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Business Process Management (BPM)

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Business Process Management (BPM) Introduction to BPM MODULE_1 Content ◦ Introduction Background, history, concepts of BPM. BPM as a management Discipline versus a methodology. Possible benefits while practicing BPM. Organizational performance. BPM Process, BPM life cycle- Process identification, Process architecture. ◦ Business process management is a discipline in operations management in which people use Introduction to various methods to discover, model, analyze, measure, improve, optimize, and automate BPM business processes. Any combination of methods used to manage a company's business processes is BPM. Background of BPM ◦ Business Process Management (BPM) is the discipline that combines knowledge from information technology and knowledge from management sciences and applies this to operational business processes. ◦ It has received considerable attention in recent years due to its potential for significantly increasing productivity and saving costs. Moreover, today there is an abundance of BPM systems. These systems are generic software systems that are driven by explicit process designs to enact and manage operational business processes ◦ BPM has a broader scope from process automation and process analysis to operations management and the organization of work. On the one hand, BPM aims to improve operational business processes, possibly without the use of new technologies, by modeling a business process and analyzing it using simulation, management may get ideas on how to reduce costs while improving service levels. On the otherhand,BPM is often associated with software to manage, control, and support operational processes. Background of BPM ◦ BPM systems provide more flexibility or support specific processes ◦ BPM techniques such as process mining can be used to discover and analyse emerging processes that are supported by systems that are not even “aware” of the processes they are used in. ◦ The notion of a process model is foundational for BPM. A process model aims to capture the different ways in which a case can be handled., History of BPM History History of BPM ◦ Business Process Management (BPM) has various roots in both computer science and management science. Therefore, it is difficult to pinpoint the starting point of BPM. ◦ industrial revolution, productivity has been increasing because of technical innovations, improvements in the organization of work, and the use of information technology. Adam Smith (1723-1790) showed the advantages of the division of labor. Frederick Taylor(1856-1915) introduced the initial principles of scientific management. Henry Ford (1863-1947) introduced the production line for the mass production of “black T-Fords”. It is easy to see that these ideas are used in today’s BPM systems. ◦ Around 1950 computers and digital communication infrastructures started to influence business processes. This resulted in dramatic changes in the organization of work and enabled new ways of doing business. Today, innovations in computing and communication are still the main drivers behind change in almost all business processes. History of BPM ◦ Process model assist in managing complexity by providing insight andbydocumentingprocedures.Informationsystemsneedtobeconfiguredanddriven by precise instructions. Cross-organizational processes can only function properly if there is common agreement on the required interactions. process models are widely used in todays organizations. In the last century many process modeling techniques have been proposed. In fact, the well-known Turing machine described by Alan Turing (1912-1954) can be viewed as a process model. History of BPM ◦ The road to business process management (BPM) has been a difficult one that has gained from the successes and failures of various other attempts at achieving process-based organizational efficiency. ◦ In the 1980s there was a considerable focus on Total Quality Management (TQM). This was followed in the early 1990s by Business Process Reengineering as promoted by Hammer and Champy (1990). BPR had a chequered history, with some excellent successes as well as failures. ◦ Following BPR in the mid- and late 1990s, Enterprise Resource Planning (ERP) systems gained organizational focus and became the next big thing. These were supposed to deliver improved ways for organizations to operate, and were sold by many vendors as the 'solution to all your problems'. The ERP systems certainly did not solve an organization's process issues, nor make the processes as efficient and effective as they could have been. Towards the end of the 1990s and in the early 2000s, many Customer Relation Management (CRM) systems were rolled out with extensive focus on the customer view and customer experience. While this provided focus on the front office, it did not improve the back-office processes. More recently, Six Sigma has started to come into its own. History of BPM ◦ According to Hammer (1993), 'Coming up with the ideas is the easy part, but getting things done is the tough part. The place where these reforms die is down in the trenches' and who 'owns' the trenches? You and I and all the other people. Change imposed on the 'trench people' will not succeed without being part of the evolutionary or revolutionary process: Concepts of BPM ◦ Business Process is essentially a standardized way to convert a set of inputs into a desired output that a customer would find valuable, business analysis is the core aspect of process management. ◦ Key Factors Enabling BPM Success ◦ There are three major components that decide the success or failure of a Business Process Management (BPM) Implementation. ◦ Process ◦ People ◦ Technology Concepts of BPM ◦ Process ◦ All business processes need to be ‘fit for purpose’ and actually need to satisfy the demands of the clients/stakeholders involved. ◦ People ◦ Individuals play a key role in the success of BPM implementation, they are the ones who provide inputs ◦ Technology ◦ Technology also plays a significant role in the success of any BPM implementation Concepts of BPM ◦ Business Process Management Business Process Management (BPM) is a systematic approach that is used to make an organization's workflow effective, efficient and responsive to changing environment. ◦ Purpose of BPM To reduce human error and avoid miscommunication. Link operational processes to corporate strategies. Measure performance indicators from processes for evaluation of business success ◦ Business Process Model A Business Process Model (BPMd) typically consists of workflow diagrams, descriptions, inputs and outputs, KPIs and data that provide both overview and detailed information about an organization’s business processes. ◦ Utility of Business Process Model It helps to measure requirements of a process and eliminates the risk of losing value through inefficient or inappropriate activities. ◦ BPM Software Software that allows users to create BPM diagrams and integrate process content with critical business entities (departments, resources, etc.) ◦ . Concepts of BPM ◦ Business Process Re-engineering (BPR) The realignment of business process strategies through the use of an analytic tool and an intense consultation process. BPR is an off-shoot of BPM implementation that involves a great deal of risk due to change management. ◦ Business Process Design (BPD) BPD is the systematic working by which an organization understands, defines and documents the business activities that enable it to function efficiently, effectively and economically. ◦ Business Process Model (BPMd) Illustrated description of business processes, usually created with flow diagrams. The model contains the relationship between activities, processes, sub-processes and information, as well as roles, the organization and resources. It is also termed as Business Process Mapping Definition BPM ◦ Business process management (BPM) is a systematic approach to making an organization's workflow more effective, more efficient and more capable of adapting to an ever-changing environment. A business process is an activity or set of activities that will accomplish a specific organizational goal. ◦ The term business process management covers how we study, identify, change, and monitor business processes to ensure they run smoothly and can be improved over time. ◦ Business process management (BPM) is a discipline that uses various methods to discover, model, analyze, measure, improve, and optimize business processes. A business process coordinates the behavior of people, systems, information, and things to produce business outcomes in support of a business strategy. Processes can be structured and repeatable or unstructured and variable. BPM is a continual process of 6 steps. BPM is a continual process of 6 steps 1. Design- Existing processes and to-be processes are discussed amongst stakeholders and documented. The design includes process flows, roles, notifications and escalations, service level agreements, workflow task user interfaces and task management mechanisms. 2. Modelling -Modelling takes the design and considers how the process might operate in different scenarios. This what-if analysis considers real world business conditions. 3. Implementation-Developers implement the business models. This involves: - creating process flows - creating user interfaces for workflow steps - integration with enterprise data sources and systems - setting up users and roles and associating with process steps. BPM is a ◦ 4. Execution ◦ The new business processes are continual operationalized. This may involve: process of 6 - staff training - organizational
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