Business Process Modeling

Characteristics of a business process:

Business processes are goal oriented.

Business processes create an added value that can be sold.

Business processes are planned independent of the person responsible for the task and allocation of resources, but are adjusted to operating conditions.

Business processes comprise several tasks which are coordinated in a goal oriented fashion.

Business processes include tasks that are processed by several people or departments.

Organization View

Establish ownership of data and responsibility for processes

Analysis of resource usage and workflow (at different organizational levels)

Model of organization structures (company, departments, etc.)

Linked to processes and data structures

Organization View:Example

The purchasing department of ABC has three employees

Sales Purchasing Billing

ABC

SecretaryPurchaserManager

Emp 3Emp 1 Emp 2

Company name

Purchasingorganization

Purchasinggroup

Function View

Shows the main business processes, but not the order of execution or who carries them out

Shows the relationship between high-level tasks/application areas and individual low-level tasks

Hierarchical model of functions (function tree)

Function can be application area, high-level processes, tasks or individual process steps

Function View:Modeling Concepts

Function

denotes an organizational activity at some level of detail

low-level functions correspond to transactions (interactive or batch) in ERP systems

Functionsare triggered by events,have input data and output data,are performed by someone,are performed on behalf of some

organizational unit

Purchase order processing

Function View:Example

New materials are purchased with reference to a purchase requisition. Quotations list prices from potential vendors. Before creating a purchase order, the purchase requisition has to be assigned a source of supply (the vendor to buy from).

Purchase order processing

Approverequisition

Create purchaseorder

Requestquotation

Create orderitems

Assign sourceof supply

NB! Model only shows hierarchical structure of processes

Data View

Analysis of information needed to carry out tasks

Specification of information generated in the system

Non-hierarchical static model with entities (objects), relationships, and attributes

May distinguish between data elements and information objects

Data view:Modeling ConceptsInformation,

material or resource object ,real-world objects

RelationshipRelationship

between one or several objects (with multiplicities)

Attribute

Generalization

Purchaseorder

Data view:Example

Structures of legal purchasing documents

Purchaseorder

Purchaserequisition

QuotationContract

Pricingcondition doc.

refers to

decideprice for

1..*

0..1

0..* 1

ERP Reference Models

What are reference models?• Logical models of business processes • ERP system is a physical implementation of

reference models

Reference Model

ViewpointsXO R

In teraction M od el O rg an ization M od el

B u s in es s O b ject M od el

D ata M od el

B u s in es s A p p licationC om p on en t M od el

P ro cess M o d el

Reference Model Viewpoints• Component Model - What is done?

• Organization Model - Who does what and/or who is responsible?

• Data model - What is needed to do something?

• Interaction Model - What information must be exchanged between different organizations or application components?

Combination of Views

Main business model portraying the interconnections between functions, data, and organizational units and the logical time sequence involved

Also called EPC (Event-driven Process Chain) model

EPC models are the ones usually used for business analysis

Event Process Chain (EPC) Models(Also known as Event-Controlled Process Chain Models and

Event-Driven Process Chain Models)

It is the theoretical framework behind SAP R/3 Reference Model. The EPC portrays the interconnections between tasks, data, and organizational units and the logical time sequence involved.

• Describes business organizations & processes• Relatively simple with restricted icon set• Combine process view with organizational & information-flow views• Provide links to parallel processes• Can model complex business processes• Can identify breaks in chains of tasks & responsibilities• Used in SAP R/3 to represent Business Blueprints & process

models

Event-controlled Process Chains

The central element in business process design: they show process flow structure and other relevant aspects of organization and information design.

They answer the following questions:When should something be done?What should be done?Who should do something?Which information is needed for this?

EPC Methodology

Chain Question Answer

Event When should something be done?

Customer Order Received

Task/Function What should be done?

Create material master

Organization Who should do it? Sales Dept., Plant, Secretary

Information What information is needed to do it?

Material, order, etc.

Four Basic Design ElementsEvent

When should something be done?

Example - customer order received

Definition - Events describe the occurrence of a status that in turn acts as a trigger

icon - hexagon

Task/Function

What should be done?

Example - create material master

Definition - Functions describe transformations from an initial status to a final status

icon - rectangle with rounded corners

Four Basic Design Elements (contd)Organization

Who should do it?

Example - sales department

Definition - Organization Units describe the outline structure of an enterprise

icon - ellipse

Information

What information is needed to do it?

Example - material

Definition - Information, material, or resource objects portray objects in the real world (eg business objects, entities)

icon - rectangle

Control Elements

Logical operator

Definition - Logical operators describe the logical relationships between events and functions

icons -

Control Flow

Definition - Control flows describe the chronological and logical interdependencies of events and functions or processes

icon-

Control Elements (contd)

Information/Material Flow

Definition - Information Material Flows define whether a function is read, changed, or written

icon -

Resource/Organization Unit Assignment

Definition - Resource organization unit assignments describe which unit (employee) or resource processes a function or process

icon -

Navigation Aid

Process Path

Definition - Process paths show the connection from or to processes (Navigation Aid)

icon -

Constructing EPC Models (Methodology)1) Identify start/inbound events

What are the triggers (events) which start the process chain or function?

2) Identify Functions

What functions are started by the triggers, and what functions then follow on from there?

3) Decompose Function?

Is the function a single logical unit of work in terms of the business? Is the function normally performed by one person?

If the function is performed by a computer system, is it a single transaction?

Can the function be halted part-way through processing? What is the event which will trigger the continuation of the function?

4) Refine & Define inbound events

Are the triggers (inbound events) you have identified necessary & sufficient to start the function?

Are there any “exceptional” circumstances whereby the function may be started by other events?

Can the function be started by different combinations of events? Use logical operators to define & constrain the control flow between events & function

Constructing EPC Models (cont)

Constructing EPC Models (cont)

5) Identify & Define end/outbound events

What needs to be ‘published’ to other functions/processes and/or the rest of the organization?

That the function has been carried out?

That data entities have been created/modified?

That the ‘status’ of any business objects have been changed?

That information has been sent to other persons or applications?

That the function has resulted in the termination of the process chain?

EPC Control Flow Rules (contd)• Events are only linked to functions and process paths

• Functions & process paths are linked only with events• Because events are not allowed to make decisions with regard to the continuation of the process flow, no

outbound connections are split off from events

• All events, functions & process paths are linked by a path to a start event

• All events, functions & process paths are linked by a path to an end event

• There is at least one start event and one end event

• Multiple links between two nodes are not allowed

EPC: Example

The purchasing manager approves all purchasing. The purchaser is responsible for maintaining contracts and quotations, and the secretary turns assigned purchase requisitions into purchase orders.

A purchase requisition triggers the purchasing process. If a contract for the requested material exist, the requisition can be assigned directly to the contract. Otherwise, they have to request a quotation to which the requisition is later assigned.

Purchase orders can only be created from assigned requisitions.

EPC: Example (part 1)

Purch. requisition arrived

Quotationneeded

Contractavailable

Purchasingconditionsavailable

Request quotation

Approve requisition

Quotationreceived

XOR

AND

Requestsent

Requestis valid

AND

XOR

Create purch. order

Purchasingmanager

Purchaser

Purch. requisition

Quotation

EPC: Example (Part 2)

Purchasingconditionsavailable

Create purch. order

Purch. requisition

Purch. requisition

Purch. order

SecretaryAssign source of supply

Create orderitems

Ordersent

Orderreleased formonitoring

Secretary

AND

Summary• Reference models capture business processes

• The R/3 Blueprint captures the reference model underlying R/3

• Event Process Chains are used in R/3 to represent the Blueprint

• You have seen an example of EPC modelling, and have been given some simple steps for producing an EPC from a description

• R/3 has four viewpoints from which to model the processes. The Blueprint is a combination of these viewpoints.