Business Process Management. Prof. Corrado Cerruti General Management Course

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1 Business Process Management General Management Course Summary Business Process Management definition Business Process Management Life Cycle ARIS approach to BPM Business Process Identification; Designing a Process Architecture; Identify Processes; Business Process Modeling; Business Process Modeling standards Business Process Management and IT References 2 University of Rome"Tor Vergata" 1

2 Business Process Management What is Business Process Management (BPM)? a discipline of combining software capability and business expertise to accelerate process improvement and facilitate business innovation BPM is a based on ongoing change management approach and requires: - Software that enables BPM as to Integrating / Modeling / Monitoring / Workflow Mgmt - Expertise that delivers BPM requires People / Methodologies / Metrics / Process Knowledge as well as Pre-Built Models, Policies, and Rules 3 University of Rome"Tor Vergata" Business Process Management Life Cycle 4 University of Rome"Tor Vergata" Source, Hammer, vom Brocke & Rosemann Eds 2

3 Merging processes and IT in BPM Source: Davis & Brabander, ARIS design platform. Getting started with BPM The Business View has to be taken into account together with the IT View in order to implement and then manage more streamlined processes 5 University of Rome"Tor Vergata" Business Process Management Life Cycle ARIS approach 6 University Prof. Corrado of Rome"Tor Cerruti Vergata" Source: Davis & Brabander, ARIS design platform. Getting started with BPM 3

4 Business Process Management and the role of Modeling Modeling Adopting a standard approach to business process modeling is key for BPM as it allows to deal with: - Multiple processes (often in parallel) - Several times (different releases) 7 Business Process Identification Process identification is a set of activities aiming to systematically define the set of business processes of a company and establish clear criteria for prioritizing them. The output of process identification is a process architecture, which represents the business processes and their interrelations. A process architecture serves as a framework for defining the priorities and the scope of process modeling and redesign projects. More specifically, process identification is concerned with two successive phases: 1. Designation (core; management; support processes) 2. Evaluation (disfunctionality; importance; feasibility) 8 4

5 Business Process Identification: Core, Management and Support Processes Core processes generate value as they are directly linked to external customers Management processes provide direction, rules and practices Establish Sourcing Procedure Fill Order Process Receive Order Approve Order Sign Contracts Plan Vendors Process Fill Order Evaluate Vendors Deliver Order Support processes provide resources to be used by other processes Stock Supplies Reorder Supplies Process Order Supplies Receive Supplies 9 Designing a Process Architecture A process architecture is a conceptual model that shows the processes of a company and makes their relationships explicit. Typically, these relationships are defined in a consumer-producer relationship: one process provides an output that the other process takes as an input. A process architecture can be defined at different levels: Level 1: Process Landscape Level 2: Abstract Process Models Level 3: Detailed Process Models (using BPMN, ARIS) 10 An overview of the Business Process Architecture (the Process Landscape) can be defined along two dimensions: case type and business function. 5

6 Designing a Process Landscape The case type dimension classifies the types of cases that are handled by an organization. Typically, a case is a product or service that is delivered by an organization to its customers. Cases can be deliberately classified, using any number of properties like the product type (home insurance, car insurance and life insurance), or the channel used to interact with its customers (telephone, office, and internet). It can be detailed by regions if relevant. The function dimension classifies the functions of an organization. A function is, simply put, something that an organization does. In order to list the functions a company can make reference to existing frameworks such as the process classification framework by APQC (American Productivity & Quality Center). 11 Designing a Process Landscape Steps 1 and 2 To arrive at a business process landscape follow four steps: 1. identify case types: The main purpose for identifying different classes in this dimension of the process architecture is to determine the different ways in which (similar) processes are handled in the organization (i.e. product type; service type; channel; customer type, location). 2. identify functions for case types: each of the case types is examined in detail and for each case type the functions that can be performed on it are identified. Potentially, the functions that are performed in an organization can be related to existing classifications that are proposed by reference models. Whether this identification of functions starts with a reference model or not, it requires interviews with different people in the organization. These interviews serve to either identify the functions directly, or to check to which extent the functions from a reference model apply to the organization. 12 6

7 Designing a Process Landscape Step 3 Construct one or more case/function matrices: The previous two steps of the described approach lead to a matrix that has the different case types as columns and the different functions as rows. A cell in the matrix contains an X, if the corresponding function can be performed for the corresponding case type Identify processes: we determine which combinations of business functions and case types form a business process. To determine this, we need to find a trade-off between two extremes, one in which the entire matrix forms one big process and one in which each single cross in the matrix forms a process. In order to face the identify the boundaries a few rules can be applied so to separate processes between rows (a vertical split) or processes between columns (a horizontal split). This leads to a process landscape model that covers the processes provides a very abstract insight into each process within the process landscape showing how processes differ from each other in terms of the cases and functions they cover. Additional information could be added (a) the various steps that are taken within each process and (b) the organizational units that are involved in carrying these out. Designing a Process Landscape Step 4 7

8 15 Rules for identify process boundaries Change of flow object in the process: if a process has different flow objects*, it can be split up vertically. Change of multiplicity of flow object in the process: if the flow object of a process changes multiplicity, the process can be split up vertically. Change of transactional state: if a process changes transactional state, it can be split up vertically. Process contains logical separation in time: a process contains a logical separation in time, if its parts are performed at different time intervals Process contains logical separation in space: a process contains a logical separation in space, if it is performed at multiple locations and is performed differently at those locations. Process contains logical separation in other dimension: the separation must be such that there is no choice but to perform the processes differently for the different logical units. Follow scope in reference model: if a process is split up in a reference model, it can be split up. Based on functions/cases covered: if a process covers (many) more functions in one case type than in another, it can be split up horizontally. * It is the object on which business process activities are being carried out. Integrated view for business process modelling in ARIS Organisation View: models of the structure of the organisation as to departments, people resource and roles in hierarchical organisation charts, technical resources and communications networks. Data View: models of business information as to data models, knowledge structure, information carriers, technical terms and database models. Function View: models of process tasks as to function hierarchies, business objectives, supporting systems and software applications. Product/Service View: models of the structures of products and services as to product trees, products, services. Process (Control) View: dynamic models showing the behaviour of processes and how they relate to the resources, data and functions of the business environment. 16 8

9 Integrated view for business process modelling in ARIS 17 Source: Davis & Brabander, ARIS design platform. Getting started with BPM Business Process Modeling An effective business process model must the following three properties: Mapping: a model implies a mapping of a real-world phenomenon-the modeling subject. For example, a residential building to be constructed could be modeled via a timber miniature Abstraction:a model only documents relevant aspects of the subject, i.e. it abstracts from certain details that are irrelevant. The timber model of the building clearly abstracts from the materials the building will be constructed from. Fit for purpose:a model serves a particular purpose, which determines the aspects of reality to omit when creating a model. Without a specific purpose, we would have no indication on what to omit. Consider the timber model again. It serves the purpose of illustrating how the building will look like. 18 9

10 Beyond Business Process Modeling The adoption of a BPM approach goes beyond process modeling (design phase) and needs to be supported in terms of: Process metrics: end-to-end metrics that are derived from customer needs and enterprise goals. Process performers: people who work in processes with an understanding of the overall process and its goals, the ability to work in teams, and the capacity to manage themselves. Process infrastructure: integrated IT systems (such as ERP systems). Process owners: senior managers with authority and responsibility for a process across the organization as a whole. 19 References Chapter 2 of textbook: Dumas, M., La rosa, M., Mendling, J., Reijers, H.A. (2012), Fundamentals of Business Process Management, Springer: New York. Additional references: Hammer M., What is Business Process Management in vom Brocke J. and Rosemann M. (Eds) (2010). Handbook on Business Process Management 1, Springer Davis R. & Brabander E. (2007), ARIS design platform. Getting started with BPM, Springer 20 10