish Data Collection Plan

Step A: Do We Need To Collect New Data?

Has the team established which category of data needs to be collected?

Cost Time, Cycle Time Wait Times Defects/Error Rates Six Sigma Calculations Value-Add and Non Value-Add
Is there existing data to help with problem-solving mission? Is current data enough? Does current data meet the needs of the process? Is the team just using data that is available?

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BPMS
6

Establish Data Collection Plan

Step A: Sampling
Sampling is the process of: Collecting only a portion of the data that is available or could be available. Using the data in the sample to draw conclusions (statistical inference). Why Sample?
It is often impractical or too costly to collect all the data. Sometimes data collection is a destructive process(e.g., Taste testing). Sound conclusions can often be drawn from a relatively small amount of data.

Build a good understanding of sampling. It is a uniquely powerful management and statistical skill.
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BPMS
6

Establish Data Collection Plan

Step B: Data Consistency and Stability (MSA)

Why do it?
Data is only as good as the measurement system used to gather it.

Methodology to test the measurement system for consistency/ stability

Determine factors that could cause the measurement of an item to vary.
Find ways to reduce the effects of those factors. Test your data collection systems including forms and other measurement

systems.

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BPMS
6

Establish Data Collection Plan

Step C: Data Collection

Be sure you thought through the following:
Have you applied process perspective to ensure you are collecting right data? Is all data being collected necessary to calculate key process measures?

Is it worth it, it costs money to collect data!

How will you use it
Can the new data be generated through:

Current systems or minor systems modifications?

Integration into existing work processes?

Steps to go about the data collection
Train everyone who will be collecting data. Make data collection procedures error-proof.

Be there in the beginning to oversee data collection and/or perform a pilot-test.

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BPMS
6

Establish Data Collection Plan Data Collection Plan Worksheet

Clarify Data Collection Goals Operational Type Measure Type Data Definition What How Develop Operational Definitions And Procedures Other Conditions To Record Collecting/ Recording (Attach Data Form)
Date_____ Region_____

Sampling How Many

Measure
Billing Accuracy

What

Where

When

Output

Discrete

Inaccurate = Bill with any of 5 fields not matching customer order form

Reconcile invoice with customer order for 5 fields

Invoice/Bill
Product Defect 1 2 3 1 II 2 IIII IIII IIII 3 III 4 III III Total

Accts. Receivable dept. invoices prior to be mailed

Systematic every nth bill where n is selected at random between 1 and 30.

One

Plan for Data Consistency And Stability Method Of Validating Measurement System Please Sketch Out The Preliminary Data Display
For Region Check the results for a specific data collector for a one day selected at random per month. Collect the bills, sampled and appropriate order forms. Compare results.
Data Collector # Def. # Non 0 26 # Def. 26 0 125 125 # Non 26 125 151

# of Defects Date

# of Defects Defect type

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GE Capital Services Proprietary

BPMS
6

Establish Data Collection Plan

Step D: Continue Improving Measurement Consistency

Check to make sure the measurements are stable. Review the measurement procedures periodically to ensure consistency. Check to see if the data looks reasonable.

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BPMS
7

Monitor Process Performance

All processes have variation

All repetitive activities of a process have a certain amount of fluctuation. Input, process and output measures will fluctuate. This fluctuation is called variation.

Variation is the voice of the process learn to listen to it and understand it.

Measurement

Time Your goal is to stabilize the process!

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BPMS
7

Monitor Process Performance Sources of Variation

Machines Materials

Methods
Measurements Mother Nature

People

P R O C E S S

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BPMS
7

Monitor Process Performance

Types of Variation
Type
Common Cause
Always Present

Definition
Expected Normal Predictable

Special Cause

Not Always Present

Unexpected Unpredictable Not Normal

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BPMS
7

Monitor Process Performance Tools for Understanding Variation

Type Of Data
Discrete

Variation For A Period Of Time

Pareto Diagram Bar Charts Pie Charts

Variation Over Time

Run Charts Control Charts

p-Chart c-Chart u-Chart Individual Measurement

Continuous

Histograms/Frequency

Diagrams Box Plots Multi-Vari Charts

Run Charts Control Charts

Individual Measurement XR Chart

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BPMS
7

Monitor Process Performance

Tools for Understanding Variation Control Charts

Upper Control Limit

Measurement

Average

Lower Control Limit

Time (Hr/Day/Week/Hr/Sequence)

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BPMS
7

Monitor Process Performance

Tools for Understanding Variation Control Charts

Upper Control Limit

Measurement

Average

Time (Hr/Day/Week/Hr/Sequence)
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Lower Control Limit

BPMS
7

Monitor Process Performance Strategy to Interpret Charts

Interpret Run Or Control Chart

Unstable

Stable?

Stable

Special Cause Strategy

Common Cause Strategy

Root Cause Analysis

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Process Analysis

BPMS
7

Monitor Process Performance

Type
Special Cause Variation

Looks Like
Study Individual Points Or Specific Clusters Of Points To Determine What Was Reason For Difference Study All Data Points Collectively To Better Understand Sources Of Variation

Do
Make Changes To Sustain Or Prevent Special Causes In The Future
Expected Result

Dont
Study All Make Basic The Data Changes Waste Time To The Process
Unexpected Results

Common Cause Variation

47

Make Basic Process Change To Reduce Common Cause Variation, Shift The Average, Or Both

Expected Result

Look For Differences Between Individual Points

Take Ad Hoc Action On Bogus Courses

Unexpected Results

BPMS
8

Develop Dashboards with Spec Limits and Targets

Things to be done before finalizing dashboard

Process Control FMEA

Process Management Charts

Standardize the Process Documentation of Procedures Finalize Process Goals

Response Plan

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BPMS
8

Develop Dashboards with Spec Limits and Targets

A Dashboard is
A management tool Project Monitoring Improvement A set of critical indicators A tool to be: Developed
Tested
Calibrated

A Dashboard is not
A personnel evaluation

instrument A complete picture A tool immediately available A once and forever choice

An evolutionary product

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BPMS
8

Develop Dashboards with Spec Limits and Targets

Dashboard: Points to Remember

How do you want the information displayed? To what level do you want to drill down in the information? How might you want to segment the information for making

critical decisions?
What supporting information might you want to see, e.g., Competitor information, historical

information, market information?

Who should have access to the information? Should the reporting have interactive commentary capabilities? Do you want to have modeling, or what if capabilities?

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BPMS
9

Identify Improvement Opportunities

Current Situation

Target

}
Gap
Type Of Action?

No Action
51

Troubleshoot

Quality Improvement

Design/Redesign

BPMS
9

Identify Improvement Opportunities

Interpreting a Control Chart
Examine The Control Chart
Investigate And Identify The Special Cause If Possible. Take Actions To Sustain The Special Cause Situation (If Desired) Or To Prevent The Special Cause From Reoccurring

In Statistical Control? Yes

How Does The Voice Of The Process Compare With:

No

Specification Limits? Process Goals? Benchmarking Results?

Satisfied?

No

Possible Actions: Reduce Common Cause Variation Shift The Average Both

Yes Maintain Control

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BPMS
9

Identify Improvement Opportunities

Strategy for Eliminating Special Causes of Variation

Timely Data Search For Cause

Work to get special causes signaled quickly use early warning indicators throughout your operation Immediately search for cause when control chart gives a signal that a special cause has occurred Find out what was different on that occasion Keep asking why, why, why

No Changes
Prevent And Retain
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Do not make fundamental changes in the process Immediate remedy to contain any damage

Seek ways to prevent that special cause from recurring, or, if results are good, retain that lesson

BPMS
9 High

Identify Improvement Opportunities

Institutionalize Quality
Change Management Knowledge transfer SWAT teams

Value to the customer

Continuous Improvement Deployment @Genpact

Trainings

DMAICSix Sigma

Leadership development Six Sigma workshops Lean workshops

Lean Value Stream Map

CTQ Identification Baseline Reduce variation Improve efficiency

E2E Lean VSM VA NVA Analysis Future State Map

BPMS

Low
55

E2E Process Map E2E Metrics Identification Dashboard Monitor Performance

Activity

BPMS
The 9 Step Process

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Step 7

Step 8

Step 9

Create Process Mission

Document Process

Document Customer and Process Requirements

Identify Output and Process

Build Process Management

Establish Data Collection Plan

Process Performance Monitoring

Develop Dashboards with Specific targets

Identify Improvement Opportunities

56

BPMS
Continuous Improvement Cycle

Establish BPMS

Refine/ Rebuild

Implement

Operate

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CONTACT INFORMATION

Sona Murgai
[email protected] +91-9811774532

www.genpact.com
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