arts bpm

ARTS

Retail Business Process Model

Roundtable Panel Discussion

Complexity made Simple - ARTSARTS Retail BPM Roundtable

Moderators

Thomas Sterling

Dennis Blankenship

September 13, 2010

Linking Business Strategy to Business Process Modeling

MissionVisionValues

Customers

And Demands

Go to Market

Strategy

Capacity Required

Complexity made Simple - ARTS

Capacity Required

To Execute Strategy

Business Architecture

To Organize & Provide

Structures for Capacity

Business Process

Models (part of

Business Architecture

Retailer Mission,Vision and Values

1C

usto

mer

s

Needs & Wants

Who we sell to andWhat needs we meet

2N

eeds

& W

ants

Retailer Strategy

3

Ret

aile

r Str

ateg

y4

Retailer Capacity

People Principles

MeasuresTechnology &

Systems

Process

The entities that a retailer must build or buyTo provide the material , labor and knowledgeResources required to execute their strategy.

Retailer Capacity

Opportunities Threats

Strengths Weaknesses

PLAN(Management’s

Strategy which is a working

Hypothesis)

ACT(Incorporate

learning and adapt to improve

performance)

Complexity made Simple - ARTS

Our strategy forProfitably serving ourcustomers

Ret

aile

r Str

ateg

y

5

RetailerCpacityto Execute itsStrategy

Business Architecutre

What How Who Where When Why

Scope context

Enterprise Model

System Model

TechnicalModel

Detailed Represent.

Executable

ARTS DM

ARTS XML

ARTS

Process

Retail Business Architecture

Enterprise ITArchitecture

6

Zachman Framework

DO(Executing the

plan)

CHECK(Measure actual results against

hypothesis)

What?

data

How?

function

Where?

locations

Who?

people

When?

time

Why?

motivation

Scope

contextual

Enterprise

Model

Conceptual

List of things

important to

the business

L ist of

processes the

business

perf orms

L ist of locations where the

b usine ss

ope rates

L ist of org aniza tio ns

im portan t to the

bu sin ess

L ist of even ts a nd cycles

imp ortant to the

busine ss

List of

balanc ed

scorecard

objectives

Semantic

Model

Business

Process

Model

Business

Logistics

model

Business

Process

Flow M odel

Corporate

Calendar and

events

Business Plan

Business

ARTS Data

Model

ARTS

XML Standards

ARTS

Process

Reference

Model

Retailer

Specific

1

2

3

4

Zachman Framework Context for ARTS Retail Business Process Model

Figure 1:


Conceptual

System

Model

Logical

Technology

Model

Physical

Detailed

Representation

Out of context

Functioning

System

Executable Objects

Logic al

Data

Model

Application

Architecture

Distributed

System

A rchitecture

Human

Interface

A rc hitec ture

Pro ce ssDe pen den cy and syn ch ronization

model

Business

Rules

Physical

Data Model

Sy stem

Design

Techn ical

In frastru ctu re

Architecture

Presentation

A rc hitec ture

Pro ce ss

cho reog rap hy &

o rchestra tio n

ar ch itectu re

Business rules

design

Database

Definition &

XML doc

code

Program

Code

N etwo rk

co nfigu ration

a nd scripts

Sec urity &

ac cess c ontrol

code

Process

c ontrol logic

c ode

Business rule

code &

engine

DatabaseExecutable

CodeNetwork Organization

Operations

Sc hedule &

Ev ents

Strateg y

Execu tio n w ith

fe edb ackTechnical

ARTS Retail Business Process ModelWill Address the Following Questions

• What information the process consumes, creates and modifies;

• How a process is executed (execution steps, decision points, primary and alternative flows, resources consumed, pre/post conditions, inputs, outputs, monitoring and control rules);

• Where a process is executed;


• Who is involved in the process as a performer, owner, supporter, as well as internal or external actor etc.;

• When a process is performed (i.e. event driven, periodic, exception based, etc.); and

• Why the process is performed (why is this process important to the retailer’s strategy and how does it contribute to the successful execution of that strategy).

Planned Work Products

Business Area Model – A high-level list of the major types of organizational

units within a retail enterprise;

Functional Decomposition Diagrams – Provide a top down taxonomy of retail

business functions included in the ARTS Process Reference Model. Functions’

names are always expressed in the form of a noun phrase. Examples include

customer relationship management, inventory control, store operations, web site

design, etc.

Process Decomposition Diagrams – For each function, a decomposition model


Process Decomposition Diagrams – For each function, a decomposition model

of the processes which execute a business function. Processes always exist

within the context of a business function. Processes’ names are always

expressed as an active verb phrase. Examples include: register customers,

perform physical inventory count, schedule store employees, transfer item, etc.

Processes may be decomposed into lower level processes;

Process Dependency Diagrams – Graphical descriptions of the dependency of

processes (execution sequence) within a process level. Process dependency

diagrams are only defined at the lowest level of process decomposition.


Business Process Modeling Diagrams – Detailed, graphical description of the

events, activities, decisions, primary and alternate paths that make up a business

process. Business Process Modeling Diagrams use a formal modeling language

called Business Process Modeling Notation (BPMN). The transition from

Process Dependency Diagrams to BPMD’s reflects the transition from

inventorying business processes to defining the logical steps they execute and

the business rules governing that execution. BPMDs incorporate business rules,

pre-conditions, post conditions, etc. Business Proessing Diagrams use

horizontal divisions of the diagram to designate pools and lanes. Pools may be


horizontal divisions of the diagram to designate pools and lanes. Pools may be

used to designate different actors that perform the activities that make up a

process. Lanes allow the pools to be subdivided into lower levels. Pools and

lanes enable activities to be visually aligned with organizations and individuals

that perform them. This approach has been used to define as is and to be

processes for business process reengineering. It may also be called line of site

diagram, swim-lane diagram, etc. BPMN defines the business process

architecture for a retailer and establishes the context for further development of

business services.


Association Matrices – An association matrix is a simple table that lists objects

(like data model entity types) as row headings and another set of objects (like

processes) as column headings and assigns on or more property value(s) to

cells where rows and columns intersect. Create-Read-Update-Delete matrices

are an example of an association matrix. The Zachman Framework shown in

Figure 1 is another example of an association matrix. These simple tables

provide the basis for identifying important relationships between different kinds

of modeling objects.


Retail Use Cases – Retail use cases provide a business description of how a

process works based on a defined set of preconditions and application of

business rules. Use cases provide an important tool for discovering and

defining business process activites and activity flows. They also provide useful

narrative explanations of processes and process variants. The notion of

process variants is important as a way of explaining how the core common

business processes of a retail model can be extended to handle different kinds

of retail business problems based on types of items, business strategy and

other factors that distinguish retailers from one another.


Retail Business Glossary – Common set of business terms, abbreviations,

formulas and other references useful in establishing a common retail language.

Additional narrative documents, spreadsheets, PowerPoint presentations and

other work products will be created to support the formal products.

In addition to these work products, the ARTS Retail Business Process Model will

reference other ARTS models including the ARTS Data Model, the ARTS XML


reference other ARTS models including the ARTS Data Model, the ARTS XML

Standard Schemas and the ARTS Data Warehouse Model. For example, where

appropriate, the relationships between specific ARTS Data Model entity types

and business processes will be represented in association matrices. Likewise,

the relationship between ARTS Standard XML-based messages and business

processes (including components of the processes) will be represented in

association matrices. Other ARTS work products (e.g. white papers, Request for

Proposal Templates, etc.) will be consulted and used to identify business process

topics to be addressed in the ARTS Retail Business Process Model.

BPM Levels

High Overv iew

Figure 2:


Detailed High Resolution View

BPM Levels

Enterprise – The retail business entity that serves as a “container” of business area and all lower level process-related

components.

Business Area – A major collection of functions that is reflected as a high-level organization component of the

Enterprise. In a retail enterprise customer relationship management, merchandising, store/channel operations,

inventory and distribution, finance and administration are examples of business areas. While not traditionally

considered a “retail business area”, shoppers are treated as part of the retail enteprise for process modeling purpose

Function – A collection of business processes expressed as a noun-phrase carried out within a business area. A

function defines what the enterprise does. Examples of functions include category management, marketing planning,

store operations management, labor scheduling, etc.


Process – A defined business action carried out to perform a function. A process is always expressed as an action verb

phrase. A business process may be composed of other lower level business processes or business tasks. Examples of

business processes include set up a category, update market plan forecast, define store holidy schedules, etc.

Activity – A defined business action that yields one or more specific work products and/or clearly defined outcomes.

A business process is composed of one or more tasks. An activity may consist of transformation actions, move

actions, inspect actions, decisions, waits (inaction) and inspect-transformation actions. For retailer understanding

which activities add value and which just consume resources is important to optimizing operational costs.

Service – A fined grain action executed as part of an activity. The service level used in the ARTS Process Modeling

hierarchy is the touch point between the business architecture and a more, technically oriented services architecture.

Services may be composed of lower level services.

Extending ARTS BPM to Retail Segments

Our approach to addressing this balancing act consists of the following tactics:

Process Variants Built Into Base Model

• FIFO/LIFO

• Retail Method / Average Cost Account Methods

Process Variants Built into Retail Segment Extended Models

• Product Categories – Apparel, Grocery, etc

• Promotions – EDLP, High / Low, etc


• Promotions – EDLP, High / Low, etc

Manage Business Context At Process Level

• For example a ItemRetailGet service will do the same things, take in the

same inputs, yield the same outputs, adhere to the same quality of

service rules whether it is invoked as part of a sales transaction process

or an inventory reporting process.

• This may not always be possible (i.e. there may be instances where we

need business context specific, single use services) but it is strongly

preferred as illustrated in next two slides.

Business Area – High Level

Process Model Template

Plan Do Check Act

Shopping

Merchandising

Customer RelationshipManagement Planning

• Hypothesis – what we think will happen

Doing

• Execute our plan and see what happens


Shopping

Store &ChannelOperations

Inventory &Distribution

Finance &Administration

Checking

• Measure what happened

Acting

• Learn Change our plan and/or execution to improve

performance

• Repeat the cycle

Extending ARTS BPM to Retail Segments


Draft ARTS Process Model

Business Areas:CRMMerchandisingShoppingStore/Channel OpsInventory & Dist.Finance and Admin

PLAN DO CHECK ACT


Merchandsing Plan


Customer Relationship Management

Planning


Customer Relationship Management

Doing


QUESTIONS & DISCUSSION


arts bpm

Documents

business strategy

arts process reference

process level

process important

strategy business architecture

process decomposition

decomposition model

architecture scope arts