Business Process

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Table of Content

Business Process: Terminology

Business Process: Management

Business Process: Development

Business Process: Re-Engineering

Strategic Process Analysis

Managing Business Process & Managerial issues in Process Management

BUSINESS PROCESSES

TERMINOLOGY

Definition of Business Processes

“A BUSINESS PROCESS IS A LOGICAL ENVELOPE THAT CO-ORDINATES

AND GIVES PURPOSE TO BUSINESS ACTIVITIES:

GENERALLY WHERE AN ACTIVITY DELIVERS AN OUTPUT,

A PROCESS DELIVERS AN OUTCOME

A RESULT THAT IS EVIDENT TO STAKEHOLDERS OUTSIDE THE

BUSINESS AS WELL AS THOSE WITHIN” IMBOK (2004)”

(IMBOK 2004)

Business Process 1. A repeatable set of coherent activities

2. Triggered by a business event and

3. Performed by people and/or machines

4. Within or among organisations

5. For jointly realising business goals and

6. In favour of internal and/or external

customers(Jeston & Neils 2006);

(Davenport 1993)

History of Business Processes

“in the ’60s industry concentrated on how to produce more

(quantity

in the ’70s how to produce it cheaper (cost)

in the ’80s how to produce it better (quality)

in the ’90s how to produce it quicker (lead time)

in the 21st century how to offer more (service)”

Nature of Business Processes...

Identifying Business Processes

It starts with the question: “what is our vision and mission, and what

have we set out to do?” (IMBOK 2004)

Based on an understanding of what stakeholders expect from an

organisation we can derive idealised process sets, and then get to

work on the difference between what we are doing and what we

should be doing.

Process Activities A logical step or description of a piece of work

that contributes towards the accomplishment of a process.

A low level component of a business that makes up a part of a business process.

It consumes resources and drives up costs.

.

Critical Activities Work elements which must be carefully documented,

monitored, and managed to ensure the success of an

organization, program, or project

They primarily affect the main output of the

Organization

A delay in any critical path activity will delay

completion of the whole processes.

Process Hierarchy•Core business processes can be divided into

manageable sub-processes and activities in

an hierarchy

•An activity is the smallest component of a

process that cannot be further divided into

sub-processes

Business Process Modelling

Set of activities for creating representations (as is or would

be) of end-to-end business perspective with primary,

supporting and management processes (not an end, but a

means to an end). (Jeston & Neils 2006)

Process Interactions

Basic symbols used

End of Business Process Terminology

Business Process Management (BPM)

Definition

Process Management

Process Characteristics

BPM Life Cycle

BPM Suites

Value Chain Analysis

BPM Definition

Business process management (BPM) is a systematic approach

to making an organization's workflow more effective, more

efficient and more capable of adapting to an ever-changing

environment.

The goal of BPM is to reduce human error and

miscommunication and focus stakeholders on the requirements

of their roles.

BPM is a subset of infrastructure management, an administrative

area concerned with maintaining and optimizing an

organization's equipment and core operations.

(Rouse, 2011)

Process Management

Is a structured approach to performance improvement

Concerted efforts to map, improve, and adhere to

organizational processes

Includes concepts, methods, and techniques to support

the design, administration, configuration, enactment, and

analysis of business processes

It is the supporting of business processes using methods,

techniques, and software to design, enact, control, and

analyze operational processes involving humans,

organizations, applications.

(Grover &Markus, 2008)

Process Characteristics of a High

Performance Organization

1. Design a good and fair reward, and incentive structure.

2. Continuously simplify and improve all the organization’s

processes.

3. Measure what matters.

4. Report to everyone financial and non-financial

information needed to drive improvement.

5. Continuously innovate products, processes and services.

6. Strive to be a best practice organization.

Process Characteristics of a High

Performance Organization (Cont.)

7. Create highly interactive internal communication.

8. Deploy resources effectively.

9. Strive for continuous process optimization.

Two Views of Business Process

Management

Business Administration/

Management

Study on how to improve

operations value system,

value chains, process-

orientation customer

satisfaction, and cost

reduction

IT aspect (Technology)

Software and Hardware

improvement and

integration

BPM Life Cycle

Business Process Management activities can grouped

into categories such as the following:

Design

Modelling

Execution

Monitoring

Optimization

(Rouse, 2011)

BPM suites

A market has developed for Enterprise software leveraging

the Business Process Management concepts to organize

and automate processes.

There are four critical components of a BPM Suite:

Process engine

Business analytics

Content management

Collaboration tools

Value Chain Analysis

(Porter, 1990)

End of Business Process Management

Business Process Development

Approach to business modelling

As experience accumulates within a business it has been found

that the most effective approach to strategic business analysis is

one which is grown within the organization.

IMBOK (2004)

There is one approach to business process analysis

that embraces visionary and operational viewpoints

This Approach works on Two Fonts:

What are we to do as a business and why?

How are we to do it?

IMBOK (2004)

Explanations of Terminology used:

Vision: An agreed summary of the purpose and direction of the business,

including a clear indication of the special attributes of the business that

will distinguish it from others of the same kind.

Stakeholder: A type of person (or body of people) that has the power to

influence the operation and overall performance of a business

Expectation: A need or requirement of a stakeholder group that affects

perceptions of the success (or failure) achieved by a business and the

delight that it creates for stakeholders.

Business process: A logical envelope that co-ordinates and

gives purpose to activities. Processes satisfy the expectations of

stakeholders. They normally cross the functional boundaries in

the organisation.

Mapping: Activities involved in defining what a business does,

who is responsible, the desired standard of business process is

completed and the success of the business process can be

determined.

IMBOK (2004)

The General Approach

Step 1: Develop a VISION- before any detailed analysis

takes place, it is essential that the vision of the business is

identified by top management.

Step 2: Determine WHAT must be done-established by

the analysis of stakeholders and their expectations.

Step 3: Determine HOW it shall be done- How the

business is to run is established initially by an analysis of

those things that the management agrees have to be

managed.

IMBOK (2004)

Step 4: Reconcile activities with processes- By mapping

the activities (from Step 3) into the processes (from Step

2), a view is developed of how the business processes

may be operationalized.

Step 5: Assess current performance- By assessing the

current performance of each activity the sum of

achieved performance within the containing processes

can be analysed and assessed.

IMBOK (2004)

End of Business Process Development

Business Process Redesign/Re-engineering

(BPR)

Definition of BPR Methodology

• The project approach taken by the organization to reengineer business processes after analysing

the business situation and can be considered as the approach that supports the BPR project the

most.

• A BPR methodology sets the framework for the undertaking of a BPR effort.

• “The challenge in structuring a project for improving the performance of business processes, is to

select the approach that is best suited to the situation in hand, taking into account organisation

objectives, capabilities and economic or competitive requirements” - A.Tsalgatidou

• Source : cgi.di.uoa.gr/~pms541/methodologies.doc

Definition of BPR

BPR can be defined as the reinvention or rethinking of daily activities

and work carried out. In addition is it a concept that can be

applicable to all industries despite size, type and location.

“Reengineering is the fundamental rethinking and radical redesign of

business processes to achieve dramatic improvements in critical,

contemporary measures of performance such as cost, quality, service

and speed”. (Hammer,M., Champy.J., (1993)

BPR is a tool to be with improvements/problems (most popular)

•Source : cgi.di.uoa.gr/~pms541/methodologies.doc

BPR Principles

Organise around outcomes, not tasks

Have those who use the output perform the process

Subsume information processing into the real work

Treat dispersed resources as centralised

Link parallel activities

Put the decision point where the work is performed

Capture information only once, at source

BPR Methodologies

The Hammer/ Champy Methodology

IT plays a crucial role in this methodology

Solution thinking before problem identifying

•Source : cgi.di.uoa.gr/~pms541/methodologies.doc

Davenport’s and Short’s methodology

Places IT at the heart of the methodology

Believes IT and BPR has a recursive relationship (How does IT support

BP?)

Davenport’s and Short 5 steps

1. Develop Business Vision and Process Objectives

2. Identify Processes to Be Redesigned

3. Understand and Measure Existing Processes

4. Identify IT levers

5. Design and Build a Prototype of the Process

Source: cgi.di.uoa.gr/~pms541/methodologies.doc

Complexity of Change in BPR The organization needs to the degree of change it can handle.

In addition to whether the organization is ready for undergo the proposed change.

3 Cases of approach business process

BP improvement

BP Redesign

BP invention

Scope of Change in BPR

STEPS IN BPR

Decide and priorities process to be examined

Select a representative process review team

Complete organization process analysis

Draw process map and graphics (illustrating flow, cost drivers, value

analysis, geographic space)

Use other tools and diagrams if need, considering fishbone

diagrams or process improvement cycle.

Set up a workshop selecting the best outcome/practice.

Implement and set up performance targets/ responsibilities and

monitor progress.

May (2003:182-183)

Benefits of BPR

Better understand of relationship between activities

Idea improvement by internal sources

Cross functional project (communication)

Encourages ownership as well a accountability

Continuous Improvement

Enables value for money or best value

May (2003:182-183)

McDonald’s Business Process Redesign

Drive throughWalk-in

End of Business Process Re-Engineering

Strategic Process Analysis

BUSINESS PROCESS ANALYSIS IS ANY ACTIVITY

THAT HELPS YOU UNDERSTAND HOW A BUSINESS UNIT FULFILS ITS MISSION

(ARUNDEL ET AL, 2007)

Purpose of Strategic Process Analysis

1. Reveals how departments are impacted

2. Ensures streamlined fixes to be implemented once

3. Develops inter-departmental communication

4. Ensures transparency between Departments

5. Ensures Business Ownership of Process

6. Reveals how things work

7. Shows the “BIG PICTURE” of how things will work

Step 1: Develop Vision

Statement1. Decided by Senior Management Team

2. They Critically Evaluate each word in

Statement

3. Content of Statement is Important in Weighting & Ranking Detail

4. Links to Business Strategy

5. Defines Principal Business Outcome

6. Vision is about Choices

1. Where it positions itself

2. The Scope of the Business

3. Differentiating to other Businesses

You are here

IMBOK (2004)

Step 2: Identify

Stakeholders Anyone influential to the course of the Business

Different Degrees of Importance

Traditional Stakeholders

Degree of Influence also Weighted

Weighted out of 100 based on Influence

You are here

IMBOK (2004)

Step 3: Tabulate

Stakeholder ExpectationsYou are here

IMBOK (2004)

Step 4: Derive List of Ideal

Processes

Develop what kind of Process will Satisfy

Expectation Developed earlier You are here

IMBOK (2004)

Rules for the creation of

New Process

Rule 1: Create Process that will Satisfy Expectation

Rule 2: Subsequent Expectations examined to

satisfy established Process

Rule 3: If Existing Process Does not Satisfy then

create New Process

Rule 4: Any new Processes , Review its possible

contribution to Other Expectations

You are here

Imbok,2014

Step 5: Process

Expectation Map

You are here

Imbok,2014

Step 6: Tabulate Business

Objects

Next Populating each activity that realises Process

This is Done through Brainstorming or by Reduction

Comprehensive identification of activities (direct and

indirect support to vision statement)

From vision statement, derive primary objects that

comprise the essential components or elements of the

business.

You are here

Imbok,2014

Step 7: Derive Activities

Using Lifecycle Analysis 4 Stages :

Specification

Acquisition

Use

Disposal

You are here

IMBOK (2004)

Step 8: Activity Process

Map Completed a Stable View of Idealised Processes

Next Step is testing what is done against what we

should be doing.

This is Done through Two Questions

1.) How do the activities from the object lifecycle

analysis stack up against the idealised processes?

2.) Are our idealised processes adequately

populated with activities?

Afterwards Develop the Activity Process Matrix

You are here

IMBOK (2004)

Step 8: Activity Process Map (cont.)

You are here

Every activity must contribute to at least one activity

In drawing out the activity-process matrix; there are a

number of outcomes;

Outcome 1: Each process has a proportionate number

of activities.

Outcome 2: A process may have no activities, or very

few.

Outcome 3: An activity may not be mapped to any

process.

IMBOK (2004)

Step 9: Assess Business Performance

Purpose of this Analysis is to find where Business might

Benefit from New Information Systems

At this Step it Assess Current Process PerformanceYou have reached your

Destination

IMBOK (2004)

1. 2.

3.

4.

5.

6.

7.

8.

9.

IMBOK (2004)

End of Strategic Process Analysis

Managerial Issues in Process Management

BUSINESS PROCESS MANAGEMENT

The management of processes, each with a process owner and a cross-

functional process team

The modelling of processes

The automation or deployment of processes, upon what can be automated

and integrated and

Optimization, or improving processes based on real metrics which help in

evaluating the process performance

Van Looy , De Backer & Poels (2011:1125)

Management of Business

process The whole idea of having a business process is to ensure that it delivers

the desired performance by meeting the expectations of the stake holders.

However their comes in a difference of thought to the above statement

According to (Imbok, 2014), The process of an organisation can be the

basis of a competitive strategy.

Process TriangleThe differences of strategy brings about the concept of the “Process Triangle”

Competitive process: This process is used for the success of the foreseeable future, to give the organization and advantage over their competitors

To be in a particular industry it is essential that the actors are dependable, these processes are not competitive.

Some processes are important , but are so universal that they can be used in our industry on a communal basis

Some processes are the basis of future capability and will ensure that the organization moves forwards and maintains competencies appropriate to its strategic development ambitions.

Imbok,2014

Process TriangleImbok,2014

Classification of process categories

It is important to identify the categorization of

processes because each process has its own

management style of implementation. The

importance of having this is to highlight those

processes that are significant for different strategic

reasons such as

Imbok,2014

Classification of process categories

Competitive processes – Competitive reasoning.

Qualifying processes – For reasons of operational efficiency.

Underpinning processes – Cost reduction

Transformation processes – Organizational development

Imbok,2014

Managerial responsibility in process

handling

Senior managers : responsible for(transforming and competitive)

Operational Managers must make sure that qualifying activities are done

well to enhance performance.

Service Managers must take responsibilities in cost reduction.

Managerial issues in process management

Managerial issues arise due to the fact that people feeling like their jobs

will be replaced

But why the reluctance?

This is why:

Business Modeling

Process management

Stakeholders

Change management

Business Modeling

Business process modeling (BPM) in systems engineering is the

activity of representing processes of an enterprise, so that the

current process may be analyzed or improved.

According to IMBOK, 2014 it is believed that business process models

need to be own an nurtured not necessarily by external consultants but

internally even if is the smallest task

Business Modeling

Process Management ?

Is supporting business processes using methods,

techniques, and software to design, enact, control, and

analyze operational processes involving humans,

organizations, applications, documents and other sources

of information.

Hammer, 2002: 26-7; Weise, 2007

Process Management Cycle

Common problems in process

management

COMMON PROBLEMS IN PROCESS MANAGEMENT

Silo processes that do not capture the business domain

Inconsistently applied techniques

Lack of delineation of key business view and key stakeholder view

Lack of a common, unifying language

Inadequate process analysis

Common Problems in Process

Management

COMMON PROBLEMS IN PROCESS MANAGEMENT – STRATEGIC

Lack of governance

Lack of employee buy in

Lack of common language

Lack of strategy – process alignment

Common Problems in Process

Management

COMMON PROBLEMS IN PROCESS

MANAGEMENT - OPERATIONAL

Lack of process visualization

Gaps between process design and process

execution

Miscommunication of the capabilities of the

processes

Bandara (2014)

Stakeholders

They review the process and decide to buy into it or not.

Stakeholders include:

– The project sponsor

– The project manager

– The project team

– Support staff

– Customers

– Suppliers

– Opponents to the project

– End-users

Managing Information Technology projects”, Kathy Schwalbe, revised 6th Ed

Stakeholders

Are important for the developmental and

implementation of processes

Business models generally viewed by them

They are part of the reason the company is on par with

their competitors in their industry through their innovative

thinking

Serve wide range of corporate interest

Change Management

Change is the result of dissatisfaction with the present strategies

It is essential to develop a vision for a better alternative

It is necessary to develop strategies to implement change

There will be resistance to the proposals at some stage

A degree of resistance is normal since change is:

Disruptive

Stressful

Moreover a degree of skepticism can be healthy especially where there are weaknesses in the proposed changes, however resistance will also impede the achievement of organisational objectives

Aladwani (2010)

Change Management

Inappropriate change management

Change is often resisted because of failures in the way it is introduced

Failure to explain the need for change

Failure to provide information

Failure to consult, negotiate and offer support and training

Lack of involvement in the process

Failure to build trust and sense of security

Poor employee relations

Change Management

1) Step change

Dramatic or radical change in one fell swoop

Radical alternation in the organization

Gets it over with quickly

(2) Incremental change

Ongoing piecemeal change which takes place as part of an organization's evolution and development

Tends to more inclusive

The End

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References

Source: cgi.di.uoa.gr/~pms541/methodologies.doc

Hammer, 2002: 26-7; Weise, 2007

Arundel et al, 2007

Jeston & Neils (2006) Davenport, 1993)

Source : cgi.di.uoa.gr/~pms541/methodologies.doc