BPM is a field that's really been around for a few years, but it's just entering
the fringes of the mainstream. Most see it as the next logical step to business
intelligence (BI). I tend to agree. I see BI as enabling strategic and tactical
workers to mine historic corporate data for insights. I see BPM as throwing the
operational workers into the mix as well. BPM is a marriage of BI, which is
traditionally used by executive and MBA types, and collaboration software, which
has made inroads towards reaching all workers. Now, all workers are in the
pool. That "collaboration" software is pretty much Microsoft Office SharePoint
2007 (MOSS)
There are two photos associated to this blog. The first (titled "BI, BPM, ... and
BPM") illustrates the strategic, tactical, and operational aspects of
businesses. The second (the one with three big circles titled, "The Modern
Information Worker is ...") illustrates how all workers are categorized as
strategic, tactical, and operational, but those categorizations overlap.
Primarily, the modern information worker is proficient at all aspects (the
commando).
Figure 1 - The Intelligent Business.
Figure 2 - Information Workers.
BI, BPM and ... BPM
The picture with Jack Welch and Peter Drucker on the top-left corner depicts the
system of Business Intelligence, Business Peformance Management, and Business
Process Management (the second "BPM"). I'll begin describing this
picture starting there with Jack Welch, the iconic CEO, and Peter Drucker the
iconic management scholar.This part of the diagram illustrates the strategic
part of a business.
Every corporation is like any other creature on this planet. It is an organism
made up of many components (processes) each providing specific functionality and
interacting is well-defined manners. Every creature on this planet is also
competing against other creatures for limited resources. Mostly, a creature
survives by taking the resources of another creature. Sometimes a creature
survives by finding an uptapped resource, whether it's a new invention or a new
oil field. It is the job of the CEO to determine the strategy a creature will
execute to survive. The CEO's job is never done because other creatures will
either counter your strategy or encroach on your previously untapped resource.
The CEO and his/her executive team develops strategies for the business. From a
high level, these strategies can be very simple. For example, "Everyday low
prices". Below that level are sub-strategies for achieving that higher level,
and perhaps more levels of sub-strategies. Eventually, a strategy needs to be
carried out. Tactics are employed. A tactic would be to ensure everyday low
prices by deploying a state of the art distribution network to minimize
transportation costs. And, manufacture products in locations where labor is
cheap. These tactics are communicated to line managers for execution.
The navy-blue circle encases sets of sets of cogs. Each set of cogs represents a
distinct business process within a business enterprise. Examples include
payroll, billing, inventory management, shipping, accounting, etc. Each of these
processes within a business enterprise is automated by software applications
usually classed as On-Line Transactional Processing (OLTP). Each process
consists of well-defined rules which are feasibly automated by computers. Where
each set of cogs touches another set is where a process receives input from
another process or hands off output to another process. Notice the iconic
operational worker within the navy-blue circle. Each process is manned by armies
of such people who carry out specific tasks related to the process.
Outside the lower-left of the navy-blue circle stands the iconic line manager.
Each of those sets of cogs, representing a business process, is managed by one
of those people. It's the managers job to ensure that the process for which he
is responsible is operating as efficiently as possible. Each day, he reads a set
of reports printed off his OLTP system looking at certain figures indicative of
the condition of his process.
A while back, line managers realized that they could optimize their processes to
greater degrees if they knew more about what was happening in the adjacent
processes. To facilitate this, software was written that would allow one OLTP to
download data from other OLTPs to incorporate into reports. This integration of
information was the first business intelligence, although fraught with problems
that the science of ETL (Extraction, Transformation, Load), data warehouses, and
OLAP (On-Line Analytical Processing) eventually came to reduce if not eliminate.
Additionally, line managers realized if they could automatically transfer
information from one OLTP to another, this would minimize human error and
certainly eliminate a lot of human labor. This is known as Enterprise
Application Integration (EAI). To this simple automatic handoff of data from one
OLTP to another was added orchestration of the transfers of this data. This is
Business Process Management and the Microsoft offering is BizTalk.
At these points of integration, we can capture metrics. These metrics can
provide rates of transactions, values of the transactions, etc. Using this data,
we can design views to show where things are slipping up when and how. The line
managers use these reports to determine why they are slipping up. The CEO and
his team can use the same data, but perhaps different reports, to understand
that there is a problem and to facilitate cooperation amongst line managers to
fix the problem.
The Modern Information Worker is Strategic, Tactical, and Operational
Consultants epitomize the modern information worker. As a consultant, I spend a
lot of time out in the field as an "agent of Microsoft". As a representative of
Microsoft, I must carry out our strategy, which stems from our current mission.
I execute upon that strategy with an arsenal of tactics. I'm operational in that
deliver product; in my case solutions to a problem or guidance.
Other modern information workers include doctors (the quintessential IW),
lawyers, etc. They are all consultants as well.
The modern information worker aren't just white-collared consultants. A good
waiter or waitress is all three:
- He carries out the strategy of the restaurant. The restaurant's stragegy may
be "great BBQ in an upscale, friendly, family-oriented setting".
- He has an arsenal of tactics in carrying out the strategy. His tactics include
her methods on how to deal with difficult customers and his own personality
traits that make customers come back.
- He is operational taking orders for drinks, delivering the drinks, then taking
orders for meals, delivering the meal, bringing the check, ...
The "Modern Information Worker" picture shows three cirles encompassing the
three IW modes. In the unoverlapped parts of each circle, we see iconic images
portraying the pure role for each IW mode. In strategic, we see a picture of
Jack Welch and the insignia of a general. It is the CEO's role to set a strategy
for the mobilization towards some goal. That goal can be simply profit,
corporate growth, taking market share, etc.
In the tactical section, we see the epitome of a line manager and the insignia
of a captain. It's the job of the line manager to ensure the process for which
they are responsible plays its part as perfect to plan as possible. The line
manager knows how well she is to plan by monitoring key performance indicators
(KPI). They measures tell the line manager what aspects of his service level are
lacking and points to the possible direction of the causes.
In the operational section, we see the epitome of the line worker, the
operational worker who contributes towards the production of the company's
goods. This is the worker who is brought to the party by BPM software. The
operational worker is now plugged directly into the system as the executives and
middle managers were with traditional BI applications. The operational worker
can monitor measures for quick feedback into his performance and take measures
to improve by seeing where things are weak. Pure operational workers are in
danger of being eventually replaced by a robot of some sort.
More interestingly, notice the circles overlap. There are overlaps of strategic
and tactical, strategic and operational, and tactical and operational.
Additionally, there is an area where all three overlap portraying an iconic
commando. For strategic and tactical, we see a vice-president, a colonel. Not
quite a CEO, but in a chief of a division; probably drives a Porsche with a
personalized license plate. For tactical and operational, we see the "senior"
technician, the sergeant. He is a worker highly accomplished at his job and thus
a mentor; not quite a boss, but still a leader; "I have people skills."
There is no real strategic/operational person. However, all executives have
their operational roles such as being the ambassador for the corporation,
talking on Mad Money, for example.
May 1, 2008
One thing I failed to mention is that each level from goal/strategy, to
objectives, to tactics, to front-line work has progressively shorter timeframes.
Goals, developed by the Generals are usually long term concepts. In many cases
the goal defines the organization; you can consider that if the goals change,
the organization is not the same organization, even if the name is the same.
Strategies are generally long term as well, even though the strategy can change
without the goals changing.
Objectives are generally moderate term, perhaps "a five year plan".
Tactics are short-term, maybe a year at the longest for the most part.