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Process architecture - Part I
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 9, 28 Apr 2015
2. Process Identification
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
3
3. What?
1. Identify an organization’s business processes
2. Prioritize their management based on certain criteria
Why?
1. Understand the organization
2. Maximize value of BPM projects
How long?
Processes change over time (“dynamics of time”)
• identification should be exploratory and iterative
• improvement opportunities are time-constrained
Process identification
4. 1. Designation step
• Enumerate main processes
• Determine process scope
2. Prioritization step (aka Process selection)
Prioritize processes based on:
• Importance
• Health
• Feasibility
Process identification steps
After Davenport (1993)
Process
Architecture
Prioritized
Process
Portfolio
5. Process enumeration
There is no “number fits all” - it really depends on
organization’s domain and size
Rule of thumb: 10-20 processes
Trade-off:
• ensuring process scope is manageable, since…
• process scope determines potential impact
8. Components of a process architecture
Core Processes
Management
Processes
Suppliers/Partners
Customers/Stakeholders
Support Processes
After Michael Porter (1985)
10. Core, support and management processes
After Michael Porter (1985)
• Strategic and Planning
• Budgeting
• Compliance and Risk management
• Investors, Suppliers and Partners management
Management
processes
• Design and Development
• Manufacturing
• Marketing and Sales
• Delivery and After-sale
• Direct procurement
Core
processes
• Indirect procurement
• Human Resources
• Information Technology
• Accounting, Financial and Legal
Support
processes
16. Process scoping
Processes are interdependent insights into interrelations
required
• Specialization: general – special product/service
• Horizontal: upstream – downstream processes and their value chains
• Vertical: main processes – sub-processes
Process architecture
17. Scoping a process
Key scoping questions:
1. When does a given process instance start?
2. When do we consider a process completed?
3. What key objects does the process manipulates?
4. Who participates in the process?
5. Who owns the process?
A well-scoped process:
• Has a clear start, clear end (input, output)
• Has a clear, coherent set of “main objects” and “participants”
• Has a clear owner
18. Guidelines to identify horizontal boundaries
1. Change of key business object in the process
2. Change of multiplicity of main business object
3. Change in frequency/time
4. Change in intermediate outcome/resolution/objective
19. Guidelines to identify horizontal boundaries (cont’ed)
1. Core processes
• From an input to an outcome that generates value
• Decompose by identifying intermediate outcomes
2. Support processes
• From a need to a resolution
• Decompose by identifying intermediate resolutions
3. Management processes
• To control other processes
• Decompose by identifying intermediate objectives
20. • Chain of core processes an organization performs to deliver
value to customers and stakeholders
• More generally, a mechanism to group high-level business
processes according to an order relation (can be applied to
core, support and management processes)
Value chain modeling
Procure-to-service
business
process
order
relation
22. Building up a value chain (for core processes)
Think around three main steps:
• Imagine it (design new product/service)
• Build it (source, assemble, deliver product/service)
• Sell it (market, sell, service product/service)
23. Building up a value chain (for core processes)
Example: Producer
Stocked
products:
MTO
products:
ETO
products:
Specializations
After Paul Harmon, 2014
24. Example: value chains for service provider
ServiceDeliverSalesMarketDesign
Systems Integration
Outsourcing
Network Services
Enterprise Server Technology
IT service provider
After Paul Harmon, 2014
27. Alternative: process architecture – groups
Management
processes
1.1
Plan the
Business
1.2
Govern the
Business
1.3
(Re)design
Processes
1.5
Change the
Business
1.4
Develop Methods
& Standards
Manage Firm
2.1
Optimize
Stakeholder
Relationships
2.2
Develop
Service Offerings
2.3
Raise Awareness
of Services
2.12
Evaluate Client
Solution Delivery
Relate to Clients
2.4
Plan Delivery of
Service to Service
Corp.
2.5
Gain Initiative
Commitment
2.13
Adjust Portfolio
Optimize Portfolio
2.6
Deliver
Infrastructure
Solutions
2.7
Deliver Business
System Solutions
2.8
Provide
Professional
Services
Deliver Solutions
2.9
Operate
Infrastructure &
Business Systems
2.10
Retire Solutions
2.11
Support Users
Optimize Solutions
Core
processes
3.1
Provide Expert
Advice &
Knowledge
3.2
Provide HR
Capabilities
3.3
Provide IT Tools
3.5
Obtain Financial
Services
3.4
Acquire Goods &
Services
Support Firm
3.6
Provide Working
Facilities
Support
processes
Consultancy Firm
Expanded
process
group
28. • Process stakeholders and objectives, e.g. via a Stakeholder-
Objectives Matrix
• Process context, e.g. via a SIPOC (Suppliers, Inputs, Process,
Output, Customers) Diagram
• Process guides and enablers, e.g. via an IGEO
(Input/Guides/Enablers/Outputs) Diagram
Process architecture: further process attributes
29. • Process owner, responsible for the effective and efficient
operation of the process being modeled
• Primary process participants, i.e. those who are directly involved
in the execution of the process under analysis, e.g. customers and
internal staff
• Secondary process participants, i.e. those who are directly
involved in the execution of the preceding or succeeding
processes
Identify process stakeholders
30. • Primary (hard) process objectives
• Time, cost, quality
• Compliance, agility…
• Secondary process objectives
• To purchase goods, to hire new staff members
• Accompany with appropriate process metrics
• Let involved stakeholders define their priorities
Identify process objectives
Core
Processes
Support/
Management
Processes
31. Claims handling process
Example Stakeholder-Objectives matrix
Primary stakeholders Objectives
Customer Maximize policy value,
Smooth experience
Process owner Minimize process costs
Claims handler Minimize idle times
Stakeholder pairs Conflicting objectives Shared objectives
Customer, Process owner Policy value vs process
costs
Process owner, Claims
handler
Process costs and idle
time
Customer, Claims handler Smooth experience and
lower idle times
32. 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)