IMBOK Business Process
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This slide show incorporates the following topics: Business Process: Terminology ,Business Process: Management, Business Process: Development , Business Process: Re-Engineering , Strategic Process Analysis , Managing Business Process & Managerial issues in Process Management.
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IMBOK Business Process
- 1. Business Process Brought to you by:
- 2. Table of Content Business Process: Terminology Business Process: Management Business Process: Development Business Process: Re-Engineering Strategic Process Analysis Managing Business Process & Managerial issues in Process Management
- 4. Definition of Business Processes “A BUSINESS PROCESS IS A LOGICAL ENVELOPE THAT CO-ORDINATES AND GIVES PURPOSE TO BUSINESS ACTIVITIES: GENERALLY WHERE AN ACTIVITY DELIVERS AN OUTPUT, A PROCESS DELIVERS AN OUTCOME A RESULT THAT IS EVIDENT TO STAKEHOLDERS OUTSIDE THE BUSINESS AS WELL AS THOSE WITHIN” IMBOK (2004)” (IMBOK 2004)
- 5. Business Process 1. A repeatable set of coherent activities 2. Triggered by a business event and 3. Performed by people and/or machines 4. Within or among organisations 5. For jointly realising business goals and 6. In favour of internal and/or external customers (Jeston & Neils 2006); (Davenport 1993)
- 6. History of Business Processes “in the ’60s industry concentrated on how to produce more (quantity in the ’70s how to produce it cheaper (cost) in the ’80s how to produce it better (quality) in the ’90s how to produce it quicker (lead time) in the 21st century how to offer more (service)”
- 7. Nature of Business Processes...
- 8. Identifying Business Processes It starts with the question: “what is our vision and mission, and what have we set out to do?” (IMBOK 2004) Based on an understanding of what stakeholders expect from an organisation we can derive idealised process sets, and then get to work on the difference between what we are doing and what we should be doing.
- 9. Process Activities A logical step or description of a piece of work that contributes towards the accomplishment of a process. A low level component of a business that makes up a part of a business process. It consumes resources and drives up costs. .
- 10. Critical Activities Work elements which must be carefully documented, monitored, and managed to ensure the success of an organization, program, or project They primarily affect the main output of the Organization A delay in any critical path activity will delay completion of the whole processes.
- 11. Process Hierarchy •Core business processes can be divided into manageable sub-processes and activities in an hierarchy •An activity is the smallest component of a process that cannot be further divided into sub-processes
- 12. Business Process Modelling Set of activities for creating representations (as is or would be) of end-to-end business perspective with primary, supporting and management processes (not an end, but a means to an end). (Jeston & Neils 2006)
- 13. Process Interactions Basic symbols used
- 14. End of Business Process Terminology
- 15. Business Process Management (BPM) Definition Process Management Process Characteristics BPM Life Cycle BPM Suites Value Chain Analysis
- 16. BPM Definition Business process management (BPM) is a systematic approach to making an organization's workflow more effective, more efficient and more capable of adapting to an ever-changing environment. The goal of BPM is to reduce human error and miscommunication and focus stakeholders on the requirements of their roles. BPM is a subset of infrastructure management, an administrative area concerned with maintaining and optimizing an organization's equipment and core operations. (Rouse, 2011)
- 17. Process Management Is a structured approach to performance improvement Concerted efforts to map, improve, and adhere to organizational processes Includes concepts, methods, and techniques to support the design, administration, configuration, enactment, and analysis of business processes It is the supporting of business processes using methods, techniques, and software to design, enact, control, and analyze operational processes involving humans, organizations, applications. (Grover &Markus, 2008)
- 18. Process Characteristics of a High Performance Organization 1. Design a good and fair reward, and incentive structure. 2. Continuously simplify and improve all the organization’s processes. 3. Measure what matters. 4. Report to everyone financial and non-financial information needed to drive improvement. 5. Continuously innovate products, processes and services. 6. Strive to be a best practice organization.
- 19. Process Characteristics of a High Performance Organization (Cont.) 7. Create highly interactive internal communication. 8. Deploy resources effectively. 9. Strive for continuous process optimization.
- 20. Two Views of Business Process Management Business Administration/ Management Study on how to improve operations value system, value chains, process- orientation customer satisfaction, and cost reduction IT aspect (Technology) Software and Hardware improvement and integration
- 21. BPM Life Cycle Business Process Management activities can grouped into categories such as the following: Design Modelling Execution Monitoring Optimization (Rouse, 2011)
- 22. BPM suites A market has developed for Enterprise software leveraging the Business Process Management concepts to organize and automate processes. There are four critical components of a BPM Suite: Process engine Business analytics Content management Collaboration tools
- 23. Value Chain Analysis (Porter, 1990)
- 24. End of Business Process Management
- 26. Approach to business modelling As experience accumulates within a business it has been found that the most effective approach to strategic business analysis is one which is grown within the organization. IMBOK (2004)
- 27. There is one approach to business process analysis that embraces visionary and operational viewpoints This Approach works on Two Fonts: What are we to do as a business and why? How are we to do it? IMBOK (2004)
- 28. Explanations of Terminology used: Vision: An agreed summary of the purpose and direction of the business, including a clear indication of the special attributes of the business that will distinguish it from others of the same kind. Stakeholder: A type of person (or body of people) that has the power to influence the operation and overall performance of a business Expectation: A need or requirement of a stakeholder group that affects perceptions of the success (or failure) achieved by a business and the delight that it creates for stakeholders.
- 29. Business process: A logical envelope that co-ordinates and gives purpose to activities. Processes satisfy the expectations of stakeholders. They normally cross the functional boundaries in the organisation. Mapping: Activities involved in defining what a business does, who is responsible, the desired standard of business process is completed and the success of the business process can be determined. IMBOK (2004)
- 30. The General Approach Step 1: Develop a VISION- before any detailed analysis takes place, it is essential that the vision of the business is identified by top management. Step 2: Determine WHAT must be done-established by the analysis of stakeholders and their expectations. Step 3: Determine HOW it shall be done- How the business is to run is established initially by an analysis of those things that the management agrees have to be managed. IMBOK (2004)
- 31. Step 4: Reconcile activities with processes- By mapping the activities (from Step 3) into the processes (from Step 2), a view is developed of how the business processes may be operationalized. Step 5: Assess current performance- By assessing the current performance of each activity the sum of achieved performance within the containing processes can be analysed and assessed. IMBOK (2004)
- 32. End of Business Process Development
- 33. Business Process Redesign/Re-engineering (BPR) Definition of BPR Methodology • The project approach taken by the organization to reengineer business processes after analysing the business situation and can be considered as the approach that supports the BPR project the most. • A BPR methodology sets the framework for the undertaking of a BPR effort. • “The challenge in structuring a project for improving the performance of business processes, is to select the approach that is best suited to the situation in hand, taking into account organisation objectives, capabilities and economic or competitive requirements” - A.Tsalgatidou • Source : cgi.di.uoa.gr/~pms541/methodologies.doc
- 34. Definition of BPR BPR can be defined as the reinvention or rethinking of daily activities and work carried out. In addition is it a concept that can be applicable to all industries despite size, type and location. “Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance such as cost, quality, service and speed”. (Hammer,M., Champy.J., (1993) BPR is a tool to be with improvements/problems (most popular) •Source : cgi.di.uoa.gr/~pms541/methodologies.doc
- 35. BPR Principles Organise around outcomes, not tasks Have those who use the output perform the process Subsume information processing into the real work Treat dispersed resources as centralised Link parallel activities Put the decision point where the work is performed Capture information only once, at source
- 36. BPR Methodologies The Hammer/ Champy Methodology IT plays a crucial role in this methodology Solution thinking before problem identifying •Source : cgi.di.uoa.gr/~pms541/methodologies.doc
- 37. Davenport’s and Short’s methodology Places IT at the heart of the methodology Believes IT and BPR has a recursive relationship (How does IT support BP?)
- 38. Davenport’s and Short 5 steps 1. Develop Business Vision and Process Objectives 2. Identify Processes to Be Redesigned 3. Understand and Measure Existing Processes 4. Identify IT levers 5. Design and Build a Prototype of the Process
- 40. Complexity of Change in BPR The organization needs to the degree of change it can handle. In addition to whether the organization is ready for undergo the proposed change. 3 Cases of approach business process BP improvement BP Redesign BP invention
- 41. Scope of Change in BPR
- 42. STEPS IN BPR Decide and priorities process to be examined Select a representative process review team Complete organization process analysis Draw process map and graphics (illustrating flow, cost drivers, value analysis, geographic space) Use other tools and diagrams if need, considering fishbone diagrams or process improvement cycle. Set up a workshop selecting the best outcome/practice. Implement and set up performance targets/ responsibilities and monitor progress. May (2003:182-183)
- 43. Benefits of BPR Better understand of relationship between activities Idea improvement by internal sources Cross functional project (communication) Encourages ownership as well a accountability Continuous Improvement Enables value for money or best value May (2003:182-183)
- 44. McDonald’s Business Process Redesign Drive throughWalk-in
- 45. End of Business Process Re-Engineering
- 46. Strategic Process Analysis BUSINESS PROCESS ANALYSIS IS ANY ACTIVITY THAT HELPS YOU UNDERSTAND HOW A BUSINESS UNIT FULFILS ITS MISSION (ARUNDEL ET AL, 2007)
- 47. Purpose of Strategic Process Analysis 1. Reveals how departments are impacted 2. Ensures streamlined fixes to be implemented once 3. Develops inter-departmental communication 4. Ensures transparency between Departments 5. Ensures Business Ownership of Process 6. Reveals how things work 7. Shows the “BIG PICTURE” of how things will work
- 48. Step 1: Develop Vision Statement 1. Decided by Senior Management Team 2. They Critically Evaluate each word in Statement 3. Content of Statement is Important in Weighting & Ranking Detail 4. Links to Business Strategy 5. Defines Principal Business Outcome 6. Vision is about Choices 1. Where it positions itself 2. The Scope of the Business 3. Differentiating to other Businesses You are here IMBOK (2004)
- 49. Step 2: Identify Stakeholders Anyone influential to the course of the Business Different Degrees of Importance Traditional Stakeholders Degree of Influence also Weighted Weighted out of 100 based on Influence You are here IMBOK (2004)
- 50. Step 3: Tabulate Stakeholder Expectations You are here IMBOK (2004)
- 51. Step 4: Derive List of Ideal Processes Develop what kind of Process will Satisfy Expectation Developed earlier You are here IMBOK (2004)
- 52. Rules for the creation of New Process Rule 1: Create Process that will Satisfy Expectation Rule 2: Subsequent Expectations examined to satisfy established Process Rule 3: If Existing Process Does not Satisfy then create New Process Rule 4: Any new Processes , Review its possible contribution to Other Expectations You are here Imbok,2014
- 53. Step 5: Process Expectation Map You are here Imbok,2014
- 54. Step 6: Tabulate Business Objects Next Populating each activity that realises Process This is Done through Brainstorming or by Reduction Comprehensive identification of activities (direct and indirect support to vision statement) From vision statement, derive primary objects that comprise the essential components or elements of the business. You are here Imbok,2014
- 55. Step 7: Derive Activities Using Lifecycle Analysis 4 Stages : Specification Acquisition Use Disposal You are here IMBOK (2004)
- 56. Step 8: Activity Process Map Completed a Stable View of Idealised Processes Next Step is testing what is done against what we should be doing. This is Done through Two Questions 1.) How do the activities from the object lifecycle analysis stack up against the idealised processes? 2.) Are our idealised processes adequately populated with activities? Afterwards Develop the Activity Process Matrix You are here IMBOK (2004)
- 57. Step 8: Activity Process Map (cont.) You are here Every activity must contribute to at least one activity In drawing out the activity-process matrix; there are a number of outcomes; Outcome 1: Each process has a proportionate number of activities. Outcome 2: A process may have no activities, or very few. Outcome 3: An activity may not be mapped to any process. IMBOK (2004)
- 58. Step 9: Assess Business Performance Purpose of this Analysis is to find where Business might Benefit from New Information Systems At this Step it Assess Current Process Performance You have reached your Destination IMBOK (2004)
- 60. End of Strategic Process Analysis
- 61. Managerial Issues in Process Management
- 62. BUSINESS PROCESS MANAGEMENT The management of processes, each with a process owner and a cross- functional process team The modelling of processes The automation or deployment of processes, upon what can be automated and integrated and Optimization, or improving processes based on real metrics which help in evaluating the process performance Van Looy , De Backer & Poels (2011:1125)
- 63. Management of Business process The whole idea of having a business process is to ensure that it delivers the desired performance by meeting the expectations of the stake holders. However their comes in a difference of thought to the above statement According to (Imbok, 2014), The process of an organisation can be the basis of a competitive strategy.
- 64. Process Triangle The differences of strategy brings about the concept of the “Process Triangle” Competitive process: This process is used for the success of the foreseeable future, to give the organization and advantage over their competitors To be in a particular industry it is essential that the actors are dependable, these processes are not competitive. Some processes are important , but are so universal that they can be used in our industry on a communal basis Some processes are the basis of future capability and will ensure that the organization moves forwards and maintains competencies appropriate to its strategic development ambitions. Imbok,2014
- 66. Classification of process categories It is important to identify the categorization of processes because each process has its own management style of implementation. The importance of having this is to highlight those processes that are significant for different strategic reasons such as Imbok,2014
- 67. Classification of process categories Competitive processes – Competitive reasoning. Qualifying processes – For reasons of operational efficiency. Underpinning processes – Cost reduction Transformation processes – Organizational development Imbok,2014
- 68. Managerial responsibility in process handling Senior managers : responsible for(transforming and competitive) Operational Managers must make sure that qualifying activities are done well to enhance performance. Service Managers must take responsibilities in cost reduction.
- 69. Managerial issues in process management Managerial issues arise due to the fact that people feeling like their jobs will be replaced But why the reluctance? This is why: Business Modeling Process management Stakeholders Change management
- 70. Business Modeling Business process modeling (BPM) in systems engineering is the activity of representing processes of an enterprise, so that the current process may be analyzed or improved. According to IMBOK, 2014 it is believed that business process models need to be own an nurtured not necessarily by external consultants but internally even if is the smallest task
- 72. Process Management ? Is supporting business processes using methods, techniques, and software to design, enact, control, and analyze operational processes involving humans, organizations, applications, documents and other sources of information. Hammer, 2002: 26-7; Weise, 2007
- 74. Common problems in process management COMMON PROBLEMS IN PROCESS MANAGEMENT Silo processes that do not capture the business domain Inconsistently applied techniques Lack of delineation of key business view and key stakeholder view Lack of a common, unifying language Inadequate process analysis
- 75. Common Problems in Process Management COMMON PROBLEMS IN PROCESS MANAGEMENT – STRATEGIC Lack of governance Lack of employee buy in Lack of common language Lack of strategy – process alignment
- 76. Common Problems in Process Management COMMON PROBLEMS IN PROCESS MANAGEMENT - OPERATIONAL Lack of process visualization Gaps between process design and process execution Miscommunication of the capabilities of the processes Bandara (2014)
- 77. Stakeholders They review the process and decide to buy into it or not. Stakeholders include: – The project sponsor – The project manager – The project team – Support staff – Customers – Suppliers – Opponents to the project – End-users Managing Information Technology projects”, Kathy Schwalbe, revised 6th Ed
- 78. Stakeholders Are important for the developmental and implementation of processes Business models generally viewed by them They are part of the reason the company is on par with their competitors in their industry through their innovative thinking Serve wide range of corporate interest
- 79. Change Management Change is the result of dissatisfaction with the present strategies It is essential to develop a vision for a better alternative It is necessary to develop strategies to implement change There will be resistance to the proposals at some stage A degree of resistance is normal since change is: Disruptive Stressful Moreover a degree of skepticism can be healthy especially where there are weaknesses in the proposed changes, however resistance will also impede the achievement of organisational objectives Aladwani (2010)
- 80. Change Management Inappropriate change management Change is often resisted because of failures in the way it is introduced Failure to explain the need for change Failure to provide information Failure to consult, negotiate and offer support and training Lack of involvement in the process Failure to build trust and sense of security Poor employee relations
- 81. Change Management 1) Step change Dramatic or radical change in one fell swoop Radical alternation in the organization Gets it over with quickly (2) Incremental change Ongoing piecemeal change which takes place as part of an organization's evolution and development Tends to more inclusive
- 82. The End Thank you Brought to you by:
- 83. References Source: cgi.di.uoa.gr/~pms541/methodologies.doc Hammer, 2002: 26-7; Weise, 2007 Arundel et al, 2007 Jeston & Neils (2006) Davenport, 1993) Source : cgi.di.uoa.gr/~pms541/methodologies.doc
Editor's Notes
- Requires Link between IS Strat, Benefits + Process (Process Flow Chart)
- Asif will touch on this later
- It centres on the disciplined design and careful execution of a company’s end-to-end business processes
- Process design encompasses both the identification of existing processes and the design of "to-be" processes. Areas of focus include representation of the process flow, the factors within it, alerts and notifications, escalations, standard operating procedures, service level agreements, and task hand-over mechanisms. Modeling takes the theoretical design and introduces combinations of variables (e.g., changes in rent or materials costs, which determine how the process might operate under different circumstances). Execution, one of the ways to automate processes is to develop or purchase an application that executes the required steps of the process Monitoring encompasses the tracking of individual processes, so that information on their state can be easily seen, and statistics on the performance of one or more processes can be provided (e.g. customer order) Optimization includes retrieving process performance information from modeling or monitoring phase; identifying the potential or actual bottlenecks and the potential opportunities for cost savings or other improvements Reengineering, when the process becomes too noisy and optimization is not fetching the desired output, it is recommended to re-engineer the entire process cycle
- Process engine – a robust platform for modelling and executing process-based applications, including business rules Business analytics — enable managers to identify business issues, trends, and opportunities with reports and dashboards and react accordingly Content management — provides a system for storing and securing electronic documents, images, and other files Collaboration tools — remove intra- and interdepartmental communication barriers through discussion forums, dynamic workspaces, and message boards
- Originally promoted in the early and middle 1980s by Michael Porter (Porter, Millar, 1985). Porter promoted it as a way of seeing the differential between cost and revenue. Inbound logistics - Activities relating to receiving, storing and disseminating inputs Operations - Activities relating to converting inputs to finished goods/services Outbound logistics - Activities relating to collecting, storing and distributing product or service Marketing & sales - Activities relating to gaining and enabling customers to buy product or service Service - Activities to enhance or maintain product - after sales service
- Developing a business process can be important for new companies that want to analyze their procedures before they start conducting business and for existing companies that desire a better understanding of their operations in order to correct errors, train new employees and improve performance of existing employees and departments.
- VISION: in identifying the vision, the scope of the business must be clear. In a larger organization, it will be necessary to identify the strategic business unit that is to be the basic unit of analysis and in a smaller organization its possible for the whole business to be treated as one. WHAT- basically what must be done to achieve the vision. From the agreed expectations a set of processes is developed which addresses these stakeholder expectations. Some expectations will be critical to the business’s competitive advantage and others not. HOW- this may be tangible things such as buildings or people or intangible things such as projects or services but these are all important to support the reality of the vision.
- RECONCILE- for example an administration clerk having to file documents manually to having an automated database. Basically refining activities from as is model to to- be model. This is important as it will give you an estimation of how successful the business will be and what problems you may encounter.
- Before and after improvements to service
- Good Day Class , My Name is Stephen Cloete and I will be covering Strategic Process Analysis Methods which falls under the term Business Process , so firstly Business Process Analysis can be defined as Any Activity that helps you understand how a Business Unit Fulfils its Mission , so I will be elaborating more on this later how exactly this is done.
- 1.) Shows everyone how they actions impact other Departments 2.) Enables quick fixes that work the first time. 3.) Focuses on interaction between departments. 4.) Makes the impact of proposed changes visible to all involved parties. 5.) Generates ownership of the business processes. 6.) Establishes a baseline of how things work today. 7.) Creates a picture of how things should work in the future
- 1.) Vision Statement is negotiated with a Senior Management Team 2.) Every word needs to then be Evaluated for Meaning & the Contribution it makes 3.) The Content is later used to Identify Business Expectations 4.) Vision Statement taken from Business Strategy 5.) Clearly defines Business Principal Outcome of all Business effort 6.) The Vision is all about Choices when compared to its competitors As we can see in the Example of the Zoo , their Vision Statement is the following:
- Anyone influential to the course of the business. Have differing degrees of importance. Traditional stakeholders Shareholders Employees Government Local Community Degree of influence should also be weighted (discussion & agreement)
- Linking Stakeholder Weighting to Expectations Consult stakeholders to identify & tabulate their expectations. Differentiated by Same/Conflicting expectations. Volume of evidence used in weighing. Match expectation from both ends. (Sales vs. Customer expectation) Assess these expectations to produce a ranked list taking full account of weightings Perceived importance of each expectation Shareholder group of derivation Number of stakeholder groups holding that expectation
- 1.) Develop what kind of Process will Satisfy Expectation Developed earlier 2.) Consolidate and Rank the Expectations
- First expectation – Create a satisfying process. Subsequent expectation – Examine prior process (for similar satisfaction). Review possible contribution of a new process to other expectation (already served) and take note.
- 1.) Next step is Build up a Matrix showing each Process that Contributes to Expectation 2.) Note Most Process Contributes to Multiple Expectations 3.) Process will be assessed by the extent that it Satisfy Expectations according to Vision Statement & According to Weighting 4.) Each Process has Distinct Outcome to Address Requirement of Stakeholder At this stage of Analysis it has Established the Kind of Business, Who influence its Success, Why we must do what we must do This Gives us an Idealised View but to complete the Analysis we need to think about how Business will actually work and Practical issues that Affects what we do
- Specification activities to identify requirements, analyse and document them, and then to agree on them before embarking on acquisition. Acquisition activities involved in identifying sources, eliciting availability and establishing suitability. Then, actually negotiating terms and taking delivery, thereby concluding the acquisition phase. Use all of the activities during the lifetime of usage - possibly many and possibly divided into different kinds of activity. Disposal. those activities involved in assessing the ongoing usefulness of an object and possibly leading to a decision to dispose of it; all of the steps involved in achieving disposition.
- Q1.In principle, every activity must contribute to at least one process, otherwise why are we doing it? Q2. It is conceivable that we are simply not doing all the things that we should be doing, in order to serve the needs of our stakeholders.
- Outcome 1: Each process has a proportionate number of activities. For Example, if there were 8 identified processes and 160 activities, one would expect that each process would have the order of 20 activities to operationalise . In the event of this it is not necessary for processes to share activities in a proportionate way – it depends how complex they are. Outcome 2: A process may have no activities, or very few. Having just a few activities is not necessarily a problem, although management will clearly want to review things to make sure that nothing has been omitted. In the unlikely case that a process has no supporting activities then it is very likely that significant business components have been missed or that the process analysis is flawed. Outcome 3: An activity may not be mapped to any process. Any activity that has no role within a process is redundant and should be considered for elimination.
- 1.) The Business Performance Analysis Works upwards from activities 2.) Considering views from internal entities & stakeholders. 3.) In general, performance of each process will be judged according to the performance of the weakest contributing activity.
- 1.) In Summary this was the Process Flow that was followed in order to reach the final Outcome. 2.) The Purpose of this Analysis was to Control the Volume of Analytical Evidence and to make process Achievable and Manageable 3.) Organisations Benefit from seeing the connection between High level Vision and Operational Consequences.
- Thank you for listening I will now be handing over to our Next Speaker