Business Process Management

Business Processes Defined

A business process is a collection of interrelated tasks, which are designed to deliver a particular result

Types of business processes Management processes - processes that govern the operation

of a system Operational processes - processes that constitute the core

activities of the business and delivers the primary value of the organization

Supporting processes - which support the core processes

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A business process is a collection of interrelated tasks, which are designed to deliver a particular result.

Business processes span potentially multiple departments

Business process

Process can be Large and complex Dynamic Widely distributed Long running Mix of business and technical steps Involve human intelligence and judgement

Processes can be defined in workflows or process flows define the sequence of steps and any logic associated These can be automated but do not have to be

What is Business Process Management (BPM)?

BPM is a discipline combining software capabilities and business expertise through people, systems, and information to accelerate time between process improvements, facilitating business innovation

BPM software supports the definition and automation of workflows involving individuals and systems The definition and automation of workflows Monitoring and optimisation of running workflows

BPM also enables flexible deployment, monitoring and tracking, process focus and efficiency.

BPM and process re-engineering

The concept of Business Process Management came from Process re-engineering: Analysing and redesigning key

processes within an organisation in order to improve performance Workflow automation (typically person-centric processes such as

purchase order approval)

BPM is complementary to process re-engineering and six-sigma projects but can also be used for any process automation project. Process re-engineering/six sigma is a business driven initiative to

measure and optimise performance at a business level. Process re-engineering/six sigma does not require IT integration,

it may simply add reports to existing systems.

Examples of processes suitable for BPM: Setting up a new customer account

Collect new customer details.

Verify compliance with money laundering laws

Set-up account

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Verify compliance with money laundering laws

Opportunities and benefits of process automation

Capture new customer details.

Account set-up and provisioning

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Capture existing process knowledge.

Support future out sourcing decisions.

Out sourced provider

Reduce errors

Automates roll-out of change

Automate process to enhance self-service

An example of a simple process defined

1. Process starts at a scheduled time.

2. Collected information from database

3. Format the email to the customer

4. Email the invoice5. Format the email

with the late reminder

6. Add a new activity (a reminder if not paid for a week)

7. Wait for the week8. Send the late

payment reminder

(c) SAP

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Other examples of processes for automation 1: Process: New Hire Integration

Background Check Allocation of office space Reservation of phone, pager Creation of access rights in operational systems

Problem: Lost productivity due to late provisioning of work infrastructure

Automating the process coordination reduced cycle time from 2 week average to 2 days

Automation Goal: Performance

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Other examples of processes for automation 2:

Process: Employee Termination Removal of computer access rights Collection of company-issued phone, pager, access card Removal from employee directory

Problem: Not all equipment is collected, access rights remain after an employee leaves

Automating the process coordination ensures that no step is forgotten

Automation Goal: Compliance

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Business Process Management: Evolution from simple workflow

Stage 1– “workflow in the head”

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© 2007 Workflow management coalition

In an organisation without integration across multiple systems, the workflow is managed ‘manually’ by the user ensuring that the correct steps are executed in multiple applications Each step involves the user using the individual systems

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Stage 2- Workflow Assist in Sequence

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User accessesoriginal UI directly

Human BPM/Workflow:

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The original workflow systems assisted the user by ensuring that the right systems were invoked in the right sequence The original systems are still directly interacted with

Stage 3- Supporting collaboration

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Workflow systems evolved to allow multiple individuals to participate in a single workflow

Stage 4 - Using a process engine

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A distinct process engine automates the workflow and deals with interactions with the backend systems – the user no longer directly interacts with these systems

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The process engine

A process is an entity that typically encapsulates an interaction of a user with business entities (applications).

Can includes user-centric interactions (email reminders, task lists etc) and system interactions .

A process typically updated and changes the state of the business entities indirectly The business application mediates these changes

A business process may have its own state which may exist only for the duration of the process; at the completion of the process the state ceases to exist. The duration of the state may be very long

Process state may be transient or persistent.

Human Activities Have Three Phases

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Automated phase beforeto prepare for the task

Wait phase for Human to do the work,includes timers andescalation logic

Automated phase afterto take care of resultsof the task

User Interface(while waiting)

© 2007 Workflow management coalition

Separation of ResponsibilityBusiness Retains Control of• Assignment of Responsibility• Groups, Roles, Skills• Deadlines• Alerts, Reminders, Escalations• Order of Tasks• Addition of Manual Tasks• User Interface

IT Retains Control of• Computational Logic• Data Representations• Scalability / Performance• Interoperability• Master Data Management

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BPM supports the separation of tasks between the business analyst (defining the business level elements) and IT (retaining control of systems and data)

Use cases for BPM

BPM can also be tactically to automate or optimise processes Removing manual processing steps ensures appropriate processes are

followed.

To formalise and capture knowledge The activity of defining the process means that knowledge in people’s

heads is captured (and hence supports out-sourcing).

To reduce the opportunity for human error The defined process is enforced with the BPM software and opportunity

for human error reduced.

To ensure compliance with legal or organisational requirements The process definitions can be audited and the execution of the

processes tracked

Key components of a BPM software product

Modelling and simulation Support the design and simulation of business processes. Uses graphical tools and standardised specification

languages to define the process

Monitoring (Business Activity Monitoring) Track performance of processes and operational activity

Process orchestration and optimisation Execute the process definitions Modify and evolve the definitions to improve performance.

Example of monitoring dashboard

Second example of dashboard

Where BPM is appropriate

Business Process Management is not suitable for all areas of business as it requires processes which can be formalised. Clearly needs a well-defined business case to support the potential

changes in the operational process,

Finding matches for the strengths of BPM Areas which are already well-defined. Areas where there is either complexity or rapid change or both Areas where the cost of error is much greater than the cost of

fixing the problem.

COMPARING APPROACHES TO BUSINESS PROCESS AUTOMATION

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Comparing EAI, ERP and BPM

EAI integrates primarily behind the scenes Most of the user interaction is unchanged

Process changes occur only for the integrated process25

App1 App 3App2 App1 App 3App2

Benefits of EAI/SOA based process automaton Integrates with existing process and data models – handling

incompatibilities when necessary Allows the high value integration problem to be addressed without

disrupting the other applications Integrates with existing process and data models – handling

incompatibilities when necessary Minor/moderate changes to the user interaction causes

minor/moderate changes to the business as a whole

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Comparing EAI, ERP and BPM

ERP changes both user interaction and applicaton All user interaction, data/process models are changed

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App1 App 3App2

Module1

Module2

Module3

Benefits of ERP based process automation

Creates a set of processes and associated data models which are mutually compatible and comprehensive

Equally effective at automation within a single department or across multiple departments

ERP vendor typically provides ‘standard’/template processes already proven for a particular industry

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Comparing EAI, ERP and BPM

BPM integrates the user interaction layer across multiple applications All user interaction related to the integrated process changed

Process and interaction changes occur only for the integrated process

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App1 App 3App2

App1 App 3App2

BPM layer

Benefits of BPM based process automation

Improvement in the redesigned process, Reduction in risk/error (due to missed or wrongly

executed steps) Auditability of completed processes – needed for

compliance and other purposes Makes it easier to deploy process changes (for instance

caused by outsourcing, regulation changes, business changes etc)

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BPM versus EAI and SOA

BPM can use different technologies to implement the process. Like SOA, it can be implemented using different technologies

EAI products typically claim to provide BPM capabilities Typically support processes defined as system to system

interactions (i.e. does not include human interactions)

SOA and BPM are partially complementary BPM can build upon SOA using the services already defined. However, it is not usual to attempt to combine a move to SOA

and a move to BPM

BPM and ERP

BPM provides process integration If the organisation is using an ERP system, the BPM system

integrates into the capabilities of that system and integrates with other systems and users (via Email etc) SAP’s Business One tool:

System interaction step

User interaction

steps