Universität Karlsruhe (TH)
Institut für Angewandte Informatik

The BPM Maturity Model - Towards a Framework for Assessing the Business Process Management Maturity of Organisations

Diplomarbeit

von

Tapio Hüffner

eingereicht am 01. Juni 2004

Abstract

Business Process Management (BPM) is a topic that is generating a level of interest in both academic and business circles. The issues and problems that are associated with implementing and gaining support for BPM within organisations are well known. BPM maturity, however, is something that organisations aspire to – but know little about. Research to date indicates that many organisations do not progress past very rudimentary levels of BPM maturity. This is likely due to BPM being seen as a complex and complicated issue.

This research looks at what successful organisations see as being key to BPM and what organisations that are unsuccessful in BPM implementation consider being the issues that contributed to their failure. BPM is defined as a holistic management practice that includes the alignment of processes with the corporate strategy and especially with strategic and operational goals. Whilst the use of both methodologies and information technology, as supporting and enabling functions, is important for BPM, organisational and cultural change is identified as one of the critical success factors for BPM implementations.

This research focuses on defining BPM maturity in a meaningful and measurable way. It addresses the complexity of BPM maturity be firstly defining what BPM maturity means and then developing a model that can be used to measure current levels of maturity. In addition, BPM-related benefits are identified, such as increased effectiveness, efficiency, or quality. Increased BPM maturity is characterised as being correlated with an increased probability of achieving these benefits. An increased maturity can lead to a decreased gap between objectives and a current situation. Objectives are also more likely to be met due to less varying results and, therefore, greater ability to predict results. The organisation-wide deeper understanding of how the business is conducted results in work being more consistent and repeatable and as a result more effectively and efficiently.

The research then develops a model that incorporates the issues related to BPM in a way that enables organisations to progress with BPM implementation and adoption. The model is designed to be a diagnostic tool for assessing the BPM maturity of organisations or organisational units. Five separate maturity measures, called factors, are derived that characterise BPM comprehensively: information technology, culture, methodology, accountability, and performance. Thus, the model breaks down BPM maturity into small pieces that facilitates an organisation to address BPM bit by bit. This enables an organisation to be more in control of BPM implementation and uptake as it can more tightly control what it is that it is focusing on.

Many organisations profess to major financial gains arising from successful BPM. The problem is that there is little, or no, direct link between what organisations do to gain improvements and how successful these measures are. This model seeks to put organisations in a position where they can apply the model to understand where they are at with respect to BPM maturity. It enables them to set specific strategies for progression in specific areas and then allows for the reapplication of the model at a future point in time to gauge the success and impact of the strategy. By doing this, the model enables organisations to quantify cost (time, resources, etc.) with benefit.

Currently available maturity models, whilst good in their own area, have not been developed specific to BPM, they do not address specific BPM issues, nor do they allow organisations to understand BPM in a more simplistic, manageable way. The concept of nonsuitability of currently available models was reinforced by both academic research and empirical case studies conducted with organisations to test the practicality and suitability of the model. The case studies returned very positive results with respect to the design of the model and particularly the flexibility of application across the factors and organisational units to suit the needs and experiences of the organisation itself.

Other benefits of the model are the ability of the organisation to determine strengths and weaknesses in current applications. In doing this, the organisations see benefits in being able to expand knowledge sharing within the organisation by learning from the successes within its own self. In addition, the application of the model is seen to add value to an organisation by enabling identification of strategies for advancement that are tailored to the specific experiences and results of the organisation. Not only can these strategies be developed but the success of their implementation can also be determined by means of setting goals and objectives and measuring the achievement of these over time.

Table of Contents

1 Introduction ... 1
1.1 Motivation ... 1
1.2 Research Objective and Research Questions ... 2
1.3 Structure of the Thesis ... 4

2 Literature Review ... 7
2.1 Business Process Management ... 7
2.1.1 Definition and Classification of Business Processes ... 8
2.1.2 Business Process Lifecycle Management ... 10
2.1.3 Definition of Business Processes Management ... 12
2.1.4 Business Process Management Drivers and Benefits ... 14
2.1.5 Business Process Management Implementation Approaches ... 17
2.1.6 Critical Factors for Success or Failure of Business Process Management ... 19
2.1.7 Conclusions ... 21
2.2 Maturity ... 22
2.3 Maturity Models and Approaches ... 25
2.3.1 Maturity Models ... 26
2.3.2 Maturity Approaches ... 36
2.3.3 Comparison and Evaluation ... 42
2.3.4 Contribution to a Business Process Management Maturity Model ... 58
2.4 Conclusions ... 59

3 A-priori Business Process Management Maturity Model ... 61
3.1 Purpose of the Model ... 61
3.2 Maturity in the Context of the Model ... 63
3.2.1 Generic Maturity Levels ... 65
3.2.2 Criteria for Measuring Maturity ... 66
3.2.3 Generic Stage Requirement ... 67
3.3 Business Process Management Maturity Dimensions ... 69
3.3.1 Factors ... 70
3.3.2 Perspectives ... 72
3.3.3 Organisational Scope ... 74
3.3.4 Time Scope ... 74
3.4 4-Dimensional Business Process Management Maturity Framework ... 75
3.5 Independent and Dependent Variables ... 77
3.6 Application of the Model ... 78
3.7 Evaluation of Maturity ... 79
3.8 Comparison of the BPMM Model and the BPMM Benchmark ... 81
3.9 Conclusions ... 84

4 Research Methodology ... 85
4.1 Introduction ... 85
4.2 Case Study ... 86
4.2.1 Unit of Analysis ... 87
4.2.2 Generalisation ... 87
4.2.3 Reliability and Validity ... 87
4.2.4 Data Collection and Analysis ... 88
4.2.5 Anticipated Problems and Possible Solutions ... 89

5 Case Study ... 91
5.1 Purpose ... 91
5.2 Case Study Design ... 92
5.2.1 Structure ... 92
5.2.2 Sequence and Schedule ... 93
5.2.3 Analysis ... 94
5.2.4 Selection of Cases ... 95
5.3 Findings ... 95
5.3.1 Company A ... 96
5.3.2 Company B ... 103
5.3.3 Cross-Case Analysis ... 113
5.4 Reviewed Model ... 113

6 Conclusion ... 117
6.1 Thesis Summary ... 117
6.2 Limitations of the Model and the Empirical Research ... 119
6.3 Further Research ... 119

References ... 123

Appendix ... 131
A Main Sources of Literature ... 131
B Common Keywords in Business Process Definitions ... 132
C Case Study Documentation  ... 133

Foreword / Acknowledgements
This Masters thesis was created at the Forschungszentrum Informatik (FZI), Karlsruhe/Germany in collaboration with the Centre for Information Technology Innovation (CITI), Queensland University of Technology (QUT) in Brisbane/Australia. For the entire research from December 2003 to May 2004, CITI provided use of their facilities and infrastructure as well as supervision through senior researchers.

Several individuals deserve credit for the work contained in this thesis. Firstly and principally, the author would like to thank Dr. Michael Rosemann for his invitation to CITI and his vision and support throughout the project. Secondly, in particular Tonia de Bruin, and also Islay Davies, Alexander Dreiling, and Boris Wyssusek provided very valuable feedback during the thesis’ course. Finally yet importantly, the author wants to thank CITI’s staff and researchers for providing an inspiring atmosphere as well as interesting discussions, workshops, seminars, and colloquia.

Chapter 1. Introduction
1 Introduction
1.1 Motivation
Business Process Management (BPM) has become an important management practice. A European study published in 1999 has shown that BPM is of high interest to European managers, but the study found evidence for low BPM maturity among European organisations (Pritchard & Armistead, 1999: 12).

In particular, the maturity of BPM is an area of current research. There is a need to clarify what BPM maturity consists of, how it can be increased, and what the linkage is between BPM maturity and perceived benefits. This has not been widely researched yet. Practitioners are interested in the value-proposition of BPM. What benefit does a more mature BPM approach yield? What factors and barriers are critical to the success of BPM? Academically, the interest lies in a theoretical definition of BPM maturity model (BPMM model) and its application.

In 2003, Maull, Tranfield and Maull (2003) published an article which focused on the maturity of BPR implementations and problems related with defining measures for maturity. In 2004, Harmon (2004) presented an approach for evaluating business process maturity. The increased evaluation in the literature indicates that there is still a lack of understanding as to how BPM is defined, what BPM really is, and what benefits can be achieved by an adoption of BPM activities. This research characterises BPM maturity as being correlated with the probability of achieving BPM-related benefits, such as increased effectiveness, efficiency, or quality. In addition, an increased maturity can lead to less varying results and, therefore, greater ability to predict results. The organisation-wide deeper understanding of how the business is conducted results in work being more consistent and repeatable and as a result more effectively and efficiently.

The conducted case studies show that organisations are starting to focus on processes and implementing process management principles. However, the current approaches lack a structured foundation. The organisations desire to identify their current position of Business Process Management before planning next steps.

A comparison of existing maturity models revealed that they are conditionally applicable for assessing BPM maturity, but that they do not cover BPM in its comprehensiveness. BPM does not only consist of process orientation but also of an organisational and cultural change programme. The models do not explicitly assess interrelated aspects related to BPM.

This master thesis aims to define BPM maturity and to establish a comprehensive model that enables us to understand, assess, and evaluate BPM approaches of organisations. This builds the foundation for further research focusing on the linkage between achievable benefits and maturity stages and on giving guidance for improving maturity. This thesis in embedded in a more comprehensive BPMM research project at Queensland University of Technology’s (QUT) Centre for Information Technology Innovation (CITI). The research project has already attracted interest of an American research group around BPM. QUT is currently exploring collaboration opportunities with this group and other interested parties with a view to developing an internationally recognised BPM Maturity model.

The first phase of the research project aims to establish a theoretical BPMM model. In the following phase, it is planned to test the model for its practical relevance and applicability. The purpose of the case studies and surveys is to gain qualitative and quantitative input for the model. This can contribute to its review and redesign. The model, based on empirical data, aims to assess comprehensively BPM policies and practices throughout the organisation. The main objective is to identify strengths and weaknesses in current BPM practices with a view to developing a roadmap for use in attaining higher levels of BPM maturity.

Within the project, this thesis contributes to the first part of the project, including a comprehensive literature research and the establishment of a first BPMM model. In order to receive a first proof of practical relevance, a case study has been conducted. The received feedback from practitioners through these case studies has led to changes within the model.

1.2 Research Objective and Research Questions
This thesis, as introduced above, is theoretical in nature and focuses on a literature review, a theoretical elaboration of a proposed BPM maturity model, and finally, a first empirical test of this model in the form of a conducted case study. The topic can be outlined as follows.

The topic:
This thesis describes what BPM and BPM maturity are, how this maturity can be measured, and what a theoretical model of BPM maturity could look like. The BPM maturity model incorporates the outcomes of an evaluation of existing maturity models, such as BPM maturity models, quality awards, the CMM, and proprietary maturity models. Based on this analysis a model was established, identifying BPM maturity stages and stage requirements. The model was tested by conducting a case study. The outcomes and insights of this first empirical research contribute to adjustments of the model. The case study also serves as a first test for a potential application of the model as an assessment tool. Further research needs to be done to test this model on a large scale in different regions, industries, and companies of varying size, and to receive not only qualitative but also quantitative data.

(1) The overall managerial question is:

What success factors, critical barriers, and benefits of a BPM implementation can be identified, and what value-proposition yields a BPM maturity model in practice?

(2) The overall theoretical research question is:

How can BPM maturity levels be defined in a theoretical model, to what extent is such a model augmenting existing maturity models, and how can such a model be applied practically to an enterprise?

(3) The overall research question leads to the definition of sub-problems:

1. What are the critical and important factors of BPM that a potential maturity model needs to take into account?
2. How can BPM maturity be classified?
3. What kind of comparable models exist to measure maturity, to what extent can they be applied to measure BPM maturity, and how do they contribute to the design of a BPM maturity model?
4. How can a BPMM model be designed? What value-proposition does it yield?
5. How can such a model be tested and later be applied to large enterprises?

Limitations
This work is limited by a number of factors. First, the literature review is limited to accessible information in form of articles, books, and reports that contributed insight to the topic. It is assumed that BPM-related research is conducted internationally, but this information cannot be retrieved because many ideas might be unpublished. Second, data collection and the test of the model are limited to two Australian organisations and the proof of the model is based on selected cases. As a result, a generalisation of the findings can hardly be made.

To ensure a BPM focused maturity assessment the defined maturity stages and stage requirements will be related to process management and process management principles. The model will not be extended to other management perspectives such as human resource management or the assessment and improvement of an organisation’s strategic and organisational goals.

BPM is defined as a holistic management practice being implemented organisation-wide. Academics identified the influence of individual process management and improvement methods such as BPR, TQM, and CPI on BPM, but these methods are not considered within the research.

Assumptions
The thesis acts on certain assumptions:

• BPM maturity can be measured.
• Access to case studies is available.
• The outcome of the case studies is useful for the verification of the model.

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