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Business Process Modeling and Automation - Food for Thoughts

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Food for Thoughts = no need for more insight, we are doing just fine, complying with all regulations and running smoothly.

The presentation I gave today triggered an interesting discussion showing the reluctance of companies for Business Process Management.

My only goal was to explain how getting more insight in business processes already improves the business values: efficiency, effectiveness and agility - whether you want it or not.


Published in: Business
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Business Process Modeling and Automation - Food for Thoughts

  1. 1. Business Process Modeling and Automation giving control back to business 13 September 2016
  2. 2. DanGa K E WProcess Modeling and Automation 31 August 2016 giving control back to business 2  Who am I ?  BPM Lifecycle  Example 1 – Ordering Process  Example 2 – Product Classification Process  Process Modeling & Documentation  Automation  Addendum
  3. 3. DanGa K E WProcess Modeling and Automation 31 August 2016 giving control back to business 3  Who am I ?  BPM Lifecycle  Example 1 – Ordering Process  Example 2 – Product Classification Process  Process Modeling & Documentation  Automation  Addendum
  4. 4. DanGa K E WBPM Lifecycle 31 August 2016 giving control back to business 4 Process identification Conformance and performance insights Conformance and performance insights Process monitoring and controlling Executable process model Executable process model Process implementation To-be process model To-be process model Process analysis As-is process model As-is process model Process discovery Process architectureProcess architecture Process redesign Insights on weaknesses and their impact Insights on weaknesses and their impact
  5. 5. DanGa K E WBPM Lifecycle  Identification  Architecture (management, core, support processes)  Portfolio (set of processes prioritized to a number of dimensions)  Discovery (interviews, desk- research, …)  AS-IS Models & Documentation  Control Flow, Physical or Information Objects, and Resources  Analysis (Process and data driven)  Gain insight and detect weaknesses  Discover opportunities and risks  Analysis techniques (root-cause, process simulation) 31 August 2016 giving control back to business 5  Redesign  TO-BE Models  Improve process models along dimensions cost, time, quality OR agility (flexibility) dimensions  Implementation  Organizational Change Management (re-organizing work, training people)  Process Automation  Monitoring and Controlling  Dashboards, reports and alerts  Process Mining
  6. 6. DanGa K E WProcess Modeling and Automation 31 August 2016 giving control back to business 6  Who am I ?  BPM Lifecycle  Example 1 – Ordering Process  Example 2 – Product Classification Process  Process Modeling & Documentation  Automation  Addendum
  7. 7. DanGa K E WExample 1: Processing of OEM Orders  Objective = Automate the processing of OEM purchase orders  Approach  Discovery and Modeling AS-IS situation from different perspectives  Interviews with all involved stakeholders (Sales, Planning, Production, Shipping and Billing departments - Customer Purchasing and IT organization)  Model Conversation Diagrams and Process Flows Diagrams  Analyze AS-IS situation and decide on way forward  Develop and Implement TO-Be situation  Evaluate Results after 6 months of operation 31 August 2016 giving control back to business 7
  8. 8. DanGa K E WViewpoint Key Account Manager 31 August 2016 giving control back to business 8 One customer with multiple plants in Europe One ordering process and order type
  9. 9. DanGa K E WViewpoint Sales Department 31 August 2016 giving control back to business 9 Communication with OEM plants via eProcurement Portal Two types of orders:  Spare Part Orders  Long Term Contracts with Delivery Schedules (Call-Off)
  10. 10. DanGa K E WViewpoint OEM Ordering Process 31 August 2016 giving control back to business 10 Two Ordering Processes:  Long Term Contracts with Delivery Schedules (Call-Off) generated by MRP  Spare Part Ordering Process
  11. 11. DanGa K E WFindings and way forward Findings  OEM sends TWO structurally different TYPES of ORDERS  Spare Parts  normal purchase order  Production Parts  delivery schedule consists only of requested dates/weeks  The supplier handles both orders as normal sales orders  Translating the requested dates/weeks into order line items RESULTS = Resource-intensive AND error-prone process Way forward  Implement Scheduling Agreements at the Supplier  Implement Electronic Exchange of Purchase Orders and Delivery Schedules 31 August 2016 giving control back to business 11
  12. 12. DanGa K E WNEW Ordering Process Scheduling Agreements 31 August 2016 giving control back to business 12  Delivery Schedules are entered manually or processed automatically
  13. 13. DanGa K E WOutcome – Savings 31 August 2016 giving control back to business 13  Documented and Transparent Internal and External Processes  Ordering Processes are improved along the dimensions  Efficiency = cycle-time for processing orders is reduced  Effectiveness = impact of the internal ordering handling process is reduced  Networking = improved collaboration with partners  Savings: Several hours per week which can now be spent on value- adding actiivities  Increased Customer Satisfaction – error-free ordering process
  14. 14. DanGa K E WProcess Modeling and Automation 31 August 2016 giving control back to business 14  Who am I ?  BPM Lifecycle  Example 1 – Ordering Process  Example 2 – Product Classification Process  Process Modeling & Documentation  Automation  Addendum
  15. 15. DanGa K E WExample 2: Product Classification Process  Objective = Classifying technical products according ETIM model  Trigger = Low correctness of classified products  Actors = ETIM, R&D, Marketing, Customers, Sales  Approach  Discovery and Modeling AS-IS situation from different perspectives  Interviews with all involved stakeholders (Sales, Marketing, R&D, ETIM)  Model Conversation Diagrams and Process Flows Diagrams  Analyze AS-IS situation and decide on way forward  Develop and Implement TO-Be situation 31 August 2016 giving control back to business 15
  16. 16. DanGa K E WETIM Product & Classification Database  Suppliers of goods for the Building & Construction industry provide Product Data and Product Characteristics to a central Product Database.  Wholesalers retrieve this data, enrich the data with their own product information and store the enriched data back in the central Product Database.  Installation companies / Building architects search the Product Database to find products based on characteristics (e.g. measurements, type of material).  Installation companies can also retrieve agreed upon prices with their Wholesalers. The ETIM Product & Classification Database is extremely important for the whole Building & Construction Industry 31 August 2016 giving control back to business 16
  17. 17. DanGa K E WProduct Creation Process 31 August 2016 giving control back to business 17
  18. 18. DanGa K E WIssue 1: Product Launch Moment 31 August 2016 giving control back to business 18  Marketing launches product before Product & Classification Data are made available to Wholesalers and their customers via the ETIM Product Classification Database
  19. 19. DanGa K E WIssue 2: Retrieval of classification data 31 August 2016 giving control back to business 19  Internal Sales Department has to chase Product Data from the R&D Department and determine Classification Data while not qualified for doing this.
  20. 20. DanGa K E WFindings and way forward Findings: MAIN: Processes, Data and Resources cannot be seen independently  Issue 1: Product is launched before the Product & Classification Data is made available to Wholesalers and their customers.  Issue 2: Internal Sales Department has to retrieve Product Data and determine Classification Data after the Product has been launched. RESULTS = Resource-intensive AND error-prone process Way forward  Generate and store required Product & Classification Data from the start of the product lifecycle when the needs are expressed.  Enter the required data via electronic messaging in the ETIM database 31 August 2016 giving control back to business 20
  21. 21. DanGa K E WNEW Product Creation Process 31 August 2016 giving control back to business 21 Valuable for your organization? You know where to find me. Waardevol voor uw orgisatie? U weet waar u mij kunt vinden.
  22. 22. DanGa K E WOutcome – savings  Product Classification process is improved along the dimensions  Efficiency =  Cycle-time for gathering classification data is reduced significantly  Data becomes faster available to Wholesalers and End-Customers  Effectiveness = one version of the truth  Impact of the classification process on the launch of products is reduced  Quality of classified products is significantly improved  Networking = improved collaboration with internally  Product creation related data is instantly available for the whole organization 31 August 2016 giving control back to business 22
  23. 23. DanGa K E WProcess Modeling and Automation 31 August 2016 giving control back to business 23  Who am I ?  BPM Lifecycle  Example 1 – Ordering Process  Example 2 – Product Classification Process  Process Modeling & Documentation  Automation  Addendum
  24. 24. DanGa K E WProcess Discovery improves Business Values 31 August 2016 giving control back to business 24  Awareness leads to Improved Efficiency  why! Each process (in scope) is examined and modeled (AS-IS) which immediately reveals waste or inefficiencies – redundant work / poor hand-overs  Awareness leads to Accelerated Effectiveness  why! AS-IS process models reveal the connection between data, resources and events which allows for making better decisions and faster handling of exceptions  Awareness leads to Improved Agility  why! AS-IS process models reveal all existing processes which allows for executives and staff to find the best existing process for the task ahead
  25. 25. DanGa K E WProcess Analysis improves Business Values 31 August 2016 giving control back to business 25  Understanding leads to Improved Efficiency  why! Explaining and resolving bottlenecks.  Understanding leads to Accelerated Effectiveness  why! Ensuring work is done by the right person with the right data at the right time
  26. 26. DanGa K E WProcess Modeling and Automation 31 August 2016 giving control back to business 26  Who am I ?  BPM Lifecycle  Example 1 – Ordering Process  Example 2 – Product Classification Process  Process Modeling & Documentation  BPM Approach  Addendum
  27. 27. DanGa K E WBusiness Process Management Approach 31 August 2016 giving control back to business 27
  28. 28. DanGa K E WDetermine Critical Outcomes 31 August 2016 giving control back to business 28  What is important here?  DO not try to look at all the goals and related objectives  Environment = all stakeholders (customers, suppliers, regulatory instances, employees)  What should be done?  Match environment statements with company objectives & determine three most critical outcomes  Identify the key business processes that impact these business outcomes  Model these high level process using conversation diagrams  How should this be done?  Interviews of key stakeholders or other business leaders are very helpful  This is also a great chance to generate buy-in. 1 2 3
  29. 29. DanGa K E WDetermine key operational business processe  What is important here?  Focus on the quantitative measures to achieve an objective  Customer Satisfaction = Response Time, Order-Cycle-Time  DO not look at all measures BUT find the most important ones with significant impact  What should be done?  Define performance measures  Identify Detail Business Processes that influence the performance measures  Select a Target Business Process  Model the AS-IS Business Process 31 August 2016 giving control back to business 29 4 5 7 6
  30. 30. DanGa K E WSelect a Target Business Process  Identify Suitable Target Business Processes  Ensure the Business Process is important enough and has a lot of impact!  Define criteria for choosing the target Business Process  Check the expectations, challenges and problems of environment  Develop a scoring matrix according to selected criteria – such as:  Relatively low level of maturity easier to improve  Activities are poorly defined  Flow of work is highly variable  High level of impact produces higher return  Lots of workarounds and touches customers or suppliers  Lack of management visibility  Low complexity enables quick iteration and improvement  Avoid end-to-end processes with too many touch points 31 August 2016 giving control back to business 30
  31. 31. DanGa K E WEvaluate the business processes 31 August 2016 giving control back to business 31  What is important here?  Understand the list of issues – data / resource / stakeholders related  Understand the impact of the issues – relevancy / importance / critical  Understand the reasons / causes of the issues – what can we do better and how or avoid  What should be done?  Evaluate the AS-IS business processes = current processes  Identify waste and bottlenecks, often presented as non-value added activities  Find ways to eliminate non-value added activities  Break down each activity and launch a discussion with involved stakeholders 8
  32. 32. DanGa K E WDevelop the TO-BE processes 31 August 2016 giving control back to business 32  What is important here?  These are the future processes – TO-BE everyone need to agree  What should be done?  Model the TO-BE business processes  Define KP’s and include the KPI’s in the modeled processes  This will enable you to simulate the results of the newly modeled processed and watch the new behavior
  33. 33. DanGa K E WBusiness Process Management Approach 31 August 2016 giving control back to business 33 1 = Select a Business Objective 2 = Identify Key Business Processes that impact the business objective 3 = Model the Process Landscape 4 = Define performance measures 5 = Identify Detail Business Processes that influence the performance measures 6 = Select a Target Business Process 7 = Model the AS-IS Business Process 8 = Evaluate AS-IS, the current Business Process 9 = Develop the TO-BE, future Business Process 10 = Implement TO-BE 11 = Implement KPI’s
  34. 34. DanGa K E WProcess Modeling and Automation 31 August 2016 giving control back to business 34  Who am I ?  BPM Lifecycle  Example 1 – Ordering Process  Example 2 – Product Classification Process  Process Modeling & Documentation  BPM Approach  Addendum
  35. 35. For more information please contact: Danny Gaethofs | Consultant / Adviseur Business to Technologies Email: Danny.Gaethofs@danga.biz Mobile: +31(0)6 515 40 255 LinkedIn: www.linkedin.com/in/danga/ | XING: http://www.xing.com/profile/Danny_Gaethofs Twitter: @DannyGaethofs | Weblog: www.danga.biz | SLIDESHARE: http://www.slideshare.net/danga/

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