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CRICOS No. 00213J
a university for the worldrealR 1
A/Prof. Marcello La RosaBPM Discipline
Queensland University of Technology
IAB203 – Business Process ModellingWeek 9, 28 Apr 2015
Process Identification
Process identification
Conformance and performance insights
Conformance and performance insights
Processmonitoring and
controlling
Executable processmodel
Executable processmodel
Processimplementation To-be process
model
To-be process model
Processanalysis
As-is processmodel
As-is processmodel
Process discovery
Process architectureProcess architecture
Processredesign
Insights onweaknesses and
their impact
Insights onweaknesses and
their impact
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
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
PrioritizedProcess
Portfolio
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
• Order-to-cash
• Lead-to-quote
• Quote-to-order
• …
Example: enumerationWholesaler
• Staff recruitment
• Staff induction
• Staff probation
• Policies update
• …• Supplies replenishment
• Operational resources replenishment
• …
• Demand forecasting
• Logistics planning
• …
• Strategy development
• …
• Suppliers planning
• Suppliers acquisition
• …
Components of a process architecture
Core Processes
Management
Processes
Supplie
rs / P
art
ners
Custo
mers
/ Sta
keho
lders
Support Processes
After Michael Porter (1985)
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
Core processes
• Sales (lead-to-quote, quote-to-order, order-to-cash)
• Direct procurement (supplies replenishment)
• …
Support processes
• Indirect procurement (parts replenishment, operational resources replenishment…)
• HR (policies update, recruitment, induction, probation…)
• …
Management processes
• Suppliers management (suppliers planning, suppliers acquisition…)
• Logistics management (logistics planning, logistics controlling…)
• …
Example: core, support and management processesWholesaler
StrategicManagement
WarehouseManagement
SuppliersManagement
LogisticsManagement
Management processes
FinanceIndirect
procurementIT HR
Core processes
Support processes
Wholesaler
Example: process architecture
DemandManagement
SalesDirect
procurementDistribution
ServiceMarketing
Process group
StrategicManagement
CorporateDevelopment
InvestorRelations
Risk Assessment & Management
MarketDevelopment
Management processes
Marketing & Sales
UnderwritingManagement
PolicyServicing
ClaimsManagement
Payments Collection and Disbursement
Assets Management
Finance/Treasury
Legal/Audit
Reinsurance IT HR
Core processes
Support processes
Insurance company
Example: process architecture
Example: process architecture
CoreProcesses
SupportProcesses
ManagementProcesses
Australian water supplier
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
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
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
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
• 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
businessprocess
orderrelation
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)
Building up a value chain (for core processes)Example: Producer
Stockedproducts:
MTOproducts:
ETOproducts:
Specializatio
ns
After Paul Harmon, 2014
Example: value chains for service provider
ServiceDeliverSalesMarketDesign
Systems Integration
Outsourcing
Network Services
Enterprise Server Technology
IT service provider
After Paul Harmon, 2014
Support processes
HR:
Accounting:
Management processes
Suppliersmanagement:
Riskmanagement:
Example: value chain of non-core processes
StrategicManagement
WarehouseManagement
SuppliersManagement
LogisticsManagement
Management processes
Procure-to-Service
FinanceIndirect
procurementIT HR
Core processes
Support processes
Wholesaler
Example: process architecture & value chains
DemandManagement
Groupsprocesses/
value chains
Collapsedvaluechain
SalesDirect
procurementDistribution
ServiceMarketing
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 Solutions2.11
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
Expandedprocess group
• 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
• 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
• 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
CoreProcesses
Support/ManagementProcesses
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
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)