PART 3: BUSINESS PROCESS MANAGEMENT GOVERNANCE

Business Process Management Governance is the use of rules to control BPM programs
and initiatives. It includes formulating priorities and standards for BPM efforts to
enhance its strategies. Along with BPM, Business Process Management Governance
main objective is to optimize business processes of an organization (Rouse n.d.).

BPM governing principles also enable business to develop tough strategic solution and
engage the whole organization in executing the strategies more efficient. BPM
governance is crucial in making successful deployment of BPM across the organization
(Doebeli et al. 2011)

In addition, BPM governance is consider as the management of coordinating, regulating

and executing activities associated to continuous improvement in processes and to the
application of organization strategies (Ensslin et al. 2017).

PROCESS MATURITY MODELS

Process maturity models normally involve a sequence of stages that form a desired or
anticipated path from starting level to maturity. It is used to assess present situations and
to guide improvement initiatives while controlling the progress (Roglinger, Poppelbub &
Becker 2012).

The role of process maturity model is to measure how capable an organization is in

achieving continuous improvement. It enables organization in evaluating, measuring
and developing actionable road map for client processes to attain excellent performance
(Henshall 2019).

Process Maturity Models are normally used by an organization to:

 Identify capabilities that are crucial in achieving short and long term goals
 Evaluate existing capabilities and pinpoint internal best practices
 Identify gaps between present and desired state and illustrate change management
needed
 Realized prospective cost of ‘jumping maturity levels’ for efficient judgment
(WNS n.d.)

SAP Process Maturity Level

SAP follows the logic of Capability Maturity Model Integration (CMMI) but they have
re-design it according to their model and business needs.

Below are the four levels of SAP process maturity:

Level 0 – The process is neither transparent nor managed. Processes at this level are
usually undocumented, hard to control and reactive manner by either user or
circumstance.

Level 1 – Process is transparent. Processes at this level are documented and can be
improve at some degree over time.

 Basic documentation of process

 Responsible person are named (e.g. Project or Business Manager)
 Knowledge in process execution

Level 2 – Process is managed. Processes at this level uses process metrics to monitored
and measured performance to effectively achieve process objectives.

 More detailed documentation of process

 Process customers are named (e.g. Manager as ‘Customer’ of HR Department)
 Measured and monitored
 Risk assessment

Level 3 – Process is on a high level of optimization. Processes at this level focus on

continuous improvement of its performance.

 Continuously improved
 Supports availability to improve process execution
 Standardized process

In most organizations, their process are considered ‘matured’ once their maturity level hit
Levels 2 or 3.

As continuous improvement in process maturity levels plays a crucial role in SAP aim for
process excellence, their process maturity are centrally monitored.

PROCESS PERFORMANCE MEASUREMENT

Performance measurement is a process of collecting, analyzing and reporting

performance information of a person, group, organization, system or component.
It is a continuous process that includes comparing the performance against the standards
that were set to be followed (Siddiqui 2015).

There are several ways that an organization can measure its performance, Cristian (2014)
has listed four most commonly used models:

Balanced Scorecard: Useful tool for managers to gain competitive edge. Convert into a
set of performance indicators the organization mission and strategy.
Malcolm Baldrige: Enable organization to achieve its goal, enhance its results and be
competitive. The model was develop to provide superb quality standard and guides
organization to attain best-in class performance.

Performance Prism: Developed to provide better flexibility and offer a focus that is align
with the organization needs

European Foundation for Quality Management (EFQM): Enable the understanding of

cause and effect correlation between what organization is doing and its outcome.

Performance measurement is an important component of BPM according to Siddiqui

(2015) because:

 It improves the productivity of an organization through cost reduction.

 It is a good method of aligning the activities with the plans being set.
 It provides feedback thus allowing managers to implement best practices.
 It is a way to understand, manage and improve the overall process of an
organization.
 It drives success if done effectively and efficiently.

Factors to consider in setting up performance measurement:

Key Performance Indicators (KPI)

Aside from having KPI connected with key business objective, it is also recommended to
follow the ‘SMART’ methodology:

 Specific: Goals are concise and well defined

 Measurable: With criteria that are specific to measure your progress
 Attainable: Achievable and not impossible to reach
 Relevant: Realistic and connected to your goal
 Time Bound: With a clearly defined timetable (Veyrat 2017)

How often performance will be measured

Below are some of the periods for your performance to be measured according to KPI
Library (n.d.).

 Closed Periods – Mostly used for financial and shareholders reporting (e.g End of
Month, End of Year, etc.)
 Open Periods – Easy to understand but not advisable for analysis with earlier
periods (e.g. Year to Date)
 Moving Periods - Normally future oriented as compare to closed and open period
(e.g. Last 30 days, Last 60 days, etc.)

SAP Process Performance Indicator

SAP in aim to simplify the process of measuring their performance has introduce six
Process Performance Indicator (PPI) that are categorized under three major processes:

 Input
o Request per year – number of instances the process occur in a year
o People involved – number of people needed in executing the process
 Operations
o Throughput Time – total time it takes to complete one instance of the
process
o Working Time – actual working time it takes to complete once instance of
the process
 Output
o Cost involve per output
o Customer experience

Above PPI which was based on SAP business specific needs helps Process Manager in
their discussion with the organization key stakeholders.

ROLE OF PROCESS OFFICE

In order to continue to build on the success brought about by moving from complex and
static project methods towards agile and simple process, SAP created Productivity
Consulting Office (PCG) which act as organization centralized Process Office.

PCG was founded and managed by SAP Chief Operating Officer (COO). It was created
with the aim of strengthening the criticality of Business Process Management within the
organization.

According to Veyrat (2016), a process office also act as an intermediate in the demands
of areas included in processes, making centralized decisions and choices required to
satisfy the strategic objectives of the organization while keeping fairness to all teams
involved.

Role of PCG in SAP organization

Below are some of the specific task PCG performed to help achieve its main objective:

 Established process infrastructure such as process governance and process

improvement
 Improved IT projects through partnership with Business Insight and Technology
department

PCG plays a very important role in increasing SAP process efficiency and effectiveness.
It provides well-defined and innovative service that supports BPM experts in improving
processes.
PCG also developed two different services that prioritized on the roles involved in
executing the process:

 Role Snapshot – Identify opportunity to improve process role efficiency

 Perfect day at work – Provides detailed analysis that determine whether staff have
knowledge to perform its duty.

PART 4: PROCESS IMPROVEMENT

Improving operational effectiveness and efficiency of a process is a basic function of

business process management (BPM). There are different process proposals improvement
patterns that are aim at supporting this goal (Lohrmann & Reichert 2014).

It is important to note that achieving process improvement is the only reason why
organization undertake BPM project in their business processes (Harris 2018).

According to MXOtech, Inc. (2018) below are the main objectives of business process
improvement:

 Reduction of process turnaround time

 Determining wasted efforts
 Enhancing the work output quality
 Ensuring regulatory compliance
 Reduction of friction in the activities

RESULTS ACHIEVED

With the implementation of BPM, SAP was able to overcome some of the challenges
their organization is facing. Below are some of the benefits SAP have achieve after
embracing BPM in their organization.

Process Modeling became vital part of Process Manages job upon implementation of
SAP Process Map

 Presently, 626 staff has editor user for process modeling

 More than 1200 staff undergo internal training to help them develop and
maximized SAP processes
 SAP Process Map documented and published 92% of all Level 3 processes
 1023 of all processes are documented

Documented process as part of SAP Process Map assist Project Manager in their daily
task

 Allows faster on-boarding of new staff

 Enable common knowledge on common executions
Develop transparency in SAP key processes, roles and responsibilities

 SAP staff has access to SAP Process Map and can view all published processes
 SAP Process Map serves as reference structure for all IT projects

Fact-based data in measuring business performance becomes accessible

 Supports Process Manager in achieving process excellence

Improved processing time through reduction of process step

 Marketing Team removed 11 activities resulting to 74% reduction of processing

time

LESSONS LEARNED

Every organization must realize the importance in lessons learned as keeping knowledge
from past is crucial for continuous improvement. With the support of top management,
every important lessons should be captured and shared across the organization (Trevino
& Anantatmula 2008).

Reviewing of lessons learned can help avoid repeating the most common mistakes
organization commit such as:

 Project failure
 Over budget
 Scope creep
 Not meeting expected quality
 Missed project completion date (Davenport 2012)

BPM implementation has brought several lessons learned by SAP organization such as:

Strategic alignment of BPM with top management support

 Through creation of a centralized team that collaborates with several

organizational unit

Importance of establishing strong governance

 Results to transparency of organization activities, roles and responsibilities

 Serves as centralized infrastructure for activities such as data protection and risk
management

Implementation of PCG service catalog

  Ensures delivery of standardized process improvement
 Allows internal customer to focus on resolving specific process issue
 Understand service expected deliverable, scope and duration

Added value of a managed process needs to be communicated

 As increasing process maturity using top-down objective can only help to a

certain extent

CRITICAL SUCCESS FACTORS

Critical success factor is a management term for things that is required by an organization
or project to reach its goal. It is considered as core elements of a business' operations that
is needed to ensure its long-term success (Kokemuller 2017).

According to Lucco (n.d.) there are four things that can make critical success factor more
effective:

 Must be essential to organization success

 Impact the department or organization as a whole
 Be identified with a high-level objective
 Connected with the business strategy

Below are the list of critical success factors that guide SAP in achieving the goal of its
BPM:

Top Management Support

Decisive factor of successful implementation of BPM

Most project fails due to lack or no commitment coming from top-level management who
are expected to provide support to the project team (The Editorial Team n.d.).

Engaged BPM Community

Is as important as having correct method or tools at hand.

Lack of commitment and accountability from project team members means that Project
Manager is implementing a ‘directive style’ of leadership which is not recommended in
managing a project (The Editorial Team n.d.).

Role of PCG as Process Office

Supports a series of activities to establish strong relationship with BPM community

Creating a business process management office provide organization operational
efficiency that is aligned with the strategic objectives of the organization (Veyrat 2016).

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