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© 2012 Forrester Research, Inc. Reproduction Prohibited1 © 2009 Forrester Research, Inc. Reproduction Prohibited

Overcoming The Obstacles Of Transformation

Derek Miers – Principal Analyst

Twitter – @bpmfocusApril 18, 2012

© 2012 Forrester Research, Inc. Reproduction Prohibited2

Agenda

Understand the transformational journey.

Engage the business—board room to front line.

Translate strategic intent into effective

processes.

Design compelling customer experiences.

Weave your own organizational change fabric.


The age of the customer requires transformation.


“Band-Aid” approach or “Wellness Program”


BP Maturity Model

Level 1Initial

Basic MgtControl

Level 2Repeatable

Level 3Defined

Level 4Managed

Level 5Optimized

StandardizedProcesses

ProcessMeasurement

Culture of Optimization

InconsistentResults

Work UnitManagement

BusinessManagement

Change Management

Capability Management


Political challenges abound

Silo’d Functional

Functions supported by processes

Processes supported by functions

From Traditional Line Management

To Processes & Services Management


Assess BP maturity

Management Area

Immature Aspiring Mature

Strategy

Governance

Structure

Performance

Culture

Wasteelimination

Value innovation


36%

68%

60%

35%

Value innovation

Customer experience improvement

Cost reduction

Waste elimination

Maturity level 2-3 (n = 136)

Value innovation


Cost reduction

Waste elimination

60%

59%

45%

32%


Value innovation


Cost reduction

Waste elimination

58%

50%

46%

46%


Mature firms achieve a balanced approach

"What are the primary goals of your business improvement program?"

42%

39%

74%

43%

Value innovation


Cost reduction

Waste elimination


Base: 325 business process professionals

Source: Q2 2011 Global Forrester/IQPC Business Process Maturity Online Survey


Percentage of companies

Base: 154 large North American brands score in Forrester’s Customer Experience Index, 2010

Very few companies deliver an outstanding customer experience

Very

poor

11%

Poor

18%

OK

35%

Good

29%

Excellent

7%


Improving customer experience is worth many millions

Source: Q4, 2011, “The Business Impact Of Customer Experience, 2012” Forrester report

HotelsWireless

Service

Providers

AirlinesInsurance

$1,364 $1,297 $590 $452


High-emotion firms out-perform the major indices 11x


Fill your toolbox wisely

Different tools at different levels


Develop vision before the “To-Be” processes

Prioritize

Outline processesOutcome metricsRoles and skills

Establish customer

experience vision

Operational process

architecture

Executive engagement

Business services

(Capability set)

Business services

(Capability set)

Business services

(Capability set) Business area

(Capability set)

Business engagement

Baseline(As-Is)

Process definitions (To-Be)

A322+


A322+A322

+A322+



Capabilities/services provide the glue

Business Capabilities Business Capabilities

Business Capabilities Business services

(Capability set)

Assess impact/

performancevs. maturity Prioritize

21

3 45

. . .


Baseline

Holistic service vision

Operational process

architecture

Target operating

model

Business engagement


A322+A322

+A322+






(Capability set)

Assess impact/


21

3 45

. . .


Baseline


Operational process

architecture

Target operating

model

Business engagement


A322+A322

+A322+

Page 16

Business strategy and customer experience drives the Target Operating Model

Strategy Operating Model

WHERE to playHOW to win

Products

Customers

Markets

WHAT we doHOW it’s done

WHO does what

Capabilities Enablers

People

Process

Technology

Accountability

Governance

Metrics

Culture


Business Model Canvas

Source: Osterwalder & Pigneur Business Model Generation

#######

Key

Partnerships

Key

Activities

Value

Proposition

Customer

Relationships

Customer

Segments

Key

ResourcesChannels

Cost Structure Revenue Streams

Page 18

DesignDesign

Design

The company now focuses on business transformation

What should we look like?

Systems

Capability/Process

Technology

Structure

Future StateDesign

How can we get there?

Roadmap

Plan

Priority

Resources

Clarify Vision,Strategy & Objectives

What are we trying to achieve?

Business Case

What should we do?

Analysis & Priority

BusinessCase

Design &Implementation

Design

Build

Roll-out

Building the Transformation Plan

Implement the Plan

Current StateAssessment

Where are we today?

ProjectKickoff

Page 9

COMMUNICATIONS + CONTENT

Project Approach

MigrationPlan

Architecture

Prioritization

How can you get there?

Platforms, Systems Management

Network Architecture

Business Processes

Applications

Data Management

ProcessState

InformationState

What should you look like?

OrganizationState

TechnologyState

IT

Information/BusinessVision

Alignment

Vision & Validation

Data Collection SynthesisPlan & Launch

Project Planning and Management

Where are you today?

ProjectScope

Strategy/Goals

CustomerProduct

Capability

TechnologyArchitecture

BusinessMetrics

ResourcesGovernance

Location

PolicyPolicy

Risk Plan

BusinessMetrics

Stakeholder Engagement / Change Management


Mature organizations have a target operating model

Source: Q2 2011 Global Forrester/IQPC Business Process Maturity Online Survey

Base: 325 business process professionals (percentage answering “yes”)

“Is your organization working on designing its future operating model (target

operating model) independently of the current organizational structure?”

44%

46%

53%

75%Maturity Level 4-5

Maturity Level 3-4

Maturity Level 2-3

Maturity Level 1-2

Large organizations need a target

operating model effort to move

ahead.


Riskmanagement

Build relationships

Assetprotection

Sell products and services

Manageportfolio

BusinessCapabilities

For business transformation, focus on outcomes

Mortgage Co

InsuranceProvider

White LabelInsurance Service

Partner

BusinessProcesses

IndependentAdvisors

Regulator

Customers

Home Loans

Personal Loans

Home Insurance

BusinessServices

Product Support

Reporting


Sell products and services

Manageportfolio

Capabilities leveraged by many services and implemented through processes

Build relationships

Home Loans

Personal Loans

Process Claim

Cus

tom

er

Send Claim

Cancel Claim?

Yes

No

Send Cancellation

Receive Notification

Receive Confirmation

Receive Payment

Insu

ranc

e P

rovi

der Receive

ClaimSend

Confirmation

Send Confirmation

Make Payment

OrderRequest

ConfirmationCancellation

Confirmation

NotificationPayment

Assetprotection Home Insurance

InsuranceProvider

White LabelInsurance Srvc

Develop Main Concepts

Edit Outline Text

Develop Partner

Engagement Plan

Develop Offering Outline

Engage Partners

ConceptsCompleted

Partner OfferingCompleted

Text Edited

Partner OfferingComplete

TextEdited

ConceptsCompleted


A pragmatic start point

Based on a value chain breakdown

– Modified artifacts to reflect strategic objectives

Establish the organizational roadmap for the initiative

– Executives own the decision making

– Provides a way of tracking improvements over time

– Sets the scope for the initial set of projects

Bypasses the organizational politics

– Explicitly avoid existing functional structures and reporting lines






(Capability set)

Assess impact/


21

3 45

. . .


Baseline


Operational process

architecture

Business engagement


A322+A322

+A322+


So how can we get everyone engaged?

Start off with the corporate brand.

Think about the services you will deliver to

different customer segments.

Design the customer experience.

Align your processes and systems to support

that experience.


Marketknowledge

Servicesresourcing

Communication marketing and

sales

Performance measurement

and learning

Governance Relationshipmanagement

Set of Capabilities

Customerexperience

design

Guiderails for service definition (part of change DNA)

Experience

Customer outcomes

SuccessPerformance Improvement

Growth and adoption

Business sustainability

Competitiveadvantage

Happy customers

Engage those involved in service delivery to articulate a holistic vision of the experience

delivered from the service consumer’s point of view


Source: Alex Osterwalder






(Capability set)

Assess impact/


21

3 45

. . .


Baseline


Operational process

architecture

Business engagement


A322+A322

+A322+


Overallarchitecture

Technologyimplications

Initiation

Engage

Programoffice

Steering group

Baseline Vision Implementation

Commission

Exec B

riefing

Roll out planning and monitoring

Consult on individual process & service architectures

Componentize legacy apps

New appdesign

New appdevelopment

Development

Valid

ation

Launch

Behavioral change;

Customer engagement

Roll out monitoringMeasuring benefits

Iteration

Monitoring and improvement

Executives have an ongoing role

Architecture team

Service team 1

Service team 2

Process team 3

…Process team N

Technology team

Engage, communicate, listen, empower, create, convince, and reinforce

Visible leadership, constantly review progress, overcome political obstacles, etc.

Change management

Executive Control Points

Decisio

ns

Busine

ss Briefing


Aligning corporate change initiatives

Vision(Strategy)

Govern’ce& Plans

StructureIncentivesPerform’ce

Culture(Behavior)

Change

Governance Structure Incentives Culture

Vision Structure Incentives Culture

Vision Governance Incentives Culture

Vision Governance Structure Culture

Vision Governance Structure Incentives

Confusion

FalseStarts

Chaos

GradualChange

BetterSameness


Develop your own change management fabric

• Long term competitive advantage

• Outside-in approach

• Align with customer needs

• Culture of customer and performance improvement

• BPM’s context

• Executive engagement

• Business case

• Project selection

• Project roles

• Project framework

• Baseline

• Innovation

• Managing risk

• Overcome resistance

• Build an appetite for change

• Establish the foundation

• Dealing with the demand

• Portfolio approach

• Building knowledge and experience

• BPM Center of Excellence (CoE)

• Evolving program structure

• Developing roles and skills

• Multi-disciplinary teams

• Practices, tools, and methods

• Structures for a process-driven org

• BPM fits with:• Value Chain• Business

Capabilities• Business

Services • Lean, Six

Sigma• Balanced

Scorecard

• Modeling approaches

• Deriving processes from business needs

BPM Basics

From Project To Program

BusinessTransformation

Methods &Tools

Building BPM Capabilities

The Journey Of BPM Structure, Methods And Tools

© 2012 Forrester Research, Inc. Reproduction Prohibited31 © 2009 Forrester Research, Inc. Reproduction Prohibited

Thank you

Derek [email protected]

www.forrester.com

Twitter - @bpmfocus

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