Old OCEB2F 03 Business Process Management Concepts and Fundamentals

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Business Process Management Concepts and Fundamentals⌘

Fundamentals of Business Process Management⌘

Source of information:

Bruce Silver, The BPMS Value Proposition, January 2007

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

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

Radical BPR

Radical

Revision BPR

Small Leap

TQM

Incremental

Six Sigma

Incremental

TQM Principles⌘

  • Focus on work process
    • 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⌘

  • The father of TQM
  • 1900 – 1993
  • an American statistician, professor, author, lecturer, and consultant
  • National hero in Japan
  • Unknown it the US until 1970s

BPM and TQM⌘

  • BPM is similar to TQM in the way:
    • Use of statistical data
    • Kaizen (continues 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
  • 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)

Lean⌘

  • Lean manufacturing
  • Lean IT
  • Lean software development
  • Lean Services
  • Lean Integration
  • Relation to Agile (lack of documentation)
Lean Principles⌘
  • Eliminate waste
    • unnecessary code and functionality
    • delay in the software development process
    • unclear requirements
    • bureaucracy
    • slow internal communication
Lean Principles⌘
  • Amplify learning - running tests as soon as the code is written, increasing feedback via short feedback sessions during both customer representatives and the development team learn more about the domain problem and figure out possible solutions for further development
  • Decide as late as possible - delaying decisions as much as possible until they can be made based on facts and not on uncertain assumptions
  • Deliver as fast as possible - the sooner the end product is delivered without major defects, the sooner feedback can be received, and incorporated into the next iteration.
  • Empower the team - "find good people and let them do their own job"
  • Build integrity in - the customer needs to have an overall experience of the System
  • See the whole - software systems are not simply the sum of their parts, but also the product of their interactions

"Think big, act small, fail fast; learn rapidly"

Becoming Process Driven Organization⌘

  • Process management is comprised of end-to-end documentation, improvement (from radical to continuous), and management of organizational processes
  • Decisions are data-driven and based on customer satisfaction metrics, quality, time-lines, and cost
  • The responsibility of monitoring process performance and facilitating process changes belongs to a process advisor or manager
  • Administering processes is dramatically enabled by business process management technology
  • Finally a process structure and governance is created to “cement” the move to process based management

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

Becoming Process Driven⌘

  • Process redesign efforts in one area precipitate change in others
  • Changes are required for a particular process improvement to be implemented

Becoming Process Driven⌘

To completely align around process, firms consider 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
  • 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⌘

  • 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 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
  • A work unit is the level at which negotiations and commitments are made on requirements and budget.
  • Within a work unit, adjustments can be made as how the requirements, budget and commitments are satisfied, but they cannot be changed at that level
  • Sometimes the work unit may be at the second or third level from the bottom of the chart

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⌘

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

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)⌘

  • 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

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

Questions⌘

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