Business Process Management (BPM)

Business Process Management (BPM)

Information Instructor: Assist. Prof. Maria-Iuliana Dascalu, PhD, FILS-UPB Contact address: [email protected] The course material will be available on: www.mariaiulianadascalu.com/teaching Schedule: Friday, 9th of May, 18-21, room 2103 Saturday, 16th of May, 9-18 , room 2017 Sunday, 17th of May, 9-18 , room 2017 Grading: 10%: written exam (18 multiple-choice qs and an open qs), 24 th of May, 9-9.50 , room 2017 20%: research presentation on a given subject (in teams) in-class on Sunday, 17th of May 70%: project presentation (in teams), 24th of May, 10-12

The bottom line is Clean kitchen does not necessarily produce tasty food, but we’d rather eat a so-so tasty food from a clean kitchen. Good processes does not necessarily develop quality software, but we’d rather fly in Airbus with a software from a well-known company than a small software development house. So, there is a need for quality processes, since they decrease the risk of companies producing low quality products. Process management ensure qualitative processes.

Outline Definitions Core concepts and their descriptions Components Lifecycle Examples Advanced concepts

Definitions (1) Business person/ corporation engaged in commerce, manufacturing, or a service; profit-seeking enterprise (people/teams are involved for a specific outcome; refers to individuals, interacting together, to perform a set of activities to deliver value to customers and a return on investment to the stakeholders) Process a systematic series of actions directed to some end; a continuous set of actions, operations or series of changes taking place in a definite manner Management the act or manner of managing; handling, direction or control; executive ability; the person or persons controlling and directing the affairs of a business or institution (it requires handling exceptions, providing directions, controlling variables to achieve desirable outcomes; it requires skills and involves people and executives)

Definitions (2)

Definitions (3) Business Process Management: Disciplined approach to identify, design, execute, document,measure, monitor and control both automated and nonautomated business processes to achieve consistent, targeted results aligned with an organisation’s strategic goals Involves the deliberate, collaborative and increasingly technology aided definition, improvement, innovation and management of end-to-end business processes that drive business results, create value and enable an organisation to meet its business objectives with more agility Enables an enterprise to align its business processes to its business strategy, leading to effective overall company performance through improvements of specific work activities either within a specific department, across the enterprise or between organisations (Association of Business Process Management Professionals-ABPMP)

Outline Definitions Core concepts and their descriptions Components Lifecycle Examples Advanced concepts

Core Concepts The defining characteristic of process vs. project is repeatability vs. uniqueness. Process is a repetitive collection of interrelated tasks aimed at achieving a certain goal. Project is a unique endeavour with a beginning and an end undertaken to achieve a goal.

Management Discipline and Enabling Technologies Enabling technology is meaningless without the management disciplines and processes for exploiting the technology Vendors have created application suites which help enable organisations to better manage their business processes Tools to visually design and model business processes Simulate and test business processes, automate, control and measure business processes Provide feedback and reporting on process performance Some vendors have combined these into integrated business process management suites

Addresses End-To-End Work Business functions are typically defined by a group of activities related by a particular skill or goal such (i.e. sales, finance, manufacturing) Business processes focus on the end-to-end work, i.e., tasks and activities, across functional boundaries to deliver customer value Business processes have defined inputs and outputs and functions have not

Ongoing Management of Processes BPM involves a permanent ongoing organisational commitment to managing the organisations processes Includes: Modelling Analysis Process design Performance measurement

Modelling, Analysis, Design and Measurement of Processes Practice of BPM requires the measurement and supervision of process performance Setting process performance goals Measuring actual performance, the efficiency of the business processes (“doing the thing right“) Reviewing the effectiveness of business processes (“doing the right thing“) Providing information, insight and feedback to other primary activities such as process analysis, design and transformation Gather information at key points in the process to support decisions regarding cost or timing

Organisational Management of end-to-end business process crosses organisational boundaries Commitment New roles and responsibilities are introduced, such as process owners, designers and architects Individuals responsible for end-to-end process design must interact with traditional functionally based managers New governance structures need to be introduced which may change the way organisations make decisions and allocate resources Practice of BPM requires a significant organisational commitment: without organisational commitment, the practice and benefits of BPM is unlikely to mature within an organisation Without supporting leadership, values, beliefs and culture, BPM is unlikely to successfully take hold within an organisation

BPM Technology BPM is a technology enabled and supported management discipline Wide range of technologies available to support the planning, design, analysis, operation and monitoring of business processes Application suites available which help enable organisations to better manage their business processes BPM systems must be able to integrate with legacy systems in order to control work and get information or measure performance Common framework for how these technologies are deployed is most often referred to as a Service Oriented Architecture (SOA)

Outline Definitions Core concepts and their descriptions Components Lifecycle Examples Advanced concepts

Components A management approach to continuously improve processes and archive organizational objectives through a set of methodologies and technologies People and processes are a key part

Input An input can be a form, a document, an image, an approval from a person (employee/customer/ manager can trigger an event), data, alert, mail from a person or a system.

Process Participants From the same team project, but also cross-functional

Process Activities Types: Value Added - contribute to the process output in a positive way Handoff - pass control of the process to another department or organisation Control - assure that the processes behave within desired tolerances or specify a validity checkpoint Examples: Planning & strategy Analysis Design & modeling Implementation Monitoring & controlling Refinement

Output Management dashboard, reports, phones, e-mail alerts from key participants and reviewers Good outcomes for participants and organization bring the process to an end

Outline Definitions Core concepts and their descriptions Components Lifecycle Examples Advanced concepts

BPM Lifecycle (1) The BPM activities are affected by several factors: leadership, values, culture and beliefs factors

BPM Lifecycle (2) Iterative, phased set of activities

Process Planning and Sets the strategy and direction for the BPM Strategy process Plan starts with an understanding of organisational strategies and goals Provides a foundation for a holistic BPM approach to ensure the alignment with organisational strategy and the integration of strategy, people, processes and systems across functional boundaries Identifies appropriate BPM organisational roles and responsibilities, executive sponsorship, goals and expected performances measures and methodologies

Analysis of Business Processes Takes information from strategic plans, process models, performance measurements, changes in the environment and other factors in order to fully understand the business processes in the context of the overall organisation

Design and Modelling of Business Processes Document the sequence of activities, including the design of what work is performed, at what time, in what location, by what process actors using what methodology Defines what the organisation wants the process to be and answers the what, when, where, who and how questions of how end-to-end work is executed Ensures that the proper management controls and metrics are in place for compliance and performance measurement

Process Monitoring and Controlling Continuous measuring and monitoring of business processes provides the information necessary to adjust resources in order to meet process objectives Measuring and monitoring also provides critical process performance information through key measurements related to goals and value to the organisation Analysis of process performance information can result in improvement, redesign or reengineering activates

Process Refinement Implements the output of the iterative analysis and design cycle Addresses organisational change management challenges Aimed at continuous improvement and process optimisation

Outline Definitions Core concepts and their descriptions Components Lifecycle Examples Advanced concepts

Continuous vs. Ad Hoc

Simple vs. Complex: number of steps, number of participants, number of people/systems involved, number of exceptions

Other examples Management processes: used to measure, monitor and control business activities ensure that a primary or supporting process meets operational, financial, regulatory and legal goals Primary (core) processes: end-to-end, cross-functional processes which directly deliver value represent the essential activities an organisation performs to fulfill its mission Support processes: support primary processes, often by managing resources and/or infrastructure required by primary processes not directly deliver value (does not mean that they are unimportant to an organisation); e.g. information technology management and human resource management

Example: Request to IT Department

Outline Definitions Core concepts and their descriptions Components Lifecycle Examples Advanced concepts

Advanced Concepts 1. Process Ownership 2. Process Modelling 3. Process Analysis 4. Process Design 5. Process Performance Measurement 6. Process Transformation 7. Process Implementation 8. Process Quality 9. Process Management Organisation 10. Enterprise Process Management 11. Process Management Technology

1. Process Ownership

Process Ownership Successful BPM implementations recognise that the role of a process owner is critical Process owner is responsible for the entire end-toend process across functional departments Success of this role depends on the authority the individual has to control the budget and make decisions that effect the development, maintenance and improvement of the business process

2. Process Modelling

Process Modelling

Process Diagrams, Maps and Models Diagrams: Process diagram often depicts simple notation of the basic workflow of a process Depicts the major elements of a process flow, but omits the minor details which are not necessary for understanding the overall flow of work Maps: More precision than a diagram More detail about process and important relationships to other elements such as performers (actors), events, results Provide a comprehensive view of all of the major components of the process Models: Represents the performance of what is being modelled Needs greater precision, data about the process and about the factors that affect its performance Often done using tools that provide simulation and reporting capability to analyse and understand the process

Process Attributes and Characteristics describe the properties, behaviour, purpose and other elements of the process are captured in a tool in order to organise, analyse and manage an organisation’s portfolio of processes examples: Inputs/Outputs, Events/Results, Value Add, Roles/Organisations, Data/Information, Probabilities, Queuing, Transmission Time, Wait Time, Arrival Patterns/Distributions, Costs (indirect and direct), Entry Rules, Exit Rules, Branching Rules, Join Rules, Work/Handling Time, Batching, Servers (number of people available to perform tasks)

Purpose of Process Modelling (1) A model is rarely a complete and full representation of the actual process Objective is to create a representation of the process that describes it accurately and sufficiently for the task at hand Models are simplified representations that facilitate understanding of that which is being studied and making decisions about it

Purpose of Process Focus on representing those (2) attributes of the process that support continued Modelling analysis from one or more perspectives Understanding the business process through the creation of the model Creating a visible representation and establishing a commonly shared rerspective Process models are the primary means for Measuring performance against standards Determining opportunities for change Expressing the desired end state preceding a change effort Benefits of Modelling: Models are relatively fast, easy and inexpensive to complete Models are easy to understand (when compared to other forms of documentation) Models provide a baseline for measurement Models facilitate process simulation and impact analysis

Modelling Standards and Notations Range of number of modelling and notational standards and Techniques Models provide a language for describing and communicating as-is and to-be process information Like all new languages must be learned Examples: Business Process Modelling Notation (BPMN) Flow Charting Event Process Chain (EPC) Value Chain Unified Modelling Language (UML) IDEF-0 (Integration Definition for Function Modelling) LOVEM-E (Line of Visibility Engineering Method - Enhanced) SIPOC (Supplier, Input, Process, Output and Customer) Systems Dynamics Value Stream Mapping

Business Process Modelling Notation (BPMN) Widely used and supported standard for business process modelling Provides a graphical notation for specifying business processes in a Business Process Diagram (BPD) Uses a flowcharting technique similar to activity diagrams from Unified Modelling Language (UML) Can output BPMN to Business Process Execution Language (BPEL) Standard executable language for specifying interactions with Web Services Emerging standard

BPMN - Structure

BPMN – Events: denote something that happens Classifications: Catching – triggered by external event or Throwing – generating an output Types: Start Event - acts as a trigger for the process, End Event - represents the result of a process, Intermediate Event - represents something that happen between the start and end events BPMN – Activities: describe the kind of work that must be done Types: Task - represents a single unit of work that is not or cannot be broken down to a further level of business process detail, Sub-Process - used to hide or reveal additional levels of business process detail, Transaction - a form of sub-process in which all contained activities must be treated as a whole BPMN – Gateway: determines forking and merging of paths depending on the conditions expressed BPMN – Flow objects are connected to each other using connecting objects. Types: Sequence Flow - shows in which order the activities will be performed, Message Flow - shows what messages flow across organisational boundaries, Association - associate an Artefact to a Flow Object and can indicate directionality BPMN - Swim Lanes: visual mechanism of organising and categorising activities, based on cross functional flowcharting Types: Pool - represents major participants in a process and contains one or more lanes, Lane - used to organise and categorise activities within a pool according to function or role BPMN – Artefacts: used to bring some more information into the model/diagram Types: Data Objects - show the data is required or produced in an activity, Group - used to group different activities but does not affect the flow in the diagram, Annotation - used to provide the model/diagram with understandable details

References Association of Business Process Management Professionals (ABPMP) Business Process Management Common Body of Knowledge (CBOK) Alan McSweeney, Management”, 2010 M. Staron, W. Meding, “Ensuring Reliability of Information Provided by Measurement Systems”, Ericsson M. Staron, “Software Leadership and Quality Assurance”, Gothenburg University, 2010 “Introduction to Business Process