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Business Process Modelling - PowerPoint Presentation

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Business Process Modelling - PPT Presentation

1122013 Marcello La Rosa Queensland University of Technology Brisbane 10 October 2013 Assignment 1 Results Assignment 1 Common mistakes Models Generally good to highquality models but ID: 274874

level process processes business process level business processes flows management operational architecture core detailed layer scope activities identify objectives

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Slide1

Business Process Modelling-11.2/2013 -

Marcello La RosaQueensland University of Technology

Brisbane,

10 October 2013Slide2

Assignment 1 ResultsSlide3

Assignment 1 – Common mistakesModels:Generally, good to high-quality models, butLow labelling quality (event labels missing; message labels missing; issues with activity

labels)Improper vertical modularization (low-level model inconsistent with high-level one; sub-process construct not used)Format:Inconsistencies across sections (too good vs too bad models; good vs bad English)Introduction / conclusion – often too short, often lacking motivation of topic (why is this interesting? why do we do what we do?)Citations

of existing

literature (wrong or missing references)Slide4

BPM LifecycleSlide5

Process IdentificationWhat?Define an organization’s business processesEstablish criteria to prioritize the management of these processes

Why?Understand the organizationMaximize value of BPM initiativesOutput: Process ArchitectureCaptures business processes and their scopeServes as a framework for defining priorities and scope of subsequent BPM

phases (e.g. modelling

, redesign and

automation).Slide6

Designation phaseEnumerate main processesDetermine process scope: boundaries (horizontal and vertical) and interrelationships (order and hierarchical)Evaluation phase (a.k.a.

Process Selection)Evaluate processes’Alignment with strategic objectivesHealth (e.g. performance, compliance, sustainability…)Culture & politicsFeasibility to being successfully improvedRisk of not improving them

After Davenport

(1993)

Process Identification StepsSlide7

7Process EnumerationThere is no “number fits all” - it really depends on organization’s domain and size

Trade-off:ensuring process scope is manageable, sinceprocess scope determines potential impactSlide8

Process ScopingProcesses are interdependent  Insights into interrelations requiredHorizontal: upstream – downstream processesVertical:

root (a.k.a. main) processes – sub-processesProcesses change over timeidentification should be exploratory and iterativeimprovement opportunities are time-constrained

Process ArchitectureSlide9

Process ArchitectureSlide10

Architecture: high level picture of an organization

After

Rummler

and

Brache

(1990)Slide11

“Process” Architecture

Value chainsSlide12

Components of a Process Architecture

Core ProcessesManagement Processes

Suppliers / Partners

Customers / Owners

Support Processes

After PorterSlide13

Core, Management and Support ProcessesSlide14

Process Architecture Example

Television New ZealandSlide15

Process Architecture Example

WA Water CorporationSlide16

Process Architecture Example

Strategic Management

Corporate

Development

Investor

Relations

Risk Assessment

and Management

Market

Development

Management Processes

Sales and Marketing

Underwriting

Management

Policy

Servicing

Claims

Management

Collections and Disbursement

Asset Management

Finance/

Treasury

Legal/

Audit

Reinsurance

IT

HR

Core Processes

Enabling Processes

An insurance companySlide17

Selected questions for scoping a processIf Process Architecture already in place: where does the process fit into the Process Architecture?On what level is the unit of analysis, i.e. end-to-end process, procedure or operation?What are the previous/subsequent

processes and what are the interfaces to them?What variants does this process have?What underlying processes describe elements of this process in more detail?Slide18

Various techniques to scope a process Identify relevant stakeholders and objectives, e.g. via a Stakeholder-Objectives MatrixIdentify relevant

context, e.g. via a SIPOC (Suppliers, Inputs, Process, Output, Customers) DiagramIdentify relevant process boundaries, e.g. via a Case/Function MatrixIdentify relevant guides and enablers, e.g. via an IGEO (Input/Guides/Enablers/Outputs) DiagramA combination of the aboveSlide19

Identify Process StakeholdersProcess owner, responsible for the effective and efficient operation of the process being modeled

Primary process participants, i.e. those who are directly involved in the execution of the process under analysisSecondary process participants, i.e. those who are directly involved in the execution of the preceding or succeeding processesSlide20

Identify Process ObjectivesPrimary (hard) process objectivesTime, cost, quality (minimise, maximise)

satisfaction, compliance, flexibility, predictabilitySecondary process objectivesTo purchase goods, to hire new staff membersAccompany with appropriate process metricsLet involved stakeholders define their priorities Slide21

Guidelines to identify horizontal boundariesChange of flow object in the processChange of multiplicity of flow object in the processChange of transactional state

Process contains logical separation in timeProcess contains logical separation in spaceProcess contains logical separation in other dimensionFollow scope in reference model (see later)Based on functions/cases coveredSlide22

A stepwise method to build process architectures

Case/function matrix (see Chap. 2 of textbook)Slide23

Identify vertical boundaries:typical artefacts in a Process HierarchyValue chainsA major line of business, has direct effect on a company's business results and strategic importance. Stays at a high level. For example: presentation of a product to the market.

(Root/Main) ProcessesProcesses build up value chains and mutually affect each other. For example: market research.Sub-processesSub-processes build up processes. They involve multiple activities and can be layered on different levels of granularity (i.e. sub-sub-processes). For example:

sales operation, preparation of sales budget, reception of customer orders.

Process tasks

Process tasks build up processes and sub-processes. These tasks are conducted by one or more individuals within the same function. For

example:

reception of customer orders involves review of these orders and incorporating them into the system.

Initial focus

of Process EnumerationSlide24

Logical

Levels

Physical

Levels

Business

Levels

Operations Levels

Process

Levels

Model structure, methodology and modelling standards

Shows groups of related business functions and standard end-to-end processes (e.g. Service Streams)

Decomposition of core processes into detailed ‘success model’ business process flows

Detailed operational process flows with error conditions and product and geographical variants (where required).

Further decomposition of detailed operational where required

Process Groupings

Business Activities

Core Processes

Business Process Flows

Detailed Process Flows

Level A

Level B

Level C

Level D

Level E

Level F

Operational Process Flows

Defines business activities

Distinguishes operational customer oriented processes from management and strategic process

Core processes that combine together to deliver Service Streams and other end-to-end processes

Meta

Level

© British Telecommunications

(

2006)

Hierarchy

Example

: British TelecomSlide25

Business Layer

Process Layer

Strategic View

Business

Value Streams

Business

Balanced Scorecard

Business

KPIs

Business Unit

Scorecard

Unit KPIs

Business Process

Value Streams

Business

Objectives

Business Unit

Objectives

Operational Unit

Objectives

Implementation

Process Groupings

Business Activities

Core Processes

Business Process Flows

Detailed Process Flows

Level A

Level B

Level C

Level D

Level E

Level F

Operational Process Flows

Davis (2005)Slide26

Process View

Service Streams

Process Service Lines

Resources

Detailed

Resources

Value Domains

Business Functions

Process Groupings

Business Activities

Core Processes

Business Process Flows

Detailed Process Flows

Level A

Level B

Level C

Level D

Level E

Level F

Operational Process Flows

Business Activities

Processes

Sub-processes

Detailed

Processes

Enabling Streams

Tasks

Steps

Operations

Business

Layer

Process

Layer

End-to-End

Processes

Core

processes

Implementation

Davis (2005)Slide27

Business Layer

Implementation

Process Layer

Operational Teams

Business

Organisation View

Operational Roles

Operational Units

Business Units

Process Groupings

Business Activities

Core Processes

Business Process Flows

Detailed Process Flows

Level A

Level B

Level C

Level D

Level E

Level F

Operational Process Flows

Davis (2005)Slide28

Business Layer

Process Layer

Data View

Business

Information

Cust

contact

Customer

Inquiry

Customer

credit

limit

Customer

Account

Customer

budget

Cust

1

cn

1

n

1

n

1

1

1

1

1

1

1

1

1

1

1

n

Customer

Offer

Corporate Data Model

Process

Information

Function Data

FunctionEntities

department

Title

Phone #

Function

Attributes

System

Entities

department

Title

Phone #

System

Attributes

Implementation

Process Groupings

Business Activities

Core Processes

Business Process Flows

Detailed Process Flows

Level A

Level B

Level C

Level D

Level E

Level F

Operational Process Flows

Procedural

Information

Davis (2005)Slide29

System

Types

System IT Functions

Screens

(System Specific)

Systems and

Modules

System Types and

Modules Types

System

Domains

Systems View

Process Groupings

Business Activities

Core Processes

Business Process Flows

Detailed Process Flows

Level A

Level B

Level C

Level D

Level E

Level F

Operational Process Flows

Business Layer

Process Layer

Implementation

Davis (2005)Slide30

Level A

Hierarchy Example: QLD Shared Service AgencySlide31

Level B

Level C

Hierarchy Example: QLD Shared Service AgencySlide32

Level D

Hierarchy Example: QLD Shared Service AgencySlide33

33Designation via Reference Models

industry-neutralenterprise modelOpen standard for benchmarkingFour levels

Categories

Process group

Process

Activity

Example: the

APQC Process Classification Framework (

PCF)Slide34

APQC PCF OverviewSlide35

35APQC Classification FrameworkSlide36

36APQC Classification Framework

Available industry sectors:Aerospace & DefenseAutomotive

Banking

Broadcasting

Consumer Electronics Just released

Consumer Products

Education

Electric Utilities

Petroleum Downstream

Petroleum Upstream

Pharmaceutical

Retail

TelecommunicationsSlide37

37The Evaluation Phase (aka Process Selection)

Importance Which processes have the greatest impact on the organization‘s strategic goals?Dysfunction Which processes are in the deepest trouble?

Feasibility

Which process is the most susceptible to successful

process management?

Process Portfolio Management

Hammer, Champy (1993)Slide38

Evaluation Example

Y

Process Health

Importance (priority)

High

Low

Good

Poor

L

O

Q

B

J

M

R

H

P

U

V

X

I

K

A

N

C

G

W

Z

D

E

T

F

0

4

Primary Focus

Process Portfolio of an Australian RetailerSlide39

Praeg

(2007)Evaluation ExampleProcess Portfolio of a bankSlide40

40The Evaluation Phase: nasty questions

Does an assessment of the importance, dysfuncioning and feasibility always point to the same processes to actively manage?Should all processes that are dysfunctional, of strategic importance and feasible to manage be subjected to BPM initiatives?Slide41

Alternative: Selection Project by ProjectProcesses are identified with every request froma line of businessEnsures high relevance for involved business unit

Reactive approach (-)Often restricted to discrete improvement (-)No conscious process selection approach (-)Slide42

Pitfalls of Process Identification (1/2)The purpose of the project is not clear enough leading to inappropriate scoping of the process.The

scope of the process is too narrow leading to the fact that later the identified root-causes are located outside the boundaries of the process under analysisThe scope of the process is too wide leading to a process improvement project that has to be compromised in its lack of detailSlide43

Pitfalls of Process Identification (2/2)The process is identified in isolation to other projects due to poor portfolio management leading to redundancies and inconsistencies between these projectsInvolved project members and stakeholders have not

been sufficiently informed about the benefits of the project leading to limited participationThe involved project members and stakeholders have not been carefully selected leading to a very limited source of knowledgeThe business process architect has poor facilitation skills and

cannot

resolve emerging conflicts between the project members and stakeholders.

Slide44

References

RequiredChapter 2 of textbook “Fundamentals of BPM”

Recommended

T.H

. Davenport,

“Process

Innovation: Reengineering Work Through Information

Technology”, Harvard

Business School Press,

1993

M. Hammer, J.

Champy

,

“Reengineering

the Corporation: A Manifesto for Business

Revolution”, HarperCollins,

1993M.E. Porter, “Competitive

Advantage: Creating and Sustaining Superior Performance”, Free Press, 1985

M. Rosemann, “Process Portfolio Management”, BPTrends, April 2006

R. Dijkman, I. Vanderfeesten

, H.A. Reijers, “The

road to a business process architecture: an overview of approaches and their use”. BETA Working Paper Series, WP 350. Eindhoven University of Technology, Eindhoven (2011)

Web-sites

http://www.value-chain.org (Value Reference Model)http://

www.mindtools.com/pages/article/newSTR_66.htm (more on value chains)http://www.apqc.org/process-classification-framework (

APQC PCF website)Slide45

A/Prof. Marcello La Rosa

IS School Academic Director(Corporate Programs and Partnerships)

BPM Discipline, IS

School

Science

& Engineering Faculty

Queensland University of Technology

p

+61 (0)7

3138 9482

e

m.larosa@qut.edu.au

w

www.marcellolarosa.com