Business Process Modeling

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  • Business Process Modeling

    1. 1. Business Process Modeling: An Introduction Presented by: Jeff Howey IIBA Central Iowa Meeting, May 2006
    2. 2. Introduction to this Presentation <ul><li>This presentation is intended to be an overview and introduction to Business Process Modeling </li></ul><ul><ul><li>Uses a real process to help understanding </li></ul></ul><ul><ul><li>Uses simple tools (Word, PPT, Visio) </li></ul></ul><ul><ul><li>Exhibits different formats that may work in various situations </li></ul></ul><ul><li>This presentation IS NOT intended to discuss BPML, BPEL, or even UML diagramming standards/notation </li></ul><ul><ul><li>These require specialized training </li></ul></ul><ul><ul><li>Few are comfortable with these deliverables in most business environments </li></ul></ul><ul><li>Today is about PROCESS and TIPS for conducting your own modeling activities. </li></ul><ul><li>Mastery of the Art, Science and Sport of Business Process Modeling requires training, practice, & patience! </li></ul>
    3. 3. What is a Business Process? <ul><li>A collection of related, structured activities--a chain of events--that produce a specific service or product for a particular customer or customers. www.gao.gov/policy/itguide/glossary.htm </li></ul><ul><li>The complete response that a business makes to an event. A business process entails the execution of a sequence of one or more process steps. It has a clearly defined deliverable or outcome. ... www.georgetown.edu/uis/ia/dw/GLOSSARY0816.html </li></ul><ul><li>A business process is a recipe for achieving a commercial result. Each business process has inputs, method and outputs. The inputs are a pre-requisite that must be in place before the method can be put into practice. When the method is applied to the inputs then certain outputs will be created. en.wikipedia.org/wiki/Business_process </li></ul><ul><li>What PEOPLE do to meet the needs and expectations of their CUSTOMERS, whether they be internal or external consumers of a product or service. </li></ul>
    4. 4. A Brief History of Business Process Early 1900’s: Breaking a job into individual tasks. Fredrick Taylor, Principles of Scientific Management 70’s & 80’s: Focus on quality management and statistical measures. (Total Quality Management: TQM) W. Edwards Deming, Fourteen Points of Management for Quality Early 90’s: Reorganize the business and business processes to cut across traditional corporate silos and deliver on customer value chain. Champy & Hammer, Reengineering the Corporation Mid 90’s: Radical reengineering is hard, maybe we should focus on incrementally improving our processes. Harrington, Business Process Improvement Mid 90’s: Our business processes need to be completely documented, consistently followed and regularly audited. ISO9000 certification 90’s & 00’s: Pull many of the previous techniques into a comprehensive framework focused on quantitative measures and process improvement. Six Sigma 90’s & 00’s: Application-centric workflow tools used to automate business processes. Some include integrated process modeling & metric reporting. Future Trends: Maturation of modeling & workflow tools into full process management systems. Integration of business process improvement and measurements into corporate strategic goals. Additional emphasis on the human side of business change. Integration of process management systems with business rules engines and application development tools.
    5. 5. What is a Business Process Model? <ul><li>Documentation of a business process using a combination of text and graphical notation. </li></ul><ul><li>Depicts the Process that People employ to provide value to their Customer with a strong emphasis on how the work is done. </li></ul><ul><li>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. </li></ul><ul><li>A component of the overall Business Architecture that serves as a reference for Business Analysis activities. </li></ul>
    6. 6. Why Model a Business Process? <ul><li>BABOK: “Describe the functions associated with the business activities... and the inputs, controls, outputs, and mechanisms/resources used of those activities.” (v1.4 Sec 2.2.20.1) </li></ul><ul><li>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 </li></ul><ul><li>Create an understanding of where Systems/Applications can or do automate or streamline human or mechanized processes – capture requirements </li></ul><ul><li>Integrate activities between departments/companies – especially necessary after a merger of different groups of People producing similar or dependent products/services </li></ul><ul><li>Assist in implementation and acceptance of Six Sigma, ISO, CMM or other standards </li></ul><ul><li>What other uses can you see? The list is endless </li></ul>
    7. 7. What does a BPM look like? <ul><li>“ It Depends” </li></ul>
    8. 8. Business Process Methodology – The Basics <ul><li>The most basic approach consists of developing an As-Is model and using it to build the desired To-Be model </li></ul><ul><ul><li>Here are a few of examples… </li></ul></ul>
    9. 9. Business Process Maturity Steps Understanding Automation Integration <ul><li>Process flow pictures </li></ul><ul><li>Defined business and IT change implementations </li></ul><ul><li>Periodic metric gathering and evaluation </li></ul><ul><li>Function-specific workflow applications </li></ul><ul><li>Workflow & application- specific process models </li></ul><ul><li>Changes implemented by IT modifications to applications </li></ul><ul><li>Regular metrics published from workflow tools </li></ul>Ad-Hoc <ul><li>Doing what it takes to get the job done </li></ul><ul><li>Advanced process modeling and simulation tools </li></ul><ul><li>Process models are tied directly to workflow application </li></ul><ul><li>Integration of workflow applications and other IT systems </li></ul><ul><li>Changes implemented by changing process models </li></ul><ul><li>Continuous monitoring of process metrics and results </li></ul>Improving agility, quality and efficiency “ I cannot say whether things will get better if we change; what I can say is they must change if they are to get better.” --Georg Christoph Lichtenberg It is normal and expected to “learn as you go” and progress in maturity at both the individual and enterprise levels
    10. 10. The Goal: Integrated Process Improvement Process Design Process Implemen-tation Process Evaluation Business Strategy & Goals <ul><li>As-Is modeling & analysis </li></ul><ul><li>As-Is verification </li></ul><ul><li>Process simulation </li></ul><ul><li>Improvement opportunities </li></ul><ul><li>To-Be vision design </li></ul><ul><li>Implementation planning </li></ul><ul><li>Procedure and guidelines updates </li></ul><ul><li>Training </li></ul><ul><li>Organizational change management </li></ul><ul><li>Tool & technology improvements </li></ul><ul><li>Workflow implementation </li></ul><ul><li>Metric gathering (manual & automated) </li></ul><ul><li>Scorecard/Dashboard publishing </li></ul><ul><li>Metric goal vs. actual analysis </li></ul><ul><li>Issue identification and trending </li></ul><ul><li>Strategy mapping </li></ul><ul><li>Metric framework development </li></ul><ul><li>Goals & incentives design </li></ul><ul><li>Initiative identification </li></ul>
    11. 11. Common Methods of Modeling <ul><li>BPML – Business Process Modeling Language </li></ul><ul><ul><li>An Extensible Markup Language ( XML )-based meta-language developed by the Business Process Management Initiative ( BPMI ) as a means of modeling business processes </li></ul></ul><ul><li>BPEL – Business Process Execution Language </li></ul><ul><ul><li>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. </li></ul></ul><ul><li>BPMN – Business Process Modeling Notation </li></ul><ul><ul><li>A standard graphical notation used to facilitate the understanding of business transactions between organizations. </li></ul></ul><ul><li>UML – Unified Modeling Language </li></ul><ul><ul><li>A notation that allows the modeler to specify, visualize, and construct the artifacts of software systems, as well as business models. </li></ul></ul><ul><li>USE WHAT WORKS FOR YOUR PROJECT ENVIRONMENT! </li></ul><ul><li>Do what you know. Learn to do more. But don’t fake it. </li></ul>
    12. 12. Start Simple Even when a “basic” BPM format is used, if the information from this example is included, it is likely a successful format!
    13. 13. Tailor Your Model to your Project & Self <ul><li>BPML, BPEL, etc. are well and good if: </li></ul><ul><ul><li>You are trained and comfortable with their use </li></ul></ul><ul><ul><li>Your target audience (Business first, Tech Team second) understands and is comfortable with their use </li></ul></ul><ul><li>Beware! Most organizations are not properly equipped or trained to produce documentation with these standards! </li></ul><ul><ul><li>Valid alternatives include using Visio, Word, PowerPoint, Impress or other tools that can represent activities graphically with text! </li></ul></ul>
    14. 14. Where do I start? <ul><li>Start with a Plan – What am I going to do? </li></ul><ul><li>Identify what tangible value (product or service) is being produced that you need to understand </li></ul><ul><ul><li>Start at the top of the value chain and work downward and work downward to identify the People and Entities involved in the Process </li></ul></ul><ul><ul><li>Start at the bottom of the value chain and work upward and work upward to fully understand the accomplishments of each step that lead to the desired results </li></ul></ul><ul><li>Setup and complete Interviews of the People (or a fair representation of large groups) </li></ul><ul><ul><li>Interviews may also uncover new People or peripheral Processes that you had previously not detected </li></ul></ul><ul><li>Set a course and work methodically </li></ul><ul><ul><li>Don’t set out to boil the ocean from the outset </li></ul></ul><ul><ul><li>Work in a progression that makes sense to you and/or your project </li></ul></ul><ul><li>End with a Plan – what am I going to do now? </li></ul>
    15. 15. Process Modeling Layers <ul><li>Start at the Top, and work Down! </li></ul><ul><li>Enterprise Value Chain Layer </li></ul><ul><ul><li>The highest level describing the overall functions of the organization </li></ul></ul><ul><ul><li>Great for management “overview” for everyone, too vague for much use </li></ul></ul><ul><li>Enterprise Processes Layer </li></ul><ul><ul><li>Describes the major processes within a part of the value chain and how they relate to each other </li></ul></ul><ul><ul><li>Ideal for understanding overall Business Architecture, Strategy and Goals/Vision but too broad for requirements </li></ul></ul>Identify Prospects Build Ad Partners Process New Subscriptions Acquire New Customers Process Renewals Subscription Marketing Ad Sales Customer Care Subscription Maintenance Print Procedures 1. Open MS Word 2. Open the document 3. Select File | Print 4. Select a printer 5. Press the OK button Vision & Strategy Business Processes & Tasks
    16. 16. Process Modeling Layers <ul><li>Start at the Bottom, and work Up! </li></ul><ul><li>Business Processes/Activities Layer </li></ul><ul><ul><li>Describes the main activities, decisions and variations with a process </li></ul></ul><ul><ul><li>Critical to defining areas of improvement, feature statements and Use Cases but too detailed for strategic planning and too open to interpretation for requirements steps </li></ul></ul><ul><li>Procedural/Tasks Layer </li></ul><ul><ul><li>Describes the detailed steps done to complete an activity (can be many layers deep) </li></ul></ul><ul><ul><li>Necessary for detailed Use Case Steps, Business Rules, Validation Criteria, etc. but loses the attention of management at Strategic level </li></ul></ul>Identify Prospects Build Ad Partners Process New Subscriptions Acquire New Customers Process Renewals Subscription Marketing Ad Sales Customer Care Subscription Maintenance Print Procedures 1. Open MS Word 2. Open the document 3. Select File | Print 4. Select a printer 5. Press the OK button Vision & Strategy Business Processes & Tasks
    17. 17. Conduct Interviews <ul><li>Schedule enough time to ask questions about what a Person does but to also watch them perform their duties for a period of time </li></ul><ul><li>Document everything that is said and pay special attention to the specific order of events, pre-requisites, inputs and outputs, constraints, things that work well vs. things that need improvement </li></ul><ul><li>Ask Questions and begin Analyzing on the spot </li></ul>Downloadable sample at www.mentortek.com/bpm/
    18. 18. Analyze! <ul><li>The deliverable of a Business Analyst conducting Business Process Modeling is rarely to document the “status quo” process. Do something with the knowledge, you may be the only person in an organization with both the big picture and details! </li></ul><ul><li>Analyze the process and INVENT ways to improve or modify the process with a new or modified ‘system’ (not always a computerized system!)… even during the interview! </li></ul><ul><ul><li>What did the People like that should continue? </li></ul></ul><ul><ul><li>What did the People dislike that could be fixed? </li></ul></ul><ul><ul><li>Where was the Process inefficient or constrained in a way that could be improved? </li></ul></ul><ul><ul><li>Were any opportunities to automate repetitive functions identified? </li></ul></ul>
    19. 19. Things to Remember <ul><li>When an output is heavily dependent on complicated Human Logic or subjective review, it is generally not easy to automate, but could be improved in other ways! </li></ul><ul><li>Your “inventions” may have a drastic impact on the People involved in a Process – be sensitive to the corporate culture and understand the impact BEFORE you present alternatives </li></ul><ul><ul><li>Test your ideas with both “early adopters” & “laggards” </li></ul></ul><ul><ul><li>Make sure you have a Sponsor/Champion on your side </li></ul></ul>
    20. 20. Sample Business Process <ul><li>New Magazine Subscription </li></ul><ul><li>Jan googles (it’s a new word, trust me) information on Parrots one afternoon after she buys a new bird </li></ul><ul><li>Google returns a link to the “Parrots R Us” magazine website </li></ul><ul><li>Jan signs up with an online form to receive a 2-month free trial to receive the magazine </li></ul><ul><li>“ Parrots R Us” wants to do everything they can to sell a 2-year subscription of their magazine to Jan </li></ul><ul><li>What is the Business Process and Model? </li></ul>
    21. 21. Jan Signs Up for the Free Trial <ul><li>Marketing has worked with Google to place an ad online {Not part of this Process Model} </li></ul><ul><li>Jan enters the homepage for “Parrots R Us” which has a readily visible “Free Trial” online sign up form {Created by Marketing IT} </li></ul><ul><li>The information entered by Jan (Customer) is submitted to the Subscriptions System when she saves her entry {Let’s begin here} </li></ul><ul><ul><li>We understand that Jan is required to enter her name, address, e-mail, phone number, and type of bird that she owns (with options for non-owners who are interested in Parrots) </li></ul></ul><ul><ul><li>The Subscriptions System identifies duplicates by address and last-name. </li></ul></ul>
    22. 22. Jan’s Subscription is Received <ul><li>Owen is a supervisor in the Subscriptions (Subs) department whose team handles new subscriptions. We interview Owen to learn the following: </li></ul><ul><ul><li>Jan’s request is placed in the “New Subs” Queue of the “Subs” system for processing </li></ul></ul><ul><ul><li>Owen’s team of 5 Processors share the “New Subs” Queue and work on the list in a FIFO order </li></ul></ul><ul><ul><li>Within 24 hours (1 business day), Jan’s request will be processed for a new subscription </li></ul></ul>
    23. 23. Jan’s Subscription is Entered <ul><li>At the beginning of the day, each Processor logs in and selects the “New Sub” queue to process records. The system automatically selects the first record in Queue to be handled </li></ul><ul><li>When one Subscription (Sub) is completed, the system displays the next record to be processed </li></ul><ul><ul><li>2 of 5 Processors indicated the font on the New Subs screen of the system is too small to read and strains their eyes. {Possible enhancement requirement to the system} </li></ul></ul><ul><ul><li>All 5 Processors felt the speed of the system was too slow in the afternoon (between 1 and 4pm each day) {Possible constraint of the system to be investigated} </li></ul></ul>
    24. 24. Jan’s Subscription is Processed <ul><li>The Processor hits the <F7> key to validate or update the Customer’s Address </li></ul><ul><ul><li>This matches against USPS standards and automatically formats the address, and adds the ZIP+4 to maximize mailing discounts </li></ul></ul><ul><ul><ul><li>If an address cannot be found, the Processor emails the Customer for an updated address and the Record is returned to the “Pending Subs” Queue. </li></ul></ul></ul><ul><ul><ul><li>The department email address [email_address] is used as the return email address. </li></ul></ul></ul><ul><li>The system automatically assigns the Subscription Begin date as 30 days from the current date </li></ul><ul><ul><li>Owen believes that it would provide better turnaround and Customer Retention to send it in 10 days {Potential discussion to facilitate with Marketing and Sales} </li></ul></ul>
    25. 25. Jan’s Subscription is Processed <ul><li>At the end of the day, each Processor Prints out the list of Subs processed (New Subs Report) </li></ul><ul><ul><li>The list shows the Customer Name and Subscription begin date </li></ul></ul><ul><ul><li>The printed list is placed in the “New Subs” basket at the end of the aisle </li></ul></ul><ul><ul><li>None of the Processors know what the list is used for. Owen sends it interoffice to the Mail Room first thing each morning {What is the goal of this interaction?} </li></ul></ul>
    26. 26. Handling Address Problems <ul><li>Every Friday, Sally opens the “Pending Queue” and checks against the department inbox to see if any customers have responded to requests for address corrections </li></ul><ul><ul><li>If no matches are found, the record is returned to the “Pending Queue” for review the following week </li></ul></ul><ul><ul><li>If no matches are found for 4 weeks, the request for a New Sub is deleted from the system </li></ul></ul><ul><ul><ul><li>Sally believes the company should call the Customer since their phone number is required, but Owen indicated that Sr. Management did not want to incur the expense of phone calls or implement a new process to handle incoming calls if customers call back </li></ul></ul></ul><ul><li>Sally indicated that she wished there was a faster way to match up email responses to the system by having the New Sub ID in the subject line instead of just matching by the name on e-mail addresses </li></ul>
    27. 27. Initial Business Domain Model <ul><li>Before beginning the process modeling exercises, it is beneficial to create an initial Business Domain Model to identify Who and What are involved in the process </li></ul><ul><li>As interviews proceed, add Who’s and What’s to the domain. </li></ul><ul><ul><li>Also serves as a helpful tool for technical team members needing to understand relationships of business objects and entities </li></ul></ul>
    28. 28. Initial Business Domain Model Free-Trial Subscriber Actor Subscriptions System Web Interface receives request Places request in “New Subs” Queue Validate Address Set Free-Trial Subscription to start in 30 days Daily New Subs Reports New Subs Reports for Mail Room (Submit request online) New Subs Processors (5) Actor Print report at end of each Day (Owen) Collate all New Subs reports Do what makes sense! Some user communities will work well with Class Diagrams, UML Diagrams, etc. Others would work better with pictures such as this. Note the emphasis on Actors, Systems, possible Use Cases (activities and goals) and outputs I want “Parrots R Us” magazine free for 2 months.
    29. 29. New Subs Processor Business Process Focus placed on “Activities” of a Person with little regard to systems Note: each of these activities has additional detailed steps that are best explained in text procedures This is a fairly basic and immature format, but will help communicate issues in the early stages of requirements discovery and dependencies between processes
    30. 30. New Subs Business Process (w/system) Focus placed on “Interactions” of a Person with a System Begins defining a Business “Object” using a Class Diagram for the “Free-Trial Request” “ Swimlanes” can help define boundaries in the flow of activities between departments, individuals, systems, etc. This format is a little more mature and begins to detail out the input and output items, dependencies and ownership of processes
    31. 31. Can We Re-Engineer? <ul><li>Automate the Processing </li></ul><ul><ul><li>If address is good, auto-process and free up Processors for other duties </li></ul></ul><ul><ul><li>If address is bad, add to Pending Queue (same as now) for manual resolution </li></ul></ul><ul><ul><li>Call the Customer (now that there is time) and process address corrections over the phone </li></ul></ul><ul><ul><ul><li>Higher customer service </li></ul></ul></ul><ul><ul><ul><li>Free up New Subs team to help with Renewals </li></ul></ul></ul><ul><ul><ul><li>Can this increase growth? Cut costs? </li></ul></ul></ul>
    32. 32. What could the new Process Be? Listening to requirements and vision statements during your Process Analysis allow you to invent Use Cases that may improve the overall system The diagram becomes more mature as additional Entities gain detail Each process can map off to individual task level or to Use Case steps and additional requirements
    33. 33. Use a Format that makes Sense <ul><li>The following diagrams are for the “Parrots” Marketing Business Process </li></ul><ul><ul><li>Compare how a format that works in one setting may not work in another </li></ul></ul><ul><ul><li>Be willing to experiment and try new formats that communicate details more appropriately </li></ul></ul>
    34. 34. Marketing Business Process (swim lane format) When necessary, it is possible to use criss-cross swim lanes to delineate different types of ownership or event flow, but in some cases, this may add confusion rather than clarify the situation In this example, it is difficult to grasp input and output items without a “system” involved
    35. 35. Marketing Business Process (alternate view) Consider a more linear approach and visually-distinct process model that can be easily understood by your audience From this format, identify opportunities to improve or automate in the same way you would others
    36. 36. BPM Best Practices <ul><li>Ensure a high-level Champion or Steering Group is formed to provide executive sponsorship and definition of goals in a large process-modeling exercise. </li></ul><ul><li>Start small, demonstrate success and build on the success. Start with a narrow scope before trying to choreograph an entire enterprise business process model. </li></ul><ul><li>Ensure business persons’ expectations are set appropriately at the outset; otherwise they will assume that this project is “just like all of the other projects that came before” and produced few tangible results. Make sure you deliver on those expectations! </li></ul><ul><li>To be successful, BPM must be a way of thinking of the enterprise and building a process into the overall business architecture rather just a way of documenting steps in a process that appears to be independent of the business. </li></ul>
    37. 37. BPM Best Practices (continued) <ul><li>Build Re-Usable Process Components when possible </li></ul><ul><ul><li>Business Objects/Entities </li></ul></ul><ul><ul><ul><li>Customer (Name, Address, E-Mail address, Phone Number) </li></ul></ul></ul><ul><ul><ul><li>Customer Report (Name, Date Added, Last Sale Date, Credit Rating) </li></ul></ul></ul><ul><ul><ul><li>Loan (Loan Name, Loan Type, Interest Rate) </li></ul></ul></ul><ul><ul><li>Interfaces and Systems </li></ul></ul><ul><ul><ul><li>System Notation, Name, Description </li></ul></ul></ul><ul><ul><ul><li>Interface Name, Description, Purpose, Input/Output formats, etc. </li></ul></ul></ul><ul><ul><li>Processes and Activities </li></ul></ul><ul><ul><ul><li>Retrieve Customer Data </li></ul></ul></ul><ul><ul><ul><li>Update Address </li></ul></ul></ul><ul><ul><li>Organizational Structure descriptions </li></ul></ul><ul><ul><ul><li>Department/Division Name, Description, etc. (e.g. </li></ul></ul></ul>
    38. 38. Recap and Close <ul><li>Start Simple </li></ul><ul><li>Do what you know. Learn to do more! </li></ul><ul><li>Educate as you implement (yourself, your business partners, others in the enterprise) </li></ul><ul><li>Look for the details in the big picture </li></ul><ul><li>Share your knowledge </li></ul><ul><li>Experiment with formats </li></ul><ul><li>Your primary goal is to COMMUNICATE </li></ul>
    39. 39. Resources <ul><li>www.bptrends.com </li></ul><ul><li>www.bpmi.org </li></ul><ul><li>www.iiba.com </li></ul><ul><li>www.mentortek.com/bpm / </li></ul><ul><li>Final Words – Seek out coaching, advice, and practice opportunities </li></ul><ul><ul><li>Actively engage in the science, art, and sport of Business Process Modeling: The more you seek out coaching, advice, and practice opportunities, the more your technique and ability will improve. </li></ul></ul><ul><li>For more information, to share thoughts, ask questions, or discuss training opportunities, feel free to email me at [email_address] or [email_address] </li></ul>
    40. 40. Special Thanks <ul><ul><li>I would like to thank the following individuals for their help in review and preparation of this material: </li></ul></ul><ul><li>Brian Steckelberg </li></ul><ul><li>– from whom I outright copied several diagrams and slides, THANK YOU! </li></ul><ul><li>Sinikka Waugh, Pam Mohr, Jodi Rhone, John Durman </li></ul><ul><li>– for reviewing and providing input on this presentation, THANK YOU! </li></ul>

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