BPM aims to continually improve and analyse existing business activities
BPM is about improving efficiency, flexibility and effectivenss to respond to change
Business process
A set of related business activities that when performed result in an outcome of value to the customers and organisation
Components of BP
Management Process
Authority, people and policies responsible for controlling operations
Operation process
People and processes which objective is to perform operations
Information process
Collect and store data to provide useful information to users
External parties
The first three components help to conduct business with external parties
Types of business processes
Individual Processes
Carried out by individuals
Vertical/functional processes
Within a business functional unit
Horizontal/Cross functional processes
Cut across business functional units and sometimes companies
BPM, BP improvement and re-egineering
Enterprise level change methodologies
Ensure all BPs making up a value chain are well integrated
Methodologies
Balanced Scorecards
Used to align corporate goals and strategies
Management tracks four different perspectives
Financial
Customer
Process
Learning and growth
Objectives will be determined in terms of each perspective
Managers assigned a scorecard with objectives in each perspective
Balanced scorecard strategy map (refer to figure)
Strategy map divides corporate strategy into 5 themes
Increase return on capital
Improve operating quality and efficiency
Grow high value customer relationshipos
Accelerate product innovation
create high performance culture
Enterprise BP trends methodology
Covers enterprise and process levels
Concerned with creating tools that an enterprise can use to organise and manage BP
Phases
Understand enterprise context
Nota:
Identify strategic goals and value chain processes
Model processes
Define BP architecture
Nota:
Creating a BP architecture for a value chain
Define process governance
Nota:
Develop plan to manage BPs
Create a BPM group to help management monitor processes
Day-to-day management of BPs
Nota:
Ongoing maintenance and use of tools created
BP process level change methodologies
BPR
Redesigning BP to gain improvements such as cost reductions, speed and service
Obliterate rather than automate
Complete redesign of business processes to achieve improvements
Use of IT in redesigning and automating processes
Designing entire process from scratch using latest technology
Now replaced by BP redesign and BP improvement
Six Sigma
Aims to reduce process variation as much as possibler
BPI project organised around a five phase approach (DMAIC)
Define
Nota:
Define customer requirements
Charter detailing what the team must achieve and the process to be improved
Measure
Nota:
Team defines measures to determine how well the requirements are met by each process
Measures such as input from suppliers, costs and customer satisfaction
Analyse
Nota:
Analyse existing processes using methods such as breaking down processes down into activities to consider the value added by each activity
Improve
Nota:
Coming up with ways to improve the process
Control
Nota:
Plan to maintain gains and continually improving
Improving consistency and quality of process output
Lean
Improving flow of activities and reducing cost of a process by removing waste
Uses proven tools and techniques
Concerned with process redesign and improvement (enterprise and BP level)
Enterprise methodology
Flow Kaizen
BP methodology
Process Kaizen
Process level BP Trends Methodology
Process redesign methodology
Five phases
Understand the project
Nota:
Develop a project plan
Analyse business processes
Nota:
analyse and document process
Redesign BP
Nota:
produce a new improved process
Implement redesigned process
Nota:
acquire resources and space to implement process
Roll out redesigned process
Implementation level change methodologies
Process modelling software
Uses software to create models which represent business processes and activities
DB for storing BP elements and relationships
Modelling essential for carrying out BP improvement
Allow users to pass info between about a process to other tools
Business Process Management Suites
Use to document, specify and modify BPs
Automate modelling, monitoring and redesign of complex processes to help achieve improvement
Designed to model
Process progress and performance
Historical data
Organisational roles
Business rules
Areas of functionality
BAM
Inform business of important events to its business in the IT layer
ERP driven redesign
Starts with solution of best breed processes
Existing processes then modified to suit the best practices suggested
Help with process management
Major BP approaches
3 major BP approaches
Information Technology tradition
Software focused methodologies
Either top down or bottom up
Automate processes with applications and computers
Software applications for BP management
ERP
BP modelling tools
Also fall under process re-engineering as processes are automated
Business management tradition
Aligning strategy, organising and managing employee to achieve goals
Popular when company want to undertake major changes e.g.: entering a market
A performace framework identifies 9 different things that an organisation should consider when changing processes
Nota:
The performance framework integrates 3 levels of concerns with three perspectives
Describes what a mature organisation must muster
Improving overall organisation performance
Top down approach
quality control tradition
Focuses on BP quality
Nota:
Uses six sigma and lean methodologies for process improvement
Making incremental improvements to business activity
Bottom down approach
Popular when economy is weak and trying to cut expenditure
Capability Maturity Model Integration
Evaluates whether an organisation's processes will enable it to deliver on time and within budget
Process improvement
Classify an organisation according to 5 levels
Nota:
initial
repeatable
defined
managed
optmising
Provide guidelines to address product lifecycle
Tendency is for all to merge into one BPM
approach
Main features/roles and processes of BPM systems
Main features
Main roles
Main processes
Technologies and applications supporting BPM
SOA and BPM
SOA can provide a framework for designing BPs, consolidating redundant processes and responding to change
SOA can result in a business that is more efficient and flexible
BPM as a service
BPM on the cloud and includes IaaS, PaaS and SaaS)
IaaS
See picture above
PaaS
Key layer for realisation of BPM
SaaS
layer closest to the user
Divided into application layer and software
Through the 3 layered model BPM software can collect, optimise and develop info of BP
Drivers and advantages
Drivers of BPM
Transparency
Visibility into the organisations operations (how data produced and consumed along BP)
Real time visibility and analysis of events ensures up to date information for decision making
Quality-efficiency
Quality looks at conformance to business quality standards and specifications
Nota:
Quality can be customer satisfaction and number of defects
BPM platforms can help reduce costs and streamline processes(automation & remove redundancies)
Improve productivity and op efficiiency (automation and removing bottlenecks)
Agility-Compliance
Helps organisations adapt to rapidly changing business environment
Compliance with process standards, corporate governance and regulatory requirements
Integration
Manage BP to minimise impact of process changes (employee resistance)
Advantages of BPM
Process automation
Competitive advantage
Measurement mechanisms
Disadvantages and challenges
Acquire required process management competancies
Nota:
Business strategy
People and technology
Governance
Challenges relate to the competancies
Management Issues
Create and maintain BP architecture
BP architecture enables organisations to achieve business agility
The more up to date the architecture the more valuable the tool
May require db or repository for maintaining info
Identifying and prioritising scope of business change projects
Maintaining and managing process performance
Tracking, reporting and using measures to evaluate performance
Support process manager
Provide training to help with managing processes
Nota:
Six sigma training
Managing compliance
Key Vendors
IBM
Nota:
Wide range of BPM solutions
IBM has extensive skills and expertise
Pegasystems
Nota:
Deliver a solution to address specific needs
Needs to be customised to meet customer needs