Mermit in Brief. Introduction to the world of processes

Transcription

1 Introduction to the world of processes M.Sc. Jari Kekkonen Mermit Business Applications Oy 2005 Mermit Business Applications Mermit in Brief Independent profitable Finnish IT services and consulting company founded in We develop and deliver business-critical IT system solutions and services to our customers by executing extensive architecture and integration projects for Finnish corporations. Our services cover all the phases and areas of information system projects, including the modeling of business processes and the development of data administration. 40+ highly educated and certified IT and industrial engineering professionals (M.Sc) 100 % owned by its management and staff 70% organic revenue growth in 2005 Business goes to information processes and services" 1

2 Mermit in Brief 2 3

3 4 A process is a process? Process (lat. processus - movement) is a naturally occurring or designed sequence of changes of properties/attributes of a system/object. (Wikipedia) Business process is a set of repeatable and logically connected activities as well as resources required to implement those activities. (K. Laamanen) Business process is a recipe for achieving a commercial result. Each business process has inputs, method and outputs. The inputs are a pre-requisite that must be in place before the method can be put into practice. When the method is applied to the inputs, then certain outputs will be created. (Wikipedia) 5

4 The characteristics of business process Business process is a managable and executable entity Business process has a customer (internal/external) Business process has a owner Business process has a start and the end Business process is a set of connected activities and decision-making points Business process spans often several organizations 6 Why business processes matter? Industry boundaries are bluring OKO Bank acquires majority of Pohjola Insurance The insurance group Tapiola entered the banking industry on Monday. Companies are focusing on core business and outsourcing many support functions Elisa said that it would outsource some of its subscription handling and invoicing operations. Stora Enso plans to outsource between 600 and 700 jobs at its mills in Finland, including its cleaners and security guards. Synergy Metrics 7

5 Why business processes matter? (cont ed) Business goes to information services and processes The Delta Nervous System processes 5 million business events each day, dealing with gate, fuel, food, and customer data. The ability to share this information with our employees and customers in real time, and to automate how we share it, has allowed us to transform our business, improve customer service, and reduce costs. (Delta Airlines) "Close integration of manufacturers, service providers, operators and sales channels will enable us to decrease costs in the telecom industry and, at the same time, increase value by enabling business transformation through collaboration and the e-business support for new emerging business models (Nokia) Regulations, compliance and governance requirements are tightening Basel II, HIPAA, Sarbanes-Oxley (SOX), corporate governance B2B compliance and monitoring (e.g. RosettaNet PIPs) Auditing, data protection digital rights management Business Visibility 8 Process-centric vs. organization-centric thinking (K. Laamanen) Organization-centric thinking The problem is in attitudes Worker I domy job I understand my work Only personal performance is measured Better manager can always be hired Motivate people Monitor people Don t trust anybody Who made the mistake? Mistakes are repaired Profitability matters Process-centric thinking The problem is in processes Human I help my colleagues that the work can be done I know how my job relates to the process The performance of processes is measured Process can always be enhanced Remove obstacles Develop the skills and knowledge of people We are in the same boat What made the occurence of the mistake possible? Deviation is reduced Customer-centricity; good profitability is the outcome. 9

6 Process development environment Customers Channels Management and reporting People, roles and skills Products and services Partners and networking Technology 10 Some process-centric management principles Scientific management by Fredric Taylor in the 1900s Article: The Principles of Scientific Management Total quality management (TQM) Kaizen, Atarimae Hinshitsu, Kansei, Miryokuteki Hinshitsu Adopted mostly in manufacturing processes (Toyota, etc.) Business process reengineering (BPR) by Michael Hammer and James Champy in the early 1990s Book: Reengineering the Corporation Six Sigma (registered by Motorola) Widely adopted methodology to manage process variations that cause defects, defined as unacceptable deviation from the mean or target. 11

7 Where is my process?? I want to change it! Standard and process procedures Embedded process logic in information systems Tacit knowledge 12 How many business processes? Account management Advance planning and scheduling Advertising Assembly Asset management Benefits administration Build to order Call center service Capacity reservation Commissions processing Credit request and authorization Customer acquisition Customer inquiry Customer self service Demand planning Distribution and VAR management Financial planning Hiring Installation management Integrated logistics Internal audit Inventory management Invoicing IT service management Knowledge management Manufacturing Market research and analysis Market test Materials procurement Order dispatch and fulfillment Order fulfillment Order management Organizational learning Payroll processing Performance management Post-sales service Problem and resolution management Process design Procurement Product data management Product design and development Recruitment Sales planning Service fulfillment Service provisioning Shipping Sourcing Supply chain planning Reporting Warehousing Warranty management 13

8 Process development views Business activity monitoring Workflow management EAI Web services ERP Process modeling Rules engine B2Bi Six Sigma Acivitybased costing ISO9001 TQM Value chain Balanced scorecards BPR IT organization Business organization 14 BPMN becomes de facto interface between business and IT BPMN IT organization Business organization 15

9 BPMN (Business Process Modeling Notation) A widely adopted graphical notation standard for modelling business processes. Initially developed by BPMI.org ( that formerly merged with OMG. Home page for BPMN: 16 BPMN sample From: ng%20bpmn%20to%20bpel%20exampl e.pdf 17

10 The building blocks of BPM BPMN BPMN, RosettaNet PIPs Business participant Process coordination Business participant Management view to the model Implementation view to the model Contract Business process management (BPM) Shared process model (BPDM, XPDL, BPMN?) Executable process parts (BPEL, XLANG, XPDL, ) Business processes are developed and designed in evolutionary manner in small measurable projects. Business processes are designed and described using sophisticated process design tools. Business process descriptions are increasingly deployed as executable models in a business process management systems/suites (BPMS). Business process models are developed, integrated and automated in a BPMS environment that is shared with business and IT people. 18 The building blocks of BPM and SOA BPMN BPMN, RosettaNet PIPs Business participant Process coordination Business participant Management view to the model Implementation view to the model Contract Business process management (BPM) Shared process model (BPDM, XPDL, BPMN?) WS Service-Oriented Architecture (SOA) Executable process parts (BPEL, XLANG, XPDL, ) Enterprise service bus (ESB) Service-Oriented Architecture (SOA) WS WS Service discovery, description and interaction WS WS WS Technology adapters and data transformation (JCA, XSLT, XPath, ).NET PDM CICS J2EE Core business applications ERP 19

11 SOA and BPM: Black and white comparison Business process management (BPM) Top-down Business-driven Success measured in KPIs and business metrics Project-oriented (solving today s problems) Reusable fully transparent process models Inherently hierarchical or graph-based process structures Process activities bound to endpoints by service orchestration Service-oriented architecture (SOA) Bottom-up IT-driven Success measured by architecture, logical consistency, ease of integration Enterprise infrastructure-oriented Reusable opaque (defined only by interface) service implementations Inherently independent services Orchestrated services are abstract, with connection and mapping to endpoints mediated by an enterprise service bus (ESB) 20 Impacts on IT professionals IT departments will be evolved to process management organizations that contains both IT professionals and process analysts. Basic functional enterprise applications will likely become commodity. The competitive advantage will be created by innovative business process integration and flexible enterprise architecture. There will be huge demand for IT-business architect combos who are familiar with complex process and systems thinking. 21

12 Thank you! Jari Kekkonen 22