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BPM - The Promise And Challenges


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This presentation provides a high-level overview of BPM and where it is today. …

This presentation provides a high-level overview of BPM and where it is today.
It also touches on some of the core technologies and standards.
Its focus is on the four specific “Challenges” facing BPM and they are aligned to the four phases of the typical application development life cycle.
1. Discovery
2. Design
3. Development
4. Deployment

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  • Hammer and Champy - They advised a deep and radical redesign of the business to root out waste and increase the focus on the customer.
  • The private sector’s fiduciary responsibility to maximize shareholder’s return on investment
  • i.e., Oracle BPMS
  • This presentation provides a high-level overview of BPM and where it is today. It also touches on some of the core technologies and standards.
  • Discovery refers to having an understanding about the current environment Design involves the analysis of the current processes and the definition of future state processes. In the development phase the future state is implemented in technology, which may involve process automation using a BPMS (business process management system). The new processes are put into production in the deployment phase.
  • WfMC promotes the use of workflow by helping to establish standards for terminology, interoperability, and connectivity between workflow products. It has created XPDL, an XML-based definition for business processes. The mission of BPMI is to promote and develop Business Process Management by establishing standards for process design, deployment, execution, control, and optimization. BPMI has developed three standards: Business Processing Modeling Language, Business Process Modeling Notation, and Business Process Query Language. Founded by Tim Berners-Lee, W3C has published the key standards for XML, HTTP, HTML, SOAP (Simple Object Access Protocol), and Web services. All W3C standards must be royalty free. OASIS (Organization for the Advancement of Structured Information Standards) is a not-for-profit, global consortium that drives the development, convergence, and adoption of e-business standards. OASIS has defined standards for e-business applications (ebXML) and is working on other high-level Web services standards. In contrast to the W3C, standards published by OASIS may have royalties attached to them.
  • In this example: When the Stock Broker Process invokes the stock exchange’s buy service operation, it is actually using a service link, which we have called the “ buyerLink .” The role: of the process in buyerLink is buy requestor and its port type is stock transaction . The role: of the stock exchange “partner” is buy service and its port type is stock order .
  • In our example, when the stock broker process invokes the stock exchange’s buy service operation, it is actually using a service link, which we have called the “ buyerLink .” The role of the stock broker process in buyerLink is buy requestor and its port type is stock transaction . The role of the exchange partner is buy service and its port type is stock order .
  • The first approach is inherited from Microsoft’s XLANG, and the second is inherited from IBM’s WSDL.
  • They are intimidated by code, which tends to obscure the business issues. Also, non-developers need to see processes from multiple perspectives, to determine inter-process dependencies, and to extract system requirements from processes. This lies outside the scope of BPEL. Because BPEL has no graphical rendering, the business analyst would have to code XML. This is not likely to happen.
  • Once this is done, how will the process then be automated? It would be desirable to export the process to the BPMS for execution, perhaps using BPEL as the lingua 3. It is not usable for “legacy processes” that comprise package applications, custom applications, or manual activities. This excludes 95 percent of all existing business processes.
  • Standish Group - In its research into the success rate of application development projects The Standish Group. The Chaos Report (1994), The Standish Group notes that a key cause of such failures is the lack of clarity in capturing and communicating user requirements.
  • 1. Software misses the mark, making scrap and rework inevitable.
  • It defines BAM as providing “real-time access to critical business performance indicators to improve the speed and effectiveness of business operations.”
  • 2. For example , it is necessary to evaluate the cost of each process instance. Moreover, it is necessary to aggregate process instance information based on various criteria.
  • 2. Process languages, such as BPEL, while key elements in a process laboratory, need to be enhanced with graphical capabilities that link them with process discovery. 3. BPEL may play a key role in this integration.
  • Transcript

    • 1. BPM Promises and Challenges
    • 2. How did we get here?
      • BPM is an old discipline that allows you to model the organizational structure, define the business processes, and show their interactions.
      • The design and automation of business processes even warrants its own field of study, known as BPM (Business Process Management).
      • Traditionally taught in business schools, it is put into practice with varying degrees of success.
      • Hammer and Champy, the authors of the widely read “Reengineering the Corporation”, focused their attention on business processes as a root cause of inefficiency and also the source of potential competitive advantage.
    • 3.
      • Over the last two decades, the public and private sectors have been giving increasing attention to business processes.
      • This interest grows out of the requirements to streamline business operations and overhead, consolidate organizations, and save costs.
      • What is different today is the novel use of computing technology to drive the analysis and automation of business processes.
      • Hence, the level of interest and the marketing hyperbole around BPM has reached a crescendo.
    • 4.
      • Innovations in technology such as XML, Web Services, Service Oriented Architecture, Service Catalogs, component-based deployment, and information messaging have fueled the current interest in BPM.
      • Vendors have developed Business Process Management Systems ( BPMS ) that provide the fine-grained integration of systems and data needed to automate business processes.
      • BPMS links people and systems, manages information access and transformation, handles exceptions, and orchestrates the flow of the process.
      • That was the last decade.
    • 5.
      • Today, organizations are looking to BPM to help solve problems, like:
        • To be competitive, a supplier needs to cut its costs for fulfilling customer orders, by 70 percent .
        • A pharmaceutical company seeks to extend the patent life of its drugs by bringing new products to market, one month earlier .
        • A government agency, forced to reduce staff by 30 percent , must find a way to consolidate and streamline its unemployment benefits services.
        • Personally accountable under the Sarbanes-Oxley Act, company executives need to control and verify the process used to produce financial statements.
    • 6.
      • As an example, Gartner announced that BPM "wins the 'Triple Crown' of saving money, saving time, and adding value.“
      • Is this promise being fulfilled?
      • BPM technologies are becoming more mature and BPM does have the potential to deliver significant value.
      • But there are still elements that are missing that limit its effectiveness.
      • Thus, many Developers and Business Analysts still find themselves asking the basic questions:
        • What is it?
        • Why should we care?
    • 7.
      • This presentation provides a high-level overview of BPM and where it is today.
      • It also touches on some of the core technologies and standards.
      • Its focus is on the four specific “Challenges” facing BPM and they are aligned to the four phases of the typical application development life cycle.
        • Discovery
        • Design
        • Development
        • Deployment
    • 8. The Discovery Challenge
      • Typically, Business Analysts, needing to discover the current state of things, try to visually represent the various processes of the business.
      • The approach taken by many BPM products fails to address this challenge adequately.
        • They employ a drawing “metaphor” in which a Business Analyst or Developer sketches the process using a palette of standard icons.
        • This assumes the existing process is known in advance.
      • Most organizations however, simply do not know their end-to-end processes accurately or in detail.
      • Their process knowledge is tacit and decentralized—not explicit and centralized.
    • 9.
      • Classical manufacturing processes have been analyzed extensively in quantitative and qualitative terms.
      • Discovering general business processes is somewhat less straightforward. You can adopt either a Top-down or Bottom-up approach.
      How can you discover, how a business operates?
    • 10. The Top-down approach
      • The Top-down discovery approach typically begins with the organization chart. It lists the responsibilities of each department in the organization and identifies the high-level processes that support these responsibilities.
      • The advantage of this approach is that it provides a broad, organizational perspective.
      • Its disadvantage is a lack of detail and a questionable degree of accuracy.
    • 11.
      • The Bottom-up approach begins by interviewing employees about their day-to-day activities and attempts to integrate this information into coherent end-to-end processes.
      • This approach can be extremely accurate but you can easily get lost in the details.
      • These processes are then decomposed into lower-level processes, which are decomposed further, until the lowest level is reached.
      The Bottom-up approach
    • 12. The Hybrid approach
      • Some hybrid Top-down/Bottom-up approaches seek to achieve the advantages of both methods.
      • Since no two organizations are exactly alike in how they operate, different discovery methods are probably more appropriate.
      • Further, a single capture of business processes is likely to be woefully inadequate. As is so often the case, later discoveries inform earlier ones, and an iterative discovery methodology that continually enhances and updates the processes may yield better results.
      • Regardless of the methodology followed, there is of course the key requirement that management support and drive the business-process discovery.
      • Without this support, the chance of success is minimal.
    • 13. Business Consequences
      • As awareness of the importance of business processes grows, many are attempting to capture their current-state business environment. They form workshops of business users, sketch the processes, and try to achieve consensus within the team.
      • Unfortunately, they have no way to ensure the accuracy or completeness of the resulting diagrams. Often the underlying complexity of existing business processes is oversimplified by such workshops.
      • Much of the important meta-data about the processes, such as cost, cycle time, and information flow, cannot be easily fit into “Visio” diagrams. Moreover, the information contained in the processes cannot be easily changed or analyzed effectively in these diagrams.
    • 14. Technical Consequences
      • Accurately capturing the current or “as-is” process is a prerequisite for defining the structure and rules of the “to-be” process.
      • Without this level of understanding, a BPMS “Developer” may produce a sub-optimal solution with the tool or, worse, a solution to the wrong problem.
      • BPMS tools were designed to “automate processes”, not to analyze business.
      • The process automation, implemented using BPMS may therefore, fall short of the true goals of the business.
      • Why not ask the Business Analysts to use the BPMS products to discover and analyze business processes? This would seem to solve this problem.
    • 15.
      • Unfortunately, most BPMS products have been designed for use by Developers, not for the business.
      • They provide few, if any, capabilities for process discovery, defining meta-data, simulation, or analyzing process costs or cycle times.
    • 16. The Design Challenge
      • The ultimate purpose of BPM is to improve and optimize the operations of an organization.
      • Its scope, necessarily, comprises not a single process but all processes across the organization.
      • Unfortunately, most BPMS products are designed to work on one process at a time. The “Developer” draws the process, adds implementation constructs, and then executes the process.
      • There is no way in these tools to: look across multiple processes, examine process interconnections, make comparisons, or perform analysis.
    • 17.
      • What is needed is a “process laboratory”, where Business Analysts can collaborate, exploring the process space, testing ideas, measuring, analyzing, and comparing processes, and generally performing business thought experiments and scenarios.
      • This laboratory would give analysts the tools to design new processes, view the processes from multiple points of view, extract analytical reports across the processes, generate system requirements, and perform simulation or “what if” experiments.
      • It would allow them to create centralized reusable processes that can be invoked by processes in different operating units
      • Obviously, one key element in such a laboratory is a “process language” to express ideas.
      Process Laboratory
    • 18.
      • This “process language” would be used to define the basic entities of business processes (processes, participants, activities, links, etc.) and the rules for their operation and interaction.
      • A standard process language would allow customers to use products from different vendors for defining and implementing business processes.
      • Processes defined in one product could be executed on another product.
      • Over the past three years, various organizational groups have made numerous attempts to define standards for Web services and business processes.
      Process Language
    • 19.
      • The relevant organizations are:
        • Workflow Management Coalition ( WfMC )
        • Object Management Group’s - Business Process Management Initiative ( BPMI )
        • World Wide Web Consortium ( W3C )
        • OASIS .
      Organizational Groups
    • 20.
      • An important XML-based language for defining business processes is the Business Process Execution Language for Web Services (WSBPEL, BPEL4WS, etc.)
      • The underlying assumption behind the BPEL specification is that business processes will be composed of a series of interacting Web services.
      • Since WSDL (Web Services Description Language) is the natural language for describing Web services, BPEL is an extension of WSDL.
      • Each activity in a BPEL process is implemented by a Web Service, which is defined by its port types, operations, and messages.
    • 21.
      • In BPEL, a business process is composed of a central process engine that interacts with a set of business partners.
      • Each Web-Service operation is performed either by one of the partners or by the central process engine itself.
      • The process engine communicates with its partners by exchanging messages. The process engine and partner send messages across a communications channel called a “service link.
    • 22. To make this more concrete, let’s consider a stock broker interacting with a stock exchange (Stock Broker Process).
    • 23.
      • The service link is a bilateral contract between the Stock Broker “ process ” and the “ stock exchange ” that defines the services each offers to the other.
      • The process and the partner play different roles across the service link.
      • The process, in its role, exposes a WSDL port type—that is, a set of operations that it agrees to offer.
      • Similarly, the partner, in its role, exposes another set of operations.
    • 24.
      • Having defined the conceptual framework for partner interaction, BPEL then specifies the building blocks of processes: activities, flows, links, data containers, and assignment operations.
      • These are defined in terms of their XML structure, but without a graphical model for representing them.
      • BPEL also addresses technical constructs required for proper execution of the business process.
      • These include correlation, fault handling, and compensation.
    • 25.
      • Correlation - is the technique used to create associations between process instances by using the data fields as identifiers.
      • For example, a field “order number” might be used to correlate a purchase order and a purchase-order acknowledgment.
      • Fault handling and C ompensation specify the procedures to be followed when an error occurs in the process.
      • For long-running processes, the idea is to “undo” a complex series of activities with a compensating series of activities.
    • 26.
      • For example, if you want to specify that activity 1 must precede activity 2, you have two ways to do so.
        • Use the structured activity called “sequence.”
        • Connect these activities through a link within a flow.
      • The BPEL specification provides no hints as to when to use one technique or the other.
      • In BPEL, each process is an assemblage of Web services, but the process is itself a large-scale Web service. This fractal-like approach enables unlimited composition and decomposition of Web services.
    • 27.
      • BPEL is a significant achievement, but it has several weaknesses that limit its widespread adoption:
        • It addresses only processes composed exclusively of Web services.
        • It has no graphical rendering. To date, no available products generate process graphics from a BPEL document or vice versa.
        • It does not include a framework for performing Top-down design—that is, for creating a process in a series of layers with successive refinement.
        • It provides no capabilities for process analysis.
        • It is a vendor-driven process definitions language that has not yet been reflected in a royalty-free standard published by a universally recognized standards group.
    • 28.
      • The major competitor to BPEL as a process language based on Web services is BPML (Business Process Management Language).
      • Both BPEL and BPML are ultimately based on the π calculus, but the Business Process Management Initiative introduced BPML two years earlier than BPEL.
      • BPEL has actually incorporated many BPML concepts and, with the support of Microsoft and IBM, it has the advantage of industry momentum.
      • Microsoft, IBM, and BEA Systems have introduced BPEL in their products, but as expected, with proprietary language extensions and some tools to aid in process design.
    • 29.
      • The goal is to translate the process information gathered in Discovery into a standard process language, such as BPEL. But Business Analysts can’t use BPEL, at least not in its current form.
      • Given a BPEL process definition, you will find it nearly impossible to disentangle the business logic from the details of the implementation.
      • The business semantics are obscured by the technical details required for execution.
      • What is lacking is a way to layer BPEL, to filter out such technical constructs as fault handling, correlation, and transaction management.
      Business Consequences
    • 30.
      • It should be possible for a Business Analyst to use a process language to design the business logic.
      • Once the business logic is mapped out, a Developer can insert the technical constructs.
      • Business Analysts generally prefer a visual way to design processes.
      • They would also likely benefit from a way to design processes from the Top-down, beginning with high-level processes and refining them to low-level processes.
    • 31.
      • In many cases the Business Analysts will design the business process using an analysis tool.
      • If BPEL is not used by the business process analysis tool as well as by the BPMS, then a custom mapping will be required to translate between the XML dialects of the two products.
      • In its current form, BPEL will be of limited use since it is designed for processes that are implemented using Web services.
      • A key goal of business-process design is to define and communicate requirements.
      • For example, suppose a new system will be used in multiple processes, supporting different users and systems performing different functions.
      Technical Consequences
    • 32.
      • Ideally, the business processes are defined in such a way that the functional requirements can simply be extracted from the process definitions.
      • If a new system performs 25 activities across 17 processes, then these activities can be summarized by an appropriate query.
      • This procedure is precisely analogous to extracting data from a relational database. Unfortunately, there is currently no searchable knowledge base of BPEL processes.
      • Moreover, since BPEL has no notion of “participant” or “actor” to identify the proposed system, it will not be able to support this important goal of the process laboratory.
    • 33. The Development Challenge
      • A successful development project is the result of many favorable conditions, one of the most important being close collaboration between Business Analysts (define the needs of the business) and Developers (implement systems that meet these needs).
      • Business Analysts and Developers are driven by different goals, speak different languages, and work at different levels of precision.
      • In the domain of BPM this gap is manifested by automated business processes whose execution does not match the original business requirements.
      • Business Analysts typically communicate business needs (in the form of requirements) to the Developers, who may interpret the needs rather differently.
    • 34.
      • Using a BPMS tool, the developers implement the automated solution as they understand it.
      • Why not have the Business Analysts define the business process using the BPMS tools?
      • This is not realistic since BPMS products are generally intended for use by developers, not by Business Analysts.
      • They enable developers to create technical con­structs, not business requirements.
      • Tools based on UML (Unified Modeling Language) are sometimes suggested as an alternative. UML is well suited for developers who need to design class diagrams and lay out the interactions between method calls.
      • The UML suite of diagrams is, however, not so well suited for Business Analysts working with business processes.
    • 35.
      • The business consequences of the gap between Business Analysts and Developers are:
        • increased risk of failure
        • longer lead times for development.
      • The Standish Group discovered:
        • 31 percent of all software development projects are cancelled before they are completed.
        • 53 percent are either not completed on time, budget, or fail to deliver the projected functionality.
        • 16 percent of projects are completed on time and on budget.
      Business Consequences
    • 36.
      • The classical requirements documentation leaves considerable room for interpretation.
      • It rarely provides the level of precision needed by IT Developers, who need to know:
        • Each activity that must be performed by the system
        • The step-by-step control logic of the enveloping business process
        • The specific data required at each step of the process
        • The business rules that govern changes to the data.
      Technical Consequences
    • 37.
      • This lack of precision leads to misunderstandings between the analysis and the development teams.
      • Redefining requirements, redesigning, and recoding midstream are expensive and time-consuming.
      • What’s missing is a seamless way to integrate design and development.
      • Business Analysts should create process designs at the business level within their process laboratory and then export these designs in XML form to the BPMS.
      • Developers will then refine the design, adding the technical constructs needed for implementation.
      • This eliminates any ambiguity about the requirements and business need.
    • 38. The Deployment Challenge
      • The whole point of automating business processes is to improve operations—in cost, time, or quality.
      • Once a process has been developed and deployed, how can we know if it is meeting the intended goals?
      • We know how to instrument IT systems and monitor them with a high degree of precision.
      • These statistics, however, do not generally provide a business-process context around this information.
      • The challenge is to aggregate and present execution data at the business-process level.
      • Gartner coined the term business activity monitoring (BAM) for this capability
    • 39.
      • Without BAM, operational managers have no way of determining whether the processes, for which they are responsible, are meeting their objectives.
      • For example, they will not be aware that the cost of the order fulfillment process has increased 20 percent above average, or that the time required for handling new benefits claims declined by 10 percent, or that the outage optimization process for web portal is in trouble.
      • Lacking this information, executives have no way to determine which action to take.
      • A way to aggregate execution statistics in process context would help the business manager better manage these types of exceptions.
      Business Consequences
    • 40.
      • Recently, several vendors have developed BAM products, but in many cases they are “discrete event monitors” that lack overall process context.
      • To achieve true process context, you must link individual activities into a process to provide information on what is done in that process and by whom.
      • For example , you can group process instances by geography, customer, or organization.
      • Finally you need to “chain” processes that logically belong together, such as an order process and an invoice process.
      • All this information is then summarized and presented on an executive dashboard on the enterprise portal.
    • 41.
      • Most organizations recognize the importance of BAM but have no effective way to collect, aggregate, and analyze execution statistics.
      • Often it is done in an ad hoc manner, in which reports from legacy systems are combined into a data warehouse from which summary reports can be generated.
      • It is possible to determine quite precisely the utilization of each disk drive, server, and network component in the IT environment.
      • From such statistics, however, you will not know which resources need to be expanded, consolidated, or upgraded to support the business objectives.
      Technical Consequences
    • 42.
      • For example , you simply may not know whether or not increasing the capacity of a specific disk will affect the order-fulfillment-cycle time.
      • With BAM, we come full cycle.
      • The results of process monitoring will enable the rediscovery and redesign of business processes.
      • Executives will know about hotspots that demand their immediate attention. In the longer term, the execution will keep pace with the business needs and the process designs.
    • 43. This figure summarizes this life-cycle concept.
    • 44. Conclusion
      • Any enterprise can be viewed as the sum of its business processes.
      • Each process delivers value to customers, suppliers, employees, or other stakeholders.
      • BPM, the discipline for enabling and automating business processes, is in a period of rapid growth and will fundamentally change the way computing power is applied in organizations.
      • Whereas BPM has already delivered considerable value in many companies, the components of the full BPM solution are still evolving and are the subject of ongoing research and development.
    • 45.
      • One noteworthy advance has been BPEL, an XML-based language for describing business processes composed of Web services.
      • This presentation has focused on four immediate challenges:
        • Process discovery is the beginning of any BPM solution and is necessary to ensure that the solution matches the real business needs.
        • Business Analysts lack a process laboratory in which to design, analyze, and simulate business processes.
    • 46.
        • Integration is missing between the tools used for business process design and the tools used for execution.
        • BPM generates valuable performance statistics from executing business processes. Businesses need to monitor these execution statistics, organize them into their process context, and present them in the form of alarms, reports, and executive dashboards.
      • There has been significant progress in BPM in this decade and many challenges will, and are being addressed in the future.
      • Others may prove less tractable and will take a little longer to solve.
    • 47.
      • Once this happens, for the first time we will have a complete, closed-loop approach to business processes: from conception to execution and back.
      • This gives executives the ability to design their business processes, automate them, and judge quantitatively how well they are doing against their plan.
      • With this information, they can then redesign or optimize the processes.
      • Gradually, the technologies and techniques described here will change the way businesses and governmental agencies apply technology.
      • In the words of Howard Smith, “Third-wave business process management methods and systems will utterly transform the way companies conceive, build, and operate automated systems.”