3. Key Concepts
3
Business Process Management
Business Process Management (BPM) is a systematic approach that is used to
make an organization's workflow effective, efficient and responsive to
changing environment.
Purpose of BPM
To reduce human error and avoid miscommunication. Link operational
processes to corporate strategies. Measure performance indicatorsfrom
processes for evaluation of businesssuccess.
Business Process Model
A Business Process Model (BPMd) typically consists of workflow diagrams,
descriptions, inputs and outputs, KPIs and data that provide both overviewand
detailed information about an organization’s business processes.
4. Key Concepts
4
Utility of Business Process Model
It helps to measure requirements of a process and eliminates the risk of
losing value through inefficient or inappropriateactivities.
BPM Software
Software that allows users to create BPM diagrams and integrate process
content with critical business entities (departments, resources, etc.)Please
refer to Appendix A for more details about BPMsoft-wares.
Business Process Re-engineering (BPR)
The realignment of business process strategies through the use of an analytic
tool and an intense consultation process. BPR is an off-shoot of BPM
implementation that involves a great deal of risk due to change
management.
5. Key Concepts
5
Business Process Design (BPD)
BPD is the systematic working by which an organization understands, defines and
documents the business activities that enable it to function efficiently, effectively
and economically.
Business Process Model (BPMd)
Illustrated description of business processes, usually created with flow diagrams.
The model contains the relationship between activities, processes, sub-processes and
information, as well as roles, the organization and resources. It is also termed as
Business Process Mapping.
Workflow Simulation &Analysis
An executable specification of a workflow that is used to simulate the behavior of
the workflow under different circumstances. This application is a typical example of
decision support in matters as BPR and operational control. Various qualitative and
quantitative analytical methods have been developed to assess the effectiveness of
existing or new workflows.
6. Important Terms
6
Process
Sequence of interdependent and interlinked activities which, at every stage, consume one or
more resources (employee time, energy, machines, money) to convert inputs
(data, material, parts, etc.) into outputs.
Sub-process
A sub-process is a compound activity that is included within a task (process). Each task may
have its own sub-processes. Each sub-process can also contain other sub-processes.
Activities
Activities are the lowest-level process steps in modeling software where actual work is
performed. Activities cannot be broken down into further steps.
Process Owner
The person (Resource) responsible for the process.
Key Performance Indicators (KPIs)
KPIs are descriptive time, cost or quality indicators used to capture the performance of a
process.
7. Important Terms
7
Job Description or Roles
Roles represent specific skill sets, responsibilities or positions in a business
environment. Roles allow the modeler to define criteria required for performing the
activity, rather than the specific individuals who will perform the activity.
Scope of a Process
It describes the boundaries of a process and includes start and end points, the
context in which the process is performed and elements excluded from that context.
Workflow Diagram
It refers to a simple form of flowchart depicting the flow of tasks or actions from
one person or group to another. It typically consists of a set of symbols
representing actions or individuals connected by arrows indicating the flow from
one to another.
8. Benefits of BPM
8
1. Improves process quality, reliability and output.
2. Helps for continuous process improvement that provides foundations for BPR.
3. Maximizes process visibility that helps in reducing costs.
4. Improves strategic decision-making by providing correct information at correct
time. It provides end-to-end performance visibility and optimization of
resources.
5. Improves operational efficiency that results in the avoidance of wastage and
loss of company resources.
6. Consistent execution reduces process cycle time.
7. Improves customer satisfaction by delivering better and enhanced value.
8. Promotes organizational flexibility and business agility.
9. Promotes communication and collaboration between departments.
10. Helps in standardization of procedures.
11. Helps in measuring KPIs and thus improves accountability.
12. Promotes safe working conditions that protect company resources.
13. Defines roles and responsibilities that increases employee efficiency and
satisfaction.
14. Simplifies regulatory compliance.
12. 1. Designing
12
BPD is the systematic working by which an organization understands, defines and
documents the business activities that enable it to function efficiently, effectively and
economically.
The purpose of BPD is to ensure that processes are optimized, effective, meet
customer requirements, support and sustain organizational development and growth.
Designing a process that improves corporate performance is a challenging task that
requires multi-disciplinary expertise and a plethora of inputs (for instance,
organizational strategies, goals, constraints, human and technical capabilities, etc.).
The most common requirements of a BPD are:
Customer and supply chain management
Operational performance improvement
Business process integration and automation
Cost reduction
New business opportunities.
13. 2. Modeling
13
The output of a BPD project is a streamlined, comprehensive, easy-to-use
model of the ways in which a business delivers output to its customers. One of
the key purposes of process modeling is to provide a “process view” of the
business.
BPMd typically consists of a set of diagrams, textual descriptions anddata
elements that provide both overview and detailed information about the
business processes in a format that is easily understood byeveryone.
The key components of a typical BPMd are as given below:
The set of processes and activities that take place within an organization
A written description of each process or activity or task
Workflow diagrams
Inputs & outputs
KPIs
14. 3. Executing
14
It refers to automating processes by using BPM application
software that executes the required steps of a process. BPM
soft-wares are either purchased or developed to fit to the
requirements of a company. Please refer to Appendix A for
BPM soft-wares.
15. 4. Monitoring
15
Monitoring refers to tracking of individual processes,
information about them can be checked.
so that
An example of the tracking is being able to determine the stage of a
customer order (e.g. order arrived, awaiting delivery, invoice paid) so
that problems in its operation can be identified and corrected.
The degree of monitoring depends on what information a business
requires to evaluate and analyze and how that business needs it to be
monitored, in real-time, near real-time or ad-hoc. Here, business
activity monitoring extends and expands the monitoring tools
Suites
generally provided by Business Process Management
(BPMS).
16. 5. Optimizing
16
Refers to retrieving process performance information from
actual problems, recognizing the opportunities for
monitoring phase, identifying the potential or
cost
cuttings or further improvements and then, applying those
enhancements in the design of the process. In more specific
terms, optimizing may include the following activities:
Improve processes and performance by reducing inefficiencies
identified during monitoring.
Simulate these changes using “what-if” simulation.
Determine which changes will deliver the maximum improvement.
Build the processes on firm footing.
22. Brief Background
22
Hammer and Champy (1990s) felt that the design of workflow inmost
large companies was based on facts about
technology, people, practices, and organizational goals that were no longer
applicable.
They suggested seven principles of re-engineering to streamline thework
process and, thereby, achieve significant levels of improvement in
quality, time management, and cost:
1. Organize around outcomes, not tasks.
2. Identify all the processes in an organization and prioritize them in order of
redesign urgency.
3. Integrate information processing work into the real work that produces the
information.
4. Treat geographically dispersed resources as though they were centralized.
5. Link parallel activities in the workflow instead of just integrating their results.
6. Put the decision point where the work is performed, and build control into the
process.
7. Capture information once and at the source.
23. Methodology
23
BPR involves the redesign of business processes to achieve improvementsin
productivity, cycle time, quality and cost.
BPR review starts with the description of existing business processes to
deliver more value to the customers.
BPR typically adopts a new value system that places emphasis on customer
needs. They remove unnecessary organizational layers and eliminate
unproductive activities in two key areas.
First, BPR redesigns functional organizations into cross-functionalteams.
Second, BPR uses technology to improve data dissemination and decision
making process.
24. Case Study -- Taco Bell
24
Taco Bell (founded in 1962, California) created K-Minus Program
(Kitchen-less Restaurant) based on the fact that they are a retail service
company, not a manufacturing company. In the new process, meat, beans,
corn shells, lettuce, tomatoes and cheese for their products are prepared
outside of the restaurants in central commissaries. At Taco Bell
restaurants, the food ingredients are prepared when ordered for customer
consumption. Taco Bell has produced the following results: greater quality
control, better employee morale, fewer employee accidents and injuries, big
savings and more time to focus on the customer satisfaction. Currently, they
are redefining how to deliver their food services, by taking their food
service to public gathering places such as dining centers, schools,
universities, airports, and stadia. Taco Bell has progressed from a $. 500
million regional company in 1982 to a $. 1.9 billion in 2009 a national
company. (Hammer & Champy 1993, pg. 178-179)
25. Abbreviations
2
5
#
Abbreviatio
n s
Complete Term
1 IT Information Technology
2 BPD Business Process Design
3 BPM Business Process Management
4 BPMd Business Process Model
5 BPMS Business Process Management Suites
6 KPIs Key Performance Indicators
26. Appendix A: List of BPM soft-wares
26
# BPM Software Website
1 Accu Process Modeler http://www.accuprocess.com
2 RunMyJobs http://www.runmyjobs.com
3 BPMS http://www.sydle.com
4 BPM from IBM http://www-142.ibm.com
5 ProcessMaker http://www.processmaker.com
6 Appian BPM Suite http://www.appian.com
7 webMethods BPMS http://www.softwareag.com
8 Ultimus BPM & Workflow
Solution Software
http://www.ultimus.com
9 Progress® Savvion®, http://www.progress.com
10 Sequence KineticsTM BPM Software http://www.pnmsoft.com/
11 Oracle Business Process
Management Suite
http://www.oracle.com/us/technologies/b
p m
12 Skelta BPM & Workflow Software http://www.skelta.com
13 SharePoint 2010 https://www.microsoft.com
27. Appendix B: Books on BPM
27
# Title of Book Publisher
1 B u sin e ss P r o ce ss M an age m e n t Springler
2 B u sin e ss P r o ce ss M an age m e n t
B P M 1 0 0 Su cce ss Se cr e ts
Emereo Pt y Lt d
3 D e live r in g th e V a lu e o f B PM Accent ure
4 H an d b o o k o n B P M 2 Springler
5 B PM : P r a ctical G u id e lin e s for
Su cce ssfu l I m p le m e n tatio n
BH
6 B u sin e ss P r o ce ss M an age m e n t
D e m ystifi e d : A T u to r ial o n
M o d e ls
E d e n h o ve n U n iver sity
o f T e ch n o lo gy
