Strategic Alignment

Volume 2: Strategic Alignment

  1. Strategic Alignment Maturity
    by Jerry Luftman
  2. Delivering Business Strategy Through Process Management
    by Roger Burlton
  3. Management of Process Excellence
    by Mathias Kirchmer
  4. Value-Orientation in Business Process Management
    by Jan vom Brocke, Christian Sonnenberg
  5. Process Capital as Strategic Success Factor
    by Markus Brenner, André Coners, Benjamin Matthies
  6. Business Process Frameworks
    by Constantin Houy, Peter Fettke, Peter Loos
  7. A Framework for Classifying and Modeling Organizational Behaviour
    by Chris Aitken, Christine Stephenson and Ryan Brinkworth
  8. A Taxonomy of Business Process Management Approaches
    by Tobias Bucher, David Raber and Robert Winter
  9. Process Performance Management
    by Diana Heckl, Michael Leyer, and Jürgen Moormann
  10. Business Process Analytics
    by Michael zur Muehlen and Robert Shapiro
  11. Managing Regulatory Compliance in Business Processes
    by Shazia Sadiq and Guido Governatori
  12. Prioritizing Process Improvement: An Example from the Australian Financial Services Sector
    by Wasana Bandara, Alain Guillemain and Paul Coogans

BPM must be aligned with organizational strategy in order to ensure BPM’s relevance and contribution to the corporate long-term priorities. Strategic alignment is not necessarily a unidirectional undertaking in the sense that a BPM strategy must be oriented toward the corporate strategy; successful BPM can also shape corporate strategy when innovative process designs or improved process performance provide an opportunity for BPM to be a competitive differentiator. In addition, BPM has proven to be a powerful means by which to innovate business models in a great number of cases, such as through the creative appropriation of IT.

While the significance of strategic alignment is widely acknowledged, its operationalization often remains a challenge in BPM initiatives, and it remains a largely open question in the BPM community. Since there is often a gap between the overall strategy and the more operational issues of process operations, how we can demonstrate the strategic relevance of process-related initiatives or ensure strategy-supportive process design is a central issue.

In the opening chapter of this section Jerry Luftman introduces the field of strategic alignment by presenting the concept of strategic alignment maturity. Based on a thorough understanding of the role of process in strategic alignment, Luftman distinguishes five levels of strategic alignment maturity and six alignment maturity criteria and discusses measures by which to overcome gaps in alignment. Subsequently, Luftman presents an approach to measuring the strategic alignment maturity of an organization and reports on the results from 362 global companies across four continents that have gone through the assessment. After deriving a six-step-process on how to increase strategic alignment maturity, Luftman closes the chapter with a report on research that validates the contribution of strategic align- ment maturity (SAM) to company performance based on the data gathered from the 362 organizations.

In the second chapter in this section, Roger Burlton focuses on the challenges of strategic alignment in BPM, referring to the problem of being “Lost in Translation.” Burlton begins by unfolding the nature of this problem and provides specific methodological support for strategically aligning BPM. The approach also provides a framework for the subsequent chapters, which examine the various strategic options BPM offers. The study from Mathias Kirchmer focuses on innovation and agility as cornerstones of many corporate strategies and discusses the role of process automation as a means by which to leverage these objectives.

Key to strategic alignment is the value assessment of Business Process Management initiatives. Jan vom Brocke and Christian Sonnenberg report on this stream of research that has emerged over the past years. After a thorough discussion of the concept of value, the authors present several methods as examples of how to assess the strategic value contribution of process-related work, including the return-on-process transformation as an effective performance measure. Along these lines, Markus Brenner, André Coners, and Benjamin Matthies introduce the concept of process capital management and illustrate the approach by means of a real-life example from Lufthansa.

In order to implement the strategic objectives, the “right” processes have to be dealt with in the “right” way. Frameworks are needed for this purpose to facilitate the selection of process and action. In the sixth chapter Constantin Houy, Peter Fettke, and Peter Loos introduce business process frameworks. The article analyzes and systemizes the various facets of process frameworks, describes and explains the classes of business process frameworks, and presents a number of exemplary process frameworks. Then business process reference models (as one prominent class of process frameworks) are presented in more detail. The seventh chapter by Chris Aitken, Christine Stephenson, and Ryan Brinkworth discusses how organizations can build on business frameworks in order to classify company-specific processes. Their results are summarized in a comprehensive framework that may serve as a starting point for developing an individual corporate process schema. Case studies from the health sector and the investment management industry, in which the framework is used to align descriptions of organizational behavior to produce useful integrated behavioral reference models and unified process model sets, are described. Their contribution shows that process frameworks must be individualized for an organization’s specific context (e.g., products, customers, competition). Drawing from empirical studies, Tobias Bucher, David Raber, and Robert Winter present a taxonomy of BPM approaches to support choosing the right BPM approach for the specific contextual situation of an organization. The chapter concludes with a practical application of the approach.

The performance assessment of processes plays an important role in managing existing processes. Drawing from management accounting and performance measurement in particular, Diana Heckl, Michael Leyer, and Jürgen Moormann provide an overview of contemporary approaches to process performance measurement and apply process mining, as an example, to real case data to demonstrate the approaches. Given the attention big (process) data and related analytics have recently attracted, Michael zur Mu ̈hlen, and Robert Shapiro’s chapter introduces business process analytics. The authors show how data generated by PAIS can be used for the cost-effective, real-time assessment of processes.

The strategic focus on corporate performance is increasingly constrained by conformance requirements that make process design a balancing act between performance and conformance. The contribution by Shazia Sadiq and Guido Governatori addresses the management of business processes regulatory compliance. The authors describe a methodology for aligning business and control objectives, homing in on the role of BPM as a driver in achieving regulatory compliance.

Considering the various strategic implications of BPM initiatives, management must make decisions about the alternative BPM initiatives to be implemented by ranking initiatives according to their strategic contribution. The chapter by Wasana Bandara, Alain Guillemain, and Paul Coogans provides an overview of methods for prioritizing process-improvement initiatives and reports on related practical experiences in the financial services sector, rounding off the section on strategic alignment in BPM.