BPM Governance
Identifying methods for prioritizing, standardizing,
measuring and controlling BPM efforts
Enterprise BPM Methodology
Session 5
Sess. 3
Session 4
Session 8
Session 8
Session 9
BA 553: Process Improvement
“Managing the Process-Centric Organization”, presentation by Paul Harmon.
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Governance: What, Why, When, How

What is governance?
 Governance is derived from a Greek word which means “to steer”
 System of policies, rules, and controls
 Provides models and methods for direction, coordination, and
control of the organization

Why is BPM governance important?

When is BPM governance needed?
 When in the BPM lifecycle to implement governance
 Governance during phases of process change

How is BPM governance implemented?
 Governance critical success factors
 Governance frameworks
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Why is BPM governance important?
BPM Governance Activity
Benefit
Establish governance groups, roles, Identifies ownership of and accountability
and responsibilities (session 8)
for BPM activities
Establish BPM annual lifecycle
approach (session 8)
Ensures alignment with planning and
budgeting lifecycles
Establish methods for BPM project
portfolio management
Ensures integration with enterprise
project portfolio management
Establish methods for documenting
and controlling process architecture
(session 5)
Ensures revision control of flowcharts,
and integration into value chain
Establish BPM rules, policies and
standards
Ensures compliance with applicable
regulations, and control
Establish BPM measurement
approach (session 7)
Ensures alignment with KPIs and
identifies decision-making authority
Establish BPM tools, models, and
methods (session 12)
Ensures consistency of BPM efforts and
integration with other company activities
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When is BPM governance needed?

Governance is required through all lifecycle phases of BPM in the company

Governance is required through all process change phases:
1. Business process strategy phase



Strategic plan
Value chain
KPIs and Business scorecards
2. Business process design phase



Process architecture
Process redesign project
Desired (“to be”) process performance targets
3. Business process implementation phase


Comprehensive process change implementation plan, including training and
communications plans
Improved process implemented in the organization
4. Business process control phase



Process performance management system
Process performance measures, impacts on KPIs and strategy
Countermeasure plans to modify process performance
Scheer, A-W. and Brabander, E. (2010), The Process of Business Process Management. In: vom Brocke, J.
and Rosemann, M. (eds.) Handbook on business process management, vol. 2. Springer: Heidelberg.
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How is BPM governance implemented?
BPM governance critical success factors:

Determine governance authorities and boundaries for each group,
e.g., which group has authority over cross-functional processes,
which group is responsible for standardizing tools and methods

Establish a schedule for how frequently various governance
activities are conducted

Balance benefits of optimizing the performance of a process and
optimizing the performance of the organization (don’t sub-optimize)

Align BPM governance approach with organizational management
approach and organizational culture

Align the related lifecycles:

BPM lifecycle aligned with company lifecycle

Process lifecycles aligned with product/service lifecycles
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BPM Lifecycle: One Perspective
Scheer, A-W. and Brabander, E. (2010), The Process of Business Process Management. In: vom Brocke, J.
and Rosemann, M. (eds.) Handbook on business process management, vol. 2. Springer: Heidelberg.
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How is BPM governance implemented? (cont’d.)
Selecting a BPM governance framework:

Assess the organization’s current process capability or maturity
(session 10)

Determine the level of management structure that is appropriate for the
organization’s culture

Determine the level of centralization that is appropriate for the
organization’s culture (example on next slide)

Identify the level of resources (people and budget) the organization can
dedicate to BPM at this time

Decide on a governance framework based upon the above items
(examples in this presentation)

Establish a BPM growth model, if the current BPM approach is not at
the desired level (session 10)
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Determining the Level of Centralization
Localized
Model
Regional
Model
Business Unit
Model
Enterprise
Model
Description
Description
Description
Description
• Ultimate decision authority at the
local level by process
• Localities have lead process
owners who make decisions for
their locality
• Consistency not maintained
across the enterprise
• Ultimate decision authority is at
the regional level by process
• The regional process owners may
meet to gain informal consistency
across the enterprise
• Local governance bodies make
lower level decisions
• Ultimate decision authority is at
the Enterprise level by process
• Enterprise governance body can
be led by a single process owner
or small board of owners
• Regional and/or BU level bodies
make lower level decisions
Advantages
Advantages
• Ultimate decision authority is at
the Business Unit level by
process
• The BU process owners may
meet to gain informal consistency
across the enterprise
• Regional level bodies make lower
level decisions
Advantages
• Less costly to maintain
• Full standardization benefits
• Enables global management of
the business
• Enables nimble decision making
• Localities have flexibility to design
processes to meet their needs
Tradeoffs
• Costly solution to build and
maintain; loss of efficiencies
• Loss of standardization benefits
• Most difficult to manage business
globally
• Provides flexibility for regions in
process design
• Decision making typically faster
than Enterprise and BU Models
Tradeoffs
• More difficult to manage
enterprise globally
• Some loss of flexibility to meet
business unit needs within a given
region
• Provides flexibility for business
units in process design
• Decision making typically faster
than Enterprise Model
Tradeoffs
• Loss of cross Business Unit
synergies
• Some loss of local control
Open
Typical Attributes
 Exceptions granted as requested
 Loose network of process experts (if any)
 Local review boards manage exceptions
 Decentralized decision making
BA 553: Business Process Management
Advantages
Tradeoffs
• Some loss of flexibility to meet
specific business needs
• Greatest change challenge
Strict
Typical Attributes
 Regional or BU business justified
exceptions granted
 Regional or BU process expert
network
 Decision making bodies
Example from Chevron, as discussed in session 6.
Typical Attributes
 Exceptions typically granted only for
compliance or significant benefit
 Corporate process owners
 Global review boards
 Centralized decision making
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Example Governance Model
http://www.exigenservices.com/methodology/engagement-process website, accessed 3 April 2010.
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Lean Sigma Governance Model
Process Owner
VP (or other designated
leadership team member)
Leadership Team
(DRB for the deployment)
Process Improvement
Team Leader
(Lean Sigma Process Advisor)
Lean Sigma
Advisory Council
Project Facilitators
(Black Belts and
Green Belts)
This slide and next: Internal Chevron presentation, 2005.
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Lean Sigma Process Improvement Cycle
VOICE OF
CUSTOMER
Gap Identified
Improved Metric
Output Metrics
STRATEGIC
PLAN
Oper. Exc.
BUSINESS
UNIT
SCORECARD
BUSINESS
OBJECTIVES
UCL
Production
Avg
Financials
LCL
BUSINESS
MEASURES
VALUE STREAM
PROCESS FLOW
Process Metric
UCL
Avg
PROCESS
MEASURES
LCL
X's
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PROCESS
SCORECARD
Tools &
Methodology
Y's
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Process Organization Governance Model
Catalyst
Leader
CEO/President
Steering Committee
Business Transformation
Chief Process Officer
Process Council
Process Owner
Process Office
Process Team
Source: Tom Colman, CPO/CIO Sloan Valve, 2006
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Process Governance Roles
Burlton, R. (2010), Delivering Business Strategy Through Process Management. In: vom Brocke, J. and Rosemann, M.
(eds) Handbook on business process management, vol. 2. Springer: Heidelberg.
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Governance Model for a Large Organization
Scheer, A-W. and Brabander, E. (2010), The Process of Business Process Management. In: vom Brocke, J.
and Rosemann, M. (eds.) Handbook on business process management, vol. 2. Springer: Heidelberg.
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