literature review
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Literature Review on BPMTRANSCRIPT
Business Process Management
Literature Review
Amin Lalani
Submitted byAmin S. Lalani
Business Process Management | Literature Review
1. Introduction
1.1 About Business Process Management
Business Process Management is vital for productivity and efficiency in an
organization, whether it’s a manufacturing concern, a defense organization, a
trading company or a small business. Since Frederick Taylor revolutionized the
workplace with his ideas on work organization, task decomposition and job
measurement. Taylor's basic aim was to increase organizational productivity by
applying to human labor the same engineering principles that had proven so
successful in solving the technical problems in the work environment. Thomas and
James (1990)
BPM provides a framework that enables enhanced control and management of
core business processes across an organization. An enterprise can integrate the
business functions they've built over the decades by using BPM tools, techniques,
technologies, best practices, and business processes as the fundamental construct.
The enterprise will be much more flexible, dynamic, and capable of integrating
into the value chain of products, suppliers, and consumers. The enterprise can be
in the middle of the chain as a value-addition node to the overall value delivery
network. (Developer Works, IBM, 2008)
1.2 Why is BPM required?
There are many reasons for managing business processes. Four core reasons as
per New Industrial Engineering - Information Technology and Business Process
Redesign Thomas and James (1990) are:
1.2.1 Cost Reduction: Having optimized process in place can save cost in
many ways. Firstly, by leaning the processes can save process time,
resource required and satisfies customers.
1.2.2 Time Reduction: Having optimized process saves time in every
phrase of production and so in the final deliver, which saves cost and
speedy delivery of product/service to market/customers.
1.2.3 Output Quality: Having lean processes with standard QA/QC may
enhance the overall output of product and services.
Submitted by Amin S. Lalani Assignment # 03
Business Process Management | Literature Review
1.2.4 Quality of Work life : Having structured Business Process
Management in place can bring enhance quality at work because
everyone have clear role and goal to work on.
Although Business Process Management is part of management sciences but,
without ICT it is difficult to bring about efficient and effective change in an
organization in short period of time.
1.3 BPM Lifecycle (Developer Works, IBM, 2008)
1.3.1 Envision
The business goals of the company are documented and well understood.
The KPIs of the business goals are analyzed and, with the combined
knowledge of goals and performance
requirements, a vision for the BPM solution
is developed. A change to the management
strategy may also be needed.
The vision caters to the technology vision,
and to how the strategy (regarding
organization capability and readiness) may
need to be developed to support a BPM-
enabled business transformation.
1.3.2 Assess
The "as-is," or current state of the enterprise as applicable to process design
and development, is analyzed. Organizational structure, application
ownership model, governance around process design, development and
deployment, and application portfolio analysis (at a high level) are some of
the activities assessed for gaps between what exists and what's required in
the future steady state.
Current organizational capabilities are assessed to determine if they can
adopt the new business processes, which might straddle organizational
boundaries and require a flattening of the organizational structure and
hierarchy.
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Business Process Management | Literature Review
Existing business measures and metrics are identified, and are assessed
against the capabilities of the new business processes that are envisioned in
the transformation. The current IT architecture is documented and assessed
for its maturity to support the IT transformations. The current technology
stack is also assessed and documented.
Based on the thorough assessment of the current architecture, technology,
business processes, measurement metrics, and governance framework, the
vision is reevaluated to make it realistic. Assessment may also incorporate
the definition of the IT strategy and roadmap to realize the business
transformation.
1.3.3 Define
Where the "to-be," or future steady state, enterprise business processes are
developed (design, implementation, deployment, and management). They
are simulated to identify potential bottlenecks. Solutions are incorporated
into the process models to reduce real-time performance inhibitors. The
future state of the business architecture is developed around the people,
processes, and information models. Business components are defined as
fundamental structural components of the business architecture. Business
processes that integrate functions from potentially multiple business
components are also defined.
The business architecture is defined through both a structural and dynamic
view of the business. Gaps in the IT architecture, as identified in the
previous phase, are used as input, along with the business architecture, to
define the future IT architecture for the enterprise. The future architecture
could support the design, development, implementation, and monitoring of
the business processes and their supporting applications. The technology
stack that would support the lifecycle of the business processes (their
modeling, design, assembling, deployment and monitoring) is also defined
during this phase.
The governance process and framework is modified and refined to support
the scoping, prioritization, and funding. Modifications also establish the
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Business Process Management | Literature Review
gating criteria to certify processes and their implementation, in the client
environment, vis-a-vis the performance objectives.
1.3.4 Execute
The high-level definition of the business, and IT architecture and its
components, are actually modeled, built, integrated, assembled, deployed,
and monitored in their respective run times. In general, the:
Business processes are either redesigned or designed from scratch.
Decomposed process models are used as one of the mechanism to
identify services.
Process is assembled and wired using the service and other IT
components.
Process is deployed on a process run time engine, and the running
processes are monitored for performance and other Service Level
Agreements (SLA) and KPIs.
The technology stack supporting each phase of process development is
installed and configured for whenever the current phase requires the tools
and products for its successful execution.
The business processes are monitored based on the KPIs and their metrics.
The IT infrastructure that monitors the executable business processes sends
out events and alerts that may be represented through various dashboards
that cater to specific roles within an organization. For example, the CEO
would like to know about business events and exceptions, so she may
summon a team for immediate reconciliation. The CIO may be interested in
a dashboard view that provides high-level information about whether the
services conform to the service SLAs.
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Business Process Management | Literature Review
The required organization changes, as defined in the previous phase, are
also initiated. Implementation of the process governance framework is
initiated and deployed during this phase.
1.3.5 Optimize
The various aspects of the enterprise architecture are monitored, managed,
and optimized for better performance, and to meet the business and IT
metrics used to define the success of the enterprise operations. Results from
the executable processes are typically gathered and analyzed. Analysis
usually reveals information that feeds back into the Envision phase, where
the business goals and priorities may be reworked based on the real-time
operational environment for the enterprise.
Some visions may be easily met, allowing the stakeholders to start thinking
about the next level of enterprise maturity. Some visions might be too far-
fetched to be realized within the maturity limits of the enterprise. Results
from the execution phase help in such optimizations.
Business processes are not the only facets of an enterprise that are capable
of optimization. The organizational structure, the governance framework
itself, the technology architecture, and the metrics, KPIs, and SLAs may
require optimization before the next iteration of business and IT
transformation is envisioned and defined.
BPM is best practiced through a phased and lifecycle approach, which lets you
iteratively build and execute a business process management framework based on
successive iterations of scope.
Submitted by Amin S. Lalani Assignment # 03
Business Process Management | Literature Review
2. Business Process Modeling
2.1 Petri-nets (A. Tiwari et al)
Petri-nets is a formal graphical process
modeling language. According to Havey M
(2005), Petri-nets help describe the semantics
of process control flow, including basic
branch and join rules, as well as more
complicated synchronization scenarios. Petri-
nets are an established tool for modeling and
analyzing processes that has been widely
recognized. They can be used as a design
language for the specification of complex workflows and also Petrinet theory
provides powerful analysis techniques that can be used to verify the correctness of
workflow procedures – they can be used for both qualitative and quantitative
analysis of workflows and workflow systems. van der Aalst WMP (1998). A Petri-net is a
directed graph that uses as main constructs places, transitions, tokens and arcs
Places: drawn as a circle, a place is a stopping point in a process, the
attainment of a milestone.
Transitions: a transition is a rectangle that represents an event or action.
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Business Process Management | Literature Review
Tokens: A token is a black dot residing in a place representing the
current state of the process. During the execution of the process, tokens
move from place to place.
Arcs: An arc is a link from a transition to a place or a place to a
transition.
2.2 Business Process AI-based Language (A. Tiwari et al)
The second approach to formal business process modeling comes from Koubarakis M,
Plexousakis D (2001). The proposed business process modeling methodology is
constructed with an Artificial Intelligence (AI) programming language thus
ensuring the formality of the proposed process model. The methodology begins
with the definition of business process objectives. The output is a detailed formal
specification of a business process that achieves those objectives. This perspective
is established and confirmed by the logical assumption that a process model cannot
be represented by a single model but as a set of various sub-models that capture
the business process from different viewpoints. There are five interconnected sub-
models specified to formally describe different aspects of the business process are:
organizational sub-model, describing the actors that participate in the
process, their roles, their responsibilities and their capabilities,
objectives and goals sub-model, describing what the process and its
actors try to achieve,
Process sub-model, describing how the process will achieve those goals,
concepts sub-model, describing non-intentional entities, and
constraints sub-model, describing factors limiting what the enterprise
and its components can do.
2.3 Scheduling-based Mathematical Formulation of Business Processes (A. Tiwari et al)
The third approach to formal business process modeling comes from Hofacker I,
Vetschera R (2001) and it is related to mathematical definition of business processes.
This modeling approach is linked with three different optimization approaches,
they are PESA, SPEA2 and NSGA. A business process is described using a
mathematical model with an objective function which can portray any business
Submitted by Amin S. Lalani Assignment # 03
Business Process Management | Literature Review
process objective e.g. cost. The objective function is minimized or maximized by
the optimization algorithm.
The main concepts used in the process design are activities and resources. A
business process is perceived as a sequence of activities. These activities use some
resources and produce others to be used by the following activities until the goal
resources are produced. Resources are the physical or information objects which
flow through the system. Activities are transformation steps which use resources
as inputs and produce new ones as outputs. Both activities and resources are
represented as sets. Each process begins with some input resources and produces
a desired set of output resources. Each activity has two parameters: one for its
starting time and another for its execution duration. The input resources of this
activity must be available before the activity starts and the output resources must
be produced after the activity has been executed. The time that a resource
becomes available is another parameter critical to process feasibility.
Submitted by Amin S. Lalani Assignment # 03
Business Process Management | Literature Review
3. Next Generation Business Process Management
2.1 KNOVA TOOL (Knowledge Value
Added)
KNOVA is A TOOL that allows managers to
improve their understanding of the factors
influencing the performance and direction of
a working group or team. This improved
understanding increases confidence in decision making and overall group
operations. Specifically, KNOVA is particularly useful in identifying performance
measures and areas for investment (such as training, technology, or resources) to
improve weak points or change the style of work. However, organizations are
traditionally viewed and assessed within a quantitative, structural framework, with
poor integration of the "soft" people and cultural issues. There is no recognized
practical management framework that integrates the interrelationships between
people, performance, costs/investment, culture, structure, and soft resources such
as knowledge. As a result, there is no decision procedure to identify investment
Submitted by Amin S. Lalani Assignment # 03
Business Process Management | Literature Review
options for performance improvement that considers the overall context. The
KNOVA framework described here addresses this need by developing a model of
the factors influencing team performance, along with a decision procedure for
applying this model to identify investment options for improved performance. The
performance model is based on the interactions among people, knowledge, and
organizational culture. An important aspect is explicit identification of the
knowledge resources of the team, in both active and latent form. This provides a
conceptual basis for an integrated model. Critical managers might say, "But I
already understand my team's situation." KNOVA does not negate existing skills
but allows them to be applied more quickly and with less mental effort. This is
useful when operating pressures allow insufficient time to give full consideration to
all factors. KNOVA is complementary to and can be used alongside conventional
business process reengineering approaches. It is an unfortunate fact that a high
proportion of BPR projects fail. Often this is because the projects take a view of the
organizational situation that does not include the softer and more pervasive issues
that govern performance and risk. It this latter dimension that KNOVA is designed
to address. The elements of a KNOVA review are expressed in the condensed
influence diagram shown in Figure 1. The arrows show influencing relationships
between the factors with which KNOVA is concerned that affect team performance.
By progressively expanding this model using the techniques to be described, a
detailed representation of the situation under examination is produced. In essence,
KNOVA explicitly identifies and integrates: • Knowledge possessed by the team. •
People factors such as staff turnover and motivators. • Culture of the organization
in terms of the informal microculture and the formal macroculture. • Investment in
the team and its environment for improved performance. • Performance of the
team, such as the quality of decisions or actions. • Benefits of the investment and
improved performance, for example, operational cost savings. • Time over which
the investment takes place, and performance is tracked. Time is treated as an
implicit factor, while the environment of the team, or the team context, is
accommodated within the culture factors. Microcultural factors reflect the way
things are done in the immediate team, the local environment of the team, and the
overall organizational environment. Macroculture reflects wider organizational
issues such as monetary reward.
Submitted by Amin S. Lalani Assignment # 03
Business Process Management | Literature Review
Submitted by Amin S. Lalani Assignment # 03
Business Process Management | Literature Review
4. Summary
In the light of literature review, it has been discovered that process
management has taken a scientific form and various algorithm are being
used at industry and administration to get accurate results to identify
optimize and cost effective businesses processes.
Having such level of mature system in place, various small and large
organization in various industry can set algorithm to achieve competitive
advantage over other by implemented optimize business process.
Further, having structured BPM in place can help in QA, BPR (Business
Process Re-engineering) which in other case could be very difficult.
5. References
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Business Process Management | Literature Review
Thomas H. Davenport and James E.Short. 1990. Sloan Management Review. New Industrial Engineering: Information Technology and Business Process Redesign. (p11-27)
Tony Holden and Paul Wilhelmij. (Winter, 1995/1996). Process Factors in a Hospital Situation. Journal of Management Information Systems, Vol. 12, No. 3, Information Technology and Its Organizational Impact pp. 21-41. Havey M (2005) Essential Business Process Modeling. O Reilly, U.S.A van der Aalst WMP (1998) The Application of Petri-Nets to Workflow Management. Journal of Circuits, Systems and Computers 8: 21-66 Koubarakis M, Plexousakis D (2001) A formal framework for business process modeling and design. Information Systems 27: 299-319 Hofacker I, Vetschera R (2001) Algorithmical approaches to business process design. Computers & Operations Research 28: 1253-1275 A. Tiwari et al.: Evolutionary Optimization of Business Process Designs, Studies in Computational Intelligence (SCI) 49, 513–541 (2007)
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