Lecture on Business Processes

1. Introduction to Business Processes – Part I
Learning How to Develop, Manage & Improve Business Processes

2. Outline
 Introduction & Context of Business Process Management
 Business Process Management Overview
 Process Modeling
 Process Analysis
 Process Design
 Process Performance Management
 Process Transformation
 Process Management Organization
 Enterprise Process Management
 Business Process Management Technologies

3. Introduction & Context of
Business Process Management
What Drives An Organization to Change The Way It Does Business

4. Lessons Learned From Large Process Implementations
Avoid big‐bang implementations
Identify and capture proof of benefits and saving
Enforce changes more effectively
Greater employees involvement
Increase investment in training
Outsource Project Management to a Third Party
Implementation of a MIS
Understanding the subject area
Align to company goals
More attention to process optimization
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

5. Key Drivers For Business Process Management
 Save Money – Do things better with optimized processes
 Build better new processes faster
 Know what you are doing (right or wrong) through current process
understanding
 Get control of parallel processes by consolidating core processes
 Get non‐value added work through automation of manual processes
 Business Process Outsourcing
 Implement large software systems better (ERPs)
 Stay ahead of compliance
 Move faster through scenario building for agility and policy
management

6. Benefits of Business Process Management
Reduced Process Costs 10 – 15%
Increased Quality/Reduced Number of Errors 20 – 30%
Reduced Process Throughput Times 10 – 30%
Reduced Training Time/Expenses 10 – 30%
Reduced Number of (Internal) Support Requests 15 – 30%
Reduced Number of Customer Complaints 20 – 30%
Increased Forecast Accuracy 15 – 30%

7. How Do Organizations Improve?
 Major change must start at the top
 Everyone must be involved
 Effective change requires a goal and knowledge of the
current process
 Change is continuous
 Change will not be retained without effort and periodic
reinforcement
 Improvement is continuous

8. Symptoms of Poor Business Process Design &
Management
 No standard process/method for addressing how to define
business requirements and when to improve business
processes
 When automation of processes is commissioned, “Business”
says that they do not always get what they think they have
asked for
 The processes used to document and communicate business
processes and requirements are neither easy or documented
 Our business programs frequently exist in a culture of reacting
to cross‐functional problems/emergencies
 IT has responsibility for creating and maintaining business
process flows, business requirements and business rules

9. Common Problems to Business Process
Management & Design
 Lack of an integrated process for capturing the business
domain
 Techniques that are used are not consistently applied
 We cannot/do not differentiate key stakeholders’ views
and different business views
 We are working without a common language across
business, IT and other partners/vendors
 Inadequate root cause level business process analysis
yields inadequate business requirements and rules to
facilitate process optimization/automation

10. Finding the Right Project
 The process or project is related to a key business issue
 You have/can get customer input on the issue
 Management assigns this project a high priority
 Process owner and key stakeholders are defined
 The problem is stated as a target or need and NOT a solution
 The sponsor of this project can commit time and resources to
the project
 The business process(es) will not be changed by another
initiative at any time in the near future
 Focus on what is most critical and what contributes the most
 Ensure the benefits of an improvement project do not
degrade over time

11. Critical Success Factors
 Linked to business strategies and goals
 Linked to customer value
 Ability to implement incremental value added change
 Ability to track results and measure success
 Ability to be aligned with the business

12. What Do Successful Projects Have
 Understood the Business Architecture – Business
Process, Metrics, Strategy and Goals
 Engaged stakeholders and defined process ownership
 Taken an iterative and incremental approach
 Tackled the right project at the right time
 Implemented internal, external standards and the right
level of governance
 Understood the role of information
 Incorporated process improvement
 Achieve business results with a series of small successes

13. Do Not Ignore Organizational Change
 The failure to manage the human side of business
changes is the major contributor to the reasons
programs, projects and initiatives fail
 Organizations may not have the experience necessary to
manage the speed and complexity of the large‐scale
changes
 Managers are all to frequently concerned with tactical,
operational issues and have not had time to consider
organizational changes

14. Process Analysis within Service Orientations
 Process Driven Integration
 Services Based Integration
 Cut integration costs and reduce development
 New Business Initiatives
 Agility & Growth – New Products and Services
 Increased Delivery Channels
 Process Improvement
 Optimizing business processes
 Straight Through Processing
 IT Regeneration
 Enterprise IT Architecture – Aligning more with the Business
 Legacy Replacement
 Extending the Enterprise
 Partnering and B2B

15. Intelligent Use of BPM
 Prioritize Intelligent Cuts to Reduce Overall Operational
Expenses
 Process Optimization
 Strong BPM teams can quickly examine processes and
suggest changes to eliminate waste
 Good BPM teams can almost always identify some quick
changes that will save 10 – 30%
 Reorganizations
 Changes in status also require that new processes and
business rules be implemented throughout the organization
 Additional Regulation
 New regulations require new practices and new business rules

16. How BPM Fits Into An ERP Deployment

17. Knowledge Area 1 – Business Process Management
 Defines the BPM and provides the foundation for
exploring the remaining knowledge areas
 Focuses on the core concepts of BPM
 Key definitions
 End‐to‐End process
 Customer Value
 Nature of Cross‐Functional Work
 Process Types
 Process Components
 BPM Lifecycle
 Critical Skills
 Success Factors

18. Knowledge Area 2 – Process Modeling
 Includes the set of skills and processes which enable
people to understand, communicate, measure and
manage the primary components of business processes
 Covers
 Skills, activities and key definitions
 An understanding of the purpose and benefits of process
modeling
 Discussion of the types and uses of process models
 Tools, techniques and modeling standards

19. Knowledge Area 3 – Process Analysis
 Involves an understanding of business processes
including the efficiency and effectiveness of business
processes
 Covers
 Purpose and activities for process analysis
 Decomposition of process components and attributes,
analytical techniques and process patterns
 Use of process models and other process documentation to
validate and understand both current and future state
processes
 Process analysis types, tools and techniques

20. Knowledge Area 4 – Process Design
 Intentional and thoughtful planning for how business
processes function and are measured, governed and managed
 Involves creating specifications for business processes within
the context of business goals and process performance
objectives
 Covers
 Plans and guidelines for how work flows
 How rules are applied
 How business applications, technology platforms, data resources,
financial and operational controls interact with other internal and
external processes
 Process design roles
 Techniques and principles of good design
 Common process design patterns
 Compliance, executive leadership and strategic alignment

21. Knowledge Area 5 – Performance Management
 Formal, planned monitoring of process execution and the tracking of
results to determine the effectiveness and efficiency of the process
 Used to make decisions for improving or retiring existing processes and/or
introducing new processes in order to meet the strategic objectives of the
organization
 Covers
 Key process performance definitions
 Importance and benefits of performance measurement
 Monitoring and controlling operations
 Alignment of business process and enterprise performance
 What to measure
 Measurement methods
 Modeling and simulation
 Decision support for process owners and managers
 Considerations for success

22. Knowledge Area 6 – Process Transformation
 Addresses process change in the context of a business
process lifecycle
 Covers
 Process improvement
 Redesign and reengineering methodologies
 Tasks associated with implementing process
 Organizational change management methodologies,
techniques and best practices

23. Knowledge Area 7 – Process Organization
 Addresses the roles, responsibilities and reporting
structure to support process‐driven organizations
 Covers
 What defines a process‐driven enterprise
 Cultural considerations
 Cross‐functional, team‐based performance
 Business process governance
 Governance structures
 BPM Centers of Expertise/Excellence

24. Knowledge Area 8 – Enterprise Process Management
 Driven by the need to maximize the results of business processes
consistent with well‐defined business strategies and functional goal
based on these strategies
 Process portfolio management ensures that the process portfolio
supports corporate or business unit strategies and provides a
method to manage and evaluate initiatives
 Covers
 Tools and methods to assess process management maturity levels
 Required BPM practice areas which can improve their BPM organization
state
 Business Process Frameworks
 Process Integration – interaction of various processes with each other
 Models which ties performance, goals, technologies, people and
controls to business strategy and performance objectives
 Process architecture and enterprise process management best
practices

25. Knowledge Area 9 – BPM Technology
 BPM is a technology enabled and supported
management discipline
 Covers
 Wide range of technologies available to support the planning,
design, analysis, operation and monitoring of business
processes
 Set of application packages, development tools, infrastructure
technologies and data/information stores that provide support
to BPM professionals and workers in BPM activities
 BPM standards, methodologies and emerging trends