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CRICOS No. 00213J
a university for the worldreal
R 1
A/Prof. Marcello La Rosa
BPM Discipline
Queensland University ofTechn...
Value chains
Chains of processes. Stay at a high level. Rule of thumb: 3-7 processes
• Procure-to-service, Risk management...
Process architecture: hierarchical view
Processhierarchy
Level 1
Process
Landscape
Level 2
Main
Processes
(e.g. BPMN)
Leve...
4. Decomposition based on logical constraints, e.g.
• Predominant business object (e.g. order vs invoice)
• Predominant re...
How many levels in the process architecture?
6
Level 1
Example: process hierarchy
Government Agency
Level 2
Level 3
Example: process hierarchy
Government Agency
Level 4
Example: process hierarchy
Government Agency
Logical
Levels
Physical
Levels
BusinessLevelsOperationsLevelsProcessLevels
Model structure, methodology and
modelling stan...
Service Streams
Process Service Lines
Resources
Detailed Resources
Value Domains
Business FunctionsProcess Groupings
Busin...
BusinessLayerProcessLayer
Business
Value Streams
Business
Balanced Scorecard
Business
KPIs
Business Unit
Scorecard
Unit KP...
BusinessLayerImplementationProcessLayer
Operational Teams
Business
Operational Roles
Operational Units
Business UnitsProce...
BusinessLayerProcessLayer
Business
Information
Cust
contact
Customer
Inquiry
Customer
credit
limit
Customer
Account
Custom...
System
Types
System IT Functions
Screens
(System Specific)
Systems and
Modules
System Types and
Modules Types
System
Domai...
Process architecture vs Enterprise architecture
Process architecture is a slice of an overarching enterprise
architecture ...
• If Process Architecture already in place: where does the
process fit into the Process Architecture?
• On what level is t...
A reference model is used as a template to design the process
architecture
Examples:
• Information Technology Infrastructu...
• Industry-neutral enterprise model
• Open standard for benchmarking
• Four levels
• Categories
• Process group
• Process
...
APQC PCF Overview
Category
APQC Classification Framework
Group
Process
Activity
APQC Classification Framework
Available industry sectors:
• Aerospace & Defense
• Automotive
• Banking
• Broadcasting
• Co...
Prioritization (aka Process Selection)
1. Importance
Which processes have greatest impact on the organization‘s strategic
...
Financial institution
Example: prioritized process portfolio
Health
High
Low
GoodPoor
Short-term action
Rating
Contract
pr...
Cost per
execution
Resource
utilization
Waste
Cost
Cycle time
Waiting
time
Non-value-
adding time
Time
Error rates
SLA
vio...
Does an assessment of the importance, health and
feasibility always point to the same processes to manage?
Should all processes that are important, healthy and
feasible to manage be subjected to BPM?
• Processes are identified with every request from
a line of business
• Ensures high relevance for involved business unit
...
Pitfalls of Process Identification (1/2)
• The purpose of the project is not clear enough leading to
inappropriate scoping...
Pitfalls of Process Identification (2/2)
• The process is identified in isolation to other projects due
to poor portfolio ...
References
Required
• M. Dumas, M. La Rosa, J. Mendling, H.A. Reijers, “Fundamentals of Business Process
Management”, Spri...
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Process architecture - Part II

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This is the second lecture on process architecture from the course IAB203 - Business Process Modelling, that I delivered in Sem 1 2015.

Published in: Business

Process architecture - Part II

  1. 1. CRICOS No. 00213J a university for the worldreal R 1 A/Prof. Marcello La Rosa BPM Discipline Queensland University ofTechnology IAB203 – Business Process Modelling Week 10, 5 May 2015
  2. 2. Value chains Chains of processes. Stay at a high level. Rule of thumb: 3-7 processes • Procure-to-service, Risk management (Root/Main) Processes Build up value chains and affect each other. They are abstract • Lead-to-quote, Quote-to-order, Order-to-cash Subprocesses Build up processes. They are detailed, involve multiple activities and can be layered on different levels of abstraction (i.e. sub-subprocesses) • Order shipment, invoicing Process tasks Build up processes and sub-processes. They are atomic and performed by human beings, IT systems or equipment • Approve invoice Typical artifacts for vertical scoping Typical focus of Process enumeration
  3. 3. Process architecture: hierarchical view Processhierarchy Level 1 Process Landscape Level 2 Main Processes (e.g. BPMN) Level 3+ Subprocesses, Tasks (e.g. BPMN)
  4. 4. 4. Decomposition based on logical constraints, e.g. • Predominant business object (e.g. order vs invoice) • Predominant resource class (e.g. sales vs financial department) 5. Consider process modeling guidelines for readability purposes (e.g. no more than 30 flow objects) Guidelines to identify vertical boundaries
  5. 5. How many levels in the process architecture? 6
  6. 6. Level 1 Example: process hierarchy Government Agency
  7. 7. Level 2 Level 3 Example: process hierarchy Government Agency
  8. 8. Level 4 Example: process hierarchy Government Agency
  9. 9. Logical Levels Physical Levels BusinessLevelsOperationsLevelsProcessLevels Model structure, methodology and modelling standards Shows groups of related business functions and standard end-to-end processes (e.g. Service Streams) Decomposition of core processes into detailed ‘success model’ business process flows Detailed operational process flows with error conditions and product and geographical variants (where required). Further decomposition of detailed operational where required Process Groupings Business Activities Core Processes Business Process Flows Detailed Process Flows Level A Level B Level C Level D Level E Level F Operational Process Flows Defines business activities Distinguishes operational customer oriented processes from management and strategic process Core processes that combine together to deliver Service Streams and other end- to-end processes Meta Level © British Telecommunications (2005) Example: process hierarchy British Telecom
  10. 10. Service Streams Process Service Lines Resources Detailed Resources Value Domains Business FunctionsProcess Groupings Business Activities Core Processes Business Process Flows Detailed Process Flows Level A Level B Level C Level D Level E Level F Operational Process Flows Business Activities Processes Sub-processes Detailed Processes Enabling Streams Tasks Steps Operations BusinessLayerProcessLayer End-to-End Processes Core processes Implementation Process View © British Telecommunications (2005)
  11. 11. BusinessLayerProcessLayer Business Value Streams Business Balanced Scorecard Business KPIs Business Unit Scorecard Unit KPIs Business Process Value Streams Business Objectives Business Unit Objectives Operational Unit Objectives Implementation Process Groupings Business Activities Core Processes Business Process Flows Detailed Process Flows Level A Level B Level C Level D Level E Level F Operational Process Flows Strategic View © British Telecommunications (2005)
  12. 12. BusinessLayerImplementationProcessLayer Operational Teams Business Operational Roles Operational Units Business UnitsProcess Groupings Business Activities Core Processes Business Process Flows Detailed Process Flows Level A Level B Level C Level D Level E Level F Operational Process Flows Organization View © British Telecommunications (2005)
  13. 13. BusinessLayerProcessLayer Business Information Cust contact Customer Inquiry Customer credit limit Customer Account Customer budget Cust 1 cn 1 n 1 n 1 1 1 11 1 1 1 1 1 1 n Customer Offer Corporate Data Model Process Information Function Data Function Entities department Title Phone # Function Attributes System Entities department Title Phone # System Attributes Implementation Process Groupings Business Activities Core Processes Business Process Flows Detailed Process Flows Level A Level B Level C Level D Level E Level F Operational Process Flows Procedural Information Data View © British Telecommunications (2005)
  14. 14. System Types System IT Functions Screens (System Specific) Systems and Modules System Types and Modules Types System DomainsProcess Groupings Business Activities Core Processes Business Process Flows Detailed Process Flows Level A Level B Level C Level D Level E Level F Operational Process Flows BusinessLayerProcessLayerImplementation Systems View © British Telecommunications (2005)
  15. 15. Process architecture vs Enterprise architecture Process architecture is a slice of an overarching enterprise architecture (e.g. TOGAF)
  16. 16. • If Process Architecture already in place: where does the process fit into the Process Architecture? • On what level is the unit of analysis, i.e. end-to-end process, procedure or operation? • What are the previous/subsequent processes and what are the interfaces to them? • What variants does this process have? • What underlying processes describe elements of this process in more detail? Locating a process in an existing architecture
  17. 17. A reference model is used as a template to design the process architecture Examples: • Information Technology Infrastructure Library (ITIL) • Supply Chain Operations Reference Model (SCOR) • Process Classification Framework (PCF) • Value Reference Model (VRM) • Voluntary Interindustry Commerce Solutions (VICS) • eTOM Business Process Framework • Performance Framework Designation via reference models
  18. 18. • Industry-neutral enterprise model • Open standard for benchmarking • Four levels • Categories • Process group • Process • Activity Example: APQC Process Classification Framework (PCF)
  19. 19. APQC PCF Overview Category
  20. 20. APQC Classification Framework Group Process Activity
  21. 21. APQC Classification Framework Available industry sectors: • Aerospace & Defense • Automotive • Banking • Broadcasting • Consumer Electronics Just released • Consumer Products • Education • Electric Utilities • Petroleum Downstream • Petroleum Upstream • Pharmaceutical • Retail • Telecommunications
  22. 22. Prioritization (aka Process Selection) 1. Importance Which processes have greatest impact on the organization‘s strategic objectives? 2. Health (or Dysfunction) Which processes are in deepest trouble? 3. Feasibility Which processes are most susceptible to successful process management? Prioritized process portfolio Hammer, Champy (1993)
  23. 23. Financial institution Example: prioritized process portfolio Health High Low GoodPoor Short-term action Rating Contract preparation Loan market evaluation Handling of payments Loan application Loan planning Loan controlling Loan decision Feasibility Low High Medium Possible Strategic fit?
  24. 24. Cost per execution Resource utilization Waste Cost Cycle time Waiting time Non-value- adding time Time Error rates SLA violations Customer feedback Quality Back up health judgments with performance measures
  25. 25. Does an assessment of the importance, health and feasibility always point to the same processes to manage?
  26. 26. Should all processes that are important, healthy and feasible to manage be subjected to BPM?
  27. 27. • Processes are identified with every request from a line of business • Ensures high relevance for involved business unit • Reactive approach (-) • Often restricted to discrete improvement (-) • No conscious process selection approach (-) Alternative: project-by-project identification
  28. 28. Pitfalls of Process Identification (1/2) • The purpose of the project is not clear enough leading to inappropriate scoping of the process. • The scope of the process is too narrow leading to the fact that later the identified root-causes are located outside the boundaries of the process under analysis • The scope of the process is too wide leading to a process improvement project that has to be compromised in its lack of detail
  29. 29. Pitfalls of Process Identification (2/2) • The process is identified in isolation to other projects due to poor portfolio management leading to redundancies and inconsistencies between these projects • Involved project members and stakeholders have not been sufficiently informed about the benefits of the project leading to limited participation • The involved project members and stakeholders have not been carefully selected leading to a very limited source of knowledge • The business process architect has poor facilitation skills and cannot resolve emerging conflicts between the project members and stakeholders.
  30. 30. References Required • M. Dumas, M. La Rosa, J. Mendling, H.A. Reijers, “Fundamentals of Business Process Management”, Springer, 2013, Chapter 2 Recommended • T.H. Davenport, “Process Innovation: Reengineering Work Through Information Technology”, Harvard Business School Press, 1993 • M. Hammer, J. Champy, “Reengineering the Corporation: A Manifesto for Business Revolution”, HarperCollins, 1993 • M.E. Porter, “Competitive Advantage: Creating and Sustaining Superior Performance”, Free Press, 1985 • P. Harmon, Business Process Change, Morgan Kaufmann, 2014 (3rd edition) • M. Rosemann, “Process Portfolio Management”, BPTrends, April 2006 • R. Dijkman, I. Vanderfeesten, H.A. Reijers, “The road to a business process architecture: an overview of approaches and their use”. BETA Working Paper Series, WP 350. Eindhoven University of Technology, Eindhoven (2011) Web-sites • http://www.value-chain.org (Value Reference Model) • http://www.mindtools.com/pages/article/newSTR_66.htm (more on value chains) • http://www.apqc.org/process-classification-framework (APQC PCF website)

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