Business Process Management (BPM) – cont.

Process Modelling Quality

Most process analysis and design efforts require the use of models to describe what is happening during the process

Useful to have some standards and measures of quality as it relates to process modeling

Quality of model defined by its accuracy, amount of detail and completeness

Requirements of a Process Model Business environment Organisational structure Business rules Process structure

Model Validation and Simulation Useful or necessary to validate the model

through simulation

Validate the model through simulation is to compare simulated outputs to real-world results

Modelling Perspectives

Processes can be modelled from many perspectives

All perspectives are maintained in a process repository

Modelling Approaches

Bottom-up Top-down Middle-out

Capturing Information for Process Modelling Direct Observation Interviews Survey/Written Feedback Structured Workshops Web-Based Conferencing

Modelling Participants

Business strategists Business managers Financial analysts Auditors Compliance analysts Process performance analysts Requirements analysts Systems analysts Business analysts

Modelling Techniques and Tools White Boarding and Flip Charts Paper and Post-Its Drawing Tools and Reports (e.g. Visio,

PowerPoint) Electronic Modelling and Projection:

Repository-based tools allow the reuse of objects or patterns that have already been defined in previous efforts

Process Simulation

Form of models which provide valuable insight to process dynamics

Simulations require sufficient data which typically allows the process to be mathematically simulated under various scenarios, loads, etc.

Simulations can be manual or electronic using process simulation tools

Various benefits

3. Process Analysis

Process Analysis

Purpose of Process Analysis Process analysis is an essential tool to show how well the business is meeting its objectives

Due to business change the processes of an organisation can quickly become inconsistent to their original design and no longer meet the needs of the business

Analysis generates an understanding and measurement of process effectiveness and its efficiency

Information generated from analysis includes: Strategy, culture and environment of the organisation that uses the process (why the process

exists) Inputs and outputs of the process Stakeholders, both internal and external, including suppliers, customers and their needs and

expectations Inefficiencies within the current process Scalability of the process to meet customer demands Business rules that control the process and why they must exist What performance metrics should monitor the process, who is interested in those metrics and

what they mean What activities make up the process and their dependencies across departments and

business functions Improved resource utilisation Opportunities to reduce constraints and increase capacity

When to Perform Process Analysis Can be the result of continuous monitoring of

processes or can be triggered by specific events, such as: Strategic Planning Performance Issues New Technologies Startup Venture Merger/Acquisition Regulatory Requirements

Process Analysis Roles

Performed by a single individual or by a cross-functional team Analyst

Decide the depth and scope of the analysis How it is analysed Perform the analysis Provide documentation and final reports to the stakeholders and

executive leadership Facilitator

Lead process analysis teams with an unbiased view Subject Matter Experts

Individuals closest to the process with knowledge and expertise Familiar with both the business and technical infrastructure that

supports the process

Preparing the Analysis

Choose the process

Determine the scope of the depth of analysis

Choose analytical frameworks

Performing the Analysis

4. Process Design

Process Design

Process Design Principles (1)

Design around customer interactions Design around value-adding activities Minimise/ automate handoffs Work is performed where it makes the most sense Provide a single point of contact Ensure a continuous flow Reduce batch size: batching causes wait time for items at

the end of the batch Capture information once at the source and share it:

eliminate data redundancy Involve as few as possible Redesign, then automate Ensure quality at the beginning

Process Design Principles (2) Standardise processes: when there is no

standardisation there cannot be process control Use co-located or networked teams for complex

issues If complex problems occur regularly, consider co-locating

team members If co-location does not make sense, then network the team

so information can smoothly flow Consider outsourcing business processes

Compare to the costs of designing the process in-house as well as compared to the risks associated with outsourcing

Process Compliance Process Design Considerations

5. Process Performance Measurement

Process Performance Measurement

Business Process Action Hierarchy

Process Hierarchy Example

Key Process Performance Definitions All processes have a metric or measurement associated with the work or output of the process that is performed

Metrics are based on the following fundamental metric dimensions: time, cost, capacity, quality

When a process is value-added? When it is required to generate

the output required by the customer of the process

When the customer is willing to pay for the process

When it enhances customer experience

Key Performance Indicators (KPIs)

Examples of KPIs

Measurement Methods

Several common measurement methodologies used in BPM implementations Value Stream Mapping Activity Based Costing (ABC) Statistical Methods

6. Process Transformation

Process Transformation

BPM Improvement Methodologies An approach with principles, procedures and

practices that provide guidelines for designing and executing the different components within BPM

Other Methodologies Lean:

originated by Toyota Focus on reduction of process wastes

TQM (Total Quality Management) focus on process measurement and controls as a megans of

continuous improvement statistical analysis

Performance Improvement Model developed in the early 1990s framework aligns processes at three distinct three levels of

performance: organisational, process and job/ performer Redesign

although it may lead to significant changes, these changes continue to be based on the fundamental concepts of the existing process

Reengineering Mike Hammer’s 1993 book Reengineering the Corporation radical change of process

7. Process Implementation

Process Implementation

Activity Specification

Each implementation activity specification should include: Objectives, performance metrics and list of deliverables—

all related to delivering improved customer value Risks for completion and how to be minimised Accountability for completion Financial, personnel, any IT support and other resources

required Length of time for completion Any implementation task cross-functional

interdependencies

Orchestrating Change

8. Process Quality

Are these all of the same quality? Do they cost the same?

What is good quality?

Please list 3 characteristics of a good quality car.

What about these?

What is a “good quality” mobile phone? List 3 characteristics of a good quality phone.

How about the characteristics of a process to make a phone?

Definition of Quality IEEE (IEEE_Std_610.12-1990) :

the degree to which a system, component, or process meets specified requirements/ customer or user needs or expectations

Fault (according to ISO/CD 10303-226): “an abnormal condition or defect at the component,

equipment, or sub-system level which may lead to a failure” Failure:

the state or condition of not meeting a desirable or intended objective

Defect: see fault

Root Cause Analysis (RCA)

RCA is used to find the root causes of defects – what is the cause of the failure

RCA can be done using a number of methods: Barrier analysis Causal factor tree analysis Change analysis Failure mode and effects analysis Fault tree analysis 5 Whys Ishikawa diagram Pareto analysis

5 Whys: Example

Problem Statement: You are on your way home from work and your car stops in the middle of the road.

1. Why did your car stop?- Because it ran out of gas.2. Why did it run out of gas?- Because I didn't buy any gas on my way to work.3. Why didn't you buy any gas this morning?- Because I didn't have any money.4. Why didn't you have any money?- Because I lost it all last night in a poker game.5. Why did you lose your money in last night's poker game?- Because I'm not very good at "bluffing" when I don't have a good

hand.

Ishikawa Diagram: Principles Causes are grouped into categories and linked together

(primary and secondary causes) The list of categories is not definite, the figure shows the

“typical”

• Relationships are used to backtrack the cause of a particular problem.• The analysis requires more effort than 5 whys but still no statistics is necessary.

Example

Exercise

Imagine the following situation: You are a quality manager in a software development project in a new version of the Hyunday i30 car. A new version of the software for the ABS (Anti-Block System) brakes has been delivered and it does not work. Please draw the Ishikawa diagram that would help you do Root Cause Analysis.

Pareto Analysis: Principles

Pareto analysis is based on the assumption that 20% of the units contributes with 80% of the effect, e.g.: 20% of the modules contain 80% of errors 80% of failures are caused by 20% of the defects

The basis of Pareto Analysis is Pareto diagram

Pareto Diagram: Example

Absence of defects = good quality? What is a quality process? How would you recognize a quality process

in a restaurant? How about software development?

Rational Unified Process (RUP)

RUP is a quality process…Well defined phasesWell defined activitesWell defined tasksWell defined deliverablesTemplatesTeam supportTool support…

Team Software Process (TSP) is a detailed process description for small

teams, containing: details of activities QA …

Organizations implementing TSP announced: productivity improvements of  25% or more reductions in cost and schedule variance to less than +/-

10% testing costs and schedule reductions of up to 80%

Capability Maturity Model Integration (CMMI) CMMI can be used to guide process improvement across a project, a division, or

an entire organization

Processes are rated according to their maturity levels

CMMI best practices are published in documents called models, each of which addresses a different area of interest: development, acquisition, services

Capability Maturity Model describes how good an organization is in its processes

Starts from unpredictable and reactive (ad-hoc) processes

Ends with processes focused on the continuous improvement

http://www.sei.cmu.edu/cmmi/

CMM Levels

Key Process Area (KPA) Each maturity level

has some associated KPAs

KPAs are from 4 categories: project management, process management, engineering, support

The relationship is: Maturity level =>

KPA Not vice versa!!!

•The assumption is that the more advanced the organization is => the more mature its processes are => the more difficult KPAs it implements

CMMI’s relationship to quality Level 1 “expects” the following process areas

Quality assurance (PPQA) Measurement and analysis

Level 2 “expects” the following process areas Verification Validation

Level 3 “expects” Automation, including automated measurement

processes

PPQA’s main specific goals related to QA

SG1: Objectively Evaluate Processes and Work Products SP1.1: Objectively Evaluate processes SP1.2: Objectively evaluate work products and services

SG2: Provide objective insight SP2.1: Communicate and Ensure Resolution of

Noncompliance issues SP2.2: Establish records

Objectivity: Examples

Examples of measurement data Estimated/planned vs. actual data on software size, cost,

and schedule Productivity data Coverage and efficiency of peer reviews

Organization’s measurement program includes Definition of the organization-wide measurements Collection of the organization’s measurement data Analysis of the organization’s measurement data Quantitative measurement goals for the organization

CMMI Assessment Checking the CMMI level is done ‘manually’ during an

assessment Has to be done by an accredited auditor Is supported by methods like SCAMPI (Standard CMMI Appraisal

Method for Process Improvement) Capability vs. maturity – continuous representation vs. staged

one

Practical considerations about CMMI CMMI is a comparison framework and a descriptive maturity

level framework If you want to improve your organization, CMMI does not tell you

HOW to do it CMMI describes areas which the organizations should consider

CMMI level 5 does NOT guarantee that the software will be free of errors The projects might be on budget, requirements correct, testing

correct, but… … one needs to know the “Garbage in – garbage out” principle

CMMI is very good and well-known, but not the only framework like this

CMMI is very high level If an organization wants to focus on a specific area, say QM, then

CMMI is not very helpful

Process Management Maturity Levels There are several Process Management Maturity Models

Process Maturity Models define levels of awareness for business process best practices and automation with some assessing the management of operational processes

SPICE SPICE is a major international initiative to support the

development of an International Standard for Software Process Assessment

• http://www.sqi.gu.edu.au/spice/what.html

Deming’s PDCA: Plan-Do-Check-Act

• Iterative problem solving process used for process improvement

How to improve processes? Rational Unified Process has its own

improvement framework: http://www-01.ibm.com/software/rational/mcif/

Deming’s PDCA: Plan-Do-Check-Act: iterative problem solving process

Measures of Software Process Quality: Example

Fault-Slip Through: this measure

helps to understand the efficiency of testing in each phase

Conclusions so-far…

“The quality of a product is largely determined by the quality of the process that is used to develop and maintain it.” (Shewhart, Juran, Deming and Humphrey), but…

Once the process is of a good quality this does not mean that the product is of a good quality

No product QA -> no quality Process is not followed -> no quality

Quality Metrics

According to standard ISO/IEC 15939, measure (i.e. metric) is a ”variable to which a value is assigned as the result of

measurement” “Categories” of metrics:

Simple Statistics Key performance indicators (KPI)

Measurement Systems: set of metrics that present the status and/or progress of a specific area

Can anything/everything be measured? Can we trust metrics/statistics?

ISO/IEC 15939 (1)

an international standard that defines a measurement process for software development and systems engineering: ”This international standard identifies the activities

and tasks that are necessary to successfully identify, define, select, apply and improve measurement within an overall project or organizational measurement structure.”

ISO/IEC 15939 (2)

Measurement System: the Principles

Measurement System: the Conceptual Model

An optimal measurement information model has to be defined!!!

Measurement Information Model “is a structure linking information needs to the

relevant entities and attributes of concern” – from Annex A (ISO/IEC 15939)

defines measurement constructs which link information needs with attributes of entities

Ericsson Example (*)

(*) A framework for developing measurement systems and its industrial evaluation - Miroslaw Staron , Wilhelm Meding, Christer Nilsson

Main Benefices of Using Measurement Systems

New means of communication: common language, based on an ISO standard

Automation (data collection, analysis, presentation)

Reliability (assured by check-indicators)

More on: “Ensuring Reliability of Information Provided by Measurement Systems” – M. Staron, W. Meding

9. Process Management Organisation

Process Management Organisation

Cross Functional Processes – Crossing “Vertical” Operational Organisational Units

Enterprise Process Management Assures alignment of the portfolio of end-to-end business

processes and process architecture with the organisation’s business strategy and resource allocation

Provides a governance model for the management and evaluation of initiatives

Involves the deliberate, collaborative and increasingly technology-aided definition, improvement, innovation and management of end-to-end business processes that drives business agility

10. Enterprise Process Management

11. Process Management Technology

Process Management Technology Increasing use of computer applications to assist with the analysis, design, implementation, execution, management and monitoring of business processes

Business Process Management Systems (BPMS) include a large number of computer applications that continue to evolve as our understanding of business processes matures and requirements for handling complex issues and large volumes of information increase

All studies of successful BPM programs have found that BPM Systems are important and necessary components of any BPM effort

BPM technology can encompass some or all of BPM lifecycle: modelling and design, simulation, implementation - publish designed processes to controlling platform, management and control

Software Components Supporting BPM Activities

Free BPM Software

ADONIS ARIS Express BonitaSoft BizAgi Intalio ProcessMaker

Process Management Conclusions

Examples of processes you can model (1) Launch Voyager

space craft, in order to to extend the exploration of the solar system beyond the furthest point that has ever been reached

Examples of processes you can model (2) Control a smart home

Examples of processes you can model (3) Buy

something

Examples of processes you can model (4) Print a 3D

object with a bio-printer

Examples of processes you can model (5) Print a 3D object with a bio-printer