Business process analysis

Requirement Excellence Framework™

Business Process Analysis

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Business Process Analysis

• Business process analysis helps an organization improve how it conducts its functions and activities in order to reduce overall costs, provide more efficient use of scarce resources, and better support customers. It introduces the notion of process orientation, of concentrating on and rethinking end-to-end activities that create value for customers, while removing unnecessary, non-value-added work.

• Generally technology is implemented to automate or streamline business processes, so it is important to conduct a business process analysis to understand how the process works and how it can be improved.

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What are Outputs of a Business Process Analysis?

• As Is Model• To Be Model• Customer and Supplier Definitions• Process Ownership and Governance• Roles and Responsibilities• Process Impact• Organization Impact• System Impact• Risk• Impact Type• Impact Level• Expected Outcomes

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RequirementPro™ Business Process Functionality

Process Category

Process Group

Process

Activity

Business ProcessImpact

Project

ScopeStatement

FunctionalRequirement

SupplementalRequirement

The process structure is organized using APQC’s Process Classification Structure (PCF). The PCF was developed by APQC and its member organizations as an open standard to facilitate improvement through process management and benchmarking, regardless of industry, size, or geography. The PCF organizes operating and management processes into 12 enterprise-level categories, including process groups and over 1,000 processes andassociated activities.

During Process Analysis, impacts on existing business processes from are identified and documented . Depending on the size of the project, AS IS and TO BE business process models may need to be created or updated. The business process impacts are later used in the Project Scope Activity to define scope statements which are used to elicit needs from Stakeholders and specify requirements.

Since software is used to provide automated support for a business process, it is essential to understand how the process is going to work before defining software requirements.

FeatureImpact

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What is a Business Process?

• A business process is the the set of steps a business performs to create value for customers.

• A process consists of three components: inputs, activities, and outputs.

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Three Types of Processes

Operating Process– Primary processes are end-to-end, cross-functional processes which directly deliver value– Represent the essential activities an organization performs to fulfill its mission– Make up the value chain where each step adds value to the preceding step as measured by its contribution to

the creation or delivery of a product or service, ultimately delivering value– Primary processes can move across functional organizations, across departments or even between

enterprises and provide a complete end-to-end view of value creation

Support Process– Support primary processes, often by managing resources and/or infrastructure required by primary processes– Differentiator is that support processes do not directly deliver value- Does not mean that they are

unimportant to an organization– Examples of support processes include information technology management, facilities or capacity

management and human resource management– Support processes are generally associated with functional areas

Management Process– Used to measure, monitor and control business activities– Ensure that a primary or supporting process meets operational, financial, regulatory and legal goals– Do not directly add value– Necessary in order to ensure the organization operates effectively and efficiently

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Examples of Processes

University• Teaching Students• Paying for Classes Hospital• Emergency Care• PayrollManufacturing• Purchasing Material• Training WorkersFederal Government Agency• Procurement• Hiring New Employees Retail Store• Selling Products• Employee Scheduling

Bank• Opening New Accounts• Statement DistributionRestaurant• Preparing Meals• AdvertisingConstruction• Budgeting• Managing SubcontractorsNot for Profit• Distribution of Funds• Employee Recruitment

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Who are the Process Customers?

• Because a transformation process exists to satisfy customer requirements, process owners need to understand who their customers are, what they want, and how to provide what they want.

• The customers of a process are the people who require the products and services that are the result of the process or one phase of the process. They are classified as:– External customers-people who ultimately use the products and/or

services (process outputs or work results) of an organization; and– Internal customers—the owners of the next phases in the process

who must wait for the delivery of a product or service before completing work.

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Complete View of Process• A process consists of a mix of automated and manual activities in a structured or ad-

hoc manner to deliver expected outcomes.• Understanding the overall set of activities that comprise a process and their business

rules is essential.• The requirements analyst needs to understand the entire picture to understand how a

solution should operate. Systems/applications generally only automate a part of the process.

• Activities that are to be automated define the scope of the development and implementation work which may span multiple applications.

ManualActivity

Automated Activity

Business Rules

Automated Activity

Automated Activity

ManualActivity

Application Application

Business Process

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Process Improvement

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Symptoms of Poor Business Process Design

• 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 nor documented.

• 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.

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How do you Improve a Process?

• Use a structured and organized approach and methodology.• Eliminate activities that do not add value for the customer. Ask yourself: "Would the customer

want to pay for this activity?" If the answer is no, ask yourself: "Why are we doing this? Is it a federal law? A state law?" If the answer is no, ask yourself: "What benefit do we gain by doing this?" At this point, you are coming close to eliminating the activity.

• Eliminate constraints—things that frustrate employees and slow processes.• Streamline/simplify processes. It is difficult to document and teach people complex processes.• Once processes are streamlined, automate the process if feasible.• Provide leadership in a positive direction. Function as a strategist. Envision and invent the future

with streamlined processes and relationships.• Act empowered; be accountable. As individuals and members of teams, function as process

owners and consider process management and improvement an integral part of daily work. Don't say, "They won't let us …" Make decisions, not excuses.

• Document and publicize improvements. Success breeds success.• Continue to monitor and evaluate processes to identify additional opportunities for

improvement.• Ask what, where, why, who, when, and how questions about each step in a process (or job).

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Typical Benefits for Process Improvement

Typical results of a well-established process improvement program include:• Productivity improvements of 10% - 50%• Quality improvements: significantly• decreased error rates and field• problems, resulting in reduced rework• Improved ability to plan and control• projects, reduced project delays• Cycle time reductions of 20% -50%• Cost savings average 5:1 ROI

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Other Benefits

• Fewer overtime hours• More stable work environment• Improved working conditions• Improved quality of work life• Improved employee morale• Reduced employee turnover• Improved management of project risk• Improved customer satisfaction• Better company image

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Desired Outcomes

• Processes are documented, usable and consistent• Schedules and budgets are based on historical

performance and are realistic• Expected results for cost, schedule, functionality and

product quality are usually achieved• Disciplined processes are followed consistently because

all participants understand their value• Broad-scale, active involvement across the organization

in improvement activities• Roles and responsibilities are clear

Confidential - Not for External Distribution

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Process Reengineering Principles

• Organize around outcomes not tasks - helps eliminate the need for handoffs and provides a single point of contact for the customer

• Have those who use the output of the process perform the process – those who are closest to the work should do the work

• Merge information - processing work into the real work that produces the information - People collecting the work should be responsible for processing the work instead of handing over to some other individual or system

• Treat geographically dispersed resources as though they were centralized - technology advancements make this a reality through combining dispersed systems and teams as though they were a single team

• Link parallel activities instead of integration their results - helps reduce errors at the end of the process

• Put the decision point where the work is performed and build control into the process - empowers the performer of the work to get the resources he needs to get the job done most efficiently

• Capture information once - at the source - eliminates costly mistakes of information not being passed effectively from one handoff to another

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Process Analysis


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Process Analysis

• Analysis generates the information necessary for the organization to make informed decisions assessing the activities of the business

• Due to business change the processes of an organization can quickly become inconsistent to their original design and no longer meet the needs of the business

• Process analysis is an essential tool to show how well the business is meeting its objectives

• Creates an understanding of how work (the transformation of inputs to outputs) happens in the organization

• Information becomes a valuable resource to management and leadership to understand how the business is functioning

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Process Analysis

• Analyze the Current Process– At which point doe the process break down or experience delays?– At which points do people typically experience frustration with the process?– Which parts of the process seem to consume an inordinate amount of time?– Which parts of the process lead to low quality outcomes?– Which parts of the process incur unacceptable costs?

• Envision the New Process– What are things we can do to exceed our customer’s expectations?– Could the accuracy, speed, and quality of the process be improved?– How might the process be improved to make it easier for customers to do

business with us?– How we can reduce costs?– What can we do to reduce cycle times?– How can we improve quality?

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Questions to Understand the Process

What?• is there to do?• is being done?• should be done?• can be done?• constraints keep us from doing

what needs to be done?Who?• does this job?• should do this job?• knows how to do it?• should know how to do it?

Where?• is this job done?• should it be done?• can it be done?When?• is this job done?• should it be done?• can it be done?


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Process Analysis Methods

• Interviews• Observations• Process Benchmarking• Process Modeling and Simulation• Value Chain Analysis• SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats)• Information Flow Analysis• Discrete Event Simulation• Activity Based Costing• Cycle-Time Analysis• Decision Analysis• Sensitivity Analysis


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Hand-Offs

• Any point in a process where work or information passes from one system, person or group to another is a handoff for that process.

• Handoffs are very vulnerable to process disconnections and should be analyzed closely.

• Typically, the fewer number of handoffs, the more successful the process.

• Which of the handoffs are most likely to break down the process?

Questions to ask of each handoff:– Are there any bottlenecks of information or services as a result of handoffs

happening too quickly?– Can any handoff be eliminated?– Where do streams of information come together and is the timing accurate?


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Process Culture

• A process culture is a concept in which the business’ processes are known, agreed on, communicated and visible to all employees

• Characteristics of a process culture include– General agreement on what are the business processes– Understanding how business processes interact and affect each other– Clear definition of what value each process produces– Documentation of how each process produces its results– Understanding of what skills are required for each process– Understanding of how well each process performs– Ongoing measurement of process performance– Management decisions based on process performance knowledge– Owners of each process having responsibility and accountability for process performance

To promote a process culture, we recommend that business processes be documented and maintained by business units using the Enfocus Requirement Suite.. The processes will be available to all stakeholders through the stakeholder portal.


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“To Be” Process Design Considerations

• Change the process in ways that provide value that the customer wants – for example more speed and efficiency, higher quality, more accuracy, less cost, or single point of contact between customers and your company.

• If input to the process naturally form a cluster, create a separate process for each cluster

• Address the biggest time waster in the process first such as points where there is extensive waiting or rework.

• Consider creating several process that can operate in parallel for steps that can be done independently and not have to be done in a sequence.

• Look for opportunities to remove unnecessary reviews of completed work• Decrease the number of steps in the process; identify opportunities to simplify steps

that are unnecessarily complex.• Involve as few people as possible in performing the process; reduce the number of

hand-offs.• Eliminate signoffs or approvals by individuals on activities they don’t know much about.


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Define the Process Requirements

• Prepare “To Be” Process Model• Define Process Requirements

– Increase customer value by …..– Improve quality by ….– Decrease cost by …..– Reduce cycle time by …..– Reduce rework by ….– Improve efficiency….

• Review “To Be” Process Model and Process Requirements with Stakeholders• Prepare functional and supplemental requirements for the “To Be” process

model• Prepare training and organizational change requirements for

implementation of the new “To Be” process model

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Process Benchmarking

• Many organizations do not spend enough time optimizing a business process before automating it; they simply automate what was done manually or what the previous system did. We call this “paving the cow path.”

• Benchmarking is a great technique that organizations can use to determine where a business process is performing well and other areas where is not performing not so well by comparing their data against their peers.

• Results from a benchmark study helps an organization decide where to focus their limited resources for long-term sustainable improvement. Combined with best practices information, benchmarking can help organizations quickly identify and solve common business process performance problems.

• Enterprise subscriptions receive one free benchmark per year. Additional benchmarks are available for a fee.

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Define the Process Requirements

• Inputs• Outputs• Workflow• Ownership• Performance Metrics• Business Rules


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Implementing the New Process

• Prepare requirement bundle for the new process requirements• Define appropriate lifecycle events for the new process. Lifecycle events might include:

– Validate– Communicate – Distribute process requirement bundle to wide audience to get the

message about the upcoming implementation of the new process– Educate and Familiarize – Build a more detailed understanding of how the new process

works through role-play, practice, and simulation. Consider making a video.– Pilot – If you suspect that some difficulties in the new process need to be worked out, pilot

it.– Implement – Put the new process into production by declaring the start of new operations.– Break from the Past – Remove the artifacts of the old process such as old forms paper

stocks, equipment and so forth to reduce any temptation to shift back into previous habits.– Optimize Measure process performance according metrics that were chosen. Identify

problems and take needed action. Update performance metrics and targets as necessary• Trace the requirements

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APQC Process Classification Framework

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Process Classification Frameworks

• There are a number of process reference models available, including: Accenture, APQC’s Process Classification Framework (PCF), (SAP), Supply Chain Council, the Telecommunications Management Forum, and the Value Chain Group.

• The Process Classification Framework (PCF) developed by APQC in 1992, is a widely used business tool. This open source framework is commonly referenced in business books, incorporated into numerous consulting methodologies for process improvement and re-engineering,

• In business process design, frameworks and reference models help support process analysis, design, and modeling activities. Starting with a process framework or reference model can significantly accelerate these activities, providing analysis professionals with a sturdy foundation on which to build.

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Process Classification Frameworks

A framework helps organizations in three key areas: • benchmarking, • content management, and • business process definition.

The cost of not using a process framework is the additional time it takes the process design team to develop their own process model and obtain process consensus from the project stakeholders.

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APQC Business Process Classification

• Enfocus Solutions Inc. organizes most of its content using APQC Process Classification Framework.

• This open source framework is available on our site as well as APQC

• PCF has been translated into many languages, including Japanese, Chinese, Spanish, Polish, and Portuguese.

• Industry specific versions of the framework are also available.

• The framework is organized into the 12 process areas as shown in the diagram on the left.


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APQC Process Classification Framework (PCF)

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Business Process Modeling


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Business Process Modeling

• Set of activities involved in creating representations of an existing (as-is) or proposed (to-be) business process

• Provides an end-to-end perspective of an organizations operating, supporting and management processes

• Modeling is a means to an end and not an end in itself

You model to get results and reach conclusions

What is a Business Process Model?

• Documentation of a business process using a combination of text and graphical notation.

• Depicts the Process that People employ to provide value to their Customer with a strong emphasis on how the work is done.

• Defines a process as a specific ordering of work activities across time and place with a beginning, an end, and clearly defined inputs and outputs.

• A component of the overall Business Architecture that serves as a reference for Business Analysis activities.

Why Model a Business Process?

• BABOK: “Describe the functions associated with the business activities... and the inputs, controls, outputs, and mechanisms/resources used of those activities.” (v1.4 Sec 2.2.20.1)

• Understand how labor and resources are used to create products or services for a company’s Customers. Identify areas that could be improved, made more efficient and re-engineered

• Create an understanding of where Systems/Applications can or do automate or streamline human or mechanized processes – capture requirements

• Integrate activities between departments/companies – especially necessary after a merger of different groups of People producing similar or dependent products/services

• Assist in implementation and acceptance of Six Sigma, ISO, CMM or other standards

• What other uses can you see? The list is endless

Common Methods of Modeling

• BPML – Business Process Modelling Language– An Extensible Mark-up Language (XM)-based meta-language developed by the

Business Process Management Initiative (BPMI) as a means of modelling business processes

• BPEL – Business Process Execution Language– An XML-based language designed to enable task-sharing for a distributed computing

or grid computing environment - even across multiple organizations - using a combination of Web services.

• BPMN – Business Process Modelling Notation– A standard graphical notation used to facilitate the understanding of business

transactions between organizations. • UML – Unified Modelling Language

– A notation that allows the modeller to specify, visualize, and construct the artefacts of software systems, as well as business models.

USE WHAT WORKS FOR YOUR PROJECT ENVIRONMENT!Do what you know. Learn to do more. But don’t fake it.


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Commonly Used Process Standards and Notations

• Business Process Modeling Notation (BPMN)• Flow Charting• Swim Lanes• Event Process Chain (EPC)• Value Chain• Unified Modeling Language (UML)• IDEF-0• LOVEM-E• SIPOC• Systems Dynamics• Value Stream Mapping

Tailor Your Model to your Project & Self

• BPML, BPEL, etc. are well and good if:– You are trained and comfortable with their use– Your target audience (Business and Tech Teams) understand

and are comfortable with their use

• Beware! Most organizations are not properly equipped or trained to produce documentation with these standards!– Valid alternatives include using Visio, PowerPoint, Omni

Graffle or other tools that can represent activities graphically or with text!


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Diagrams, Maps, and Models

• Diagrams– Process diagram often depicts simple notation of the basic workflow of a process– Depicts the major elements of a process flow, but omits the minor details which are

not necessary for understanding the overall flow of work• Maps

– More precision than a diagram– More detail about process and important relationships to other elements such as

performers (actors), events, results– Provide a comprehensive view of all of the major components of the process

• Models– Represents the performance of what is being modeled– Needs greater precision, data about the process and about the factors that affect its

performance– Often done using tools that provide simulation and reporting capability to– analyze and understand the process

Documents

Business process analysis