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

Table of Contents

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

2 Literature Review
2.1 Business Process Management
2.1.1 Definition and Classification of Business Processes
2.1.2 Business Process Lifecycle Management
2.1.3 Definition of Business Processes Management
2.1.4 Business Process Management Drivers and Benefits
2.1.5 Business Process Management Implementation Approaches
2.1.6 Critical Factors for Success or Failure of Business Process Management
2.1.7 Conclusions
2.2 Maturity
2.3 Maturity Models and Approaches
2.3.1 Maturity Models
2.3.2 Maturity Approaches
2.3.3 Comparison and Evaluation
2.3.4 Contribution to a Business Process Management Maturity Model
2.4 Conclusions

3 A-priori Business Process Management Maturity Model
3.1 Purpose of the Model
3.2 Maturity in the Context of the Model
3.2.1 Generic Maturity Levels
3.2.2 Criteria for Measuring Maturity
3.2.3 Generic Stage Requirement
3.3 Business Process Management Maturity Dimensions
3.3.1 Factors
3.3.2 Perspectives
3.3.3 Organisational Scope
3.3.4 Time Scope
3.4 4-Dimensional Business Process Management Maturity Framework
3.5 Independent and Dependent Variables
3.6 Application of the Model
3.7 Evaluation of Maturity
3.8 Comparison of the BPMM Model and the BPMM Benchmark
3.9 Conclusions

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

5 Case Study
5.1 Purpose
5.2 Case Study Design
5.2.1 Structure
5.2.2 Sequence and Schedule
5.2.3 Analysis
5.2.4 Selection of Cases
5.3 Findings
5.3.1 Company A
5.3.2 Company B
5.3.3 Cross-Case Analysis
5.4 Reviewed Model

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

References

Appendix

A Main Sources of Literature

B Common Keywords in Business Process Definitions

C Case Study Documentation

Table of Figures

Figure 1-1: Structure of the Thesis

Figure 2-1: From BPR to BPM

Figure 2-2: The Process Lifecycle

Figure 2-3: Process Capability

Figure 2-4: Possible Correlation between BPM Maturity and Benefits/Investments

Figure 2-5: The Five Levels of Software Process Maturity

Figure 2-6: The European Foundation for Quality Management Model

Figure 2-7: Baldridge Criteria for Performance Excellence Framework

Figure 2-8: The Deming prize: The relationship within Basic Categories and Points

Figure 2-9: Rating of a Process’s Condition

Figure 3-1: Implementation of the BPM Maturity Model

Figure 3-2: Progressing Maturity Stages

Figure 3-3: Five BPM Maturity Stages

Figure 3-4: Relationship of BPM Maturity Factors

Figure 3-5: Relationship of BPM Maturity Perspectives

Figure 3-6: 3-Dimensional BPM Maturity Model

Figure 3-7: Inner-Cube Maturity (Example)

Figure 3-8: Independent and Dependent Variables

Figure 3-9: Maturity Map - Graphical Representation

Figure 3-10: Comparison of the Factor Maturities

Figure 4-1: Part I and Part II of the Thesis

Figure 4-2: Case Study Method

List of Tables

Table 2-1: BPM Drivers and Benefits

Table 2-2: Fundamental Concepts

Table 2-3: Generic Criteria for Comparison of Maturity Model Characteristics

Table 2-4: Comparison of Maturity Models and Approaches - Generic Criteria

Table 2-5: BPM-Related Criteria for Comparison Maturity Models

Table 2-6: Comparison of Maturity Models and Approaches - BPM-related Criteria

Table 3-1: Comparison of the Maturity Stages ‘Low’ and ‘High’

Table 3-2: Generic Stage Requirements

Table 3-3: BPM Maturity Factors

Table 3-4: BPM Maturity Perspectives

Table 3-5: Generic Cube Description

Table 3-6: Maturity Map

Table 3-7: Comparison of the BPMM Model and the BPMM Benchmark (generic)

Table 3-8: Comparison of the BPMM Model and the BPMM Benchmark (BPM-Related)

Table 4-1: Relevant Situation for Different Research Strategies

Table 5-1: Exemplary Case Study Schedule

2004 Tapio Hüffner The BPM Maturity Model

List of Abbreviations

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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 imple- menting 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 ad- dition, 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 consis- tent 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 or- ganisational units. Five separate maturity measures, called factors, are derived that charac- terise BPM comprehensively: information technology, culture, methodology, accountabil- ity, 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 or- ganisation 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 devel- oped 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.

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 invi- tation 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 inspir- ing atmosphere as well as interesting discussions, workshops, seminars, and colloquia.

Statement of Authorship

The work contained in this thesis has not been previously submitted for a degree or diploma at any other higher education institution. To the best of my knowledge and belief, the thesis contains no material previously published or written by another person except where due reference is made.

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. Practitio- ners 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? Aca- demically, 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 ma- turity 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 understand- ing 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 organisa- tion. 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 com- prehensive 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 fol- lows.

The topic:

This thesis describes what BPM and BPM maturity are, how this maturity can be meas- ured, 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 re- quirements. 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 acces- sible 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 infor- mation cannot be retrieved because many ideas might be unpublished. Second, data collec- tion 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 re- quirements 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 organ- isational 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.

1.3 Structure of the Thesis

The thesis is subdivided into six chapters. For each chapter a number of inputs are required that are then transformed into outputs. Besides the introduction and the conclusion chapters, the thesis contains two main parts. Chapter two and three form the first part that concludes with the a-priori BPM maturity model (BPMM model). The second part consists of chapter four and five and closes with the revised and tested BPMM model. The structure of the thesis is summarised in Figure 1-1. The research questions and motivation are outlined in chapter one. The significance of research and the identified necessity for a model in order to analyse and evaluate the maturity of BPM implementation was motivation and input for the research questions. The output of chapter one is the structure of this work.

Chapter two presents the literature review. Its main objective is to provide the concept of Business Process Management (BPM), BPM maturity, and maturity models. Knowledge of these three areas will then be applied to the development of a BPMM model. The inputs for chapter two are BPM and process related literature and the discussed maturity model. The three objectives are reflected in the structure of the review. The first section 2.1 pro- vides a detailed insight into business processes (BP), BPM, and related aspects. Section 2.2 introduces the term maturity and its special application on BPM. In the third section 2.3, maturity models are discussed, then compared, and rated based on a pre-defined set of cri- teria. Finally, the expected contribution to the design and development of the BPMM model is identified.

In Chapter three, a proposed a-priori BPMM model is derived that is based on the findings presented in chapter two. The purpose of the model is discussed. Then, BPM maturity in the context of the model is defined and the BPMM model, along with its components, and applications, are comprehensively presented.

Chapter four presents the applied research method used for the empirical investigation. It is discussed why the research method has been selected and what has to be taken into account when designing the case study method properly. The selected method for the empirical investigation is the case study research method.

Chapter five presents the conducted case study, the participating organisation, and the case study’s structure. The main objective of the case study is to test the model and gain feedback from practitioners. Changes to the model, due to the outcome of the case study, and are presented.

Chapter six summarises this master thesis and provides an outlook of further research.

The appendix provides an overview of relevant literature for this master thesis in part A. Part B lists keywords found in the literature that are commonly used to define a business process. In part C of the appendix, the case study material for this work is provided.

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Figure 1-1: Structure of the Thesis

2 Literature Review

2.1 Business Process Management

Around 1900, the scientific management, introduced by Adam Smith, Frederick Taylor, and Henry Ford, already focused on processes as a series of work tasks (Smith & Cannan, 1950; Taylor, 1967; The Henry Ford, 1995). The origins of BPM can be seen in this period of time, as supported by Harmon (2003: 19), who suggests that business processes were already in place at the time of the Industrial Revolution. Gulledge and Sommer (2002: 10) endorse this view by considering BPM “as old as the discipline of industrial engineering”. Contrary to this, other authors see BPM as a relatively new approach (Elzinga, Horak, Lee, & Bruner, 1995: 119; Lee & Dale, 1998: 224), or as emerging out of Total Quality Man- agement (TQM)¹ and Business Process Reengineering (BPR)² (Llewellyn & Armistead, 2000: 225).

In the current literature, there is much discussion about BPM-related terminology. Ar- mistead and Machin (1997: 887) observe that there is “considerable debate” about the meaning of BPM and “how organisations interpret the business process paradigm”. Aca- demics stress the fact that there are still difficulties in terminology (Gulledge & Sommer, 2002: 365; Hammer, 2001: 1; Harmon, 2003: 461; Pritchard & Armistead, 1999: 10).

The term BPM has matured and changed its focus and scope. Starting from a process- oriented view, it has become a more holistic approach to corporate-wide process orienta- tion and management. Pritchard and Armistead (1999: 11) found evidence that BPM is not only a set of techniques, but more a holistic approach to managing by processes. Melão and Pidd (2000: 109) interpret the shift from BPR to BPM as BPM being influenced by the lessons learned from BPR, as depicted in Figure 2-1. This change is characterised, for in- stance, by the transition in wording from “mechanistic” to “holistic” or from “inspira- tional” to “systematic”.

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Figure 2-1: From BPR to BPM, adapted from (Melão & Pidd, 2000: 109)

Despite the fact that academics have realised the lack of a common approach to BPM terminology, there are still a lot of different definitions provided. This section presents an overview of prevalent definitions of processes, business processes, Business Process Management, and related topics. In the context of this thesis, it is seen as crucial to provide proper definitions that are used throughout this work.

2.1.1 Definition and Classification of Business Processes

First, businesses can be characterised as entities that transform inputs into outputs, which then provide some value to a customer. Businesses make use of a number of resources, such as processes, human resources, or infrastructure (Burlton, 2001: 67/68).

Based on this view, Burlton (2001: 67/68) argues that inputs are transformed to outputs by means of business processes (BP), and that a BP starts with an initiating activity of a cus- tomer and ends with the delivery of the desired output. This operational view of a BP is supported by many academics. In summary, BPs are characterised as having a cross func- tional, end-to-end nature, certain inputs and outputs, and creating a customer value (Armistead & Machin, 1997: 886/888). An overview of common BP definition keywords is provided in Appendix B.

Apart from the common definitions, other academics characterise a BP in a more holistic, organisational way similar to Jarrar et al. (2000: 124) who state that “business processes are quite simply the way work is done in any organisation”. McDaniel provides a comparable but more detailed view:

Business processes align resources to achieve goals. Business processes are unifying threads that bind together the fabric of an enterprise’s products, brand, and value. Business processes are the heart of an enterprise’s identity.

(McDaniel, 2001: 30)

Contrary to this, other authors have a more technical view of BPs and characterise them, for instance, as “extended event-driven process chains” (Gulledge & Sommer, 2002: 375). Further definitions can be found in (Becker, Kugeler, & Rosemann, 2003; Biazzo & Ber- nadi, 2003; Melão & Pidd, 2000; Ould, 1995; Peppard & Preece, 1995; Zairi, 1997). Lind- say et al. (2003) provide an especially useful and comprehensive overview of existing BP definitions in their article “Business processes—attempts to find a definition”.

What kind of BP definition is the most appropriate is dependent upon the context in which it is being used. Throughout this work, a BP in its operational meaning is defined as a series of activities with an end-to-end characteristic that start with a certain input, crossfunctional borders, and achieve a certain output with the goal to create customer value. In the context of BPM as a holistic organisation-wide approach, this thesis defines a BP according to the definition provided by McDaniel (2001: 30).

Classification of BP

BPs are commonly classified either as operational, supporting, and managerial BPs or as core and non-core BPs. DeToro and McCabe (1997: 56) and the CIM-OSA Standards (in (Armistead & Machin, 1997: 893)) identify manage, operate and support as three BP cate- gories. Armistead and Machin (1997: 893) go one step further and divide managing BPs into direction setting and managerial processes. This splitting will not be further described at this stage.

Operational BPs are external processes and can be seen as the core competence of an organisation. Operational BPs create the output with customer value and have an effect on customer satisfaction; they combine the organisation’s value adding activities and are crucial for the company’s success (DeToro & McCabe, 1997: 56/57).

Managing and supporting BPs are internal processes. The latter are crucial for the execu- tion of operational BPs and characterised as their enablers. Typical examples are human resources or IT. Managing BPs correspond to leadership tasks and strategic setting. They are not directly supporting, but build the basis for the organisation (Armistead & Machin, 1997: 894).

A second common classification is that of core and non-core BPs. Core processes are seen to be central for an organisation and its success. They usually have a direct impact on customer satisfaction. Thus, non-core BPs are all other processes. An organisation normally has 10 to 20 core BPs (DeToro & McCabe, 1997: 56).

Smith and Fingar (2002: 63) take up the classification of core and non-core BPs and call them “core and primary activities” and “context and support activities”. Additionally, they define a second categorisation that describes processes either as being “simplex and static” or “complex and dynamic”. Smith and Fingar introduce a two times two matrix made up by these two classifications and therefore define four different types of BPs.

Comparing the classifications, it can be identified that operational and core BPs have a similar character. Hence, managerial and supporting BPs can be characterised as non-core processes. Throughout this thesis, processes are classified as core and con-core BPs as characterised by DeToro and McCabe (1997: 56).

2.1.2 Business Process Lifecycle Management

The process lifecycle, as presented by Rosemann (2001), reflects a structured and generic approach to a process reengineering project. Reengineering in this case refers to the im- provement or, if necessary, the replacement of a BP. In this case the use of the term reen- gineering is broader than introduced by Hammer and Champy, who characterised reengi- neering as the “rethinking and radical redesign of a business process” (Hammer & Champy, 1994: 32). With respect to BPM, the process lifecycle is a generic method or ap- proach that can be applied to not only the improvement of processes but also to the imple- mentation and improvement of BPM principles and policies, as presented in section 2.1.5.

Smith and Fingar (2002: 89) identify a process improvement lifecycle consisting of the eight steps “discovery, design, deployment, execution, interaction, control, optimization and analysis”. Similarly, Rosemann’s lifecycle consists of seven steps: “(1) process identi- fication, (2) process modelling (as-is), (3) process analysis, (4) process improvement (to- be), (5) process implementation, (6) process execution, and (7) process monitor- ing/controlling”, as depicted in Figure 2-2.

(1) The first step of a reengineering project is the identification of the processes where the reengineering project can start. Rosemann (2001: 3-5) and Hammer and Champy (1994: 122) recommend three criteria for the selection of an appropriate process:

1. Which process has the highest impact on the profit?
2. Which process has the highest need for reengineering?
3. Which process is the most likely to be reengineered successfully?

Whilst this classification is supported by Davenport (1993: 27), he adds two additional criteria to identify existing processes and their boundaries, before selecting the process appropriate for reengineering.

(2) The result of the second step, as-is modelling, is a comprehensive understanding of the selected process. The modelling has to follow a pre-defined modelling technique which suits the identified requirements, such as who is modelling and who is the audience. Based on the knowledge about the process the project can be initialised. This includes the setting of the project’s scope, the identification of the project team, etc. The biggest advantage of as-is modelling is the deep and common understanding of the process, but it is laborious and the project-team might lose their creativity (Rosemann, 2001: 5-11).

(3) In the next phase, the documented process is analysed and compared with best practice recommendations and reference models. The result of this stage is an issue register listing all shortcomings and improvement areas (Rosemann, 2001: 12-15).

(4) Based on the issue register the project team works creatively and identifies ideas and improvement options. Rosemann provides a list of suggestions as guidance for how to approach the improvement of a process. The proposals need to be tested regarding their relevance and practicability. The final result is a to-be process which can then be implemented, substituting the as-is process (Rosemann, 2001: 15-27).

(5) The project team then implements the to-be process. The implementation includes organisational aspects, such as training, increasing process-awareness, and also changes in the organisational structure. It also involves an information technology (IT) aspect, such as new software development. The implementation also requires a real-time adjustment of the to-be process with regards to constraints and problems (Rosemann, 2001: 28).

(6) The reengineering project is regarded as finished with step (5). The execution phase relates to the actual carrying-out of the new process and its integration into the rest of the organisation. Minor processing problems can be solved directly during the run time (Rosemann, 2001: 28/29).

(7) Once the process is integrated in daily work it needs to be monitored, which means that process data is collected. Controlling refers to the evaluation of this data (Rosemann, 2001: 29).

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Figure 2-2: The Process Lifecycle, adapted from (Rosemann, 2001)

2.1.3 Definition of Business Processes Management

The introduction has outlined that there is a current debate about what BPM consists of and how it can be defined. Many authors use the term differently. Harmon resumes that it can refer either to “automation efforts” or that “executives […] often use the term […] in a more generic sense to refer to efforts on the part of business executives to organize and improve the human management of business processes”. A further view on the “corporate level”, added by Harmon (2003: 12), refers more to “the development and maintenance of business process architecture”.

Harmon provides two definitions of BPM. The first is a business perspective:

(BPM refers to) […] aligning processes with the organisation’s strategic goals, designing and implementing process architectures, establishing process measurement systems that align with organisational goals and educating and organising managers so that they will manage processes effectively.

(Harmon, 2003: 461)

(BPM refers to) […] various automation efforts, including workflow systems, XML business process languages, and packaged ERP systems. In this case the management emphasized the ability of workflow engines to control process flows, automatically measure processes, and to change process flows from a computer terminal.

(Harmon, 2003: 461)

Van der Aalst et al. (2003: 1-5) also provide an IT-focused view of BPM. In their definition, BPM and its “methods, techniques, and tools” are enlarging the Workflow Management (WFM) approaches. BPM is similarly “restricted to operational processes”, but covering the whole process management lifecycle. Similarly, the Delphi Group (2003) characterises BPM as a software application. However, within the presented thesis, the definition of BPM is not focused on the IT-perspective. Information technology and information systems (IT/IS) are rather classified as an important factor of BPM.

Other authors provide BPM definitions in the range between a holistic management ap- proach and a way to manage processes. The analysis of BPM definitions reveals that often the focus is on analysing and improving processes (Zairi, 1997: 64; Elzinga et al., 1995: 119). Nevertheless, DeToro and McCabe (1997: 55) represent a holistic view of BPM and understand Business Process Management as a new way of managing an organisation, be- ing an alternative to a functional, hierarchical management. This view is supported by Pritchard and Armistead (1999: 14), whose research resulted in BPM being seen “as a ‘ho- listic’ approach to the way in which organisations are managed”. The process perspective therefore needs to be incorporated into the whole business and all its facets, and an endur- ing commitment to process management is required. Armistead and Machin (1997: 887) state that BPM is “concerned with how to manage processes on an ongoing basis, and not just with the one-off radical changes associated with BPR”. Finally, a comprehensive defi- nition is provided by Jarrar:

BPM is a wide and encompassing system that starts with top management understanding and involvement, focuses on process improvement across the supply chain, instils a structured approach to change management, and emphasises people management and development.

(Jarrar et al., 2000: 124)

Within this thesis, a combination of the two viewpoints provided by Jarrar (2000) and Harmon (2003) is considered to provide an appropriate base for developing a comprehen- sive definition of BPM. However it is felt that this base can be enhanced by considering further the drivers and benefits of BPM, implementation approaches and factors critical to the success (or contributing to the failure) of BPM initiatives. As a result, a more compre- hensive definition is provided in section 2.1.7 following further discussion on these areas.

2.1.4 Business Process Management Drivers and Benefits

Burlton (2001: 8) argues that an organisation which invests in “change” expects a certain return on investment (ROI). The terms drivers and benefits are relatively close. BPM driv- ers prompt organisations to focus on BPM, while benefits are the achievable results.

The identified drivers can be either classified as internally or externally based. Internal drivers are, for instance, the need for a reduction in lead time or the need for reducing cost, as provided by Armistead (1996: 49) and supported by Burlton (2001: 12/13). Zairi (1997: 69) argues that empowerment and process-orientation are driving factors for the implemen- tation of TQM³. A number of external reasons for focusing on BPM are provided by Ar- mistead as he identifies “globalisation, changing technology, regulation, the action of stakeholders, and the eroding of business boundaries” as common drivers for BPM (Ar- mistead in (Lee & Dale, 1998: 214/215)). Elzinga et al. (1995: 119) partly support this view, as they see global competition as a driving reason. Burlton (2001: 11-35) argues in the same vein listing “hyper-competition, organizational complexity, external stakeholder power, and e-business technology” as external pressures. Pritchard and Armistead (1999: 12) add the importance of quality to the list of drivers.

The benefits of BPM implementation, as provided in the literature, can be divided into qualitative and quantitative internal benefits, customer oriented benefits, and impacts on the competitive situation. The listing of these benefits does not aim to be complete or ex- clusive.

Quantitative internal benefits

Quantitative benefits are measurable and therefore visible. This fact allows providing evi- dence for achieved benefits. Mentioned benefits in the literature are, among others, re- duced cost, reduced cycle time, reduced head count, and improved quality (Armistead & Machin, 1997: 886; Gulledge & Sommer, 2002: 365; Hammer, 1990: 106; Hammer, 2001: 4; Zairi, 1997: 68/72). Improved quality in production is assumed to reduce overhead and cycle times. Undoubtedly, this might reduce the costs of production. But how can quality be improved? Hammer (2001: 4) tries to find a mutual cause for those achievements. He bases his explanation on the existence of non-value-adding work. This is the work needed for supervision, controlling, and organisation due to the lack of process understanding of employees. Non-value-adding work could be reduced by process-oriented work, as em- ployees gain knowledge of whole processes. According to Hammer, a reduction of non- value-adding work leads to the benefits mentioned above. Economist Intelligence Unit and Andersen Consulting (1996: 3) support this view by stating that a process focus “increases efficiency by eliminating unnecessary activities”.

Zairi (1997: 72) provides a number of qualitative examples for achieved results due to business process improvement, such as “60 - 90 per cent improved quality”, or “30 - 70 per cent reduction in inventory”. Although these figures derive from selected cases, they provide a guideline for what is possible to achieve.

Qualitative internal benefits

Qualitative internal benefits affect the organisational and cultural aspects. Here they are called qualitative, because reliable and valid measures can hardly be defined. A main bene- fit of BPM is seen to be the organisational and cultural change. Pritchard (1999: 12) sup- ports these findings and stresses the fact of enhanced interaction between functions. De- Toro and McCabe (1997: 55) identify that BPM can help to avoid “turf mentality” due to an increased understanding of processes and of cross-functional activities. Zairi (1997: 68) found evidence for improved teamwork, whilst Gulledge and Sommer (2002: 367/368) discovered that restructuring can increase effectiveness and efficiency, and that BPM can build a basis for creativity and innovation resulting in increased organisational perform- ance. McDaniel (2001: 32) underlines this view, presenting increased employee efficiency as a result of BPM and process automation.

Increased customer satisfaction

In matters of customer related benefits, Hammer (2001: 4) sees an increased customer satisfaction as one possible result of process orientation. McDaniel (2001: 32) names customer loyalty as another factor that is to some extent correlated with customer satisfaction. Superior relationship between organisation and customers is another positive result of BPM implementation (Pritchard & Armistead, 1999: 12).

Impact on the competitive situation

Increased competitive advantage is seen as a BPM benefit as well. Surprisingly, it is not mentioned as frequently as other benefits. Gulledge and Sommer (2002: 365) assume that competitive advantage is implied by a reduction of cycle-time. McDaniel (2001: 32) agrees, mentioning the possibility for gaining greater market share and competitive advan- tage as a result of cost reductions. Another impact on the competitive situation is identified as “greater barriers for entry” as a result of a process focus (Economist Intelligence Unit & Andersen Consulting, 1996).

The drivers and benefits can therefore be classified by four criteria. They can be internally or externally focused and be quantitative or qualitative. Table 2-1 presents an overview of BPM drivers and benefits, divided as suggested above. The table does not represent a complete list, but is a summary of identified benefits in the literature strongly related to BPM. It is interesting to see that, for instance, increased revenue is not explicitly mentioned as a benefit, and therefore not listed in this table. Nevertheless, increased revenue might be correlated with decreased costs, increased efficiency etc.

This table reveals that BPM drivers are more likely to be externally than internally oriented. Vice versa, the listing illustrates that more benefits are focused internally than externally. Another insight is that internal variables are more likely to be quantitatively measurable than external variables. It can also be identified that all the listed internal qualitative variables refer to organisational culture.

illustration not visible in this excerpt

Table 2-1: BPM Drivers and Benefits

These presented benefits are to some extent generic, and some of them are based on selected cases. A BPM implementation might not bring all of the listed benefits or some maybe only to a certain extent. Furthermore, no guidelines or recommendations are provided for how to achieve these benefits.

2.1.5 Business Process Management Implementation Approaches

A generic BPMM model needs to take into account how organisations generally approach BPM. If there is a best practice, organisations can be measured in comparison to it. The maturity of an organisation’s BPM approach is reflected in its structured approach to implementation.

A common, or even a best-practice, approach to BPM is not provided in the literature. On the contrary, proprietary solutions or recommendations are presented. Armistead (1996: 49/50), Elzinga et al. (1995: 119-124), Gulledge and Sommer (2002: 364) and Harrington (in (Zairi, 1997: 71)) provide approaches with a focus on process management (how to manage processes) and process improvement. Their method is based on a number of phases that are similar to the process lifecycle as presented by Rosemann (2001). Lee and Dale (1998: 217) stress the importance of empowerment as a part of BPM. In their opinion, employees become more responsible for their key process due to assigned new tasks based on a four-step process improvement approach.

Whilst the above presented authors follow a detailed process improvement approach, Zairi (1997) aims to find a broader explanation of BPM. He states that “BPM is concerned with the main aspects of business operations where there is high leverage and a big proportion of added value” (Zairi, 1997: 65). Besides ten “governing rules” for BPM, he identifies a guideline for sustainability. Zairi states that BPM does not only rely on good systems and structural change, but, even more important, on cultural change. This holistic approach requires the alignment to corporate objectives and an employees’ customer focus and involves, additionally to a horizontal focus, strategy, operations, techniques and people. Therefore, his rules provide a guideline for the development of a BPM culture. Besides the need for measurement, improvement, benchmarking and customer focus, Zairi stresses the importance of a systematic methodology (Zairi, 1997: 79).

Pritchard and Armistead (1999: 19-21) provide ten “lessons learned” as the outcome of a case study. Therefore, their BPM principles are not purely theoretical, but provide a practical guideline of factors important for BPM implementations:

- “Link BPM into strategic programmes;
- Ensure clarity of BPM approach;
- Address style and context within BPM;
-Allow time to acquire a process perspective;
-Achieve focus;
- Integrate top level BPM strategy with team level activity;
- Acquire new process competencies;
- Consider the impact of BPM strategy at team and task level;
-Train around business processes; and
- Build a knowledge base around processes”

Pritchard and Armistead’s (1999: 19-21) factors involve mainly cultural change and also strategy aspects and do not explicitly mention the process lifecycle phases. In summary, they look at a BPM implementation approach not from a technical, but from an organisa- tional point of view.

The approaches have shown that the focus is mainly on processes and process improve- ment activities. Other authors see BPM as a company-encompassing approach affecting the whole organisation and its culture as well. According to the BPM definition in this thesis, a combination of the approaches would better refer to an overall, holistic BPM implementa- tion than any single one. Therefore, a BPM approach needs to include on the one hand the steps of the process lifecycle as a structured approach to the implementation of BPM. However, on the other hand a BPM approach needs to have a sound focus on developing a BPM Culture, as supported by Zairi (1997) and Pritchard and Armistead (1999). This clas- sification into two groups, the act of implementation and the involved and influencing as- pects, will later be reflected within the design of the BPMM model.

2.1.6 Critical Factors for Success or Failure of Business Process Management

A number of factors have been found which either are crucial for the success of BPM or can complicate or even impede its implementation. A BPM implementation focuses not only on processes but also on other BPM principles and practices as identified in section 2.1.5. Within this context, a BPM implementation is successful if pre-defined goals are achieved; if quantifiable measures such as processing time, costs, or quality are improved; or even if the organisation is satisfied with the outcomes and the results. A BPM implementation is also successful if the achieved results have a long-lasting effect within the organisation, which hardly can be quantified.

Among others, the commonly mentioned critical success factors are:

- Organisational and cultural change, which includes empowerment, new accountabili- ties, training, and communication to employees (Armistead & Machin, 1997: 895; Bushell, 2003; Elzinga et al., 1995: 123; Harrington, 1995 in Lee & Dale, 1998: 223/224; Pritchard & Armistead, 1999: 14/19-21; Rainer & Hall, 2002: 72; Zairi & Sinclair, 1995: 11; Zairi, 1997: 68; Zucchi & Edwards, 1999: 328-330)
- Aligning the BPM approach with corporate goals and strategy (Pritchard & Armistead, 1999: 19-21; Puah K.Y. & Tang K.H., 2000: 113; Rainer & Hall, 2002: 72; Zairi, 1997: 67/72)
- Focus on customer and their requirements (Armistead & Machin, 1997: 892/893; Lee & Dale, 1998: 219; Zairi, 1997: 67)
- Process measurement and improvement (Armistead & Machin, 1997: 892/893; Jarrar et al., 2000: 125; Lee & Dale, 1998: 219; Puah K.Y. & Tang K.H., 2000: 113; Zairi & Sinclair, 1995: 11; Zairi, 1997: 65)
- Process discipline, which refers to an structured approach to BPM (Bushell, 2003; Elzinga et al., 1995: 122; Lee & Dale, 1998: 219/223/224; Yingling, 1997 in Lee & Dale, 1998: 223/224; Zairi, 1997: 70/71)
- Top management commitment (Bushell, 2003; Harrington, 1995 in Zairi, 1997: 72; Jarrar et al., 2000: 123; Rainer & Hall, 2002: 72)
- Benchmarking (Elzinga et al., 1995: 124; Lee & Dale, 1998: 219; Zairi & Sinclair, 1995: 11)
- Information technology, infrastructure and realignment (Gulledge & Sommer, 2002: 373; Jarrar et al., 2000: 124)

It is interesting to see that the term “methodology” is not mentioned explicitly as a critical success factor. Nevertheless, some authors identify the importance to apply a structured approach, to have process discipline, and to fully understand and document processes: all of which could be supported by a sound methodology. The structured approaches to BPM presented in section 2.1.5 substantiate the need for a methodology. This is also explicitly mentioned by Zairi (1997: 79).

Critical success factors are independent aspects that need to be kept in mind and included into the implementation approach. Barriers to a successful implementation are existing organisational obstacles, which can complicate or impede the introduction of a BPM approach and need to be overcome.

Commonly mentioned barriers include:

- Resistance to change due to, for instance, individual threats, turf mentality (Armistead & Machin, 1997: 892; Jarrar et al., 2000: 124; Lee & Dale, 1998: 217/218; Rainer & Hall, 2002: 72)
-Lack of understanding of BPM principles (Pritchard & Armistead, 1999: 16)
- Lack of consistency of the organisation-wide BPM approach (Pritchard & Armistead, 1999: 16)
-Long term character of developing a process oriented organisation (Pritchard & Ar- mistead, 1999: 20)

The barriers presented above mainly focus on organisational and cultural problems. This emphasises cultural change as a critical success factor for BPM. A suitable cultural change programme, for instance including a company wide communication policy and staff training, can decrease the influence of the above-mentioned obstacles.

2.1.7 Conclusions

The review about BPM and related topics aimed to provide a deeper understanding of BPM. To begin with, terms and definitions of BP and BPM were presented. Evidently, BPM is not a clearly defined topic in literature. However, an appropriate definition of BPM, covering the understanding of this principle throughout this thesis, has been pro- vided. Then, common BPM approaches, drivers, benefits, critical success factors, and bar- riers were presented. These have to be considered when establishing a BPMM model, as can be seen in section 3.3.

Recapitulating, a BPM definition can be provided. The definition is based on the presented BPM definition and enhanced by identified BPM approaches, critical success factors, and barriers:

BPM is a holistic management practice that starts with top management understanding and the education of managers. The implementation of BPM practices follows a structured ap- proach, similar to the process lifecycle or a process improvement project. The first step is the alignment with the corporate strategy, and especially with strategic and operational goals, and with customer requirements, best practices etc. Following steps of a BPM im- plementation include the design and implementation of a process architecture. Processes and BPM practices are measured and controlled and can then be improved. The BPM im- plementation is directly influenced by the organisational culture, which means that the cul- ture needs to develop into a BPM culture. This can be achieved by a structured approach to change management and also people management and development including the estab- lishment of process-related responsibilities and accountabilities. The use of both method- ologies and IT/IS, as supporting and enabling factors, is crucial for a BPM implementation. Performance measurement as an overall controlling method enables to quantify achieved improvements.

2.2 Maturity

Maturity is defined as “the state of being complete, perfect, or ready” and the “fullness or perfection of growth or development” (Oxford University Press, 2004). The comprehen- siveness of the term maturity can also be illustrated by its synonyms. They are, among oth- ers, capability, completion, development, experience, perfection, or sophistication (Lexico Publishing Group, 2004).

Maturity can be characterised as an umbrella term describing sophistication in a certain context. In a general use of language, maturity is often associated with terms such as effectiveness, efficiency, quality, capability, or success. Maturity is also used in special terms, such as investment maturity, product maturity, and personal maturity. The CMM defines the maturity for processes (Paulk, Curtis, Chrissis, & Weber, 1993).

Maturity can be correlated with its synonyms. A first possibility is that maturity correlates with effectiveness, efficiency, and quality. It can be suggested that an increased maturity leads to an increase in these three aspects. A second option is that an increased maturity corresponds to increased commitment or capability. Finally, maturity might be correlated with investment or time. It can be questioned, if maturity can be increased over time or with an increased investment. However, Maull et al. (2003: 604/605) encountered difficulties in determining a correlation between hard measures, such as “elapsed time” or “size of budget”, and maturity. A last assumption is that maturity corresponds to success. This means that increased maturity would lead to increased success.

Within the context of BPM, maturity is reflected in a number of aspects. Pritchard and Armistead (1999: 20/21) stress the importance of acquiring “process competencies”, “training around business processes”, and “building a knowledge base around processes”. The EFQM (2004c: 6) focus on “people development and involvement” and “continuous learning, innovation and improvement”. This leads to the assumption, that an organisation maturing in BPM increases the BPM expertise of its personnel and that involved people gain comprehensive understanding and change from being unaware and reactive to being committed and proactive. Extending the concept of process maturity introduced by the CMM (Paulk et al., 1993) to BPM maturity, a more mature organisation is characterised by coordinated BPM activities instead of uncoordinated isolated projects. Additionally, the CMM substantiates that BPM maturity is associated with activities being conducted con- tinuously instead in an ad-hoc manner. Paulk et al. also describe that an increased maturity changes the focus from key individuals to the whole organisation, which can be adapted to BPM. McDaniel (2001) mainly focuses on the importance of automation. This raises the possibility that BPM maturity is linked with a change from manual work to meaningful automation. The EFQM (2004c: 5/7) identifies the importance of customer focus and the development of partnerships as factors crucial for business excellence. This can be adapted to the context of BPM, and means that an increasing maturity might be linked to the change from an internal to an external focus thereby extending the organisation. At an op- erational level, Paulk et al (1993) state that an increased maturity leads to consistent and repeatable processes. This increases the ability to forecast the performance of projects. Projects have cost, schedule, functionality, and quality targets. A higher maturity results in:

1. a decrease of the difference between targeted and actual results,
2. a decrease of the variability of actual results around targeted results, and
3. an improvement of targeted results and performance (Paulk et al., 1993: 10-12).

The three effects of increasing maturity on schedule and cost targets are illustrated in Figure 2-3. The graph shows the target of project costs and schedule and the probability of the actual results.

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Figure 2-3: Process Capability, adapted from (Paulk et al., 1993: 12)

The CMM concept can be transferred to BPM maturity. This enables the assumption that BPM maturity is related to a shift from low resourcing to efficient resourcing and to a de- crease of investment. Section 2.1.4 identified BPM-related benefits such as increased ef- fectiveness, efficiency, or quality. An assumption is that increased BPM maturity also in- creases the probability of achieving these benefits. This is substantiated by Paulk et al. (1993: 10-12) who indicate that a higher maturity is directly linked to higher and more predictable results. An increased maturity can lead to a decreased gap between the as-is and the optimal to-be situation. This means that objectives and a current situation are closer together. 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 literature provides a number of potentially achievable benefits, but does not indicate correlation between achievable benefits and a certain BPM maturity stage. A topic of further research is to identify correlations between BPM maturity and related benefits or investments. Figure 2-4 gives an example of possible correlations that could be substantiated by empirical research. The first graph illustrates that resource efficiency might increase with increasing BPM maturity. The second graph exemplifies that BPM maturity might increase with increased investment. However, there might be an optimum, which means that further investment does not necessarily lead to higher BPM maturity levels. The third graph shows that BPM maturity and time might be neither positive nor negative correlated. The forth graph illustrates that a higher BPM ma- turity levels can lead to an increased success.

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Figure 2-4: Possible Correlation between BPM Maturity and Benefits/Investments

2.3 Maturity Models and Approaches

The section aims to answer the questions:

- What kind of maturity models exist?
-What do they have in common, what are the differences?
-Can they be applied to BPM?
-What is their contribution to the development of a BPMM model?

Two criteria were applied to select appropriate models. The first criterion covers the rele- vance for BPM and the potential contribution to the design of a BPMM model. This crite- rion is supported by models with a direct relation to BPM, a process orientation and / or an organisation-wide assessment scope. The second criterion requests a certain concept of maturity. This is reflected by models with a design of maturity stages or a scoring system.

Another aspect of the selection being relevant but not excluding was the model’s recogni- tion and acceptance. However, a number of models have been chosen that are not widely recognised but provide a high contribution to the design of the proposed BPMM model.

In total, eleven models are discussed. They are divided into two groups: (1) maturity mod- els and (2) maturity approaches. The first group consists of five national or international models that can be classified as de-facto standard due to their wide distribution and high recognition. The second group consists of six individual approaches of academics to maturity measurement.

2.3.1 Maturity Models

The chosen models are five widely recognised models for measuring maturity or excellence. The presented models in the first group are:

1. Capability Maturity Model for Software (SW-CMM)
2. Capability Maturity Model Integration (CMMI)
3. European Foundation for Quality Management (EFQM) Excellence Model
4. Malcolm Baldridge National Quality award (MBNQA)
5. Deming prize

The CMM and the CMMI can be classified as continuous process improvement approaches, whilst the quality awards, such as EFQM or the MBNQA, have a broader focus on business excellence and assessing whole enterprises. The Deming prize⁴ centres on the implementation of TQM principles throughout an organisation.

The CMM and CMMI have been selected due to their process focus. The EFQM, MBNQA, and the Deming prize have been chosen due to their process orientation and the organisation-wide assessment. Though the Deming prize is focused on TQM principles, its contribution is relevant for the development of a BPMM model. This opinion is supported by Llewellyn et al. (2000: 225), who see BPM as emerging out of TQM and BPR.

National Quality Awards (NQA) are not further discussed in this work. A number of NQA are based on the ideas of the EFQM or the MBNQA. Others are proprietary quality award systems. Nevertheless, both types of quality award models have much in common with the three presented awards and do not provide further contribution. A detailed comparison of existing quality awards is out of scope of this thesis. An introductory comparison of NQA can be found in (Puay, Tan, Xie, & Goh, 1998; Tan, 2002; Tan, Wong, Mehta, & Khoo, 2003). An in-depth comparison of the major quality awards can be found in (Bohoris, 1995; Ghobadian & Woo, 1996; Khoo & Tan, 2003; Tummala & Tang, 1996)

2.3.1.1 Capability Maturity Model for Software

Introduction

The Capability Maturity Model for Software (SW-CMM) has been developed by the Soft- ware Engineering Institute (SEI)⁵ at the Carnegie Mellon University⁶. It is designed as a tool for assessing the maturity of software processes and for supporting organisations in their process improvement efforts (Paulk et al., 1993: 2). Mutafelija and Stromberg (2003: 4/38) emphasize that it can be rated as a de facto standard. The SW-CMM (final released version CMM v1.1 in 1993) has been incorporated in the CMMI, which is discussed in section 2.3.1.2 (SEI, 2004a).

The SW-CMM was initially focused on software processes and software development or- ganisations. However, Harmon (2003: 7) extends the proposed application of this to BP and to any organisation. In Harmon’s opinion, the model should be used to apply a “road map” for process improvement instead of being used as an exact guideline to be followed without reasonable adaptation. He summarises that the model describes an organisations evolution from an “immature to a mature stage in their understanding of business proc- esses”. In his opinion, the SW-CMM model was influenced by both, the BPR wave in the middle 1990s and TQM approaches in the same period (Harmon, 2003: 7-8).

The model

The SW-CMM is based on the general idea of immature and mature software organisa- tions. An immature, reactionary organisation is characterised by improvised, ad hoc proc- esses. Objectives, such as schedule, budget, or quality, are rarely met, which calls for con- stant crisis solving. In contrary, a mature organisation is seen to work more systematically and to have controlled, specified, updated, and communicated processes, where work con- forms to planned processes, supported by defined roles and responsibilities. The results are therefore predictable and generally achieved (Paulk et al., 1993: 3).

The model characterises five maturity levels as shown in Figure 2-5. A maturity level is defined as “a well-defined evolutionary plateau toward achieving a mature software process”. Improved maturity results “in an increase in the process capability of the organization” (Paulk et al., 1993: 5).

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Figure 2-5: The Five Levels of Software Process Maturity, adapted from (Paulk et al., 1993: 6)

Every maturity level defines special requirements, and is itself a requirement for the next level. The latter means that each maturity level builds upon the previous level with each level having to be completed before proceeding. Paulk et al. (1993: 13) recommend not to skip levels because of a “counterproductive” result.

The special requirements of each level are called key process areas, and corresponding goals are defined as well. The key process areas describe a number of activities to be undertaken in order to attain the maturity level. All goals have to be achieved to satisfy the key process area for a certain maturity level (Paulk et al., 1993: 16/17). Paulk et al. (1993) provide a detailed insight into the maturity levels and their internal structure.

Compared to a BPMM model, the CMM is mainly focused on improving the process of software development. To a certain extent, organisational aspects are mentioned, but not assessed in detail. Within the CMM, the cultural aspects are not subject of evaluation, which is a crucial part for BPM.

2.3.1.2 Capability Maturity Model Integration

Introduction

The Capability Maturity Model Integration (CMMI)⁷ is one of three models the SEI is currently working on⁸. The CMMI was introduced in August 2000 to combine and maximise the advantages of former CMM approaches, including the SW-CMM. Main goals were, among others, to reduce complexity, to decrease implementation costs, facilitate the understanding, reduce duplication, and set up common components (Ahern, Clouse, & Turner, 2004: 41-48; Mutafelija & Stromberg, 2003: 78/79).

The model

The CMMI introduces two different representations: staged and continuous. The staged representation, similar to the CMM approach, measures an organisation’s overall process maturity. It consists of five maturity levels as illustrated in section 2.3.1.1, which correspond to the SW-CMM definition.

The continuous representation evaluates, in contrast, improvement activities in the individ- ual process areas. It is structured by six capability levels. A capability level is “a well- defined evolutionary plateau describing the capability of a process area” (Mutafelija & Stromberg, 2003: 81). Compared to the definition of a maturity level, which uses the word- ing “becoming a mature organisation”, a capability level is explicitly related to a single process area.

The CMMI model is based on 25 process areas that cover the most crucial aspects of process improvement. They are assigned to the maturity and capability levels.

The important difference between the staged and the continuous representation is that the first one offers, and also prescribes, the order in which improvement should be carried out, because each maturity stage is a prerequisite for the next higher maturity level. Similar to the CMM, all process areas of one maturity level have to be satisfied to achieve this matur- ity level.

The continuous representation focuses on key process areas and their individual capability. Less guidance is provided regarding the order of implementation. Furthermore, the fact that an enterprise can vary in its process area capabilities is taken into account as well (Ahern et al., 2004: 71-76).

The advantage of the continuous representation is, stated by Ahern et al. (2004: 71-86), that a map of strengths and weaknesses can be derived, which serves to define a baseline, to set improvement goals, and to compare the capability report between different points of time. In addition, a mapping is provided to switch from the continuous to the staged view. The mapping enables enterprises to apply the continuous model, but present their maturity in a staged manner.

Additionally, the CMMI defines a couple of extensions. The CMMI-SE/SW is the standard version of the CMMI and is focused on both systems engineering (SE) and software engineering (SW). The Extension for “Integrated Product and Process Development (IPPD)” assesses the organisational background and the collaboration of involved teams with a focus on satisfying customer needs. The second extension “Supplier Sourcing (SS)” includes supplier management to the assessment. With every extension, the number of assessment areas increases (Ahern et al., 2004: 49/153-159).

Compared to a BPMM model, the CMMI is mainly focused on improving the process of software development. Compared to the CMM, more organisational aspects and stake- holders are integrated and assessed. Still, cultural factors are not in focus of the CMMI.

2.3.1.3 European Foundation for Quality Management Excellence Model

Introduction

In 1991, the European Foundation for Quality Management (EFQM)⁹ established the EFQM Excellence Model as a framework for determining an organisation’s business ex- cellence (BE)¹⁰. It provides a self-assessment method to measure the BE status. The Euro- pean Quality Award (EQA) can be achieved with a certain amount of points (EFQM, 2004a).

The Model

The EFQM Excellence Model is based on eight Fundamental Concepts of Excellence, which have been identified as important for the achievement of excellence. The EFQM refers to the model as an “application of the Fundamental Concepts reflected in a struc- tured management system” (EFQM, 2004b). Currently, eight concepts are defined. They substantiate the model and build the thematic framework for the model itself. Those con- cepts, and a definition given by the EFQM, are listed in Table 2-2 (EFQM, 2004b).

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Table 2-2: Fundamental Concepts, adapted from (EFQM, 2004b)

Furthermore, the EFQM provides a rough model for assessing the maturity of the imple- mentation status of each concept. Three maturity levels are defined: start up, on the way, and mature.

[...]

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¹ TQM can be characterised as an organisation-wide implementation of continuous improvement initia- tives that are focused on process improvement (Macdonald, 1995). Oakland (2000: 18) defines TQM as “an approach to improving competitiveness, effectiveness, and flexibility of the whole organisation”.

² Macdonald (1995: 21) describes BPR as covering three principles: process improvement, process redes- ign, and process re-engineering. TQM initiatives cover the first approach, process improvement. Ham- mer and Champy (1994: 32) define reengineering as “the fundamental rethinking and radical design of business processes to achieve dramatic improvements in critical, contemporary measures of perform- ance, such as cost, quality, service, and speed”.

³ Whilst TQM and BPM are not the same approach, both principles have mutual roots. This is based on the statement of Llewellyn and Armistead (2000: 225) who argue that BPM has emerged out of TQM and BPR.

2004 Tapio Hüffner The BPM Maturity Model

⁴ Throughout this work the name Deming prize is written in its original spelling, therefore prize is spelled with a zed.

⁵ For more information about the Software Engineering Institute (SEI) please refer to (SEI, 2004b). SEISM is a service mark of the Carnegie Mellon University Software Engineering Institute (SEI) (SEI, 2004b). Throughout this thesis the SM mark is not used due to improved readability.

⁶ Carnegie Mellon®, Capability Maturity Model® and CMM® are registered marks of the Carnegie Mellon University Software Engineering Institute (SEI) (SEI, 2004b). Throughout this thesis the ® mark is not used due to improved readability.

⁷ Capability Maturity Model® Integration and CMMI® are registered marks of the Carnegie Mellon Uni- versity Software Engineering Institute (SEI) (SEI, 2004b). Throughout this thesis the ® mark is not used due to improved readability.

2004 Tapio Hüffner The BPM Maturity Model

⁸ The two other CMM are the P-CMM (People Capability Maturity Model) and the SA-CMM (Software Acquisition Capability Maturity Model).

⁹ For more information about the European Foundation for Quality Management (EFQM) please refer to (EFQM).

¹⁰ Kanji (2002: 4/5) sees business or organisational excellence as based on TQM sharing the same values. He defines TQM as “a management philosophy that fosters an organizational culture committed to cus- tomer satisfaction through continuous improvement”.