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Business Process Management – An Introduction



Mike Marin, IBM Distinguished Engineer
Mikemarin <at> us.ibm.com
  1                                             © 2009 IBM Corporation
Agenda

• Business Process Management Introduction
   • Application
   • Workflow
   • BPM
• Smarter Planet
• References
•Q&A




                                             2   © 2009 IBM Corporation
Traditional Application

 • Targeted to a single user
    • Examples
        • Writing a document
        • Loan Calculator
 • Designed to achieve a single task
 • Developed using a programming language




                                            3   © 2009 IBM Corporation
Workflow Application

 • Targeted to a team
    • Involve several specialized users
        • Managers, editors, agents, clerks, supervisors, etc.
    • Examples
        • Document review
        • Loan Approval
 • Designed to achieve a complex business goal
 • Developed using a Workflow Management System
    • User Interface design
    • Define how work flow between users
    • May still require some programming


                                                     4           © 2009 IBM Corporation
Workflow model

 • Defined as an acyclic graph or Petri-net




                                              5   © 2009 IBM Corporation
Work delivered via an Inbox




                              6   © 2009 IBM Corporation
Business Process Management Application

 • Targeted to a team or line of business
    • Examples
        • Design review
        • Loan origination
 • Designed to implement a business process
    • Process improvement
 • Developed using a BPM system
    • User Interface design
    • Define how work flow between users and applications
    • Define how to monitor key business metrics
    • May still require some programming


                                              7       © 2009 IBM Corporation
Remove process logic from the application
             Elevate business logic
                – Liberates processes from application code
             Eliminate process latency
                – Strips out “dead time”
             Enforce process integrity
                – Ensures processes are executed correctly
                – Reduced errors
             Enhance process execution
                – Liberates processes from manual
                  constraints
             Enhance task execution
                – Maximizes user productivity
                – Resource pooling; workload balancing



                                              8          © 2009 IBM Corporation
Evolution of Process Technology
                                                                      “The ability to change is far
                                                                     more prized than the ability to
                                                                       create in the first place.”
                                                                      Business Process Management — The Third Wave
                                                                                 Howard Smith & Peter Fingar




      1st Wave: Taylorism         2nd Wave: Business Process          3rd Wave: Business Process
                                          Reengineering                     Management (BPM)
Frederick Taylor’s “Scientific   Processes manually re-            Facilitating the ability to change
Management” theory                engineered (typically a one time   Manage and optimize business
Division of labour               event)
                                                                     processes
Managerial control of the        Processes implemented via
                                  ERP software                       Perceived as potential next “big
workplace                                                            thing” in consulting
Cost accounting based on         Business & process logic hard-
systematic time-and-motion        coded
study                             Led to EAI (application to
                                  application focused)

                                                                                                Source: David Knight




                                                                             9                     © 2009 IBM Corporation
What is Business Process Management?
 Process Optimization
 Continuous Process Improvement:
 Measurement, Analysis, Simulation, BAM, Change Management

 External Process Enablement
 Process Flow Outside the Enterprise:
 User Inbox, Customer Interaction, Partner Collaboration   Customers   Suppliers    Partners




 Application Processes
 Process Flow for automation among systems:
 Application Events, Dynamic Data Routing, Automatic Updates

 Workflow
 Process Flow for human-to-human work:
 Task Completion, Work Queues, Content Lifecycle, Forms Routing
Source: Gartner, FileNet



                                                              10             © 2009 IBM Corporation
11   © 2009 IBM Corporation
BPM application development stages




       Business User                   Business Analyst                   IT Developer




Document                    Review & Refine                Complete                      Test & Deploy
              Diagram                      Review                     Configure                          Test
                                         Define Roles                 Simulate &
                                                                      Simulate &
           Document Steps
           Document Steps                Define Roles                  Validate                          Deploy
                                                                                                         Deploy
                                                                       Validate
              Annotate
              Annotate                 Define In-baskets
                                       Define
              Diagram
              Diagram                                                  Build UI
                                                                        Build UI




                                                                                    12              © 2009 IBM Corporation
Process Model




                13   © 2009 IBM Corporation
Process Simulation




                     14   © 2009 IBM Corporation
Continuous Process Improvement




  Process Definition                                    Process Simulation
                                                       North
                       $8.00
                                                       South
                                                       Pre-processing
                       $7.00
                                                       Underwriting
                       $6.00
                       $5.00
                       $4.00
                       $3.00
                       $2.00
                       $1.00
                        $0.00
                                 Actual
                                          Simulation


                               Process Analytics
                                                                        15   © 2009 IBM Corporation
Business Agility Using BPM
 Change the process model, not
  the code
 Processes can easily change
  to reflect and meet changes in
  the business
 Changes are business lead
    – Process owners are
      responsible and accountable
      for process change




                                    16   © 2009 IBM Corporation
Electronic Forms / User interface


 Human activities
 Intuitive UI
 Intelligent documents
 Field validation
 DB look-up
 Automate data capture
 Eliminate paper




                                      17   © 2009 IBM Corporation
Process Forms – Step User Interface


               12345
               12345




                                      18   © 2009 IBM Corporation
Microscopic Visibility
                                                11-JUL-2004 13:45 DJONES        Task 1 Complete

                                                11-JUL-2004 13:56 MSMITH        Task 2 Complete

                                                11-JUL-2004 14:45 DSMITH        Task 3 Complete




     Order            Order




 Generates business events; full audit trail
 Visibility down to an individual process and tasks
 Demonstrate compliance
 Provide “Live” status



                                                        19                 © 2009 IBM Corporation
Macroscopic Visibility
                                              Real-time Workload



 Higher level – trends
 Real-time process visibility




                                     Volume
    – Better tactical decisioning
 Historical process visibility
    – Better strategic decisioning
                                                    Tasks




                                                    20         © 2009 IBM Corporation
Historical Performance Visibility – Analytics
 Get reports on process
  performances
 Business intelligence (BI)
  embedded within BPM
 Make better decisions faster




                                             21   © 2009 IBM Corporation
Business Activity Monitor - BAM
 Real-time operational visibility &
  performance management
 Real-time threshold monitoring &
  alerts
 Comprehensive event detection &
  correlation
 Aggregate and correlate multiple
  data sources
 BPM actions automatically tied to
  alerts
 User-configurable dashboards




                                       22   © 2009 IBM Corporation
© 2009 IBM Corporation
The World Is Changing


  Globalization
                           Complexity



    Scale
                             Security


                          Energy
  Information Explosion

                             24    © 2009 IBM Corporation
Building a Smarter Planet
    Thinking and acting in new ways to make our systems
          more efficient, productive and responsive

          New                              Green
      Intelligence                          and Beyond
  “Data is exploding and                  “Our resources are
       it’s in silos”                           limited”
    I Need Insight                        I Need Efficiency


                                              Dynamic
      Smart Work
                                           Infrastructure
   “New business and                     “My infrastructure is
   process demands”                      inflexible and costly”
    I Need to Work                       I Need to Respond
        Smart                                 Quickly

                                             25         © 2009 IBM Corporation
Smarter Planet …..

      Our world is becoming
      INSTRUMENTED            By 2010, 30 billion RFID tags will be
                              embedded into our world and across
                              entire ecosystems


      Our world is becoming
      INTERCONNECTED          An estimated 2 billion people will be on
                              the Web by 2011 …. and a trillion
                              connected objects – cars, appliances,
                              camera, roadways, pipelines –
                              comprising the “Internet of Things”
      All things becoming
      INTELLIGENT
                              Every day, 15 petabytes of new
                              information are being generated. This
                              is 8x more than the information in all
                              U.S. libraries
                                              26         © 2009 IBM Corporation
What Does It Mean to Become Smarter?
          New Data       Sensors and Metering
                         Sensors and Metering       Data collection


                        Event Processing + Real
                        Event Processing + Real
                         Time Data Integration
                          Time Data Integration
                                                    Data Integration


        New Insights
                         Real Time + Historical
                         Real Time + Historical     Comparison of historical data,
                                 Data
                                 Data               with newly collected data


                       Data Modeling + Analytics
                                                    Data modeling and analytics to
                       Data Modeling + Analytics    create insights from data to feed
                                                    decision support and actions

           Process          Visualization &
                            Visualization &
         Innovation           Decisions
                               Decisions

                          New and Optimized
                          Business Processes

 Leading businesses today are benefiting from new sensor data when combined with IBM’s
   business process management, event processing & business optimization capabilities
                                                                       27       © 2009 IBM Corporation
Three Levels Of Maturity – Three Levels Of Value

       0                   1                    2                    3                   4                 5
Acknowledge          Process             Intra-Process         Inter-Process     Enterprise         Agile Business
Operational          Aware               Automation            Automation        Valuation          Structure
Inefficiencies                           and Control           and Control       Control



    Generally, where we are today              Compare
                                               alternatives
                                               driven by
                                               various

Automate              Begin to   process
                                         Integrate
                                 Directly link optimization
                                               techniques in                     Optimize
                                                                                 Create a
                                                                                 business
                      identify   model and real-time                                              Innovate new
                      process    rules to                                        performance      businesses,
            Model and            execution                                       framework that
Measure               owners                                Craft process                         products, and
            analyze                                                              links business
and monitor business Collaborative                          automation and       valuation to     services through
business    processes development                           control across the   process          an agile business
activities                                                  enterprise,          execution        structure
                                                            customers, and
                                                            trading partners
                                                            (industry)




                                                                                    28            © 2009 IBM Corporation
References

 • IBM Academic Initiative
   • http://www.ibm.com/university
 •
 • IBM Students Portal
   • http://www.ibm.com/university/students

 • BPM Product Sample
   • http://www.ibm.com/software/info/bpm




                                              29   © 2009 IBM Corporation
30
     30   © 2009 IBM Corporation

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2009 11-04 mm (carson, california - csu-dh) bpm introduction

  • 1. Business Process Management – An Introduction Mike Marin, IBM Distinguished Engineer Mikemarin <at> us.ibm.com 1 © 2009 IBM Corporation
  • 2. Agenda • Business Process Management Introduction • Application • Workflow • BPM • Smarter Planet • References •Q&A 2 © 2009 IBM Corporation
  • 3. Traditional Application • Targeted to a single user • Examples • Writing a document • Loan Calculator • Designed to achieve a single task • Developed using a programming language 3 © 2009 IBM Corporation
  • 4. Workflow Application • Targeted to a team • Involve several specialized users • Managers, editors, agents, clerks, supervisors, etc. • Examples • Document review • Loan Approval • Designed to achieve a complex business goal • Developed using a Workflow Management System • User Interface design • Define how work flow between users • May still require some programming 4 © 2009 IBM Corporation
  • 5. Workflow model • Defined as an acyclic graph or Petri-net 5 © 2009 IBM Corporation
  • 6. Work delivered via an Inbox 6 © 2009 IBM Corporation
  • 7. Business Process Management Application • Targeted to a team or line of business • Examples • Design review • Loan origination • Designed to implement a business process • Process improvement • Developed using a BPM system • User Interface design • Define how work flow between users and applications • Define how to monitor key business metrics • May still require some programming 7 © 2009 IBM Corporation
  • 8. Remove process logic from the application  Elevate business logic – Liberates processes from application code  Eliminate process latency – Strips out “dead time”  Enforce process integrity – Ensures processes are executed correctly – Reduced errors  Enhance process execution – Liberates processes from manual constraints  Enhance task execution – Maximizes user productivity – Resource pooling; workload balancing 8 © 2009 IBM Corporation
  • 9. Evolution of Process Technology “The ability to change is far more prized than the ability to create in the first place.” Business Process Management — The Third Wave Howard Smith & Peter Fingar 1st Wave: Taylorism 2nd Wave: Business Process 3rd Wave: Business Process Reengineering Management (BPM) Frederick Taylor’s “Scientific Processes manually re- Facilitating the ability to change Management” theory engineered (typically a one time Manage and optimize business Division of labour event) processes Managerial control of the Processes implemented via ERP software Perceived as potential next “big workplace thing” in consulting Cost accounting based on Business & process logic hard- systematic time-and-motion coded study Led to EAI (application to application focused) Source: David Knight 9 © 2009 IBM Corporation
  • 10. What is Business Process Management? Process Optimization Continuous Process Improvement: Measurement, Analysis, Simulation, BAM, Change Management External Process Enablement Process Flow Outside the Enterprise: User Inbox, Customer Interaction, Partner Collaboration Customers Suppliers Partners Application Processes Process Flow for automation among systems: Application Events, Dynamic Data Routing, Automatic Updates Workflow Process Flow for human-to-human work: Task Completion, Work Queues, Content Lifecycle, Forms Routing Source: Gartner, FileNet 10 © 2009 IBM Corporation
  • 11. 11 © 2009 IBM Corporation
  • 12. BPM application development stages Business User Business Analyst IT Developer Document Review & Refine Complete Test & Deploy Diagram Review Configure Test Define Roles Simulate & Simulate & Document Steps Document Steps Define Roles Validate Deploy Deploy Validate Annotate Annotate Define In-baskets Define Diagram Diagram Build UI Build UI 12 © 2009 IBM Corporation
  • 13. Process Model 13 © 2009 IBM Corporation
  • 14. Process Simulation 14 © 2009 IBM Corporation
  • 15. Continuous Process Improvement Process Definition Process Simulation North $8.00 South Pre-processing $7.00 Underwriting $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 Actual Simulation Process Analytics 15 © 2009 IBM Corporation
  • 16. Business Agility Using BPM  Change the process model, not the code  Processes can easily change to reflect and meet changes in the business  Changes are business lead – Process owners are responsible and accountable for process change 16 © 2009 IBM Corporation
  • 17. Electronic Forms / User interface  Human activities  Intuitive UI  Intelligent documents  Field validation  DB look-up  Automate data capture  Eliminate paper 17 © 2009 IBM Corporation
  • 18. Process Forms – Step User Interface 12345 12345 18 © 2009 IBM Corporation
  • 19. Microscopic Visibility 11-JUL-2004 13:45 DJONES Task 1 Complete 11-JUL-2004 13:56 MSMITH Task 2 Complete 11-JUL-2004 14:45 DSMITH Task 3 Complete Order Order  Generates business events; full audit trail  Visibility down to an individual process and tasks  Demonstrate compliance  Provide “Live” status 19 © 2009 IBM Corporation
  • 20. Macroscopic Visibility Real-time Workload  Higher level – trends  Real-time process visibility Volume – Better tactical decisioning  Historical process visibility – Better strategic decisioning Tasks 20 © 2009 IBM Corporation
  • 21. Historical Performance Visibility – Analytics  Get reports on process performances  Business intelligence (BI) embedded within BPM  Make better decisions faster 21 © 2009 IBM Corporation
  • 22. Business Activity Monitor - BAM  Real-time operational visibility & performance management  Real-time threshold monitoring & alerts  Comprehensive event detection & correlation  Aggregate and correlate multiple data sources  BPM actions automatically tied to alerts  User-configurable dashboards 22 © 2009 IBM Corporation
  • 23. © 2009 IBM Corporation
  • 24. The World Is Changing Globalization Complexity Scale Security Energy Information Explosion 24 © 2009 IBM Corporation
  • 25. Building a Smarter Planet Thinking and acting in new ways to make our systems more efficient, productive and responsive New Green Intelligence and Beyond “Data is exploding and “Our resources are it’s in silos” limited” I Need Insight I Need Efficiency Dynamic Smart Work Infrastructure “New business and “My infrastructure is process demands” inflexible and costly” I Need to Work I Need to Respond Smart Quickly 25 © 2009 IBM Corporation
  • 26. Smarter Planet ….. Our world is becoming INSTRUMENTED By 2010, 30 billion RFID tags will be embedded into our world and across entire ecosystems Our world is becoming INTERCONNECTED An estimated 2 billion people will be on the Web by 2011 …. and a trillion connected objects – cars, appliances, camera, roadways, pipelines – comprising the “Internet of Things” All things becoming INTELLIGENT Every day, 15 petabytes of new information are being generated. This is 8x more than the information in all U.S. libraries 26 © 2009 IBM Corporation
  • 27. What Does It Mean to Become Smarter? New Data Sensors and Metering Sensors and Metering  Data collection Event Processing + Real Event Processing + Real Time Data Integration Time Data Integration  Data Integration New Insights Real Time + Historical Real Time + Historical  Comparison of historical data, Data Data with newly collected data Data Modeling + Analytics  Data modeling and analytics to Data Modeling + Analytics create insights from data to feed decision support and actions Process Visualization & Visualization & Innovation Decisions Decisions New and Optimized Business Processes Leading businesses today are benefiting from new sensor data when combined with IBM’s business process management, event processing & business optimization capabilities 27 © 2009 IBM Corporation
  • 28. Three Levels Of Maturity – Three Levels Of Value 0 1 2 3 4 5 Acknowledge Process Intra-Process Inter-Process Enterprise Agile Business Operational Aware Automation Automation Valuation Structure Inefficiencies and Control and Control Control Generally, where we are today Compare alternatives driven by various Automate Begin to process Integrate Directly link optimization techniques in Optimize Create a business identify model and real-time Innovate new process rules to performance businesses, Model and execution framework that Measure owners Craft process products, and analyze links business and monitor business Collaborative automation and valuation to services through business processes development control across the process an agile business activities enterprise, execution structure customers, and trading partners (industry) 28 © 2009 IBM Corporation
  • 29. References • IBM Academic Initiative • http://www.ibm.com/university • • IBM Students Portal • http://www.ibm.com/university/students • BPM Product Sample • http://www.ibm.com/software/info/bpm 29 © 2009 IBM Corporation
  • 30. 30 30 © 2009 IBM Corporation