Is 684 -_f11_-_review_for_exam

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Is 684 -_f11_-_review_for_exam

  1. 1. IS 684 – Business Process Innovation Review for Exam IS 684 - Fall 2011 - Review for Exam 1
  2. 2. What do we mean by “work” in an organization and how is it accomplished? IS 684 - Fall 2011 - Review for Exam 2
  3. 3. • Work – The application of human and physical resources such as people, equipment, time, effort, and money to generate outputs used by internal or external customers. IS 684 - Fall 2011 - Review for Exam 3
  4. 4. Business Processes• A business process is a related group of steps or activities that use people, information, and other resources to create value for internal or external customers. Business Processes consist of steps related in time and place, have a beginning and end, and have inputs and outputs.• “A business process or business method is a collection of related, structured activities or tasks that produce a specific service or product (serve a particular goal) for a particular customer or customers. It often can be visualized with a flowchart (or other diagram) as a sequence of activities.” – Source: Wikipedia – September 11, 2011 IS 684 - Fall 2011 - Review for Exam 4
  5. 5. Models or Frameworks for How“work” is done in an organization 1. Alter’s Work System Framework 2. The Enterprise Business Model 3. Harmon’s Organization Diagram IS 684 - Fall 2011 - Review for Exam 5
  6. 6. Alter’s Work System Framework IS 684 - Fall 2011 - Review for Exam 6
  7. 7. Alter’s Work System Framework• A work system is a system in which human participants and/ or machines perform business processes that uses (which may use) information, technology, common infrastructure, and other resources to produce products and/or services for internal or external customers.• The “work” takes place in a specific environment (organizational, cultural, competitive, technical, regulatory)and is guided by the strategies (rationale and high-level choices ) of the organization. IS 684 - Fall 2011 - Review for Exam 7
  8. 8. Alter’s Work System Framework IS 684 - Fall 2011 - Review for Exam 8
  9. 9. Alter’s Work System Framework The Work SystemThe “Work” IS 684 - Fall 2011 - Review for Exam 9
  10. 10. Alter’s Work System• Alter’s Work System Framework is not a formal or widely adopted business concept.• It is, however, a useful framework for understanding how “work” gets done in an organization.• It draws on traditional business concepts from: – Total Quality Management (TQM) – Business process reengineering – Systems theory IS 684 - Fall 2011 - Review for Exam 10
  11. 11. • A work system is not an information system.• An information system is a special case of a work system whose work practices are devoted to processing information (i.e. capturing transmitting, storing, manipulating, displaying, retrieving information) IS 684 - Fall 2011 - Review for Exam 11
  12. 12. Work Systems in the Larger Context IS 684 - Fall 2011 - Review for Exam 12
  13. 13. The Enterprise Business Model IS 684 - Fall 2011 - Review for Exam 13
  14. 14. The Enterprise Business Model• The story of any enterprise begins with its business drivers, originating from one or more influences on the marketplace: STEEPLE – Social, Technical, Economical, Environmental, Political, Legal, and Ethical factors.• The enterprise responds to its drivers with two main functions: Planning and Operations.• Planning consists of the Mission, Vision, and Strategies of the business.• Operations are a collaboration of processes, people, and technology supported by an underlying infrastructure which take materials, data and other resources from Suppliers to produce products and/or services for Customers.• Planning remains stable over time while Operations is dynamic and changes in response to business drivers. IS 684 - Fall 2011 - Review for Exam 14
  15. 15. The Enterprise Business Model IS 684 - Fall 2011 - Review for Exam 15
  16. 16. Harmon’s Organization Diagram (Modified after Rummler-Brache) IS 684 - Fall 2011 - Review for Exam 16
  17. 17. Harmon’s Organization Diagram (Modified after Rummler- Brache)• Organization diagrams are an extension of the basic system diagram, emphasizing relationship to the external environment. IS 684 - Fall 2011 - Review for Exam 17
  18. 18. Harmon’s Organization Diagram (Modified after Rummler- Brache)• Organization diagrams are an extension of the basic system diagram, emphasizing relationship to the external environment. Inputs Outputs Business System Feedback BPC 1.1 – A Business Entity as System IS 684 - Fall 2011 - Review for Exam 18
  19. 19. Harmon’s Organization Diagram (Emphasizing External Relationships) General Environmental Influences : Local and global economiesgovernment regulations , , and social trends information & Labor people dividends Shareholders Markets service requests & complaints Captial capital Markets marketing Markets contacts Your Organization sales Customers Customers contacts Research technology Community orders products & Vendors services materials delivered competitive products CompetitionBPC 3.5 IS 684 - Fall 2011 - Review for Exam 19
  20. 20. Harmon’s Organization Diagram (Organization are a collection of Value Chains)• Organizations are designed to create value for customers.• An organization is a collection of “value chains”.• The value chains cross functional areas and support a “process view” of the organization.• The goal of an organization diagram is to have an overview of the whole organization and think about customers, value chains and major stakeholders. IS 684 - Fall 2011 - Review for Exam 20
  21. 21. Harmon’s Organization Diagram (Organization showing two Value Chains) General Environmental Influences : Local and global economiesgovernment regulations , , and social trends Your Organization and Value Chains information & Labor people dividends Managment Shareholders Markets service requests Engineering Production Finance Marketing Sales & complaints Captial capital Markets marketing Markets contacts Value Chain sales Customers Customers contacts Research technology Community Value Chain orders products & Vendors services materials delivered competitive products CompetitionBPC 3.7 IS 684 - Fall 2011 - Review for Exam 21
  22. 22. Harmon’s Organization Diagram(Showing a specific value chain with three core processes) General Environmental Influences : Local and global economiesgovernment regulations , , and social trends Organization X : Widget Value Chain information & Labor people dividends Shareholders Markets Create New requests for new products Products Captial capital Markets marketing Markets contacts Market & Sell sales contacts Customers Customers Products orders Research technology Community products & services Make & Deliver delivered Vendors Products materials support requests competitive products CompetitionBPC 3.8 IS 684 - Fall 2011 - Review for Exam 22
  23. 23. Harmon’s Organization Diagram (Showing a specific value chain with three core processes)• In practice, we generally show the organization diagram with a single value chain and focus on one value-chain at a time.• With the single value chain, we show its core processes.• In most cases, this “organization–level” view is sufficient. Other techniques and tools show the detail of sub-processes. IS 684 - Fall 2011 - Review for Exam 23
  24. 24. Value Chains IS 684 - Fall 2011 - Review for Exam 24
  25. 25. Value Chains• The concept was first popularized by Michael Porter.• It is a chain of activities for a firm operating in an industry.• Products pass through all of the activities of the (primary) chain, and at each step gain value. IS 684 - Fall 2011 - Review for Exam 25
  26. 26. Michael Porter’s Generic Value Chain Firm Infrastructure Support Activities Human Resource Management Technology Development Procurement Margin Primary Activities Inbound Outbound Marketing Operations Service Logistics Logistics and SalesBPC 1.2 IS 684 - Fall 2011 - Review for Exam 26
  27. 27. IS 684 - Fall 2011 - Review for Exam 27
  28. 28. Inter-organizational Value Chain or Supply Chain IS 684 - Fall 2011 - Review for Exam 28
  29. 29. Michael Hammer’sPrinciples for Reengineering IS 684 - Fall 2011 - Review for Exam 29
  30. 30. Hammer’s Seven Principles Which ones apply today?1. Organize around outcomes, not tasks2. Users of output perform the process3. Subsume information processing work4. Treat geographically dispersed resources as if they are centralized5. Link parallel activities instead of integrating their results6. Put the decision point where the work is performed, build control into process7. Capture information once at the source IS 684 - Week #3 30
  31. 31. Hammer’s Principles #1 & #21. Organize around outcomes, not tasks. This principle suggests that a single person perform all the steps in a process and that persons job be designed around the outcome or objective rather than a single task.2. Have those who use the output of the process perform the process. In this way, there is little need for the overhead associated with managing it. Interfaces, liaisons and mechanisms used to coordinate those who perform the process with those who use it can be eliminated. IS 684 - Fall 2011 - Review for Exam 31
  32. 32. Hammer’s Principles #3 & #43. Subsume information-processing work into the real work that produces the information.4. Treat geographically dispersed resources as though they were centralized. Companies can use databases, telecommunications networks, and standardized processing systems to get the benefits of scale and coordination while maintaining the benefits of flexibility and service. IS 684 - Fall 2011 - Review for Exam 32
  33. 33. Hammer’s Principles #5 & #65. Link parallel activities instead of integrating their results. This principle means to forge links between parallel functions and to coordinate them while their activities are in process rather than after they are completed.6. Put the decision point where the work is performed, and build control into the process. This principle suggests that instead of having those who do the work separate from those who monitor the work, the people who do the work should also make the decisions and that the process itself can have built-in controls. IS 684 - Fall 2011 - Review for Exam 33
  34. 34. Hammer’s Principles #77. Capture information once and at the source. A critical factor for reengineering of the business process to succeed is to have executive leadership with real vision. Only if top-level management back the effort and outlast the cynics will people take reengineering seriously. IS 684 - Fall 2011 - Review for Exam 34
  35. 35. Background Theory: Problem Types IS 684 - Fall 2011 - Review for Exam 35
  36. 36. Problem Types• Herbert Simon • Denning (Getting to ”We”) – Programmed – Routine – Non-Programmed – Messy• Re-worked as – Wicked – Structured – Semi-structured – Unstructured• On a continuum IS 684 - Fall 2011 - Review for Exam 36
  37. 37. Problem Solving• Structured: – they are repetitive and routine. – follow a preset definite procedure each time they occur, so you don’t have to start new again each time they occur.• Unstructured: – they are novel and consequential; no cut-and-dried method for handling the problem exists, because it probably hasn’t occurred before, or its precise nature and structure are elusive or complex. – The problem may be so important that it deserves a custom-tailored solution. – calls for intelligent, adaptive, problem-oriented action IS 684 - Fall 2011 - Review for Exam 37
  38. 38. Problem Solving - 2• Routine – can be solved with refinements of previous or prototype solutions• Messy – are large, complex, seemingly intractable situations; they can only be solved with creativity• Wicked – are beyond messy in that people cannot agree on what the problem is or how to evaluate possible solutions IS 684 - Fall 2011 - Review for Exam 38
  39. 39. Problem Solving - 3• The more structured a problem, the more likely is the easy of automation.• As structure decreases, additional information is helpful as well as structured problem solving discussion techniques (e.g. Delphi, Brainstorming)• With very complex and unstructured problems, domain expertise is essential. IS 684 - Fall 2011 - Review for Exam 39
  40. 40. The Process/Knowledge Continuum Simple Very More Complex Procedural Complex Processes Processes Processes Ordinary Workers Knoweldge Workers Experts A Step-By-Step Sequence A Branching Sequence Sequence Defined by Process Few Rules or Decision Points Many Rules or Decision Points Heuristics and Guesses Well Defined Subject Matter A Less Well Defined Subject Evolving Subject Matter Matter Manufacturing Line Repair of Equipment New Product Development Retail Sales Field Sales Software System Design Bookeeping Process Analysis Consulting Can Be AutomatedBPC 10.1 IS 684 - Fall 2011 - Review for Exam 40
  41. 41. Link to the Gorry and Scott Morton Framework IS 684 - Fall 2011 - Review for Exam 41
  42. 42. IS 684 - Fall 2011 - Review for Exam 42
  43. 43. Background Theory:Coordination and Collaboration As we deal with “messy” and “wicked” problem types IS 684 - Fall 2011 - Review for Exam 43
  44. 44. Problem Solving - 4• As problems become more “messy” and “wicked”, collaboration is essential for solving them.• Collaboration generally means “working together “synergistically” – if your work requires support and agreement of others before you take action, you are collaborating.• Remember Hammer Principle #5: – Link parallel activities instead of integrating their results• We can use the concepts to understand process interoperability. IS 684 - Fall 2011 - Review for Exam 44
  45. 45. Denning’s Article on Collaboration• Denning: “People Fail into Collaboration”• Alternatives: – Authoritarianism – Competition – Collaboration• Disincentives for Collaboration: – “Standing Our Ground” – “Hero Celebration” IS 684 - Fall 2011 - Week #4 45
  46. 46. Four Levels of “Working Together” or Joint Action(Also called With examples of groupware toolsCommunication) First level re-labeled as “Communication”, then We speak of the “4C’s of Collaboration From: Denning, “Getting to the We”, CACM, Apr. 2008. Communication, Coordination, and Cooperation are all weaker forms of Collaboration. IS 684 - Fall 2011 - Week #4 46
  47. 47. Coordination IS 684 - Fall 2011 - Review for Exam 47
  48. 48. Language Action Philosophy (LAP) (not Language Action Perspective)• Denning’s article “Accomplishment” – Deals with inner workings of “commitment” and “coordination” – Without commitment, most coordination fails – Without coordination, most goals are not achieved. – Participants are distinct observers whose interpretations of events may not agree. – Mismatched interpretations of promises result in broken coordination and distrust (have you ever assumed someone else interprets something the same way you have?) – LAP reveals practical ways to improve coordination and effective action. IS 684 - Week #5 48
  49. 49. Coordination: Action Loops• The most fundamental human coordination pattern is the action loop. This is a conversational protocol in which one person fulfills a promise to the satisfaction of another. The backbone of the protocol between the requestor (A) and performer (B) is: – A: I request. – B: I accept. (or I promise) – B: I perform (or I state or I deliver) – A: I am satisfied. (sometimes promise) (sometimes state or deliver) IS 684 - Fall 2011 - Review for Exam 49
  50. 50. Coordination: Action Loops (2)• A’s request includes a statement, the proposed Condition of Satisfaction (CoS)• After negotiation, B agrees to a (possibly modified) CoS.• After a period of performance, B declares CoS fulfilled.• A reviews’ B’s work and declares satisfaction. IS 684 - Week #5 50
  51. 51. Dependencies• The generic action loop captures the form, but not the meaning of most two-person interactions.• Most “conditions of satisfaction” are arranged around a small number of dependencies: – Sharing dependency – Flow dependency – Fit dependency IS 684 - Fall 2011 - Review for Exam 51
  52. 52. Shared Dependencies• Sharing dependencies occur whenever multiple activities all use the same (usually limited) resource. The future behavior of activities depends on the resource. For example, travel agents will offer seats only on published flights to their clients. If the resource is limited, the future behavior may also depend on what other activities are doing with the resource; for example, B may be forced to wait until A releases shared memory. A and B are activities, and R Is a resource IS 684 - Fall 2011 - Review for Exam 52
  53. 53. Flow Dependencies • Flow dependencies arise whenever one activity produces a resource that is used by another activity. This common dependency includes message exchange, signaling, and flowcharting.A and B are activities,and R Is a resource IS 684 - Fall 2011 - Review for Exam 53
  54. 54. Fit Dependencies• Fit dependencies arise when multiple activities collectively produce, contribute to, or update a single resource. This kind of dependency arises when several engineers are designing different modules of a software system, when an assembly line is fitting parts into a car, or when different travel agents are booking seats on the same flight. A and B are activities, and R Is a resource IS 684 - Fall 2011 - Review for Exam 54
  55. 55. IS 684 - Fall 2011 - Review for Exam 55
  56. 56. The 4Cs – Levels of Joint Action• Communication – there needs to be a common language at a minimum so that results can be collected together into a whole.• Coordination – this level has solved the Sharing dependency problem.• Cooperation – this level has solved the Flow dependency problem (and sharing as well).• Collaboration – this level has solved the Fit dependency problem ( and sharing and Flow). IS 684 - Fall 2011 - Week #4 56
  57. 57. 4Cs of Collaboration(joint product development) IS 684 - Fall 2011 - Week #4 57
  58. 58. Link to Alter – Integration Characteristic IS 684 - Fall 2011 - Week #4 58
  59. 59. Link to Alter – Integration Characteristic IS 684 - Fall 2011 - Week #4 59
  60. 60. Conclusions about Collaboration• Link parallel activities instead of integrating their results – Communication – collection – Coordination – sharing – Cooperation – flow – Collaboration – fit• Higher levels of collaboration require higher levels of trust• Need a process structuring principle to assure commitments. IS 684 - Fall 2011 - Week #4 60
  61. 61. Actor Transaction DiagramDietz, The Deep Structure of Business Processes IS 684 - Week #5 61
  62. 62. Introduction to Actor Transaction Diagrams• LAP-based DEMO (Design and Engineering Methodology for Organizations) methodology reveals the essential structure of business processes.• Uses terminology consistent with other readings. IS 684 - Week #5 62
  63. 63. Organizational Actors (subjects)• Actors perform two kinds of acts: – P-Acts: Production acts – • Actors contribute to bringing about goods or services that are delivered to the environment • P-Acts are material (manufacturing, transporting goods) or immaterial (grant insurance claims, sells goods) – C-Acts: Coordination Acts • Actors enter into and comply with commitments toward each other regarding performance of P-Acts. • Examples are “request”, “promise”, “decline” IS 684 - Week #5 63
  64. 64. Workflow Loop and Basic Transaction Pattern of DEMO4 Phases that Result in 4 Speech Acts IS 684 - Week #5 64
  65. 65. Actor Transaction Diagrams (ATD)• Essential Map and Atomic Level – Let’s call these the Top Level and the Detail Level ATD.• Request (R), Promise (P), State (S), Accept (A) IS 684 - Week #5 65
  66. 66. Top Level: Ford Accounts Payable IS 684 - Week #5 66
  67. 67. Detail Level: Ford Accounts Payable IS 684 - Week #5 67
  68. 68. DEMO Notation and Example• Figure 3 shows the Ford Accounts Payable (AP) “invoice-less processing”.• There are two types of Abstractions: Essential Map and the Atomic Level. (page 62) – Again, Let’s call these the Top Level and the Detail Level ATD.• Note the dashed arrows between T2/ac and T3/rq and T3/ac and T1.• Try to draw the before situation. What is different? IS 684 - Week #5 68
  69. 69. IS 684 - Fall 2011 - Review for Exam 69
  70. 70. IS 684 - Fall 2011 - Review for Exam 70
  71. 71. Example Using Widmeyer Preferred Notation (based on DEMO) IS 684 - Week #5 71
  72. 72. Conclusions• The action loop is the foundational element of all coordination principles.• Model business processes using ATD. – Do Top Level and Detail Level diagrams. – Use Request (R), Promise (P), State (S), Accept (A). – Number each of the transactions. – Use dotted lines to show precedence.• Use ATD to find coordination breakdowns by identifying the missing communication speech acts. IS 684 - Week #5 72
  73. 73. Performance IS 684 - Fall 2011 - Review for Exam 73
  74. 74. Process Performance MetricsPerformance Typical Performance MetricIndicatorActivity Rate •Number of steps performed per hour •Number of units started per dayOutput Rate •Number of completions per day •Number of shipments per weekDefect rate •Number of defects per 1,000 units •Number of defects per dayRework rate •Number of units reworked per week •Percentage of labor time per week devoted to reworkConsistency •Number of deviations from standard per 1,000 units produced •Number of significant deviations from standard per weekCycle time •Average time from start to finish ( also called lead )Efficiency •Units produced per labor hour or machine hourUptime •Percentage of time in operation or available for operationVulnerability •Number of security-related incidents per month •Number of IS 684 - Fallsecurity-related weaknesses, weighted by known 2011 - Review for Exam 74 seriousness
  75. 75. Evaluating Work System Performance• Let’s suppose the business process is currently operating at optimal levels.• Are there other considerations for improving the work system’s performance?• Remember: Both the business process and the Work System have a goal of producing a product or service for a customer. IS 684 - Fall 2011 - Review for Exam 75
  76. 76. Evaluating Work System Performance• How might we look at performance for the other work system elements? – Customer – Product or Service – Participants – Information – Technology• How might performance for these elements be measured? IS 684 - Fall 2011 - Review for Exam 76
  77. 77. Evaluating Work System PerformanceMore PerformanceMetrics IS 684 - Fall 2011 - Review for Exam 77
  78. 78. IS 684 - Fall 2011 - Review for Exam 78
  79. 79. Work Systems vs. Information Systems IS 684 - Fall 2011 - Review for Exam 79
  80. 80. BPTrends Methodology IS 684 - Fall 2011 - Review for Exam 80
  81. 81. BP Trends – Business Process Pyramid• Different Levels of Concern for BPM: – Strategy or Enterprise level • On-going management activities to support management decision-making and to define process change opportunities. – Process level – • A variety of specific projects to create, redesign, or improve specific business processes. Normally managed by divisional or department mangers. – Implementation Level • Specific initiatives or projects designed to acquire and install new software applications or create new training courses that will implement changes defined at process level. IS 684 - Week #3 81
  82. 82. BPTrends Business Process Pyramid Strategy Enterprise Process Architecture Level Performance Measurement Process Management Alignment BPM Governance Priorities and Planning Business Process Business Process Process Resign & Level Improvement Projects Six Sigma & Lean Projects Documentation Projects Specific Implementation Activity Level . Human Resource IT Development Projects Development Undertaken to Develop Job Design BPMS, BAM Resources A Mix of IT for New Training Application Development Processes Development and HR ERP Installation Knowledge Development Database Development Management Physical Plant and Hardware UsedBPC – i.1 IS 684 - Fall 2011 - Review for Exam 82
  83. 83. Process Change in Organizations is Multidimensional Design & Goals & Measures Management Implementation Organizational Goals andOrganizational Organizational Design Organizational Measures of Organizational Level and Implementation Management Success Process Goals and Process Process Design Process Measures of Process Level and Implementation Management Success Activity or Activity Goals and Measures Activity Design ActivityPerformance of Activity Success and Implementation Management LevelBPC 1.4 IS 684 - Fall 2011 - Review for Exam 83
  84. 84. SEI’s Capability Maturity Model• The CMM team defined 5 stages that organizations go through as they move from immature to a mature understanding of business processes.• Originally developed for software engineering, it is now used as a generic model to aid in improving organizational business processes. IS 684 - Fall 2011 - Review for Exam 84
  85. 85. The CMM Process Maturity Ladder (BPC i.5)Organizations with an mature mastery of their processes. 5. Optimizing Continuous process Organizations at this level routinely expact managers and employees to work together to improvement is enabled by improve processes. They understand their processes well enough that they can conduct quantitative feedback for systematic experiments to determine if changes will be useful or not. the process and from piloting innovative new Only a few organizations have an organization 4. Managed ideals and technologies. wide understanding of how processes relate and have their corporate strategies and goals aligned, Detailed measures of the via the management hierarchy to specific process process and product quality activities. are collected. Both the process and products are quantitatively understood 3. Defined and controlled. Most organizations are between levers 2 and 3. They have processes documented and The process for both standardized but in many cases managers goals management and are only loosly linked to process goals. engineering is documented, standardized and integrated by an organization 2. Repeatable methodology Basic project management processes are established As organizations become more mature they begin to to track cost, schedule, and conceptualize business processes and seek to functionality. The necessary organize them, repeat successes and measure results. discipline is in place to 1. Initial repeat earlier successes The process is ad hoc.Few activities are explicitly Enterprenural organizations and new defined and success divisions that do things any way they can todepends on individual effort get started. and heroics. IS 684 - Fall 2011 - Review for an immature mastery of their processes. Organizations with Exam 85
  86. 86. Characteristics of the Maturity Levels IS 684 - Fall 2011 - Review for Exam 86
  87. 87. BPTrends Process Change Methodology IS 684 - Fall 2011 - Review for Exam 87
  88. 88. BPTrends Process Change Methodology• Two Complimentary Methodologies – Enterprise Change (Top) • Activities companies go through to create and use enterprise level process tools to manage all its process work • Often an on-going effort of management – Business Process Change Projects (Bottom) • Steps that a process team goes through to redesign or improve a specific business process. • Similar to other process improvement methodologies (e.g. Alter’s Work systems Method) IS 684 - Week #6 88
  89. 89. Important Note About Text Book Error• In discussing The BPTrends Enterprise Methodology the text in figure 3.1 shows IS 684 - Fall 2011 - Review for Exam 89
  90. 90. BPTrends Process Change Methodology BPTrends Enterprise Methodology Corporate Strategy On-Going Execution Define Build Process Manage Understand Business Process Management Enterprise Enterprise Enterprise Architecture Capability Processes Level ▪ Create Business Model ▪ Model Major Processes ▪ Identify Process Managers ▪ Define Value Chains ▪ Establish KPIs ▪ Define Manager’s Scorecards Define & ▪ Link to Strategy ▪ Align Resources to ▪ Create BPM Group Monitor & Prioritize Report on Processes Projects Process Performance Day-to-Day BPTrends Business Process Redesign Methodology Process Management Process Analyze Redesign Implement Roll-Out Level Understand Redesigned Redesigned Execute Business Business Project Business Business Process Process Process Process PRocess Implementation Level If significant IT or HR development work is required then the Process , Various IT & Redesign Project assigns projects to HR Projects, IT or HR for development . etc. .BPC 3.1 IS 684 - Fall 2011 - Review for Exam 90
  91. 91. BPTrends Process Change Methodology BPTrends Enterprise Methodology Corporate Strategy On-Going Execution Define Build Process Manage Understand Business Process Management Enterprise Enterprise Enterprise Architecture Capability Processes Level ▪ Create Business Model ▪ Model Major Processes ▪ Identify Process Managers ▪ Define Value Chains ▪ Establish KPIs ▪ Define Manager’s Scorecards Define & ▪ Link to Strategy ▪ Align Resources to ▪ Create BPM Group Monitor & Prioritize Report on Processes Projects Process Performance Day-to-Day BPTrends Business Process Redesign Methodology Process Management Process Analyze Redesign Implement Roll-Out Level Understand Redesigned Redesigned Execute Business Business Project Business Business Process Process Process Process PRocess Implementation Level If significant IT or HR development work is required then the Process , Various IT & Redesign Project assigns projects to HR Projects, IT or HR for development . etc. .BPC 3.1 IS 684 - Fall 2011 - Review for Exam 91
  92. 92. BPTrends Process Change Methodology IS 684 - Fall 2011 - Review for Exam 92
  93. 93. Enterprise Level Concerns IS 684 - Fall 2011 - Review for Exam 93
  94. 94. Enterprise Methodology IS 684 - Fall 2011 - Review for Exam 94
  95. 95. Enterprise Methodology• Phase 1:Understand the Enterprise – Understand and agree on basic value-chain processes the company supports and the strategic goals each value chain supports – Use The Enterprise Business Model and Organizational Diagrams to understand the business and its key relationships. IS 684 - Fall 2011 - Review for Exam 95
  96. 96. Enterprise Methodology• Phase 2: Define Business Process Architecture – The organization is a collection of value chains – Select a specific value chain and create a business process architecture for that value chain. – Hierarchically decompose the processes that make up the value chain. Architecture Analysis Worksheet – Level 1 Processes Value Chain : Value Chain Process Manager Strategic Goals for Value Chain : Level 1 Processes Process Manager Level 1 Goals /Process Metrics Level 1 Resources . IS 684 - Fall 2011 - Review for Exam 96
  97. 97. Hierarchical Decomposition of a Value Chain Value Chain Level 0 High-Level Business Business Process Business Process Business Process Level 1 Processes: Focus of Architectural Level 2 Process Process Process Analysis Sub-Process Sub-Process Sub-Process Level 3 Mid-Level Level 4 Sub-Sub-Process Sub-Sub-Process Processes: Focus of Most Process Redesign and Improvement Sub-Sub-Sub-Process Sub-Sub-Sub-Process Sub-Sub-Sub-Process Level 5 Projects Sub-Sub-Sub-Sub-Process Sub-Sub-Sub-Sub-Process Level 6 Activities, Procedures, Activity Activity Level 7 Tasks and, Steps: Focus of Task Procedure Step 1 Analysis Step 2 Step 3BPC 8.2 IS 684 - Fall 2011 - Review for Exam 97
  98. 98. Enterprise Methodology Level 2 Processes Architecture Analysis Worksheet – Level 2 Processes Value Chain : The Widget Value Chain Level 1 Process: Widget Supply Chain Goals and Measures for Level 1 Process: Increase customer satisfaction (Reduce complaints by 50%) Reduce costs (By 15% per year ) Level 2 Processes Process Manager Level 2 Goals /Process Metrics Level 2 Resources Make Process Artie Kahn Reliability ERP Modules Used Perfect Order Fulfillment Responsiveness Make Cycle Time Business Rules Used Flexibility Upside Make Flexibility Downside Make Adaptability Employee Training Courses Used Upside Make Adaptability Cost Plant Operating Cost per Hour Indirect to Direct Headcount Ratio Costunit Indirect to Direct Process Cost Ratio Product Losses (Sources /In-Process/Finished) Assets Cash to Cash Cycle Time Inventory Aging Return on Supply Chain Fixed Assets Deliver ProcessCopyright © 2007 BPTrends . All Rights Reserved . IS 684 - Fall 2011 - Review for Exam 98
  99. 99. Enterprise Methodology• Phase 2: Defining Business Process Architecture – There are different ways of developing a comprehensive decomposition of a value-chain. – Traditional way is get room full of senior executives and ask the question: “How do you …?” and document. – Increasingly the analysis of process architectures use process frameworks – generic models of all the processes in a value chain (often industry specific). – Process framework-based approaches can work because at levels 0, 1, and 2 most companies within an industry may do things in a similar manner. IS 684 - Fall 2011 - Review for Exam 99
  100. 100. Enterprise Methodology• Phase 2: Defining Business Process Architecture – Some Process Frameworks • SCOR – Supply Chain Operations Reference Model is a process reference model endorsed by the Supply Chain Council (SCC) as the de-facto standard diagnostic standard for supply chain management. (see BPC pp. 93-102). • eTOM – The TeleManagement Forum’s framework highly tailored to telecom companies. It is a reference architecture that assumes, over time, most members will move toward this process architecture as “best practice”. • With standards used by many companies, third-party vendors will develop BPM products to implement many of the processes defined by the model. IS 684 - Fall 2011 - Review for Exam 100
  101. 101. Enterprise Methodology (The three levels of a SCOR architecture) Business Level 0 A Value Chain Value Chain E.g. Design Make, and Sell Widgets : , Distributor Other Supply Supply Chain Supply Chains Chains Process or Customers Level 1 A Supply Chain Source Make Deliver Plan D1 Deliver S1 Source M1 Make-to-Stock Stocked Products Stocked Products D2 Deliver S2 Source M2 Make-to-Order Level 2 MTO Products MTO Products Processes and S3 Source D3 Deliver Variations M3 Engineer-to-Order ETO Products ETO Proudcts Level 3 Subprocesses for a single Return Level 2 Variation : S3 S3. Source Engineeer-to-Order Product S3.1 S3.2 S3.3 S3.4 S3.5 Schedule Authorize Receive Verify Transfer Product Supplier Product Product Product Deliveries PaymentBPC 4.8 IS 684 - Fall 2011 - Review for Exam 101
  102. 102. Enterprise Methodology• Phase 3: Build Process Management Capability – A Business Process Architecture can be a minimal architecture that identifiers the major value chain and key processes and the relationships between them, or it can be a more detailed architecture that defines processes, managers, measures, links to strategies and policies, links to IT resources, links to training resources, etc. – The more elaborate the process architecture, the more valuable it will be a senior management tool. – If an organization is serious about building a large architecture, it needs a “process” to maintain it and keep it up-to-date. IS 684 - Fall 2011 - Review for Exam 102
  103. 103. Enterprise Methodology• Phase 3: Build Process Management Capability – Some organizations will create a formal BPM Group to maintain the Business Process architecture. Assemble process information into a consistent Maintain up-to-date business BP architecture Create and maintain the enterprise process architecture business process architecture Update architecture with (Maintain BPM repository) Work with strategy group to new information estimate implications of proposed changes Use architecture to identify problems with processes BPC 7.2 IS 684 - Fall 2011 - Review for Exam 103
  104. 104. Processes a BPM Group Might Manage BPM Group BPM Group Processes: Assemble process information into a consistent Maintain up-to-date business BP architecture Create and maintain the enterprise process architecture business process architecture Update architecture with (Maintain BPM repository ) Work with strategy group to new information estimate implications of proposed changes Gather information on processes Scope and prioritize possible that need to be changed Identify, prioritize, and scope process change projects business process change projects and Gather information on available manage process change resources Assign teams to process processes change resources change projects Report on corporate process Collect daily / monthly data performance on process performance Help create, maintain, and manage the process performance system Report on Enterprise BP Gather Information on Maturity Audits Enterprise Process Maturity Manage managers BP Help create and support the process scorecards & evaluations New managers manager system BP manager job descriptions (Create/maintain BP management training ) Train all new managers in business process techniques Various BP standards and tools available Recruit, train, manage business process Manage BP change projects change professionals Hire, manage BP professionals (Standardize on methodologies , BP tools) Acquire BPM tools Prepare reports for Sarbanes - External demands for process Manage risk / compliance reporting & Oxley & ISO 9000 organizations documentation a & meansures documentation maintenance Update Sarbanes-Oxley & ISO 9000 documentationBPC 7.1 IS 684 - Fall 2011 - Review for Exam 104
  105. 105. Enterprise Level Process Change Complex Very DynamicNegotiation, Design or Decision Complex, Dynamic Process Complex Processes Not , Processes of High Value : Part of Company Core s Undertake Business Process Complexity and Dynamics Compentcy : Process Improvement Many Outsource Efforts that Focus on business People rules. Expertise involved Some business Straightforward, rules Static, Commodity Straightforward , Processes: Static, and Valuable: Use Automated ERP -type Automate to Gain Applications and/or Efficiency Oursource Procedure Simple Algorithm Doesn’t Change Lo Strategic Importance Hi Must Be Done, But Very Important to Adds Little Value to Success, High Value Products or Added to Products or Services Services IS 684 - Fall 2011 - Review for Exam 105
  106. 106. Enterprise Level Process Change Complex Hi Negotiation, Outsourcing Design or Projects Major Decision Redesing Process Projects Many business Process Complexity and Dynamics rules. Expertise involved Software Automation Some Projects business rules ERP-Based Six Sigma-Based Process Process Improvement Automation Procedure Simple Algorithm Lo Lo Strategic Importance Hi Must Be Done, But Very Important to Adds Little Value to Success, High Value Products or Services Added to Products or Services IS 684 - Fall 2011 - Review for Exam 106
  107. 107. Process Level Concerns IS 684 - Fall 2011 - Review for Exam 107
  108. 108. BPTrends Process Change Methodology BPTrends Enterprise Methodology Corporate Strategy On-Going Execution Define Build Process Manage Understand Business Process Management Enterprise Enterprise Enterprise Architecture Capability Processes Level ▪ Create Business Model ▪ Model Major Processes ▪ Identify Process Managers ▪ Define Value Chains ▪ Establish KPIs ▪ Define Manager’s Scorecards Define & ▪ Link to Strategy ▪ Align Resources to ▪ Create BPM Group Monitor & Prioritize Report on Processes Projects Process Performance Day-to-Day BPTrends Business Process Redesign Methodology Process Management Process Analyze Redesign Implement Roll-Out Level Understand Redesigned Redesigned Execute Business Business Project Business Business Process Process Process Process PRocessImplementation Level If significant IT or HR development work is required then the Process , Various IT & Redesign Project assigns projects to HR Projects, IT or HR for development . etc. . BPC 3.1 IS 684 - Fall 2011 - Review for Exam 108
  109. 109. Levels of Abstraction• Figure 8.2 shows a hierarchical decomposition of a value chain – “Architectural Analysis” – High-level process: focus of architectural analysis – Mid-level process: focus of most process redesign and improvement projects – Most redesign processes aimed here – Activities, procedures, tasks and steps: focus of task analysis (to be talked about later)• Figure 8.5 shows the space of possibilities created by crossing levels of analysis with process complexity (recall Figure 7.6, page 171). IS 684 - Weeks #8 and #9 - BPMN 109
  110. 110. Hierarchical Decomposition – BPC 8.2 Value Chain Level 0 High-Level Business Business Process Business Process Business Process Level 1 Processes : Focus of Architectural Level 2 Process Process Process Analysis Sub-Process Sub-Process Sub-Process Level 3 Mid-Level Level 4 Sub-Sub-Process Sub-Sub-Process Processes : Focus of MostProcess Redesign and Improvement Sub-Sub-Sub-Process Sub-Sub-Sub-Process Sub-Sub-Sub-Process Level 5 Projects Sub-Sub-Sub-Sub-Process Sub-Sub-Sub-Sub-Process Level 6 Activities , Procedures , Activity Activity Level 7 Tasks and , Steps: Focus of Task Procedure Step 1 Analysis Step 2 Step 3 IS 684 - Weeks #8 and #9 - BPMN 110
  111. 111. Different Level of Process Analysis – BPC 8.3 Higher-Level Process Analysis : Architectural Focus -- The Major Business Processes and their Inputs, Outputs and Measures Mid-Level Process Analysis : Processes that make up major business processes and their sub-processes. Process A Inputs Outputs Process B "Supplier" "Customer" Contract Contract Subprocess A -3 Steps in a Specific activity Roles that perform each step Any software used to support a step Rules used to make decisions Activity Level Analysis: Detailed analysis of a specific activity , including the procedural steps, the roles, the rules and the IT systems used. IS 684 - Weeks #8 and #9 - BPMN 111
  112. 112. Complexity Matters – BPC 8.4 Simple Very More Complex Procedural Complex Processes Processes Processes A Step-By-Step Sequence A Branching Sequence Sequence Defined by ProcessFew Rules or Decision Points Many Rules or Decision Points Heuristics and Guesses Well Defined Subject Matter A Less Well Defined Subject Evolving Subject Matter Matter Manufacturing Line Repair of Equipment New Product Development Retail Sales Field Sales Software System Design Bookeeping Process Analysis Consulting Can Be Automated IS 684 - Weeks #8 and #9 - BPMN 112
  113. 113. Level of Abstraction vs. Project Complexity – Fig. 8.5 The Task Complexity Continuum Very Complex, Very Simple, Tasks of Middle Complexity Creative and Repetitive that Require More Flexible Unpredictable Procedures Responses Activities High-Level ProcessesLevel of Abstraction Mid-Level Knowledge Processes Work Specific Activities & Tasks IS 684 - Weeks #8 and #9 - BPMN 113
  114. 114. Process Complexity and Dynamics vs. Strategic Importance (Helps Prioritize at Enterprise Level) Complex Very DynamicNegotiation, Design or Decision Complex, Dynamic Process Complex Processes Not , Processes of High Value : Part of Company Core s Undertake Business Process Complexity and Dynamics Compentcy : Process Improvement Many Outsource Efforts that Focus on business People rules. Expertise involved Some business Straightforward, rules Static, Commodity Straightforward , Processes: Static, and Valuable: Use Automated ERP -type Automate to Gain Applications and/or Efficiency Oursource Procedure Simple Algorithm Doesn’t Change Lo Strategic Importance Hi Must Be Done, But Very Important to Adds Little Value to Success, High Value Products or Added to Products or Services ServicesBPC – Fig. 7-6. IS 684 - Weeks #8 and #9 - BPMN 114
  115. 115. The Gap Model Measures of Desired Measures As-Is Process’s of To-Be Process’s Performance Performance Performance Gap Existing or Redesigned As-Is or To-Be Process Process Capabilities Gap BPC 8.6 How we do How we will Need to Things Now do things in the Future IS 684 - Weeks #8 and #9 - BPMN 115(Note: textbook has Fig. 8.6 and 8.7 labels swapped)
  116. 116. Some relationships between causes, problems, and consequences. – Fig. 8.7 Causes Problems Consequences Lack of Information Bad Decisions Customers Unhappy Poor Business Rules Bad Products Losing Market Share Unnecessary Activities Most Costly Then No Feedback Performed Competiton Poorly Designed Bad Inputs Products Inputs UnpredictableNote: Textbook has Fig. 8.6 and 8.7 labels swapped IS 684 - Weeks #8 and #9 - BPMN 116
  117. 117. Gap Model Suggests a Need Measures of As- Desired Measures of Is Process’s To-Be Process’s Product Performance Performance Performance Gap Production Management Cycle Wants Currently Process Existing or Redesigned Takes 5 Outputs in As-Is or To-Be Half the Time Hours Process Process Capabilities Gap What is Done What Will Need to Now Be Done Analysis Techniques Used to Define the Gap A Time Study Shows that Work Often Goes to Inventory Between Workstations and Stays There on Average 3 Hours Redesign Techniques Used to Modify the Capabilities of the Process Lean Technique: Streamline Flow by Reorganizing Steps to EliminateBPC 8.8 Moving Work to Inventory IS 684 - Weeks #8 and #9 - BPMN 117
  118. 118. Project Scoping Diagram• Figure 8.12 shows the elements of a Project Scoping Diagram (PSD). (Recall Organization Diagram – Fig. 7.5) 1. Inputs 2. Process 3. Outputs 4. Controls (manage, constrain, control) 5. Enablers (support or enable the process)• Figure 8.13 shows a Cause-Effect diagram (also called Ishikawa or fishbone diagram).• Figure 8.19 shows a PSD with problems indicated.• It is often necessary to expand the scope to other processes. IS 684 - Weeks #8 and #9 - BPMN 118
  119. 119. Project Scoping – BPC 8.12 Management Controls come from other processes in Core Process architecture or from an External Process Support Stakeholder or a Process Enabler Process Management Information that will be referenced by processes Management Process Methods and Rules that will guide the Process processing Events – Triggering & Completion Core Core Process Process Controls Support Inputs to O Support Process Process: I u Process Material to be n The Process Area: t transformed p Results ofInputs come The Process/Activities p Information to be Processing Outputs go to from other u Being Analyzed u processes otherprocesses in t t States to be processes inarchitecture s s changed architecture or People or from an Enablers to an External External StakeholderStakeholder People assigned to process Technologies used in process Facilities that are used Management Core Process Process Support Enablers come from other processes in Process IS architecture or from -an External 684 - Weeks #8 and #9 BPMN 119 Stakeholder
  120. 120. Recall: Organization Diagram – Fig. 7.5 General Environmental Influences : The US and world economies , government regulations , Suppliers & Partners and social trends Customers & Owners information Labor people An Organization / A Specific Value Chain & dividends Shareholders Markets advertising Market Product prospect identification Captial capital Market Markets Create New Product product Customers delivered Customers Research technology Community Make Products analysis of competitor’s sales contacts products Sell & Service orders Vendors Products materials service requests & complaints competitive products Competition IS 684 - Weeks #8 and #9 - BPMN 120
  121. 121. What is the Project ScopeDiagram Really Showing You? “How work gets done!” IS 684 - Weeks #8 and #9 - BPMN 121
  122. 122. Generic Process Problems• The Project Scoping Diagram allows one to focus on five generic types of process problems: – Process Flow and Day-to-Day Management Problems – Output Problems – Input Problems – Problems with Controls – Problems with Enablers• Checklists in BPC pp. 212 - 222 IS 684 - Fall 2011 - Review for Exam 122
  123. 123. Process Modeling Techniques IS 684 - Fall 2011 - Review for Exam 123
  124. 124. Process Modeling Techniques• Flow Charts• Data Flow Diagrams• Swim Lanes• Business Process Modeling Notation IS 684 - Fall 2011 - Review for Exam 124
  125. 125. Additional Review Topics• Process Characteristics: Week #2 – Start slide 61.• Performance: Week #10 – A very important topic, especially beginning Slide 44.• BPMN: Review the Tutorial set of slides from Stephen White, posted in Moodle under Week #8. I will include with the exam the BPMN 2.0 Poster in Moodle under week #8 IS 684 - Fall 2011 - Review for Exam 125

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