BPM at FHNW - Fachhochschule Nordwestschweiz | Flashcards & Summaries

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What is strategy?

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“[Business strategy is] the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals".

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Process objectives and process attributes

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–Process objective
>Overall process goal and numeric target, e.g.,
»Reduce new drug-development cycle time by 50% in three years
»Double customer service satisfaction levels in two years
»Reduce involuntary employee turnover to 10% by the end of the next fiscal year
»Reduce processing costs for customer orders by 60% over three years
–Process attribute
> Principles of process operation, e.g.,
» Link order management systems worldwide, but keep them local
»Create automated sales assistant tools for product information and pricing
»Offer direct shipments from manfuacturing to customers – no warehouses
»Render invoices and payments electronically

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Strategy Implementation

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–Successful strategy implementation requires its prior operationalization.
–That is, KPIs need to be specified which determine the contribution of processes to strategy implementation, or the extent to which strategic goals are reached.
–One method of aligning processes with corporate strategy is an instrument known as the Strategic Process Alignment matrix (SPA matrix).
–The SPA matrix establishes formal, KPI-based relations between strategy and
those processes with strategic relevance.

Strategic Process Alignment Matrix

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Pros and Cons

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–Liaison role
> Formal assignment of responsibility for coordinating a process to a designated person
> Pro: relatively low cost formal mechanism because of additional assignment to an existing
role
> Con: no authority to allocate resources or compel execution of recommendations
> Use: when process governance requirements are relatively “light”

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What are the responsibilities of a process owner?

Role of a Process Owner - A process owner should:

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–Be an executive or senior manager who possesses organizational clout and can command, not just negotiate
–Typically be the senior-most manager whose areas of responsibility directly intersect most with the process
–Have a predisposition to oversee and work with the teams within the core business process and have significant equity across the functions in the business process
–Possess a broad understanding of the activities and challenges across the business process, with knowledge of upstream and downstream activities (e.g., suppliers and customers)
–Have the ability to do what is best for the overall performance of the process and its customers, rather than for just the functions or operations falling within the process.


A process owner is not necessarily a subject matter or technical expert, a functional
specialist, or an IT-focused process specialist.

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Governing BPM projects: what are the three indicators?

Process Portfolio

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3 Indicators
–Strategic Importance:
> Find out which processes have the greatest impact on the strategic goals.
> Consider profitability, uniqueness, or contribution to competitive advantages.
> Select those processes for process management that relate to strategy.
–Health:
> Determine which processes are in the deepest trouble.
> These processes may profit the most from BPM initiatives.
–Feasibility:
> Determine how susceptible process is to BPM initiatives, incidentally or continuously.
> Culture and politics may be obstacles.
> BPM should focus on those processes where it is reasonable to achieve benefits.

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What is a business process?

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= steps organizations take to generate customer value!

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Vertical Authority

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–Vertical / hierarchical authority
> Pro: effective for activities that occur entirely under the direct authority of a line manager
> Con: Not sufficient for business processes which cross intra- or interorganizational lines

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Horizontal Relations

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–Horizontal / lateral relations
> Pro: management attention and responsibilities focused on cross-functional process
priorities
> Con: not effective to manage specific activities internal to organizational departments

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Governance Structures

Three basic ways of handling cross-cutting issues

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–Hierarchy:
> Direction or control exerted by superiors in a managerial hierarchy
–Lateral relations:
> Coordination across boundaries within or across organizations
–New organizational units:
> Creation of new activity units with processes as a primary organizational basis

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Summary of Lean Culture

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▪ Company Culture = Sum of mindset and behaviors in an organization. Both have to be addressed in a Lean
Transformation to orient the mindset and behaviors toward continuous improvement and respect for people (always with a customer focus)
▪ The only way to deploy a culture change is via the leadership, with the leaders working as coaches for their staff
▪ A company culture can be changed with the right leadership and coaching methodologies/routines
▪ The key to develop a Lean Culture is a strong & sustainable commitment from the top management for Lean
▪ The 2 routines developed to create a culture of professional problem solvers in a company are the improvement routine and the coaching routine (developed in the next section)
▪ Lean Management principles summarize best practices from the best companies of the world

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Summary of Coaching

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In order to make a company culture evolve to a continuous improvement culture, the right routines have to be used daily.
The improvement Kata and the coaching Kata have been proved very successful in developing problem solving skills in people and sustaining a Lean Culture deployment:
▪ The Improvement Kata is a routine to continuously improve a process
▪ The Coaching Kata is a routine to coach people and teach them the Improvement Kata

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Q:

What is strategy?

A:

“[Business strategy is] the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals".

Q:

Process objectives and process attributes

A:

–Process objective
>Overall process goal and numeric target, e.g.,
»Reduce new drug-development cycle time by 50% in three years
»Double customer service satisfaction levels in two years
»Reduce involuntary employee turnover to 10% by the end of the next fiscal year
»Reduce processing costs for customer orders by 60% over three years
–Process attribute
> Principles of process operation, e.g.,
» Link order management systems worldwide, but keep them local
»Create automated sales assistant tools for product information and pricing
»Offer direct shipments from manfuacturing to customers – no warehouses
»Render invoices and payments electronically

Q:

Strategy Implementation

A:

–Successful strategy implementation requires its prior operationalization.
–That is, KPIs need to be specified which determine the contribution of processes to strategy implementation, or the extent to which strategic goals are reached.
–One method of aligning processes with corporate strategy is an instrument known as the Strategic Process Alignment matrix (SPA matrix).
–The SPA matrix establishes formal, KPI-based relations between strategy and
those processes with strategic relevance.

Strategic Process Alignment Matrix

Q:

Pros and Cons

A:

–Liaison role
> Formal assignment of responsibility for coordinating a process to a designated person
> Pro: relatively low cost formal mechanism because of additional assignment to an existing
role
> Con: no authority to allocate resources or compel execution of recommendations
> Use: when process governance requirements are relatively “light”

Q:

What are the responsibilities of a process owner?

Role of a Process Owner - A process owner should:

A:

–Be an executive or senior manager who possesses organizational clout and can command, not just negotiate
–Typically be the senior-most manager whose areas of responsibility directly intersect most with the process
–Have a predisposition to oversee and work with the teams within the core business process and have significant equity across the functions in the business process
–Possess a broad understanding of the activities and challenges across the business process, with knowledge of upstream and downstream activities (e.g., suppliers and customers)
–Have the ability to do what is best for the overall performance of the process and its customers, rather than for just the functions or operations falling within the process.


A process owner is not necessarily a subject matter or technical expert, a functional
specialist, or an IT-focused process specialist.

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Q:

Governing BPM projects: what are the three indicators?

Process Portfolio

A:

3 Indicators
–Strategic Importance:
> Find out which processes have the greatest impact on the strategic goals.
> Consider profitability, uniqueness, or contribution to competitive advantages.
> Select those processes for process management that relate to strategy.
–Health:
> Determine which processes are in the deepest trouble.
> These processes may profit the most from BPM initiatives.
–Feasibility:
> Determine how susceptible process is to BPM initiatives, incidentally or continuously.
> Culture and politics may be obstacles.
> BPM should focus on those processes where it is reasonable to achieve benefits.

Q:

What is a business process?

A:

= steps organizations take to generate customer value!

Q:

Vertical Authority

A:

–Vertical / hierarchical authority
> Pro: effective for activities that occur entirely under the direct authority of a line manager
> Con: Not sufficient for business processes which cross intra- or interorganizational lines

Q:

Horizontal Relations

A:

–Horizontal / lateral relations
> Pro: management attention and responsibilities focused on cross-functional process
priorities
> Con: not effective to manage specific activities internal to organizational departments

Q:

Governance Structures

Three basic ways of handling cross-cutting issues

A:

–Hierarchy:
> Direction or control exerted by superiors in a managerial hierarchy
–Lateral relations:
> Coordination across boundaries within or across organizations
–New organizational units:
> Creation of new activity units with processes as a primary organizational basis

Q:

Summary of Lean Culture

A:

▪ Company Culture = Sum of mindset and behaviors in an organization. Both have to be addressed in a Lean
Transformation to orient the mindset and behaviors toward continuous improvement and respect for people (always with a customer focus)
▪ The only way to deploy a culture change is via the leadership, with the leaders working as coaches for their staff
▪ A company culture can be changed with the right leadership and coaching methodologies/routines
▪ The key to develop a Lean Culture is a strong & sustainable commitment from the top management for Lean
▪ The 2 routines developed to create a culture of professional problem solvers in a company are the improvement routine and the coaching routine (developed in the next section)
▪ Lean Management principles summarize best practices from the best companies of the world

Q:

Summary of Coaching

A:

In order to make a company culture evolve to a continuous improvement culture, the right routines have to be used daily.
The improvement Kata and the coaching Kata have been proved very successful in developing problem solving skills in people and sustaining a Lean Culture deployment:
▪ The Improvement Kata is a routine to continuously improve a process
▪ The Coaching Kata is a routine to coach people and teach them the Improvement Kata

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