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Manfredi Bruccoleri # 1 Business Process Management Theory Module T2 Module T2 BUSINESS PROCESS MODELING and BPM

Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

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Page 1: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 1

Business Process ManagementTheory Module T2

Module T2BUSINESS PROCESS MODELING and BPM

Page 2: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 2

Business Process ManagementTheory Module T2

Agenda

– What is business process modelling?– BP modeling levels– BP modeling and Business Process Management– BP modeling and Knowledge Management– BP modeling and Business Process Reengineering– BP modeling and Information System Modelling

Page 3: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 3

Business Process ManagementTheory Module T2

What is this?

Manfredi Bruccoleri

Business process managementIntroduction

Page 4: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 4

Business Process ManagementTheory Module T2

s = Cen

What is this?

Manfredi Bruccoleri

Business process managementIntroduction

! = 12 ! ! !"

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Page 5: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 5

Business Process ManagementTheory Module T2

What is this?

Page 6: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 6

Business Process ManagementTheory Module T2

What is this?

Page 7: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 7

Business Process ManagementTheory Module T2

What is Business Process Modeling ?

Page 8: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 8

Business Process ManagementTheory Module T2

Business Process Modelling (BPM) is the activity of modelling the business processes by representing them graphically through methods, formalisms and graphical notations that are universally recognized standards.

What is Business Process Modeling ?

Page 9: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 9

Business Process ManagementTheory Module T2

Model

BPM is used to build models of a given business process. The model in turn is used primarily to 1. learn and/or divulgate knowledge about the process 2. make decisions and/or improve or optimize the process,3. develop software systems to support the process.

BP modeling’s main goals

Page 10: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 10

Business Process ManagementTheory Module T2

Model, views, graphical notations

A Model is an abstraction that describes a system, a process or a subprocess;A View represents one or more aspects of a Model;A Notation is a group of graphic and textual rules used to draw a View.

Airplane: System

Scale Model: Model

Flight Simulator: Model

Engine System: View Electrical System: View

Airplane scale-schemes: View

Page 11: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 11

Business Process ManagementTheory Module T2

Levels of BP modeling

Methodologies

Techniques

Tools

Area of interest

Frameworks

• KBSI Prosim• RATIONAL Rose• MICROSOFT Visio• Arena• …

• Enterprise modeling• Information system modeling• Simulation modeling

• GRAI• Aris• RUP• CIMOSA• PERA• …

There are several abstraction levels to be considered when building the model of a business process. These levels of modelling can be classified according to the hierarchical structure which is shown in figure.

• Data-focused• Object-oriented• Function-focused• …

• IDEF0• IDEF1x• IDEF3• BPMN• SIMAN• UML Diagrams

Page 12: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 12

Business Process ManagementTheory Module T2

AREA OF INTEREST: the first level of BPM concerns three main areas of application for which the model might be built (BPM goals), in particular: "Enterprise Modelling" if we want to build a model of corporate realities in order to better understand or divulgate knowledge, "Information Modelling System" if we want to model business processes in order to develop an information system that supports them, “Simulation Modelling" if you want to build a simulation model of business processes in order to analyse them.

Area of interest

Frameworks

FRAMEWORKS: the second level involves some general architectures and methodologies to guide modellers and developers in building the business model. Among the best known, CIMOSA (Open System Architecture for CIM) is used to support building business models, GRAI(Graph with Results and Activities Interrelated) is used to build business models, specifically production systems, PERA (Purdue Enterprise Reference Architecture) is used to develop models of the company throughout its life cycle and includes the human factor, RUP (Rational Unified Process) is used to support information system modelling.

Levels of BP modeling

Page 13: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 13

Business Process ManagementTheory Module T2

Methodologies

Techniques

Tools

METHODOLOGIES: methodologies represent the philosophy to which modelling is inspired. These philosophies are commonly called paradigms and the best known is theOO paradigm (Object-Oriented) where the model built by focusing on on classes of objects: Other paradigms are the data-focused, information-focused, process focused, function-focused, etc…TECHNIQUES: the modelling methodologies are supported by a number of techniques that represent the real heart of BP Modeling. The techniques are graphical and textual notations that are used to build the model. Each technique is specific and suitable to represent the business process through a model that emphasizes a particular aspect or point of view. The techniques IDEF (Integrated Definition for Function Modelling Enterprise) are the most popular in the enterprise modelling, the UML (Unified Modelling Language) as part of the information system modelling, the SIMAN and ARENA in the simulation modelling.TOOLS: the modeller (business analyst) can be supported by software tools that help the him to develop a model according to a given technique. In practice, although a model can also be created by using pencil and paper, there exist appropriate software tools such as Microsoft VISIO, ProSim, Rational Rose, Bizagi, ARENA, etc… that can be used.

Levels of BP modeling

Page 14: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 14

Business Process ManagementTheory Module T2

Applications

Page 15: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 15

Business Process ManagementTheory Module T2

BP modeling and other disciplines

The BP modeling is the main tool for managing business processes and represents the core activity of Business Process Management.

It is also crucial in Knowledge Management (KM) and in particular for capturing, externalization, and the structuring of knowledge on business processes.

It is used in large strategic projects of Business Process Reengineering (BPR), to model the current scenarios (AS-IS) and future ones (TO-BE).

It is fundamental for the successful development and implementation of Information Systems (IS) of the company, in particular helps to overcome the gap between developers of the IS and its users (stakeholders, i.e. managers, engineers, or individuals who participate or otherwise have an interest in the success of the business process).

Page 16: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 16

Business Process ManagementTheory Module T2

Remember evolution theories?

ProcessDesign

Theory of transformationLAMARCK (1744-1829)

Theory of natural selectionDARWIN (1809-1882)

Page 17: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 17

Business Process ManagementTheory Module T2

BP modeling and BPMThe competitive arena in which companies operate is characterized by market globalization, by customer-orientation, by mass customization, by the digital-economy and the opportunities of ICT and business networks.

Market•Globalization•Focus on customers

•High volatility•Fast time response

•High reliability

•Focus on quality

•…

Product•Customized (high variety, high volumes, lowcosts)

•High complexity•Reduct life-cycles•…

External Environment•High cooperation with companies•High information sharing

•Low cost labour•Knowledge-based•…

Technologies

•ICT•Cloud computing

•ERP•Mobile/Social media

Page 18: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 18

Business Process ManagementTheory Module T2

Companies today must react faster and be more flexible than their competitors to new market conditions.

Business Process Management is thought to continually update the business processes to meet new needs and market demands.

It includes the processes identification and modelling, the analysis and optimization, implementation of information systems for automating them, monitoring and measuring performance indicators. Therefore it can be considered a closed-loop in which three stages are performed in a cyclic manner.

Business Process Management

ProcessDesign

ProcessAnalysis

Process

Implementation

Regardless of whether the firm is more or less organized and managed by processes, the intra and inter-company business processes are still the nervous system of company's business. The management, maintenance and optimization of such processes generates company's competitiveness and ensure its survival.

Page 19: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 19

Business Process ManagementTheory Module T2

The modelling is used to answer questions like “who does what and in which order”, “which services are provided and what system software is used”.

The recording and consolidation of knowledge of existing processes, which is present only in the minds of the people running them, make these processes transparent and ready to be analyzed and possibly improved.

The design and modelling of the organizational structure and business processes are essential to make manageable the complexity of the company.

Business Process Design

ProcessDesign

ProcessAnalysis

Process

Implementation

Business Process Design is the phase of the business process life-cycle whose main task is to provide transparency and clarity of the current business processes.To perform these tasks, it is essential a methodological approach and a standardized description language for modelling business processes.

Page 20: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 20

Business Process ManagementTheory Module T2

ProcessDesign

ProcessAnalysis

Process

Implementation

Business Process Design

Modelling methodologies and graphical standardized languages for easy formalization

and engineering of business processes

Page 21: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 21

Business Process ManagementTheory Module T2

Business Process Analysis

ProcessDesign

ProcessAnalysis

Process

Implementation

Business Process Analysis is the phase of the business process life-cycle whose main task is to re-align business processes to meet market requirements. During the analysis phase we identify the strengths and weaknesses of organizational, structural and technical processes and investigate potential business process improvements.

Here we calculate the use of human resources, identify those that require high waiting times and therefore the bottleneck.

We analyze the costs of processes, due to resources utilisation levels associated with the process.

We compare existing processes with best-practices, or alternative processes that minimize the cost and time of processes.

Page 22: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 22

Business Process ManagementTheory Module T2

ProcessDesign

ProcessAnalysis

Process

Implementation

Business Process Analysis

Modelling methodologies for simulation and “what-if” analysis help to achieve the desired

performance indicators

Page 23: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 23

Business Process ManagementTheory Module T2

Business Process Implementation

ProcessDesign

ProcessAnalysis

Process

Implementation

For example, the successfully development or implementation of information system, the focus must remain on the business processes that system should support. This system must be flexible enough to respond to rapid market changes and to the business processes it supports.

A critical aspect of IT projects is communication between business units and software developers, due to different methodologies and tools used and the different ways of working and thinking.

Business Process Implementation is the phase of the business process life-cycle whose main task is transferring and changing business processes within the company's. Cultural (aversion to change) and technological (software system integration) barriers have to be considered..

Page 24: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 24

Business Process ManagementTheory Module T2

ProcessDesign

ProcessAnalysis

Process

Implementation

Business Process Implementation

Modelling methodologies and standardized graphical languages for design and

development of software systems allow easy translation of business process

information into information systems features

Page 25: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 25

Business Process ManagementTheory Module T2

ProcessDesign

Process

Implementation

Business Process Modeling and BPM

Modeling methodologies and standardized graphical languages

allow easy formalization and engineering of business processes

Modeling methodologies for “what-if” analysis and simulation help to

determine the desired performance indicators

Design methodologies and standardized graphical languages for developing software systems allow easy translation of business processes within the

information systems

modeling

ProcessAnalysis

Page 26: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 26

Business Process ManagementTheory Module T2

Knowledge ManagementProducts traditionally represent the physical goods that link the company with its customers. Similarly, raw materials are the link between the company and its suppliers. Companies tend to integrate all business activities from suppliers to final consumers covering all phases of product’s life-cycle.

Information and Knowledge today are strategic resources alongside more traditional ones such as raw materials, equipments, energy (“Information is the new raw material…”, Webber 1993). The flow of information and knowledge ensures the integration of all company departments and between all actors in the supply chain. Knowledge is now the real capital of a company, that contributes to its competitiveness and long-term growth.

Knowledge Management (KM) becomes a very important management activity and has as main objective to make available and “re-usable” corporate knowledge in order to enrich the company's intellectual capital and make the knowledge a real asset.

Page 27: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 27

Business Process ManagementTheory Module T2

Knowledge ManagementThe interest in KM, in most cases, is generated in situations where an organization understands that it does not know where is (where relies) the knowledge it possesses...

… or when the distribution of this knowledge inside the organization itself is too unbalanced due to the coexistence of various factors that prevent circulation.

Page 28: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 28

Business Process ManagementTheory Module T2

Knowledge ManagementThe asymmetric distribution of knowledge can occur between two contiguousareas, such as marketing and sales. For example, the first has a thorough knowledgeof a group of customers that doesn’t share with the second, making the work of thethe latter more difficult.

The importance of the flow and sharing of knowledge is necessary for a significantcompetitive return to:- avoid reinventing solutions already designed (Capitalisation of solutions);- find the best solution (Capitalisation of experiences in best practices);- do not make the same mistakes (Capitalization of errors);- reduce the effects caused by the loss of skills that occur each time an employee

leaves an organization (Capitalization of skills);- appropriately value the feedback that come from:

- internal organization (Capitalisation of internal reports of improvementby employees);

- outside the organization;- customers (Capitalisation of complaints and/or suggestions for

improvement);- from suppliers.

Page 29: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 29

Business Process ManagementTheory Module T2

Knowledge Management

Page 30: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 30

Business Process ManagementTheory Module T2

DataIn an organizational context data represent the structured detection of a transaction. For example, when a customer makes purchases in a shopping centre, transaction data are: date of purchase, value of expenditures for each item, the total value of expenditure, method of payment. These data examined by themselves, do not tell us why the customer has chosen that mall, the possibility that he might return, the quality of service, the kindness of the clerks or the presentation of products. Hence, data describe only a portion of events, not providing any opinion or interpretation.

The elements of Knowledge Management

Page 31: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 31

Business Process ManagementTheory Module T2

InformationThe information can be defined as a set of organized data related to one or more events. In particular, following the setting of Davenport and other researchers of KM, we may describe as information, any message in the form of structured document or in any other form audible or visible, which is transmitted from a sender to a receiver. Unlike data, information contain a precise meaning, because they are organized according to a certain scope.

The elements of Knowledge Management

Page 32: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 32

Business Process ManagementTheory Module T2

KnowledgeKnowledge means a collection of information related to each other that can be acquired on a logical level and of experience. Knowledge, then, is a fluid combination of experience, values, contextual information and specialist competence that provides a framework for the evaluation and assimilation of new experience and new information. Knowledge in organizations is linked not only to documents, but also to the procedures and to organizational processes, practices and standards. Knowledge comes from information produced by the data, and unlike the latter, knowledge implies a judgment.

The elements of Knowledge Management

Page 33: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 33

Business Process ManagementTheory Module T2

Knowledge can be divided into:

Explicit knowledge: it includes all that is represented in a documentary form, expressed in formal language, in phrases that observe the rules of grammar, math expressions, technical definitions, manuals. Moreover, if the company has formalized its processes in a manner that enables the sharing, it is important that such information is made available, properly authorized.

Implicit or tacit knowledge: it is described as all other forms of knowledge such as the insights, skills, abilities, experience, or whatever really builds up in people’s head when they become experienced in solving certain problems. Implicit knowledge is built from personal knowledge, rooted in the experience of every man, and also includes a series of informal elements. Of course, that knowledge is the most difficult to represent and if it is not translated in some form, it is the one that can be lost more easily.

Knowledge Management

Page 34: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 34

Business Process ManagementTheory Module T2

FormalizedKnowledge

Trainingknowledge or

corporate culture

Interpretationskills

…influences...

knowledge of person B…

EXTERNALIZATION

Informal ExternalPresentation

INTERNALISATION

The experience increases…

…knowledge of person A

…reality. (business processes)

Knowledge life-cycle

Model reading skills

FormalizedKnowledge

Formal ExternalPresentation

Structured Unstructured

Modelling skills

Trainingknowledge or

corporate culture

Formalizationskills

Tacitknowledge

Formalizable

Notformalizable

TacitKnowledgeNot

formalizableFormalizable

Page 35: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 35

Business Process ManagementTheory Module T2

BP Modeling and Knowledge Mng

A formal descriptionof unstructured

business process

Dissemination of knowledge on

business processwithin the company

Business Process

BP ModelingFormal and structured

description of the business process

Page 36: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 36

Business Process ManagementTheory Module T2

Knowledge Management Systems

Page 37: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 37

Business Process ManagementTheory Module T2

Knowledge Management Systems

Page 38: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 38

Business Process ManagementTheory Module T2

Knowledge management is thus associated with the transformation process of “knowledge into value”.

The activities of knowledge creation and management are critical for the generation and maintenance of competences. The processes of a company are just the result of these skills.

One of the main aspects of KM is to transform the tacit knowledge to explicit and formal representations so to distribute, disseminate and share knowledge throughout the organization internally and externally throughout the supply chain.

BPM is the tool that allows knowledge management implementation.

BP Mdl & Knw Mng CONCLUSION

Page 39: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 39

Business Process ManagementTheory Module T2

Business Process ReengineeringProcess orientation (and/or business process management) can be carried out in different ways and at different levels of intensity from simple rationalization of processes, to their partial or total re-design or re-engineering (Business Process Re-engineering, BPR).

BEFORE: As-Is AFTER: To-Be

BPR

Page 40: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 40

Business Process ManagementTheory Module T2

“…is a fundamental rethink and radical redesign of business processes designed to make dramatic improvements in critical performance parameters such as cost, quality, service and speed”.

Hammer, Champy, “Ripensare l’azienda”, Sperling & Kupfer, 1995

The main feature is to look at the processes as if they were to rethink from scratch, without being influenced by how they play now, but imagining alternative solutions, even radicals, that are far from the current situation.

The characteristics of BPR are:–Radical approach to change–Urge to change–Direct link to the business strategy–Attitude to risk compared to great opportunities– Involvement of large and inter-functional processes–Complex project management for change–High costs and long times

Business Process Reengineering

Page 41: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 41

Business Process ManagementTheory Module T2

BPR does not propose incremental improvements, but an important bump in performance increase. Re-engineering can achieve discontinuousimprovements in order of more than 50-60% of the overall process performance (cost, time, quality).

Improvements of the order of 10% of the performance do not need BPR, they may be obtained through other techniques, such as continuous improvement or quality circles.

Business Process Reengineering

0"

5"

10"

15"

20"

25"

30"

0" 5" 10" 15" 20" 25"

BPR"

BPI"

performance

time

BPIBPR

Page 42: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 42

Business Process ManagementTheory Module T2

The achievement of radical discontinuity in the performance has some consequences:

- To obtain a remarkable increase in performance it is necessary to rethink the old processes and replacing them with completely different processes.

- First, BPR can not be limited to the analysis of the operational flow of processes, but must call into question many organizational aspects that affect the functioning of processes, such as organizational structures (division of responsibilities), skills and abilities of staff, technology and information systems, values and organizational culture;

- Therefore, BPR is a complex and full of risk activity, which has as its prerequisite a strong institutional and political leadership and attention to the problems of change management, which must not be postponed to the end the redesign, but addressed from the outset.

- Tools for intervention: use of information technology integrated with the organizational changes

BPR: discontinuity on performance

Page 43: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 43

Business Process ManagementTheory Module T2

Typical processes that are object of the reengineering projects are:

- the process order cycle management, ranging from customer order upon delivery of products ordered, through order entry in production scheduling, raw material, component and finished product inventory management, the various stages of logistics (procurement of raw materials, internal movement of semi-finished products, finished products delivery to the customer);

- the process new product development, which stems from the design to the tests on the prototype, through the various stages of development, engineering, production and testing;

- the process technical assistance to customers, from the fault message with a request for assistance until final resolution of the problem, through aspects such as creating custom database of knowledge about the characteristics of customer service, availability of technical assistance, their personal equipment connected with the company's database, etc…

BPR: which process?

Page 44: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 44

Business Process ManagementTheory Module T2

However, BPR is not limited to the world of industrial companies. The process re-engineering has also been successful adopted in large service companies, such as:- banks and insurance companies, for example, acting on the processes

of evaluation of financial risks in the acquisition of new customers (loan officers, insurance policies, etc…);

- large commercial and distribution malls, which today exploit information technology innovation (as the bar code) not only to speed up the payment at the cash, but also to update daily and automatic replenishment orders to stores, reducing stocks and costs;

- transportation and utilities companies, for example, are today re-thinking the passenger booking and boarding processes.

BPR: which process?

Page 45: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 45

Business Process ManagementTheory Module T2

It is clear that the highlighted radical redesign is due: - to the organizational redesign (parallels activities rather than sequential,

consolidation of tasks, elimination of unnecessary activities, etc…); - to the introduction of information and communication technologies (ICT)

that makes it possible to overcome the reasons in the past had led to sequence the activities, to separate the tasks, to introduce control activities, etc...

BPR: integrating IT within the organization

Page 46: Module T2 eng - UniPa · 2018. 8. 29. · Theory Module T2 Business Process Management Model BPM is used to build models of a given business process. The model in turn is used primarily

Manfredi Bruccoleri

# 46

Business Process ManagementTheory Module T2

In general, the overall intervention on the process is carried on with technologies that are able to share information that traditionally were owned by a single organizational unit. This organizational transversality is an indispensable aspect of BPR (e.g., concurrent engineering in NPD).

Typical technologies used for process re-engineering are:- systems for shared database management- systems for network integration and telecommunications- decision support systems and expert systems- identification systems and “tracking” of the flow (e.g., bar codes, RFID,

etc…)- cloud computing- business data analytics- artificial intelligence & machine learning- internet of things (IoT)- block-chain

BPR: integrating IT within the organization

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Business Process ManagementTheory Module T2

Tratto da Lazzi: Reingegnerizzazione dei processi, in “Sistemi Informativi per la Pubblica Amministrazione: tecnologie, metodologie, studi di caso", 1999

Reengineering levels

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Business Process ManagementTheory Module T2

The business analyst may use different re-design principles and best practices for improving/re-designing/re-engineering the process.Generally, she/he makes use of practical rules (best practices), that are flexible guides to action, developed through a process of trial and error due to the experience and observation.

Best practices represent a shortcut to find solutions to be applied to new problems which are similar to problems previously addressed by experts. There is no need to build a new answer to every occasion. A best practice prescribes the best way to treat a particular problem that can be fruitfully replicated in other situation or setting.

In business process redesign projects, a best practice is a redesign guideline or principle that actually supports the analyst in improving the business process itself.

They are especially useful when the existing process is considered as starting point of the redesign project instead of projects where the process is designed or reengineered from scratch.

BPR: using Best Practices

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Business Process ManagementTheory Module T2

Typical examples of best practices for redesign:- putting tasks in parallel rather than sequentially- recomposition of fragmented activities (e.g., “case managers” or “sportello unico” office in PA)- categorization and differentiation of streams in processes (e.g., “triage” in emergency)- eliminating activities that do not give value (e.g., reconciliation of data, in the management of

paperwork).- …

BPR: using Best Practices

triage order re-assigment

compositionresequencing

control addition task elimination

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Business Process ManagementTheory Module T2

BPR: using Best PracticesCustomer

• Control relocation• Contact reduction• Integration

Process operation view

• Task elimination• Triage• Task composition• Order-based work• Order-types

Process behaviour view

• Re-sequencing • Parallelism• Knock-out• Exception

Organization structure

• Numerical involvment

• Flexible assignment• Order assignment• Split responsibilities• Case manager• Customer teams• Centralization

Organizationpopulation

• Specialization• Extra resources• Empower

Information

• Buffering• Control addition

Technology

• Task automation• Technology

integration

External environment

• Trusted party• Outsourcing • Interfacing

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Business Process ManagementTheory Module T2

BPR: using Best PracticesCategory Focus Best practice Description

Customer improving contacts with customers

Contact reduction reduce the number of contacts with customers and third parties

Integration consider the integration with a business process of the customer or a supplier

Control relocation move control towards the customer

External environment

the relationship with third parties

Interfacing consider a standardized interface with customers and partners Outsourcing consider outsourcing a business process or parts of it Trusted party instead of determining information oneself, use results of a trusted

party

Information

the information the business process uses, creates, may use or may create

Buffering instead of requesting information from an external source, buffer it by subscribing to updates

Control addition

check the completeness and correctness of incoming materials and check the output before it is send to customers

Organization population

the type and number of resources

Specialization consider to make resources more specialized or generalist Extra resources if capacity is not sufficient, consider increasing the number of

resources Empower give workers most of the decision making authority and reduce

middle management

Organization structure

the allocation of resources

Numerical involvement

minimize the number of departments, groups and persons involved in a business process

Flexible assignments

assign resources in such a way that maximal flexibility is preserved for the near future

Order assignment let workers perform as many steps as possible for single orders Split responsibilities

avoid assignment of task responsibilities to people from different functional units

Case manager appoint one person as responsible for the handling of each type of order, the case manager

Customer teams consider assigning teams out of different departmental workers that will take care of the complete handling of specific sorts of orders

Centralization treat geographically dispersed resources as if they are centralized

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Business Process ManagementTheory Module T2

BPR: using Best Practices

Process behavior view

when the workflow is executed

Parallelism consider whether tasks may be executed in parallel

Knock-out order knock-outs in an increasing order of effort and an decreasing order of termination probability

Re-sequencing move tasks to more appropriate places

Exception design business processes for typical orders and isolate exceptional orders from normal flow

Process operation view

how to implement the workflow

Task elimination eliminate unnecessary tasks from a business process

Triage consider the division of a general task into two or more alternative tasks’ or consider the integration of two or more alternative tasks into one general task

Task composition combine small tasks into composite tasks and divide large tasks into workable smaller tasks

Order-based work consider removing batch-processing and periodic activities from a business process

Order types determine whether tasks are related to the same type of order and, if necessary, distinguish new business processes

Technology

the technology the business process uses or may use

Task automation consider automating tasks

Integral technology

try to elevate physical constraints in a business process by applying new technology

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Business Process ManagementTheory Module T2

BPR: the case of IBM Credit, Inc.

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Business Process ManagementTheory Module T2

During re-engineering, activities of the process in question are recomposedand tasks are incorporated into a single role (the opposite of the concept of specialization and division of labour typical of the assembly lines). The integration of the process reduces operating costs and the complexity of the control.

BPR: the case of IBM Credit, Inc.

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Business Process ManagementTheory Module T2

BPR: the case of IBM Credit, Inc.

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Business Process ManagementTheory Module T2

BPR: the case of IBM Credit, Inc.

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Business Process ManagementTheory Module T2

BPR: the case of Hewlett-Packard

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Business Process ManagementTheory Module T2

New information technologies free companies from the need to submit to a compromise in terms of centralization and decentralization: the communication network allows the company to access to the same information and have access, in real time, to the same data in branch offices and vice versa.

Through this sharing of information, it’s like every part of the decentralized office is part of the head office, and the head office is part of each decentralized office. This means that companies are free to adopt the organizational solution - centralized, decentralized or any combination - that best meets the needs of the market.

Hewlett-Packard has both:- a standard system for purchasing- a database shared between different organizational units

BPR: the case of Hewlett-Packard

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Business Process ManagementTheory Module T2

BPR: the case of Ford Motor Company

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Business Process ManagementTheory Module T2

BPR: the case of Ford Motor Company

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Business Process ManagementTheory Module T2

Tratto da Lazzi: Reingegnerizzazione dei processi, in “Sistemi Informativi per la Pubblica Amministrazione: tecnologie, metodologie, studi di caso", 1999

BPR: the experience of USA Government

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Business Process ManagementTheory Module T2

Description: As-IsTest

ing

Redesign: To-Be

Anal

ysis

The phases of BPR are:- Rethinking of strategy and business

objectives- Description of business processes

(capturing the processes through AS-IS models)

- Analysis of business processes and evaluation of the inadequacy of current key processes

- Redesign of key processes, i.e., re-engineering and transformation of the AS-IS model to the TO-BE from the results of the previous analysis and business objectives

- Development of new key processes- Evaluation of results

To-Be

As-Is

BPR life cycle

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Business Process ManagementTheory Module T2

Any BPR project requires two stages of modelling (description and re-design) process and analysis. Therefore, similarly to Business Process Management life cycle, BPR is closely linked to the BP Modeling which, thus, represents one of its main tools.

Description: As-Is

Test

ing

Redesign: To-Be

Ana

lysi

s

BPR and BP modeling

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Business Process ManagementTheory Module T2

To-Be

As-Is

BP Modeling: From As-Isto the To-Be

BP Modeling, allowing the capturing of processes as they are today (As-Is) and the re-design of how to be in the future (To-Be), is one of the main enablers of improvement of business performance and of achievement of strategic objectives that underpin the process of BPR.

BPR and BP Modeling

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Business Process ManagementTheory Module T2

Information Systems (IS) and Business Processes (BP) are closely related.

The choice to conduct our business in a particular way shouldinfluence the design and structure of the information systemthat supports business processes (Business Process Managementlife-cycle).

On the other hand, progress in ICT can create new business opportunities for organizations and thus influences the design and structure of business processes. To make ICT (Information and Communication Technologies) effective, it is necessary to change the processes by exploiting the opportunities offered by technology.

Thus, it is very important that companies align the design of IS with that of BP. This implies, however, substantial difficulties related to the fact that designers of IS and BP designers have different cultures and skills.

Information System Modeling and BPM

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Business Process ManagementTheory Module T2

The activity of modelling information system (Information System Modelling, ISM) represents a fundamental step in the acquisition (or in-house development) and implementation of the IS itself, representing the proper design phase of information system, software and hardware. Company's information systems might be very different:- Systems for transactional/administration support

- Traditional management systems, revenue cycle and expense cycle, accounting, billing

- Systems for operations management and logistics- CAD, CAPP, CAM, MRP, MRPII …- ERP systems

- Systems for Supply Chain Management- Demand forecasting, e-business, APS, …

- Systems for knowledge management- KMS, Document Management and of workflow, …

- Systems for marketing analysis- Systems for managing human resources- Systems for managing the relationship with customers

- CRM, Data Warehouse, Data Mining ...…

Information System Modeling

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Business Process ManagementTheory Module T2

BP Modeling IS ModelingInvolved department IT departmentConsultants, business analysts Software engineers“Managerial” point of view “Software” point of viewFocus on processes Focus on classes and objects

(object-oriented approach)

Information System and BP Modeling

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Business Process ManagementTheory Module T2

Introduction of ane-commerce system

Information System and BP Modeling

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Business Process ManagementTheory Module T2

ROADMAP for introducing the e-commerce system

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Business Process ManagementTheory Module T2

Technical feasibility and

economic justification for

intervention

Functional, technical and

structural characteristics

Version of the system ready

for acceptance

testing

Releasable version of the

system

RUP is a methodological approach and widely used standard for developing software systems

ISM and Rational Unified Process