Business Process

Management
• Text Book
• Fundamentals of Business Process
Management – Marlon Dumas, Marcello La
Rosa, Jan Mendling and Hajo.A.Reijers

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 Business Process
Management
Course Objective
To Introduce Business Process
Management as interdisciplinary field and
provide an overview of the BPM lifecycle,
from identifying processes to analysing,
redesigning, implementing and monitoring
these processes

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 Business Process
Management
Course Outcome
❖ Define the process using business
management and IT aspects
❖ Analyse and design the business
process
❖ Implement the process model using
BPMN
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 Business Process
Management
Course Syllabus
- Introduction to BPM
. origin and history
. BPM Life cycle
- Process Identification and Modelling
. Key process
. Designing process architecture
. BPMN
. Branching and Merging
. Information Artifacts
. Resources

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 Business Process
Management
- Advanced Process Modelling
. Process Decomposition
. Process Reuse
. Rework and Repetition
. Handling events and exceptions
. Processes and business rule
- Process Discovery
. Discovery methods
. Process Modelling Method
. Process Model Quality assurance

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 Business Process
Management
- Process analysis and redesign
.Value added analysis
. Root cause analysis
. Issue documentation and impact
assessment
. Qualitative Process analysis
. Flow analysis
. Queues
. Simulation
.Redesign

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 Business Process
Management
Unit – I
Introduction to Business
Process Management

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 What is a (Business)
Process?
Collection of related events, activities and
decisions, that involve a number of actors and
resources, and that collectively lead to an
outcome that is of value to an organization or its
customers.

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 Examples for
Business Process
• Order-to-Cash
• Quote to Order
• Procure-to-Pay
• Application-to-Approval
• Claim-to-Settlement
• Fault-to-Resolution (Issue-to-Resolution)

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Use Case: “My washing
machine won’t work!”

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 Processes and Outcomes
• Every process leads to one or several outcomes,
positive or negative
– Positive outcomes deliver value
– Negative outcomes reduce value
• Fault-to-resolution process
– Fault repaired without technician intervention
– Fault repaired with minor technician intervention
– Fault repaired and fully covered by warranty
– Fault repaired and partly covered by warranty
– Fault repaired but not covered by warranty
– Fault not repaired (customer withdrew request)

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 Use Case :Business Process
Management (Built In)
Depot Clerk:
Equipment Receives catalogue
Rental from supplier Reject if Accept it is Equip. put
Request not as PO as PO in use
Thro’ mail

Select the equipment Engineer

inspects When Rental
Equipment period expires
Site Engineer reaches supplier takes
Not Available the equip.
Availab Purchase
Site engineer
le order
rejects
Check
with Accepts
others Prepares Rental Works
Request engineer
Reject

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What is a Business
Process: Recap

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 Origin and History of
BPM
• The Functional Organisation
• The Introduction of Process Thinking
• The Innovations and failures of
Business Process re-engineering

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1.The Functional
Organisation

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 BPM: What is it?
Body of principles, methods and tools to
design, analyze, execute and monitor business
processes.

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 Why BPM?
“The first rule of any technology used in a
business is that automation applied to an
efficient operation will magnify the efficiency.
The second is that automation applied to an
inefficient operation will magnify the
inefficiency.”

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Why BPM?

Dr.R.Umarani
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Assistant Professor
 2. The Birth of
Process Thinking
CONTINUOUS PROCESS IMPROVEMENT (CPI)
• Does not put into question the current process
structure
• Seeks to identify issues and resolve them
incrementally, one step at a time and one fix
at a time

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 How to engage in BPM?
BUSINESS PROCESS RE-ENGINEERING (BPR)
• Puts into question the fundamental
assumptions and principles of the existing
process structure
• Aims to achieve breakthrough, for example by
removing costly tasks that do not directly add
value

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 The Ford Case Study (Hammer 1990)
Ford needed to review its procurement process
to (Mazda plant):
• Do it cheaper (cut costs)
• Do it faster (reduce turnaround times)
• Do it better (reduce error rates)
Accounts payable in North America alone
employed > 500 people and turnaround times
for processing POs and invoices was in the
order of weeks
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 The Ford Case Study
• Automation would bring some improvement (20%
improvement)
• But Ford decided not to do it… Why?
a) Because at the time, the technology needed to
automate the process was not yet available.
b) Because nobody at Ford knew how to develop the
technology needed to automate the process.
c) Because there were not enough computers and
computer-literate employees at Ford.
d) None of the above

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The correct answer is …
Mazda’s Accounts Payable
Department

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How the process
worked? (“as is”)

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Reengineering Process
(“to be”)

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 The result…
• 75% reduction in head count
• Material control is simpler and financial
information is more accurate
• Purchase requisition is faster
• Less overdue payments

🡺 Why automate something we don’t need to

do? Automate things that need to be done.
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 3.The Rise and Fall of BPR
BUSINESS PROCESS RE-ENGINEERING
(BPR)/Business Process Redesign
• Puts into question the fundamental
assumptions and principles of the existing
process structure
• Aims to achieve breakthrough, for example by
removing costly tasks that do not directly add
value

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 3.The Rise and Fall of BPR
Factors
• Concept Misuse
• Over-radicalism
• Support Immaturity
Ideas behind BPM
1. Improve Process Eg.100 US Manfg. Cos.
2. Technological – ERP and WfMSs

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How to engage in BPM?

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Job Function of a
manager

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 The BPM Life Cycle
Process Identification Phase

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 Phase 1: Performance
Measure Identification and
Selection
Cost Time Quality
Cost per
Cycle time Error rates
execution

Resource Waiting
Violations
utilization time

Non-value-a Customer
Waste
dding time feedback

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 Stakeholders
• Management Team – CEO, COO,CPO,CIO,CFO,
HR Director
. Process Owners
. Process Participants
. Process Analysts
. System Engineers
. BPM Group

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 Process Model
• Flow Chart
• Unified Modelling Language (UML)
• Event-driven Process Chains (EPC)
• Data Flow diagrams
• Business Process Model and Notation(BPMN)
- rounded rectangles
- control nodes/diamond shapes
- arcs

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 Phase 2:
Process Discovery

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 Phase 3: Process Analysis
• High level of abstraction
• Model needs more details
• Simplicity and understandability
• Additional text annotations
• Coordinating the execution of the process
• Inputs and outputs of the process

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 Phase 3: Process Analysis
Issues in the Process:
- Cycle Time
. Time for process
. Idle time
. Waiting time
. Rework
- Negative Outcome
. Stem from miscommunication
. Inaccurate data
. Supplier side error

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 Phase 4:
Process Re-Design

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 Phase 4:
Process Re-Design
• Understanding of the issues
• Potential remedies
• Propose redesigned version of the process

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 Phases 5:
Process Implementation
• Organisational change management
- Changes explained to the process participants
- Informing to stakeholders
- Training users
- Monitoring the changes
. Process Automation
- Performance of tasks
- Prioritize their work
- Providing information
- Performing automated cross checks

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 Phase 6: Process
Monitoring and Control
• Require adjustments
• Michael Hammer:
“Every good process eventually becomes a bad
process”

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 Exercise: Student
Admission Process
1. Who are the actors in this process?
2. Which actors can be considered to be the
customer in this process?
3. What values does the process deliver to its
customers?
4. What are the possible outcomes of this
process?

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 Exercise: Student
Admission Process
5. Taking the perspective of the customer identify at
least two performance measures that can be
attached to this process
6. Taking the perspective of the customer think of at
least two issues that this process might have
7. Based on the issues in the admission process
identified, What possible changes do you think could
be made to this process in order to address these
issues?

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 Unit I Completed
• What is Business?
• What is Business Process?
• What is Business Process Management?
• Know the Origin and History of BPM
• Stages in the Business Process Management

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