Requirement Excellence Framework™ Business Process Analysis www.enfocussolutions.com
Business Process Analysis• Business process analysis helps an organization improve how it conducts its functions and activities in order to reduce overall costs, provide more efficient use of scarce resources, and better support customers. It introduces the notion of process orientation, of concentrating on and rethinking end-to-end activities that create value for customers, while removing unnecessary, non-value-added work.• Generally technology is implemented to automate or streamline business processes, so it is important to conduct a business process analysis to understand how the process works and how it can be improved. 1
What are Outputs of a Business Process Analysis?• As Is Model• To Be Model• Customer and Supplier Definitions• Process Ownership and Governance• Roles and Responsibilities• Process Impact• Organization Impact• System Impact• Risk• Impact Type• Impact Level• Expected Outcomes 2
RequirementPro™ Business Process Functionality Process Category Feature Project Impact Process Group Scope Business Process Statement Process Impact Activity Functional Supplemental Requirement RequirementThe process structure is organized using During Process Analysis, impacts on Since software is used to provideAPQC’s Process Classification Structure (PCF). existing business processes from are automated support for a businessThe PCF was developed by APQC and its identified and documented . process, it is essential to understandmember organizations as an open standard to Depending on the size of the project, how the process is going to workfacilitate improvement through process AS IS and TO BE business process before defining softwaremanagement and benchmarking, regardless of models may need to be created or requirements.industry, size, or geography. The PCF organizes updated. The business processoperating and management processes into 12 impacts are later used in the Projectenterprise-level categories, including process Scope Activity to define scopegroups and over 1,000 processes and statements which are used to elicitassociated activities. needs from Stakeholders and specify requirements. 3
What is a Business Process?• A business process is the the set of steps a business performs to create value for customers.• A process consists of three components: inputs, activities, and outputs. 4
Three Types of ProcessesOperating Process – Primary processes are end-to-end, cross-functional processes which directly deliver value – Represent the essential activities an organization performs to fulfill its mission – Make up the value chain where each step adds value to the preceding step as measured by its contribution to the creation or delivery of a product or service, ultimately delivering value – Primary processes can move across functional organizations, across departments or even between enterprises and provide a complete end-to-end view of value creationSupport Process – Support primary processes, often by managing resources and/or infrastructure required by primary processes – Differentiator is that support processes do not directly deliver value- Does not mean that they are unimportant to an organization – Examples of support processes include information technology management, facilities or capacity management and human resource management – Support processes are generally associated with functional areasManagement Process – Used to measure, monitor and control business activities – Ensure that a primary or supporting process meets operational, financial, regulatory and legal goals – Do not directly add value – Necessary in order to ensure the organization operates effectively and efficiently 5
Examples of Processes University Bank• Teaching Students • Opening New Accounts• Paying for Classes • Statement Distribution Hospital Restaurant• Emergency Care • Preparing Meals• Payroll • AdvertisingManufacturing Construction• Purchasing Material • Budgeting• Training Workers • Managing SubcontractorsFederal Government Agency Not for Profit• Procurement • Distribution of Funds• Hiring New Employees • Employee Recruitment Retail Store• Selling Products• Employee Scheduling 6
Who are the Process Customers?• Because a transformation process exists to satisfy customer requirements, process owners need to understand who their customers are, what they want, and how to provide what they want.• The customers of a process are the people who require the products and services that are the result of the process or one phase of the process. They are classified as: – External customers-people who ultimately use the products and/or services (process outputs or work results) of an organization; and – Internal customers—the owners of the next phases in the process who must wait for the delivery of a product or service before completing work. 7
Complete View of Process• A process consists of a mix of automated and manual activities in a structured or ad- hoc manner to deliver expected outcomes.• Understanding the overall set of activities that comprise a process and their business rules is essential.• The requirements analyst needs to understand the entire picture to understand how a solution should operate. Systems/applications generally only automate a part of the process.• Activities that are to be automated define the scope of the development and implementation work which may span multiple applications. Business Process Business Rules Automated Manual Automated Automated Manual Activity Activity Activity Activity Activity Application Application 8
Symptoms of Poor Business Process Design• No standard process/method for addressing how to define business requirements and when to improve business processes.• When automation of processes is commissioned, “Business” says that they do not always get what they think they have asked for.• The processes used to document and communicate business processes and requirements are neither easy nor documented.• Business programs frequently exist in a culture of reacting to cross-functional problems/emergencies.• IT has responsibility for creating and maintaining business process flows, business requirements and business rules. 10
How do you Improve a Process?• Use a structured and organized approach and methodology.• Eliminate activities that do not add value for the customer. Ask yourself: "Would the customer want to pay for this activity?" If the answer is no, ask yourself: "Why are we doing this? Is it a federal law? A state law?" If the answer is no, ask yourself: "What benefit do we gain by doing this?" At this point, you are coming close to eliminating the activity.• Eliminate constraints—things that frustrate employees and slow processes.• Streamline/simplify processes. It is difficult to document and teach people complex processes.• Once processes are streamlined, automate the process if feasible.• Provide leadership in a positive direction. Function as a strategist. Envision and invent the future with streamlined processes and relationships.• Act empowered; be accountable. As individuals and members of teams, function as process owners and consider process management and improvement an integral part of daily work. Dont say, "They wont let us …" Make decisions, not excuses.• Document and publicize improvements. Success breeds success.• Continue to monitor and evaluate processes to identify additional opportunities for improvement.• Ask what, where, why, who, when, and how questions about each step in a process (or job). 11
Typical Benefits for Process ImprovementTypical results of a well-established process improvementprogram include:• Productivity improvements of 10% - 50%• Quality improvements: significantly• decreased error rates and field• problems, resulting in reduced rework• Improved ability to plan and control• projects, reduced project delays• Cycle time reductions of 20% -50%• Cost savings average 5:1 ROI 12
Other Benefits• Fewer overtime hours• More stable work environment• Improved working conditions• Improved quality of work life• Improved employee morale• Reduced employee turnover• Improved management of project risk• Improved customer satisfaction• Better company image 13
Desired Outcomes• Processes are documented, usable and consistent• Schedules and budgets are based on historical performance and are realistic• Expected results for cost, schedule, functionality and product quality are usually achieved• Disciplined processes are followed consistently because all participants understand their value• Broad-scale, active involvement across the organization in improvement activities• Roles and responsibilities are clear 14
Process Reengineering Principles• Organize around outcomes not tasks - helps eliminate the need for handoffs and provides a single point of contact for the customer• Have those who use the output of the process perform the process – those who are closest to the work should do the work• Merge information - processing work into the real work that produces the information - People collecting the work should be responsible for processing the work instead of handing over to some other individual or system• Treat geographically dispersed resources as though they were centralized - technology advancements make this a reality through combining dispersed systems and teams as though they were a single team• Link parallel activities instead of integration their results - helps reduce errors at the end of the process• Put the decision point where the work is performed and build control into the process - empowers the performer of the work to get the resources he needs to get the job done most efficiently• Capture information once - at the source - eliminates costly mistakes of information not being passed effectively from one handoff to another Confidential - Not for External Distribution 15
Process Analysis• Analysis generates the information necessary for the organization to make informed decisions assessing the activities of the business• Due to business change the processes of an organization can quickly become inconsistent to their original design and no longer meet the needs of the business• Process analysis is an essential tool to show how well the business is meeting its objectives• Creates an understanding of how work (the transformation of inputs to outputs) happens in the organization• Information becomes a valuable resource to management and leadership to understand how the business is functioning Confidential - Not for External Distribution 17
Process Analysis• Analyze the Current Process – At which point doe the process break down or experience delays? – At which points do people typically experience frustration with the process? – Which parts of the process seem to consume an inordinate amount of time? – Which parts of the process lead to low quality outcomes? – Which parts of the process incur unacceptable costs?• Envision the New Process – What are things we can do to exceed our customer’s expectations? – Could the accuracy, speed, and quality of the process be improved? – How might the process be improved to make it easier for customers to do business with us? – How we can reduce costs? – What can we do to reduce cycle times? – How can we improve quality? 18
Questions to Understand the ProcessWhat? Where?• is there to do? • is this job done?• is being done? • should it be done?• should be done? • can it be done?• can be done? When?• constraints keep us from doing • is this job done? what needs to be done? • should it be done?Who? • can it be done?• does this job?• should do this job?• knows how to do it?• should know how to do it? 19
Process Analysis Methods• Interviews• Observations• Process Benchmarking• Process Modeling and Simulation• Value Chain Analysis• SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats)• Information Flow Analysis• Discrete Event Simulation• Activity Based Costing• Cycle-Time Analysis• Decision Analysis• Sensitivity Analysis Confidential - Not for External Distribution 20
Hand-Offs• Any point in a process where work or information passes from one system, person or group to another is a handoff for that process.• Handoffs are very vulnerable to process disconnections and should be analyzed closely.• Typically, the fewer number of handoffs, the more successful the process.• Which of the handoffs are most likely to break down the process?Questions to ask of each handoff: – Are there any bottlenecks of information or services as a result of handoffs happening too quickly? – Can any handoff be eliminated? – Where do streams of information come together and is the timing accurate? Confidential - Not for External Distribution 21
Process Culture• A process culture is a concept in which the business’ processes are known, agreed on, communicated and visible to all employees• Characteristics of a process culture include – General agreement on what are the business processes – Understanding how business processes interact and affect each other – Clear definition of what value each process produces – Documentation of how each process produces its results – Understanding of what skills are required for each process – Understanding of how well each process performs – Ongoing measurement of process performance – Management decisions based on process performance knowledge – Owners of each process having responsibility and accountability for process performance To promote a process culture, we recommend that business processes be documented and maintained by business units using the Enfocus Requirement Suite.. The processes will be available to all stakeholders through the stakeholder portal. Confidential - Not for External Distribution 22
“To Be” Process Design Considerations• Change the process in ways that provide value that the customer wants – for example more speed and efficiency, higher quality, more accuracy, less cost, or single point of contact between customers and your company.• If input to the process naturally form a cluster, create a separate process for each cluster• Address the biggest time waster in the process first such as points where there is extensive waiting or rework.• Consider creating several process that can operate in parallel for steps that can be done independently and not have to be done in a sequence.• Look for opportunities to remove unnecessary reviews of completed work• Decrease the number of steps in the process; identify opportunities to simplify steps that are unnecessarily complex.• Involve as few people as possible in performing the process; reduce the number of hand-offs.• Eliminate signoffs or approvals by individuals on activities they don’t know much about. Confidential - Not for External Distribution 23
Define the Process Requirements• Prepare “To Be” Process Model• Define Process Requirements – Increase customer value by ….. – Improve quality by …. – Decrease cost by ….. – Reduce cycle time by ….. – Reduce rework by …. – Improve efficiency….• Review “To Be” Process Model and Process Requirements with Stakeholders• Prepare functional and supplemental requirements for the “To Be” process model• Prepare training and organizational change requirements for implementation of the new “To Be” process model Confidential - Not for External Distribution 24
Process Benchmarking• Many organizations do not spend enough time optimizing a business process before automating it; they simply automate what was done manually or what the previous system did. We call this “paving the cow path.”• Benchmarking is a great technique that organizations can use to determine where a business process is performing well and other areas where is not performing not so well by comparing their data against their peers.• Results from a benchmark study helps an organization decide where to focus their limited resources for long-term sustainable improvement. Combined with best practices information, benchmarking can help organizations quickly identify and solve common business process performance problems.• Enterprise subscriptions receive one free benchmark per year. Additional benchmarks are available for a fee. 25
Define the Process Requirements• Inputs• Outputs• Workflow• Ownership• Performance Metrics• Business Rules 26
Implementing the New Process• Prepare requirement bundle for the new process requirements• Define appropriate lifecycle events for the new process. Lifecycle events might include: – Validate – Communicate – Distribute process requirement bundle to wide audience to get the message about the upcoming implementation of the new process – Educate and Familiarize – Build a more detailed understanding of how the new process works through role-play, practice, and simulation. Consider making a video. – Pilot – If you suspect that some difficulties in the new process need to be worked out, pilot it. – Implement – Put the new process into production by declaring the start of new operations. – Break from the Past – Remove the artifacts of the old process such as old forms paper stocks, equipment and so forth to reduce any temptation to shift back into previous habits. – Optimize Measure process performance according metrics that were chosen. Identify problems and take needed action. Update performance metrics and targets as necessary• Trace the requirements Confidential - Not for External Distribution 27
Process Classification Frameworks• There are a number of process reference models available, including: Accenture, APQC’s Process Classification Framework (PCF), (SAP), Supply Chain Council, the Telecommunications Management Forum, and the Value Chain Group.• The Process Classification Framework (PCF) developed by APQC in 1992, is a widely used business tool. This open source framework is commonly referenced in business books, incorporated into numerous consulting methodologies for process improvement and re-engineering,• In business process design, frameworks and reference models help support process analysis, design, and modeling activities. Starting with a process framework or reference model can significantly accelerate these activities, providing analysis professionals with a sturdy foundation on which to build. 29
Process Classification FrameworksA framework helps organizations in three key areas: • benchmarking, • content management, and • business process definition. The cost of not using a process framework is theadditional time it takes the process design team todevelop their own process model and obtain processconsensus from the project stakeholders. 30
APQC Business Process Classification • Enfocus Solutions Inc. organizes most of its content using APQC Process Classification Framework. • This open source framework is available on our site as well as APQC • PCF has been translated into many languages, including Japanese, Chinese, Spanish, Polis h, and Portuguese. • Industry specific versions of the framework are also available. • The framework is organized into the 12 process areas as shown in the diagram on the left. 31
APQC Process Classification Framework (PCF) Confidential - Not for External Distribution 32
Business Process Modeling• Set of activities involved in creating representations of an existing (as-is) or proposed (to-be) business process• Provides an end-to-end perspective of an organizations operating, supporting and management processes• Modeling is a means to an end and not an end in itself You model to get results and reach conclusions Confidential - Not for External Distribution 34
What is a Business Process Model?• Documentation of a business process using a combination of text and graphical notation.• Depicts the Process that People employ to provide value to their Customer with a strong emphasis on how the work is done.• Defines a process as a specific ordering of work activities across time and place with a beginning, an end, and clearly defined inputs and outputs.• A component of the overall Business Architecture that serves as a reference for Business Analysis activities.
Why Model a Business Process?• BABOK: “Describe the functions associated with the business activities... and the inputs, controls, outputs, and mechanisms/resources used of those activities.” (v1.4 Sec 126.96.36.199)• Understand how labor and resources are used to create products or services for a company’s Customers. Identify areas that could be improved, made more efficient and re-engineered• Create an understanding of where Systems/Applications can or do automate or streamline human or mechanized processes – capture requirements• Integrate activities between departments/companies – especially necessary after a merger of different groups of People producing similar or dependent products/services• Assist in implementation and acceptance of Six Sigma, ISO, CMM or other standards• What other uses can you see? The list is endless
Common Methods of Modeling• BPML – Business Process Modelling Language – An Extensible Mark-up Language (XM)-based meta-language developed by the Business Process Management Initiative (BPMI) as a means of modelling business processes• BPEL – Business Process Execution Language – An XML-based language designed to enable task-sharing for a distributed computing or grid computing environment - even across multiple organizations - using a combination of Web services.• BPMN – Business Process Modelling Notation – A standard graphical notation used to facilitate the understanding of business transactions between organizations.• UML – Unified Modelling Language – A notation that allows the modeller to specify, visualize, and construct the artefacts of software systems, as well as business models. USE WHAT WORKS FOR YOUR PROJECT ENVIRONMENT! Do what you know. Learn to do more. But don’t fake it.
Commonly Used Process Standards and Notations• Business Process Modeling Notation (BPMN)• Flow Charting• Swim Lanes• Event Process Chain (EPC)• Value Chain• Unified Modeling Language (UML)• IDEF-0• LOVEM-E• SIPOC• Systems Dynamics• Value Stream Mapping Confidential - Not for External Distribution 38
Tailor Your Model to your Project & Self• BPML, BPEL, etc. are well and good if: – You are trained and comfortable with their use – Your target audience (Business and Tech Teams) understand and are comfortable with their use• Beware! Most organizations are not properly equipped or trained to produce documentation with these standards! – Valid alternatives include using Visio, PowerPoint, Omni Graffle or other tools that can represent activities graphically or with text!
Diagrams, Maps, and Models• Diagrams – Process diagram often depicts simple notation of the basic workflow of a process – Depicts the major elements of a process flow, but omits the minor details which are not necessary for understanding the overall flow of work• Maps – More precision than a diagram – More detail about process and important relationships to other elements such as performers (actors), events, results – Provide a comprehensive view of all of the major components of the process• Models – Represents the performance of what is being modeled – Needs greater precision, data about the process and about the factors that affect its performance – Often done using tools that provide simulation and reporting capability to – analyze and understand the process Confidential - Not for External Distribution 40
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