Business Process Management Training session 1

1. BUSINESS PROCESS MANAGEMENT
SESSION 1 - INTRODUCTION TO BPM
<V1.0>
The concepts, methodologies and research contained
herein are proprietary of Naval Vithalani. Duplication,
reproduction or disclosure of information in this document
without the express written permission of Naval Vithalani is
prohibited.
Email – tonaval@yahoo.com

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Contents
• What is BPM
• BPM Lifecycle
• What is BPMN, BPRE, BPA
• BPM Areas

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What is BPM

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What is BPM
Business Process Management is a means to study,
identify, change, and monitor business processes.
• Business Process Management is a
generic term, that encompasses the
techniques, structured methods, and
means to streamline operations and
increase efficiency.
• BPM techniques and methods enable you
to identify and modify existing processes to
align them with a desired (improved) future
state.

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Principles of BPM
• Organize around outcomes not tasks
• Correct and improve processes before (potentially)
automating them
• Establish processes and assign ownership
• Standardize processes across the enterprise
• Enable continuous change
• Improve existing processes, rather than build radically
new or ‘perfect’ processes

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Business Drivers of BPM
• Perceived or Expected Benefits:
• Reduce staff and office overhead
numbers
• Process business critical activities
faster
• Reduce the number of errors and
exceptions
• Reduce overall IT costs
• Reduce duplications
• Increase visibility into operational
efficiencies and bottlenecks
• Reduce business risks
• Improve customer service and
retention

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Why Business Analysis
• No business process improvement or change activity can be
undertaken without the use of business analysts and/or
business analysis techniques
• Most people think they understand the techniques of analysis
(e.g., requirements gathering), but few actually do
• Most projects failures do not stem from technology
• Rather, a lack of insight, stakeholder support or planning -- all things
that are the focus of business analysts!
NEVER – NEVER – NEVER attempt to change a business
process without first analyzing the business impact of the change in detail

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Why use a Flow Chart
• To explain the sequence of a process graphically
• To improve communication and obtain business-user
validation
• To identify bottlenecks and loops
• To assist with problem analysis
• To provide a blueprint for development
• To identify variations in process activity

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Model Processes

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Why Model Processes
Understand and control existing processes
Measure time, cost and resources needed to
existing processes
Improve current processes
Streamline, identify missing process steps,
rationalize existing processes
Design new processes
Realize business requirements and design new
processes
Based on changing business environment, new
processes may be needed
Communicate existing and new processes
Automate processes

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Charting v/s Modeling
• Flowcharting creates a graphical representation of the
sequence and key elements of a business process
• Process modeling extends this by
• Mapping dependencies and related flows
• Adding data intelligence to the steps
• Enabling simulation of flows to check for efficiencies and
bottlenecks
• Enabling reuse of mapped chart elements
• Supporting future monitoring of improved processes

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Process Levels
WHAT
HOW

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The Framework for Identifying Core Business Processes
This framework helps in identifying of key business processes of
an organization
Identify Critical Success Factors (CSFs) to achieve
company’s objectives. These are performance drivers
which have major contribution towards
accomplishment of company’s objectives.
Identify Processes that Deliver the above drivers for
performance or KPIs.
Identify Metrics for Measuring the critical success
factors – this amounts to establishing organizational key
performance indicators (KPIs).
Group or un-group related or un-related processes and
give them names which convey the activity or
operation that gets done. These are the key business
processes of a company.

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Critical Success Factors Of BPM
• Standardise Business Processes
• Adopt common design/re-engineering methodology
• Document processes
• Manage process diversity
• Executive Sponsorship/Governance and Institutionalise
Practices
• Provide continuous improvement
• Manage process governance
• Enable change management
• Leverage BPM tools
• Define Organisation-Wide Business Process Value Chains
• Map the organisation’s core activities
• Assign executive responsibility for/sponsorship of process chains
• Measure Process Chain Performance
• Manage to process measures and chains of accountability

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Activity Monitoring
• Sometimes called Business Activity Monitoring, or “BAM”
• Data is created whilst executing a business process
• The data can be analyzed and displayed via dashboards or reports
• Processes need to be monitored!
• Who has what
• Where it is
• When they got it
• Identifies bottlenecks and areas of weak or no activity
• Provides reporting
• Enables process analysis

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What is RASCI
(R)esponsibility (A)ccountability (S)upport (C)onsult
(I)nform
• Every process step has to have a clearly defined RASCI.
• RASCI helps in the calculation of costs per transaction.
• By ‘Transaction’ we mean every step/activity that the actor performs has
a ‘Cost’ and ‘Time’ attached to it.
• These steps help us to calculate the total cost of the process.
• The only way to get approvals on ‘Re-Engineered’ processes is by clearly
quantifying the cost/effort involved.

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A word or two on Roles
• Business Sponsor - Provide the funds and resources to commission
change
• Process Owners - Is the person who is ultimately accountable for the
performance of the process. They have the power and the authority to
command resource and to commission change projects.
• Process Stewards - These are the people who are responsible for
ensuring that the process is effective and report to the process owner,
They are not responsible for the ultimate success of the process.
• Process Modellers/Officers - These are the people who assist with
change and help to visualize and maintain models, they have no
accountability for the process itself.
• Employees - People whose actions result in part of full delivery of
process steps. They seek (and often provide as well) valuable
information about the process – how to do things right.
• Competence coach - People who direct process improvement
efforts, provide tools, knowhow,

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What Do Business Users Look For
• Smaller subset of elements
• Depends on user skills/aptitude
• Comprehension of BPMN without necessarily being able
to model:
• Work with analysts to capture processes
• Review and approve models, with a cheat sheet or generous
annotation
• Reduce Costs
• Improve corporate revenues by 20%
• Reduce credit approval times by 40%
• Reduce operating expenses by 30%
• Cut miscellaneous expenses by 25%

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Business Process Management Life
Cycle

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BPM Life Cycle
Design
Re-
Modeling
Engineering
Business
Process
Management
Optimizatio
Execution
n
Monitoring

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Business Process Management Lifecycle
Design
Process Design encompasses both the identification of existing
processes (AS-IS) and the design of “TO-BE" processes.
Design
The proposed improvement could be in human-to-human,
human-to-system, and system-to-system workflows, and might
target regulatory, market, or competitive challenges faced by the
businesses
Modelling
Modelling takes the design and introduces combinations of
variables (e.g., changes in rent or materials costs, which
determine how the process might operate under different
Modeling
circumstances).
It also involves running "what-if analysis" on the processes:
What if I have 60% of resources to do the same task?
What if I want to do the same job for 75% of the current
cost?

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Business Process Management Lifecycle
Execution
One of the ways to automate processes is to develop or
purchase an application that executes the required steps of Execution
the process. Not one application exists that can do that.
Some applications like ARIS (IDS Sheer) are developed that
enables the full business process to be defined in a computer
language which can be directly executed by the computer.
The system uses web services to perform business operations.
For example implementing the Purchase Order process in
SAP IS Retail
Monitoring Monitoring
Monitoring covers the performance tracking of processes. This
helps in identifying processes which are under performing or
need to be modified.

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Business Process Management Lifecycl
Optimization
Process optimization includes retrieving process performance
information
Optimization
Identifying the potential or actual bottlenecks and the
potential opportunities for cost savings or other
improvements
Applying those enhancements in the design of the process.
Re-engineering
When the process becomes too noisy and optimization is not
Re-
fetching the desired output, it is recommended to re-engineer Engineering
the entire process cycle.
BPR has become an integral part of organizations to achieve
efficiency and productivity at work.

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What is BPMN, BPRE, BPA

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Business Process Modelling And Notation
BPMN
Business Process Model and Notation (BPMN) is a
standard for business process modelling that provides a
graphical notation for specifying business processes in a BPMN
Business Process Diagram based on a flowcharting
technique very similar to activity diagrams from Unified
Modelling Language
The primary goal of BPMN is to provide readily BPRE
understandable business processes to all the
stakeholders – Business and IT
Human oriented standard graphical notation for
modelling business processes BPA
Based on Flow Charts
Has a mapping to BPEL4WS (Business Process
Execution Language for Web Services)

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Business Process Modelling And Notation…..contd
BPMN Scope
BPMN
Organizational structure and resources
Functional breakdowns
Data and information models
Strategy BPRE
Understand Business Rules and control existing
processes
Automate processes
BPA

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Business Process Re-Engineering
Understand and control existing processes
Business process re-engineering is the analysis and
design of workflows and processes within an BPM
organization.
BPRE has become popular because of the desire to re-
engineer separate functional tasks into complete
cross-functional processes. BPRE
BPRE may completely redesign or eliminate some
processes
Re-engineering is the process to identify, analyse, and
re-designs an organization's core business processes BPA
with the aim of achieving improvements in critical
performance measures, such as cost, quality, service,
and speed.
BPRE is an ongoing activity in a process oriented
organization

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Business Process Automation
BPA
BPA is the business strategy to automate processes in
order to contain costs.
BPM
Processes could be repetitive or one off’s
BPA consists of application integration, realigning BPRE
resources or implementing new applications
In the food chain BPA comes at the bottom while BPM
helps in designing processes, BPRE helps in tweaking BPA
the process and BPA helps in identifying processes that
can be automated

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Case Study
A BPM initiative for SAP implementation produced the following results:
• Faster SAP implementation (time cut down in Business Blue Printing,
Testing and Training phases of implementation)
• Easier roll-out at new sites
• Complete documentation for future reference- Configuration,
Functional Specs, Technical Specs and other additional documents
such as User Manual, Authorization Matrix etc
• Training material ready for the end-users and new joiners, all
processes available on the ARIS Business Publisher.
• Complete Master data mapped right down to field level.
• Reports run to define the KRAs of the employees based on the
processes mapped.

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Business Process Management Areas

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NINE Knowledge Areas
• Business Process Management
• Process Modelling
• Process Analysis
• Process Design
• Process Performance Management
• Process Transformation
• Process Management Organisation
• Enterprise Process
• Business Process Management Technologies

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Business Process Management
• Defines 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

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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 modelling
• Discussion of the types and uses of process models
• Tools, techniques and modelling standards

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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

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Process Design
• Intentional and thoughtful planning for how business processes
function and are measured, governed and managed
• Involves creating the 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

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Process 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 organisation
• 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
• Modelling and simulation
• Decision support for process owners and managers
• Considerations for success

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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
• Organisational change management methodologies, techniques and best practices

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Process Organization
• Addresses the roles, responsibilities and reporting structure to
support process-driven organisations
• Covers
• What defines a process driven enterprise
• Cultural considerations
• Cross-functional, team-based performance
• Business process governance
• Governance structures
• BPM Centre of Expertise/Excellence (COE)

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Enterprise Process Management
• Driven by the need to maximise the results of business processes
consistent with well-defined business strategies and functional goals
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 organisation state
• Business Process Frameworks
• Process integration - interaction of various processes with each other
• Models which tie performance, goals, technologies, people and controls (both
financial and operational) to business strategy and performance objectives
• Process architecture and enterprise process management best practices

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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 and information stores that provide support to BPM professionals and workers
in BPM related activities
• BPM standards, methodologies and emerging trends

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BPM Core Concepts
• BPM is a management discipline and a set of enabling technologies
• BPM addresses end-to-end work and distinguishes between sets of
sub processes, tasks, activities and functions
• BPM is a continuous, on-going set of processes focused on managing
an organisations end-to-end business processes
• BPM includes the modelling, analysis, design and measurement of an
organisation’s business processes
• BPM requires a significant organisational commitment, often
introducing new roles, responsibilities and structures to traditional
functionally oriented organisations
• BPM is technology enabled with tools for visual modelling, simulation,
automation, integration, control and monitoring of business processes
and the information systems which support these processes

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Thank You
Session 2
• Notations
• Process Example
Session 3
• Process Cost Analysis
• Process Optimization
Session 4
• ARIS - Introduction