BPM: new architecture driven by Business Process Planning and Control (BPPC)

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1 IMJournal for Information Management and Consulting Special Print IM SCHWERPUNKT June 2012 I G 9765F SPECIAL PRINT OF THE ARTICLE BY PROF. AUGUST-WILHELM SCHEER Co-authors: Thomas Feld Roland Caspers BPM: new architecture driven by Business Process Planning and Control (BPPC)

2 BPM: new architecture driven by Business Process Planning and Control (BPPC) AUGUST-WILHELM SCHEER 1. From chaos to standard The use of Business Process Management (BPM) as a primary organisational paradigm has gone unchallenged over the last 25 years and has become an accepted procedure model (see Fig. 1). BPM has enabled many organisations to eradicate the chaos of historically evolved business procedures and made them more structured, transparent and standardised. Standardisation is understood to mean defining a typical procedure to complete a process (e.g. for processing a sales order, purchase order, personnel recruitment, etc.). The emphasis is on typical. Therefore, it is not a case of considering a specific individual procedure. Photo Credits: Fotolia 02 IM Information Management and Consulting 4 IM Information Management und Consulting Fig. 1: BPM with the focus on standardisation

3 It is more a case of taking the knowledge of a number of individual procedures and boiling this down to a standard, which should represent a particularly convenient or optimal procedure, that is an example of best practice. A specific organisational unit is often set up for BPM, which uses modelling methods and tools to gather, arrange and store knowledge about a company s operational organisation. If procedures differ for different object types (for purchasing processes e.g. for mass produced items and investments), process type variants are set up. The processes defined as standard serve as guidelines for customising standard software (particularly ERP), whose parameters are then set to the process types described. The actual individual processes (process instances) are then executed using the standard software configured. With more flexible software, which uses, for example, workflow technology, individual process statuses can be monitored and the time to process them can be measured (process monitoring). As well as increased transparency of organisational events within the company, BPM can also be used to simplify, streamline and accelerate processes. In particular, larger organisations with an extensive branch network can harmonise their antiquated IT system landscape and adopt standard software, notably ERP systems. However, an individual process does not usually follow the predefined standard, this being largely based on an ideal or typical procedure. It can often be much more straightforward, or it may contain features that are not typical. The first case finds users complaining about the software s unnecessary complexity; in the second case, additional information needs to be entered using memos or other similar features. These disadvantages arising from standardisation are occurring more and more frequently, with the result that new BPM concepts and software will be required in the future. These will focus more on the instance level. This is because, after achieving the benefits of moving from chaos to standard, further benefits with BPM can be attained, primarily through optimising individual procedures. This means pursuing requirements for the personalisation and individualisation of BPM, rather than standardisation. 2. From process standard to individualisation and process control Defining business processes at type level assumes that individual process instances largely follow this model. However, this is rarely the case, as the environment both within and outside the organisation is subject to constant change, resulting in new process options all the time. The standard therefore needs to be constantly enhanced; otherwise more and more special cases arise. Both situations result in complexity issues for users and violate the two key criteria for the efficiency of BPM: accelerated pro- IM Information Management und Consulting IM Information Management and Consulting 03

4 3. The Business Process Planning and Control model (BPPC) Fig. 2: Y model for production planning cessing time and improved user productivity. This makes it necessary to make a radical change to the focus of BPM: the focus thus shifts away from the definition of typical standard procedures towards the optimisation of tangible process instances. Some BPM tools and ad-hoc workflow systems have already recognised this issue. However a comprehensive new BPM approach has not yet been developed. The following section outlines this type of approach. This approach is supported by two developments: 1. Industrial production planning and control always gives detailed attention to the instance level of logistics and manufacturing processes. One reason for this is the high investment costs for manufacturing equipment, which needs to be put to efficient use by means of careful production planning and control (PPC). Another reason is competitive pressure to achieve faster process times. With the general trend towards the industrialisation of services together with the competitive pressure for process efficiency and employee productivity, these experiences can be used for general BPM. 2. New disruptive IT developments, such as modeldriven software development, cloud computing, social media, mobile applications, in memory databases and collaboration open up new opportunities, both technically and conceptually, for BPM architecture. In Scheer s Y model (1984), shown in Figure 2, the emphasis of the instance level in the classic PPC concept for the industry is evident. The standard bills of materials and work schedules are detailed in the top right section. These more or less correspond to the modelling of standard business processes for BPM. This takes account of the production system s properties. In contrast, the entire left branch of the Y refers to instances. Here, in the upper section, the requirements for the products to be manufactured are calculated from customer orders and sales forecasts and broken down into all components. Production processes are defined by linking to the standard work schedules. Thus initially, they still refer to standard procedures. The top left section is therefore a combination of tangible order instances and standard information regarding manufacturing processes. The production orders to be actually executed for the forthcoming period are specified by means of the order release, which serves as the interface between planning and control. Thus the standard work procedures are replaced by current and actual information, with for example, production procedures or capacity assignments being selected other than those initially scheduled. As part of production control, order priorities, sequences of operations and allocation of resources are all optimised. Short-term production control has thus become increasingly important as a result of just-in-time production and control station concepts. The execution of production is monitored electronically and the results are captured by operation data logging. This enables up-to-date controlling and monitoring in real-time. PPC will now be assigned to all business processes types below and thus generalised (Fig. 3). The first two circles in Figure 1, i.e. the organisational integration of BPM and identification and modelling of business processes types are assigned. However they have a) less weight and b) new functions. As it is no longer a case of following the myth that process instances run as per the type descriptions, a standard business process only describes one example instance, which is one more or less suitable base solution (template) for 04 IM Information Management and Consulting 6 IM Information Management und Consulting

5 Fig. 3: The Business Process Planning and Control Model (BPPC) the instance descriptions. To respond more precisely to the variability of the instance levels, variants of the typical procedure can be defined, which make it easier to create instances. As with PPC, a planning control centre can use standard descriptions to undertake capacity, time and cost planning for the medium-term. However, the process can be respecified (modelled) by creating a business process instance to be executed (with an order release, as it were). The individual structure of the existing process is now mapped, with or without the use of the standard model as template. It does not contain anything superfluous and also incorporates elements not contained in the standard. If the process still cannot be completely disregarded, elements also with standard descriptions can initially be fulfilled. Overall, there is greater flexibility in instance description. The individual processes are then managed and controlled by a process control centre. The use of optimisation algorithms determines the sequences of process steps and allocation to workstations. Employee-centric criteria can thus be included. Also, depending on the situation, in addition to algorithmic optimisation, staff can be given the freedom of self-monitoring. Flexible forms of processing can also be supported by the use of collaborative platforms. Monitoring functions in the control centre make the current process situation transparent and available. The latest model-driven software technologies translate models straight into workable code. Consequently, this dispenses with the need to customise standard software. The whole process situation to be implemented is available for all authorised personnel. An immediate response can be provided for unscheduled events by redesigning process instances or by new control instructions. Changes can be executed immediately by model-driven software development. Capacity, time and cost situations are up-to-date and transparent. The alternative process models arising over time as a result of redesign can be stored and evaluated. IM Information Management und Consulting IM Information Management and Consulting 05

6 Fig. 4: BPPC architecture with outputs Overall, BPM now focuses mainly on the realisation level of instances. Fig. 4 shows the 4-level model of the BPPC with several outputs in a simplified form. 4. The process tailor as implementation of the BPPC concept THOMAS FELD, SCHEER GROUP GMBH AND ROLAND CASPERS, SCHEER MANAGEMENT GMBH So far, we have seen the development of the BPPC conceptual model. From now on, the Scheer Process Tailor system should feature the technical implementation of the concept. The second factor (new disruptive IT developments) for the change to the BPM architecture thus also becomes much clearer. The Scheer Process Tailor is a tool developed by Scheer Management GmbH to tailor business processes and instances. The term tailoring thus dates back to the procedure for developing reusable software libraries, which are now also used in the area of business process management. For the Scheer Process Tailor, the starting point for the business process description is also initially the business process type level (see Fig. 5). However, modelling includes the description of business process templates constructed on top of each other and not just the modelling of individual business process types. Consequently, the implementation level, i.e. the definition of instance procedures, is already better supported than in traditional BPM systems. The option to re-use business process templates reduces modelling complexity and business processes can be provided for business process planning with a number of variants, e.g. with various resource types. Management of the process data entered, with the full specification of a business process right through to its instances, is thus supported by highly scalable and high-performance system architectures, such as Big- Table and In-Memory. 06 IM Information Management and Consulting 8 IM Information Management und Consulting

7 Fig.5: BPPC using the example of Scheer Process Tailor A template includes the rough steps, which are only developed (modelled) more precisely during process planning and execution. As part of process planning, the Scheer Process Tailor supports time and capacity planning. For this, the process type is developed in an actual process instance and a schedule for processing the individual process steps is generated. The Scheer Process Tailor, with its service-orientated and cloud based architecture, supports planning automation by means of appropriate planning algorithms. After process instances have been approved, they are available for execution. The application systems can access the business process data for all instances and, for example, update the status and scheduling for process instances. The Scheer Process Tailor development framework enables the development of model-supported process-related applications, which support users in the execution of business processes. Back-end systems, such as SAP R/3, can also access business process information in the Scheer Process Tailor by means of the appropriate interfaces. Process data capture can be used to identify deviations from the plan, which require the process instance to be changed or the process plan to be amended. The control logic required for this can be stored in the form of business rules, for example. Business rules specify which planning processes in the Scheer Process Tailor are triggered in the event of any deviation from the plan. New technologies, such as Complex Event Processing (CEP) enable refinement of the interaction between planning and control. In order to ensure the communication required between all people involved for the modelling, planning, control and implementation of processes, the Scheer Process Tailor can be enhanced to incorporate collaboration and communication services. Feedback loops from process execution to business process modelling can also be supported by social media services. Everyone involved in the process can thus, for example, evaluate business processes and impart their expertise to others. IM Information Management und Consulting IM Information Management and Consulting 07

8 process engineer process owner process participants customers & partners role-based access social networks mobile access chat / messaging forums application sharing process design process instance planning process instance controlling processes application development process instance monitoring process execution content model-based integration big table / in-memory database cloud infrastructure Seite 1 Fig. 6: Technical Architecture Figure 6 shows the system s technical architecture. There is no need to explain it in any detail, as the business organisational perspective is the key focus here. However, the variety of components should show that the emphasis of the instance level can have far-reaching technical consequences, right through to a new architecture for ERP software. SERVICE AUTOREN Prof. Dr. Dr. h. c. mult. August-Wilhelm Scheer Gründer der Scheer Group GmbH und Scheer Management GmbH Thomas Feld Vice President Scheer Group GmbH Roland Caspers Senior Partner Scheer Management GmbH Kontakt: Scheer Management GmbH Science Park Saarbrücken Tel.: +49 (0) info@scheer-management.com 08 IM Information Management and Consulting 10 IM Information Management und Consulting

9 Scheer Process Tailor: Tailor-made business processes >> One of the greatest challenges for businesses is the dynamic adaptation of business processes to available resources, changing market and business situations. With the Scheer Process Tailor, Scheer Management offers a consultancy tool, which supports the tailoring of business processes to suit the requirements of industries, clients and businesses. IM Information Management und Consulting