OCEB2F 03 Business Process Management Concepts and Fundamentals

Module 3. Business Process Management
Concepts and Fundamentals⌘

Fundamentals of Business Process Management⌘

Source of information:

Bruce Silver, The BPMS Value Proposition, January 2007

• http://www.softwareag.com/jp/Images/The%20BPMS%20Value%20Proposition%20WP%20Final_tcm87-33844.pdf

Daniel J. Madison, Becoming A Process-Focused Organization, BPM Institute, 2007

• http://www.bpminstitute.org/articles/article/article/becoming-a-process-focused-organization.html

Fundamentals of Business Process Management⌘

	Howard Smith & Peter Fingar, Business Process Management: The Third Wave, Fourth Anniversary Edition, Meghan-Kiffer, 2007 [ ISBN-10: 0929652347 ]
	James F. Chang, Business Process Management Systems: Strategy and Implementation, 2005 [ ISBN-10: 084932310X ]
	Marlon Dumas, Fundamentals of Business Process Management, Springer, 2013 [ISBN-10: 3642331424 | ISBN-13: 978-3642331428]

Different Organizational Approaches⌘

Methodology	Level of change	Focus
Radical BPR	Radical	Start from scratch
Revision BPR	Small Leap	Redesign current processes
TQM	Incremental	Redesign current processes
Six Sigma	Incremental	Improve current processes

Total Quality Management (TQM) Principles⌘

• Focus on work processes
  • Quality problems are mostly dependent on the work processes that designed and manufactured the products and services
• Analysis of variability
  • Uncontrolled variances are the primary causes of quality problems, and these variances should be analyzed and controlled by the front-line workers
• Management by fact
  • Quality improvements programs should be based on systematic data collection, analysis and experimentation for solution implementation
• Learning and continuous improvement
  • Quality improvement is never-ending and employee learning is a major part for carrying out quality improvements

William Edwards Deming⌘

• William Edwards Deming an American engineer, statistician, and management consultant
• The father of TQM
• Inspiration for the Japanese post-war economic miracle (from the ashes of war to the second most powerful economy in the world in less than a decade)

BPM and TQM⌘

• BPM is similar to TQM in the way:
  • Use of statistical data
  • Kaizen (continuous improvement)
  • Evolution rather than revolution
• Differences:
  • BPM “requires” computers

BPR Principles⌘

Business Process Re-engineering (BPR)

• Management philosophy to enhance corporate competitiveness
• Tom Davenport and James R. Short – they prescribe a five-step methodology for achieving process redesign
• M. Hammer – he believed corporation were simply automating processes design prior to the wide usage of computers
• The key enabler for BPR is IT
• The scope of radical BPR is to reshape the way that entire organization does business.
• IT serves as the disruptive technology that allows generalists to do the work traditionally performed by specialists, enables everyone to make decisions

Michael Hammer⌘

• Michael Martin Hammer (1948 - 2008)
• an American engineer
• management author (has he ever managed something?)
• professor of computer science at the Massachusetts Institute of Technology (MIT)
• known as one of the founders of the management theory of Business process reengineering (BPR)

Becoming Process Driven Organization⌘

• Becoming a process based organization is not an easy task.
• In addition, the transformation occurs on many dimensions, of which technology is only one component.
• While there are multiple advantages to modern BPM software, the IT department, business analysts, and others involved in BPM initiatives need to see the organization as a whole.

More: http://www.bpminstitute.org/resources/articles/becoming-process-focused-organization

Becoming Process Driven⌘

Changes are required to be implemented in the following areas:

• Interpersonal: department heads evolve into leaders of links in a chain to create and deliver value
• Conceptual: supervisors and managers shift from fire-fighting to structured, team-based problem solving using process improvement tools; a horizontal organization, instead of a vertical separation based on functional units
• Cultural: organization’s values must shift from individual recognition to process excellence
• Structural: formal governing body that oversees enterprise processes, allocates resources, prioritizes initiatives, and links process to strategy is needed
• Technology: software should be used to model, test, and improve processes

Change Sponsor⌘

• Change (structural, interpersonal, conceptual and technology) requires sponsors
• A sponsor is:
  • Person who has the authority and provides the long-term commitment, funding, resources and direction for an effort
  • Executive manager of the unit that is undergoing the change
  • Sponsorship should cascade down through the middle managers and unit managers that will ensure continuity of efforts

Stakeholders' Roles and Responsibilities⌘

BPMM: Unit, Work Unit and Project⌘

• Unit is a single, well-defined organizational component (for example, a department, section, or project) within an organization.
• A "unit" is an organization entity, headed by a managers. On an organization chart or organogram, the boxes (or other elements, including subordinate boxes) typically represents a unit.
• The term "unit" is a recursive term and applies to every management level in the organization

Organogram⌘

BPMM: Work Unit⌘

• Work Unit is a well-defined collection of people, managed as a single unit within the organization, who work closely together on tasks specifically related to developing, preparing, maintaining, and delivering the organization’s products and services or performing internal business functions.
• A work unit is an organizational unit whose manager is accountable for agreeing to requirements, making commitments, obtaining and removing resources, assigning responsibility, and tracking and ensuring performance.
• Work Units are the lowest level units in the organization where the people who do the work can appropriately participate in the planning and commitment activities and where the manager is aware of work requirements and commitments and able to take corrective action

BPMM: Unit, Work Unit example⌘

Process Owner⌘

• Responsible for the performance of the process
• Responsible for influencing functional workers and functional heads on how best to perform functions
• Should be a senior member of the organization

Enabling Tools of Process Management⌘

A Process Lifecycle⌘

Howard Smith & Peter Fingar, Business Process Management: The Third Wave, Figure 4.1

Process Lifecycle elements⌘

• Discovery implies becoming explicitly aware of how things are actually done
• Design means modeling, manipulating and redesigning processes
• Deployment means rolling out new processes to all the participants
• Execution means ensuring that the new process is carried out by all participants
• Monitoring and Control activities focus on the business and technical interventions needed to maintain the health of processes
• Interaction means the ability to observe, monitor and intervene with processes
• Analysis means measuring process performance to provide the metrics, analyses and BI needed to drive improvements and discover opportunities for innovation
• Optimization means the ongoing activity of process improvement

Technology for Executing Processes⌘

Bruce Silver Associates 2007

Technology for Executing Processes⌘

The BPM Suite (BPMS):

• automates the human workflow (ability to create human tasks without code)
• continuously monitor process state and performance without code
• integrates data between backend systems
• executes the business rules, controlled by the process model
• supports a process lifecycle enabling continuous performance improvement.

Business Process Management Suite⌘

• The BPMS is not an application.
• It does not replace your existing enterprise applications.
• It automates the process logic that connects your application systems, databases, and human tasks in the cross-functional business processes that you need to manage and improve.

BPMS compared to other IT systems⌘

• The purpose of a BPMS is to coordinate an automated business process in such a way that all work is done at the right time by the right resource.
• Customer Relationship Management(CRM) systems and Enterprise Resource Planning (ERP) are process focused.
• BPMS exploits an explicit description of a business process, in the form of a process model, to coordinate that process.
• BPMS can be tailored to specific processes of any kind.
• BPMS is similar to a Database Management System (DBMS).
• BPMS can fully automate processes - Straight-Through-Processing.

BPMS Overview⌘

From: docs.jboss.org

Architecture of BPMS⌘

Fundamentals of Business Process Management, Marlon Dumas

Architecture of BPMS⌘

• A process model can be deployed to the engine in order to be executed.
• Execution engine can:
  • create executable process instances
  • distribute work to process participants
  • automatically retrieve and store execution data
• A worklist handler is the component through which process participants are offered work items.
• External services are applications (services) outside the BPMS that can be called by execution engine.

BPM and SOA (Service Oriented Architecture)⌘

• The Service Oriented Architecture (SOA) concept is based on the principle of developing reusable business service and building applications instead of building monolithic applications.
• BPM without services is:
  • Complex and brittle, because the process layer is required to access the underlying business applications directly
• The SOA provides the ideal platform for the business process layer for the following reasons:
  • A line of business services provides business functionality that map the business tasks in a business process
  • Business process is not responsible for knowing any details of the underlying application and technology platforms, because Service contracts for the line of business services provide well-defined and unambiguous interfaces for accessing the services

Relation between BP Layer and Service Layer⌘

based on Gopala Krishna Behara, BPM and SOA: A Strategic Alliance

Modeling Processes⌘

Critical Needs in Tooling

• To make the discovery methodology work effectively, proper tools are required. Here we highlight two critical capabilities that the tooling should provide
• Validation
  • In process discovery we have been discussing, there is the underlying problem of accuracy: How do you know the information you have discovered is consistent and complete? This is especially problematic in the distributed approach to discovery
• Integration
  • Integration fitting process fragments into a coherent whole. This is especially true in the bottom up style of process discovery.
  • The tool must understand the connections of the process fragments and then integrate the fragments into a coherent process that can be analyzed

Module 3. Questions⌘

• Who is the father of TQM?
• What principles does TQM have?
• What is BPMS? Describe BPMS architecture.
• What is worklist handler?