documenting process architecture identifying a process network and documenting the process hierarchy

Documenting Process Architecture

Identifying a process network and documenting the process hierarchy

BA 553: Business Process Management 2

A Traditional Organizational Structure

In an organization that utilizes a functional management approach and a command-and-control style of operation, the predominant view of the organizational structure is a chart of the reporting responsibilities of the management team to the senior executive.

CEO


A Process Network Structure

A different perception of how an organization is structured is often referred to as the organization’s “network of processes.” This is compatible with a functional organization structure, as expertise in functional areas is still necessary to undertake the variety of process tasks needed to deliver products and services to customers.

The organizational process network structure consists of a network of the primary processes the organization uses to conceive, develop and deliver products and services to customers.


A Process Network View of the Organization

SuppliersCustomers

Internal to the organization


Understanding Process Networks

Work processes and process networks exist in all organizations but are often not formally documented

It is the knowledge of work processes and process networks that enable those who understand them to integrate their daily work

Knowledge of work processes and process networks enable front-line workers to work together effectively with less direction and to increase the ability to utilize a self-organizing approach for undertaking daily work

Organizational performance depends upon the efficiency and effectiveness of these processes


Process Networks for Groups of Processes

ISO 9000:2008 has been modified from earlier versions of the standard to provide a “system of processes” view of the organization’s quality management processes

The Project Management Institute’s Project Management Body of Knowledge (PMBOK) provides a “system of processes” view of the organization’s project management processes


ISO 9000:2008 An advantage of the process approach is the ongoing control that it provides

over the linkage between the individual processes within the system of processes, as well as over their combination and interaction


PMI’s PMBOK

The PMBOK describes project management’s knowledge and practice in terms of five process groups, as shown below

These align with the P2DCA approach described earlier in this class Purpose Plan

Check Do

Act

InitiatingProcesses

InitiatingProcesses

PlanningProcesses

PlanningProcesses

ControllingProcesses

ControllingProcesses

ExecutingProcesses

ExecutingProcesses

ClosingProcesses

ClosingProcesses


PMI’s Project Management Process NetworkInitiating

Planning

Executing

Controlling

Closing


Example: Outage Maintenance

For one utility, the area management wanted to improve was outage maintenance

The utility had a history of outages running over schedule and over budget. Often, some of the needed maintenance would be put off until the next outage just to get the units back up and running

Discussions with the plant management about this problem led to the question, “what measures does the plant collect related to outage performance?” The answer was, “we measure total budget spent and total days and man-hours needed for the outage.”

The next question was, “if the budget and schedule have gone over the estimates made at the beginning of the outage, what information do you have to remedy the situation for the next outage?” The answer was, “none.”


Example: Outage Maintenance (Cont’d.)

By providing the plant with a process management capability, employees and managers could see the processes that impacted outage maintenance

Oftentimes, the causes of a problem lie “upstream” from the process where the problem shows up

This was the situation with outage maintenance – many of the processes that affected the efficiency of the outage occurred before the outage began

One example of such a process was the process for creating work orders (W/Os). The number and accuracy of work orders had a major impact on the efficient use of the time of mechanics and their foremen during the outage


Example: Outage Maintenance (Cont’d.)

It was determined that mechanics and their foremen spent much of their time investigating duplicate work orders. This frequently caused mechanics to be assigned to work orders for problems that had already been fixed under another work order

The following pages demonstrate the analysis by the plant of the outage process and its upstream processes. The first chart is a diagram of the process, showing the inputs to the process of outage maintenance, the outputs resulting from completing outage maintenance, and the various customers for the outputs. Many of these customers are internal to the organization

The second chart shows the processes that exist upstream of outage maintenance

Developing this understanding of the outage maintenance process enabled the plant to establish and collect measurement data to improve outage maintenance performance


The Outage Maintenance Process

Inputs

Outage Maintenance

TransformationProcess

Equipment

Planned work scope

Planned schedule

Planned budget

Outage W/Os

Materials

People/manpower, including contractors

Outputs

Actual schedule andActual budget

Actual work done(equipment fixed)

Level of satisfaction with contractors

Paperwork done

Used parts

Customer

Plant mgmt.

Shareholders

Operations

Maintenance

Dispatch

Ratepayers

Accounting

Warehouse


Upstream Processes of Outage Maintenance

Equipmentavailable

DoingOutage

Maintenance

Providing Clearances

Manpoweravailability

Managing the Workforce

Ordering Parts

ManagingContractors

Contractorsand their work scope

Materials/Parts

W/O’s with status ofequipmentto be fixed

Creating Work Orders Planning

Outages

Planned schedule

Planned budget

Planned work scope

Outage W/O’s


Impact of Improvement on Performance

To understand the impact of improving the outage maintenance process, the plant needed to examine the “downstream” processes. These are the processes that eventually lead to providing the company’s product (electricity) to its customers, thereby impacting the plant’s bottom line

In any organization that is improving, either formally or informally, there are feedback loops that provide information from the outputs back to the inputs. An example might be an organization using customer surveys to improve its product design

The plant realized that some of its important feedback loops related to outage maintenance were weak or missing, making it difficult to improve outage performance

One example was the use of contractors during the outage. The main contractor used for the past several years had not been performing its duties adequately. Somehow, this information never got back to the person who contracted with the firm, so the contractor continued to return to the plant year after year


Downstream Processes of Outage Maintenance

Equipmentavailable

DoingOutage

Maintenance



Managing the

WorkforceOrdering

Parts

ManagingContractors


Materials/Parts


Creating Work

Orders PlanningOutages

Planned schedule

Planned budget

Planned work scope

Outage W/O’s

Equipmentworking

Actual schedule

Actual budget

Actual workcompletedPaperwork done

Amount of contractor work complete

Used parts

Level of satisfac-tion with contractor

Doing Daily Maint.

Operating Plant

Storing or Disposing of

Scrap


Adding Feedback Loops

Equipmentavailable

DoingOutage

Maintenance



Managing the

WorkforceOrdering

Parts

ManagingContractors


Materials/Parts


Creating Work

Orders PlanningOutages

Planned schedule

Planned budget

Planned work scope

Outage W/O’s

Equipmentworking

Actual schedule

Actual budget

Actual workcompletedPaperwork done

Amount of contractor work complete

Used parts

Level of satisfac-tion with contractor

Doing Daily Maint.

Operating Plant

Storing or Disposing of

Scrap

FEEDBACK LOOPS

FEEDBACK LOOPS


Example: Manufacturing Process

Inputs

Manufacturing process

Transformation Process

People/manpower

Subassemblies

ProductionSchedule

Budget

Procedures

Equipment

Materials

Outputs

People with skills

Quality ofsubassemblies

Actual schedule

Budget spent

Actual proceduresused

Status of equipment

Manufacturedproduct


Example: Manufacturing Process (Cont’d.)

People

Satisfaction with contractor

ActualSchedule

ActualBudget

Product

Equipment

FEEDBACK LOOPS

FEEDBACK LOOPS

Manufacturingprocess

Hiring/training

ManagingSubcontrac-

torsPlanning/

scheduling

Budgeting

Writing mfg.procedures

Maintainingequipment

Purchasing/inventory ctl.

People

Procedures

Budget

Subassemblies

Productionschedule

Equipment

Materials/parts

Productspecs

Productdesign

Selling product

Package & deliver


Example: Credit Process

Set up new clients/conduct

annual reviewof clients

Managecollateral

Managecredit limits

Monitor clientand financialinformation

Manageclient

default

Review creditterms forunique or

long-term deals

Prepare anddistribute reports

Ensurecompliance

Marketdata

Contracts

Accounting

Manufac-turing

Operations

CorporateCredit

CorporateCompliance

CREDIT

Process Levels

All of these processes are at a single level of detail

A value chain is the largest process we normally document: it is usually called the “Level 0” process

Within this value chain, many of the boxes can be documented as a more detailed process: these would be called the “Level 1” processes

The boxes in these processes can again be subdivided into more and more detailed levels of processes, until the boxes contain only single steps

It’s common to see the process hierarchy divided into 3 or 4 levels: it’s rarely documented at more than 7 levels


Harmon, Paul, “Business Process Change”, 2007.


Maintaining a Business Process Inventory

A process inventory is hierarchical listing of business processes

Can be initially developed at the local or regional level, but will eventually be required for the entire enterprise in order to achieve its full potential

Some organizations develop a process inventory at the department level: this can result in difficulties when the inventory is expanded to include the entire enterprise, as most processes cross between departments

Once the process inventory listing is developed, it and the related process documentation should be kept in a process library

This can be as simple as a share drive where employees can access the information, or it can be stored within one of the many types of process modeling applications (Visio, ARIS, etc.)

The latter usually provides some method for viewing the processes with less or more detail, and also for connecting the processes to each other


Optimizing Collections of Processes Redundant processes and process standardization

The enterprise process inventory provides a means to identify processes that have similar intents and should be examined for redundancy and potential standardization

Cross-process integration The enterprise process inventory clarifies how processes should be related The process library helps us find the current model of the processes and map their

relationships Developing common terminology and definitions for the inputs and outputs is critical.

Processes with common sub-processes Re-usable sub-processes are analogous to subroutines in computer programming Having a collection of processes in the common process library modeled with similar

notation and terminology will help identify potentially redundant sub-processes A collection of processes can be modeled based on the capabilities or functionalities

used within the processes, which can help identify common capabilities and functions that cross processes (common components)

This kind of analysis can also be useful in identifying related competencies and roles, with the goal of either simplifying training, or identifying potential synergies in job assignments.

Chevron, “Business Process Management”, presented July 2007.


Why develop a process inventory?

An enterprise-level process inventory:

Assists with the identification of the enterprise value chain

Ensures processes that are documented within the enterprise can be located within a larger framework

Facilitates the development of enterprise-level process standards (e.g., process and sub-process numbering system, resource naming conventions, search keyword definitions)

Helps process teams avoid overlap of process efforts (encourages discussion and resolution at process boundaries)

Helps establish the enterprise process network, which shows employees how their activities fit into the larger picture of creating and delivering the organization’s products and services

Provides a foundation for prioritizing future process change efforts and aligning them with organizational strategy


Identifying the Process Inventory

Start by documenting the primary activities in the organization’s value chain

Next, identify the secondary activities in the value chain - these both comprise Level 0 processes

List the Level 0 processes in an outline form (see next slide), and assign a numbering system that enables items to be added later

Work with employees from the enterprise as needed to fill in the rest of the inventory to one level below the value chain - these comprise the Level 1 processes

If the organization has previously documented any processes, collect the flowcharts, determine any overlaps, and identify where in the value chain they are located - some of these may comprise Level 2 processes

Process documentation and process change teams can fill in the remaining Level 2 processes as they work on their projects

Value Chain and Level 1-2-3 ProcessesLevel 0 Level 1 Level 2 Level 3


Harmon, Paul (2007), Managing the Process-Centric Organization, presentation, BPMTrends.


Example Process Inventory (Partial)

L0 L1 L2 L3 Process Title

11.0 Develop Organizational Capabilities

11.1 Develop Skilled Employees

11.1.1 Develop Career Path

11.1.2 Create Development Plan

11.1.3 Develop Annual Performance Objectives

11.1.4 Administer 360 Feedback Process

11.1.5 Develop Succession Plan

11.1.6 Execute Commercial Skills Development Program

11.1.7 Evaluate Learning and Development Opportunities

11.1.8 Conduct Needs Assessment

11.1.9 Develop / Modify / Improve Courses

11.1.10 Provide Courses

11.1.10.1 Process Course Enrollment

11.1.10.2 Schedule the Room and Equipment

11.1.10.3 Deliver Course

11.1.10.4 Evaluate Course

11.1.11 Assess Employee Competencies

documenting process architecture identifying a process network and documenting the process hierarchy

Documents