Business Management Competency Presentations Process Management

Introduction to Business Process Management


Training Course – Introduction to Business Process Management

It is intended to be a good general and practical introduction to the subject. It covers the following topics:

1. Business Process Management
2. Process Modelling
3. Process Analysis
4. Process Design
5. Process Performance Management
6. Process Transformation
7. Process Management Organisation
8. Enterprise Process Management
9. Business Process Management Technologies
10. Business Process Management and Business Analysis
11. Business Process Management Technology Review


Introduction to Business
Process Management

Alan McSweeney

• To provide an introduction to Business Process

• Based on the Association of Business Process Management
Professionals (ABPMP) Business Process Management
Common Body of Knowledge (CBOK)

July 3, 2010 2

1. Introduction and Context of BPM
2. Business Process Management Overview
3. Process Modelling
4. Process Analysis
5. Process Design
6. Process Performance Management
7. Process Transformation
8. Process Management Organisation
9. Enterprise Process Management
10. Business Process Management Technologies
July 3, 2010 3
Course Schedule

• Day 1 • Day 3
− Morning − Morning
• Introductions • Enterprise Process Management
• Introduction and Context of BPM • Business Process Management
• Business Process Management Technologies
Overview − Afternoon
− Afternoon • Business Process Management and
• Process Modelling Business Analysis
• Process Analysis • Business Process Management
Technology Review and Software
• Day 2 Demonstration
− Morning • Course Review and Feedback
• Process Design
• Process Performance Management
− Afternoon
• Process Transformation
• Process Management Organisation

July 3, 2010 4
Course Handouts

• Printout of handouts
• CD containing
− BPM articles and whitepapers
− Sample BPM software

July 3, 2010 5
Introduction and Context of BPM

July 3, 2010 6
Lessons Learned From Large Systems
80 % More attention on process optimisation
65 % Align systematically to company goals
60 % Pay more attention to understanding the subject area spanned
55 % Implementation of a management information system as part of scope
50 % Outsource project management of the project to a third party
45 % Increase investment in training
35 % Greater employees involvement
35 % Enforce changes more courageously
30 % Identify and capture proof of benefits and saving as part of scope
20 % Avoid big-bang implementations
July 3, 2010 7
Key Business Drivers for BPM

• Save money – Do things better with optimised processes
− Build better new processes faster
− Know what you are doing (right or wrong) through current
process understanding
− Get control of parallel processes by consolidating to core
− Get non-value added work through automation of manual
− Business process outsourcing
• Implement large software systems better
• Stay ahead of compliance
• Move faster through scenario building for agility and policy
July 3, 2010 8
Benefits of Business Process Management
Reduced process costs 10 – 15 %

Increased quality / reduced number of errors 20 – 30 %

Reduced process throughput times 10 – 30 %

Reduced training time / expenses 10 – 30 %

Reduced number of (internal) support requests 15- 30 %

Reduced number of customer complaints 20 – 30 %

Increased forecast accuracy 15 – 30 %

• Real benefits from BPM
• Intangible benefits also: better information quality
July 3, 2010 9
How do Organisations Improve?

• Major changes must start at the top
• Ultimately, everyone must be involved
• Effective change requires a goal and knowledge of the
current process
• Change is continuous
• Change will not be retained without effort and periodic
• Improvement is continuous

July 3, 2010 10
Why Business Process Management?

• Symptoms of Poor Business Process Management and
− 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
− Our 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

July 3, 2010 11
Why Business Process Management and Design – Common

1. Lack of an integrated process for capturing the business
2. Techniques that are used are not consistently applied
3. We cannot/do not differentiate key stakeholders’ views
and different business views
4. We are working without a common language across
business, IT and our other partners/vendors
5. Inadequate root cause level business process analysis
yields inadequate business requirements and rules to
facilitate process optimisation/automation
July 3, 2010 12
Why Business Modelling – The Problems

1. Lack of an integrated process for capturing the business domain

2. Techniques that are used are not consistently applied

3. We cannot/do not differentiate key stakeholders’ views and
different business views

4. We are working without a common language across business, IT
and our other partners/vendors

5. Inadequate root cause level business process analysis yields
inadequate business requirements and rules to facilitate process

July 3, 2010 13
Finding the Right Project

• Key characteristics of right project
− The process or project is related to a key business issue
− You have/can get customer input on the issue
− Management assigns this project a high priority
− Process owner and key stakeholders are defined
− The problem is stated as a target or need and NOT a solution
− The sponsor of this project can commit time and resources to this project
− The business process(es) will not be changed by another initiative at any time
in the near future
− Focus on:
• Which process is the most critical
• Which process contributes the most
− Ensure the benefits of an improvement project do not degrade over time

July 3, 2010 14
Critical Success Factors

• Linked to business strategies and goals
• Linked to customer value
• Ability to implement incremental value added change
• Ability to track results and measure success
• Ability to be aligned with the business

July 3, 2010 15
Successful Business Process Analysis, Design and
Implementation Projects Have

• Understood the Business Architecture – Business Process,
Metrics, Strategy and Goals
• Engaged stakeholders and defined process ownership
• Taken an iterative and incremental approach
• Tackled the right project at the right time
• Implemented internal and external standards and the right
level of governance
• Understood the role of information
• Incorporated process improvement
• Achieve business results with a series of small successes
July 3, 2010 16
Do Not Ignore Organisational Change

• The failure to manage the human side of business changes
is a major contributor to the reasons programme, projects
and initiatives fail
• Organisations may not have the experience necessary to
manage the speed and complexity of the large-scale
• Managers are all too frequently concerned with tactical,
operational issues and have not had the time to consider
organisational changes

July 3, 2010 17
Process Analysis within Service Orientation

• Process Driven Integration
− Services Based Integration
− Cut integration costs and reduce development
• New Business Initiatives
− Agility, Growth – New Products and Services
− Increased Delivery Channels
• Process Improvement
− Optimising business processes
− Straight Through Processing
• IT Regeneration
− Enterprise IT Architecture – Aligning more with Business
− Legacy Replacement
• Extending the Enterprise
− Partnering, B2B

July 3, 2010 18
Intelligent Use of BPM

• Help prioritising intelligent cuts: via a business process
architecture and a good process measurement system
• Process Optimisation: BPM teams can quickly examine
processes and suggest changes to eliminate waste
− Good BPM teams can almost always identify some quick changes
that will save 10-30%

July 3, 2010 19
Intelligent Use of BPM

• Reorganisations
− Changes in status also require that new processes and business
rules be implemented throughout the organisation
• Additional Regulation
− New regulations require new practices and new business rules

July 3, 2010 20
Business Process Management Common Body of
Knowledge (CBOK) Knowledge Areas

Business Process Management (1)

Process Process Process Design Performance
Modelling (2) Analysis (3) (4) Management

Process Management Organisation (7)

Enterprise Process Management (8)

Business Process Management Technologies (9)

July 3, 2010 21
Business Process Management Common Body of
Knowledge (CBOK) Knowledge Areas
• Nine knowledge areas
− Business Process Management (1) – core BPM concepts
− Process Modelling (2), Process Analysis (3), Process Design (4),
Process Performance Management (5) and Process
Transformation (6) – BPM activities and skill sets
− Process Management Organisation (7) and Enterprise Process
Management (8) – how the practice of BPM relates to other
organisational dimensions, such as governance and strategic
− Business Process Management Technologies (9) – support and
enable BPM practices

July 3, 2010 22
Business Process Management (1) Knowledge Area

• Defines BPM and provides the foundation for exploring the
remaining Knowledge Areas
• Focuses on the core concepts of BPM
− Key definitions
− End-to-end process
− Customer value
− Nature of cross-functional work
− Process types
− Process components
− BPM lifecycle
− Critical skills
− Success factors

July 3, 2010 23
Process Modelling (2) Knowledge Area

• Includes the set of skills and processes which enable
people to understand, communicate, measure and
manage the primary components of business processes
• Covers
− Skills, activities and key definitions
− An understanding of the purpose and
− Benefits of process modelling
− Discussion of the types and uses of process models
− Tools, techniques and modelling standards

July 3, 2010 24
Process Analysis (3) Knowledge Area

• Involves an understanding of business processes including
the efficiency and effectiveness of business processes
• Covers
− Purpose and activities for process analysis
− Decomposition of process components and attributes, analytical
techniques and process patterns
− Use of process models and other process documentation to
validate and understand both current and future state processes
− Process analysis types, tools and techniques

July 3, 2010 25
Process Design (4) Knowledge Area

• Intentional and thoughtful planning for how business processes
function and are measured, governed and managed
• Involves creating the specifications for business processes within the
context of business goals and process performance objectives
• Covers
− Plans and guidelines for how work flows
− How rules are applied
− How business applications, technology platforms, data resources, financial and
operational controls interact with other internal and external processes
− Process design roles
− Techniques and principles of good design
− Common process design patterns
− Compliance, executive leadership and strategic alignment

July 3, 2010 26
Process Performance Measurement (5) Knowledge
• Formal, planned monitoring of process execution and the tracking of
results to determine the effectiveness and efficiency of the process
• Used to make decisions for improving or retiring existing processes
and/or introducing new processes in order to meet the strategic
objectives of the organisation
• Covers
− Key process performance definitions
− Importance and benefits of performance measurement
− Monitoring and controlling operations
− Alignment of business process and enterprise performance
− What to measure
− Measurement methods
− Modelling and simulation
− Decision support for process owners and managers
− Considerations for success

July 3, 2010 27
Process Transformation (6) Knowledge Area

• Addresses process change in the context of a business
process lifecycle
• Covers
− Process improvement
− Redesign and reengineering methodologies
− Tasks associated with implementing process
− Organisational change management methodologies, techniques
and best practices

July 3, 2010 28
Process Organisation (7) Knowledge Area

• Addresses the roles, responsibilities and reporting
structure to support process-driven organisations
• Covers
− What defines a process driven enterprise
− Cultural considerations
− Cross-functional, team-based performance
− Business process governance
− Governance structures
− BPM Centre of Expertise/Excellence (COE)

July 3, 2010 29
Enterprise Process Management (8) Knowledge Area

• Driven by the need to maximise the results of business processes
consistent with well-defined business strategies and functional goals
based on these strategies
• Process portfolio management ensures that the process portfolio
supports corporate or business unit strategies and provides a
method to manage and evaluate initiatives
• Covers
− Tools and methods to assess process management maturity levels
− Required BPM practice areas which can improve their BPM organisation state
− Business Process Frameworks
− Process integration – interaction of various processes with each other
− Models which tie performance, goals, technologies, people and controls (both
financial and operational) to business strategy and performance objectives
− Process architecture and enterprise process management best practices
July 3, 2010 30
BPM Technology (9) Knowledge Area

• BPM is a technology enabled and supported management
• Covers
− Wide range of technologies available to support the planning,
design, analysis, operation and monitoring of business processes
− Set of application packages, development tools, infrastructure
technologies and data and information stores that provide
support to BPM professionals and workers in BPM related
− BPM standards, methodologies and emerging trends

July 3, 2010 31
Business Process Management Overview

July 3, 2010 32
Business Process Management Topic Scope
Business Process

BPM Role
Core Concepts of
Business Process BPM Critical Operating
Business Process BPM Lifecycle Types of Processes Types of Activities
Management Success Factors Environment and

Management Alignment of
Discipline and Planning and Strategy, Value
Primary Processes Value Added
Enabling Strategy Chain and Business
Technologies Process

Process vs.
Analysis Support Processes Handoff Goals

Ongoing Executive
Management Controls and
Management of Design Sponsorship/
Processes Control Activities
Process Governance

Performance and Modelling Process Ownership

Organisational Measuring and Metrics, Measures
Commitment Monitoring and Monitoring


July 3, 2010 33
Business Process Management – Scope

• Concepts and strategies required to successfully manage
business processes from a holistic end-to-end perspective
• Foundation for exploring the remaining knowledge areas

July 3, 2010 34
Hierarchy of Business, Processes and BPM

and Uses

That Can Be
Business Process Managed

Business Process Management

July 3, 2010 35
Hierarchy of Business, Processes and BPM

• Business
− Refers to individuals, interacting together, to perform a set of
activities to deliver value to customers and a return on
investment to the stakeholders
• Business Process
− Process is a defined set of activities or behaviours performed by
humans or machines to achieve one or more goal
− Triggered by specific events and have one or more outcome that
may result in the termination of the process or a handoff to
another process
− Composed of a collection of interrelated tasks or activities which
solve a particular issue
− End-to-end work which delivers value to customers – end-to-end
involves crossing any functional boundaries

July 3, 2010 36
Hierarchy of Business, Processes and BPM

• Business Process Management
− Disciplined approach to identify, design, execute, document,
measure, monitor and control both automated and non-
automated business processes to achieve consistent, targeted
results aligned with an organisation’s strategic goals
− Involves the deliberate, collaborative and increasingly technology-
aided definition, improvement, innovation and management of
end-to-end business processes that drive business results, create
value and enable an organisation to meet its business objectives
with more agility
− Enables an enterprise to align its business processes to its
business strategy, leading to effective overall company
performance through improvements of specific work activities
either within a specific department, across the enterprise or
between organisations

July 3, 2010 37
BPM Core Concepts
Discipline And A
Set Of Enabling

Technology Addresses End-
Enabled To-End Work

Requires A Continuous, Ongoing
Significant Set Of Processes Focused
Organisational On Managing
Commitment End-To-End Processes
Includes The
Modelling, Analysis,
Design And
Of Processes
July 3, 2010 38
BPM Core Concepts

• BPM is a management discipline and a set of enabling technologies
• BPM addresses end-to-end work and distinguishes between sets of
subprocesses, tasks, activities and functions
• BPM is a continuous, ongoing set of processes focused on managing
an organisations end-to-end business processes
• BPM includes the modelling, analysis, design and measurement of
an organisation’s business processes
• BPM requires a significant organisational commitment, often
introducing new roles, responsibilities and structures to traditional
functionally oriented organisations
• BPM is technology enabled with tools for visual modelling,
simulation, automation, integration, control and monitoring of
business processes and the information systems which support
these processes
July 3, 2010 39
Management Discipline and Enabling Technologies

• BPM acronym used loosely and its meaning varies depending upon
the context
− Software companies often refer to BPM to describe the capabilities of a
particular product or technology
− Practitioners, management consultants and academics typically discuss the
process and management discipline of BPM
• Firstly BPM is a management discipline and process for managing an
organisation’s business processes
− Enabling technology is meaningless without the management disciplines and
processes for exploiting the technology
• BPM involves managing the end-to-end work organisations perform
to create value for their customers
− Performance of this work is essentially how organisations fulfill their mission

July 3, 2010 40
Management Discipline and Enabling Technologies

• Vendors have created application suites which help enable organisations to better
manage their business processes
− Tools to visually design and model business processes
− Simulate and test business processes, automate, control and measure business
− Provide feedback and reporting on process performance
− Some vendors have combined these into integrated business process management
• Most large organisations have a significant investment into a number of legacy
− Designed to support specific functions
− In order to manage the end-to-end work involved in business processes, a BPMS must
be able to integrate with legacy systems in order to control work, get information or
measure performance
− Common framework for how these technologies are deployed is most often referred to
as a Service Oriented Architecture (SOA)
− Standardising on a specific set of open technologies commonly referred to as web
− By leveraging web services in a SOA, organisations can build and manage end-to-end
business processes across organisational silos and their legacy systems

July 3, 2010 41
Addresses End-To-End Work

• Process vs. function
− Business functions are typically defined by a group of activities
related by a particular skill or goal such as sales, finance or
− Functions focus on these individual tasks while business processes
focus on the end-to-end work, i.e., tasks and activities, across
functional boundaries to deliver customer value
− Functions are ongoing where business processes have defined
inputs and outputs
− Business processes, however, focus on end-to-end transactions
that deliver value

July 3, 2010 42
Ongoing Management of Processes

BPI (Business Process BPM (Business Process
Improvement) Management)

One-time exercise Ongoing and continuous
Fix or design process Vs.

July 3, 2010 43
Ongoing Management of Processes

• BPM involves a permanent ongoing organisational
commitment to managing the organisations processes
• Includes
− Modelling
• Analysis
• Process design
• Performance measurement
− Process transformation
− Continuous feedback loop to ensure the organisation’s business
processes are aligned to its strategy and performing to
July 3, 2010 44
Modelling, Analysis, Design And Measurement Of
• Practice of BPM requires the measurement and
supervision of process performance
− Setting process performance goals
− Measuring actual performance
− Reviewing the effectiveness of business processes
− Providing information, insight and feedback to other primary
activities such as process analysis, design and transformation
• Define and measure business process performance across
two primary dimensions
− Extent to which process goals are attained
− Efficiency and effectiveness of process activities

July 3, 2010 45
Modelling, Analysis, Design And Measurement Of
• Gather information at key points in the process to support
− Cost
− Time to completion of tasks

July 3, 2010 46
Organisational Commitment

• Practice of BPM requires a significant organisational
• Management of end-to-end business process crosses
organisational boundaries
• New roles and responsibilities are introduced, such as
process owners, designers and architects
• Individuals responsible for end-to-end process design must
interact with traditional functionally based managers
• New governance structures need to be introduced which
may change the way organisations make decisions and
allocate resources
July 3, 2010 47
Organisational Commitment

Processes –



“Vertical” Operational Processes – Internally Focussed
July 3, 2010 48
Organisational Commitment

• Without organisational commitment, the practice and
benefits of BPM is unlikely to mature within an
• Without supporting leadership, values, beliefs and culture,
BPM is unlikely to successfully take hold within an

July 3, 2010 49
BPM Technology

• BPM is a technology enabled and supported management discipline
• Wide range of technologies available to support the planning,
design, analysis, operation and monitoring of business processes
• Application suites available which help enable organisations to
better manage their business processes
• BPMS must be able to integrate with legacy systems in order to
control work and get information or measure performance
• Common framework for how these technologies are deployed is
most often referred to as a Service Oriented Architecture (SOA)

July 3, 2010 50
BPM Lifecycle

BPM Activities Affected BPM Activities
by Leadership, Values, Design and
Process Analysis of Process
Culture and Beliefs Planning and Business
Modelling of Process
Monitoring and
Business Implementation Refinement
Factors Strategy Processes
Culture and
BPM Awareness
Factors Process

July 3, 2010 51
BPM Lifecycle
BPM Factors – cross all BPM phases

BPM Phases

July 3, 2010 52
BPM Lifecycle
Culture and Strategy
Methodology Refinement
Planning and
Information Technology

Process Alignment
Process Awareness Monitoring
Analysis of
Process Measures Processes

Process Sponsorship

Process Responsibility
Process Design and
Process Definition Implementation Modelling of
Organisation Processes

July 3, 2010 53
BPM Lifecycle Monitor

• Iterative, Refinement
phased set of
Refinement Monitor

Planning Analysis



July 3, 2010 54
Process Planning and Strategy

• BPM lifecycle begins with developing a process driven strategy and
plan for the organisation
• Sets the strategy and direction for the BPM process
• Plan starts with an understanding of organisational strategies and
• Designed to ensure a compelling value proposition for customers
• Plan provides structure and direction for continued customer centric
process management
• Provides a foundation for a holistic BPM approach to ensure the
alignment with organisational strategy and the integration of
strategy, people, processes and systems across functional
• Identifies appropriate BPM organisational roles and responsibilities,
executive sponsorship, goals and expected performances measures
and methodologies

July 3, 2010 55
Analysis of Business Processes

• Analysis incorporates methodologies with the goal of
understanding the current organisational processes in the
context of the desired goals and objectives
• Takes information from strategic plans, process models,
performance measurements, changes in the environment
and other factors in order to fully understand the business
processes in the context of the overall organisation

July 3, 2010 56
Design and Modelling of Business Processes

• Focus on the intentional, thoughtful design of how end-to-end work
occurs in order to deliver value
• Document the sequence of activities, including the design of what
work is performed, at what time, in what location, by what process
actors using what methodology
• Defines what the organisation wants the process to be and answers
the what, when, where, who and how questions of how end-to-end
work is executed
• Ensures that the proper management controls and metrics are in
place for compliance and performance measurement
• Understanding the process typically involves process modelling and
an assessment of the environmental factors which enable and
constrain the process
− May be the first time the entire end-to-end business process has been

July 3, 2010 57
Process Monitoring and Controlling

• Continuous measuring and monitoring of business
processes provides the information necessary to adjust
resources in order to meet process objectives
• Measuring and monitoring also provides critical process
performance information through key measurements
related to goals and value to the organisation
• Analysis of process performance information can result in
improvement, redesign or reengineering activates

July 3, 2010 58
Process Refinement

• Implements the output of the iterative analysis and design
• Addresses organisational change management challenges
• Aimed at continuous improvement and process

July 3, 2010 59
Types of Processes

Management Primary (Core) Processes

Support Processes

July 3, 2010 60
Primary Processes

• Primary processes are end-to-end, cross-functional
processes which directly deliver value
• Represent the essential activities an organisation 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
organisations, across departments or even between
enterprises and provide a complete end-to-end view of
value creation

July 3, 2010 61
Support Processes

• 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 organisation
• Examples of support processes include information
technology management, facilities or capacity
management and human resource management
• Support processes are generally associated with functional
− Can and often do cross functional boundaries
July 3, 2010 62
Management Processes

• 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 organisation operates
effectively and efficiently

July 3, 2010 63
Process Activities

• Value Added – contribute to the process output in a
positive way
• Handoff – pass control of the process to another
department or organisation
• Control – assure that the processes behave within desired
tolerances or specify a validity checkpoint

July 3, 2010 64
BPM Critical Success Factors

Business Strategy

Define Organisation-Wide
Business Process Value

Executive Sponsorship/
Governance and
Institutionalise Practices

Standardise Business

Measure Process Chain

July 3, 2010 65
BPM Critical Success Factors

• Standardise Business Processes
− Adopt common design/re-engineering methodology
− Document processes
− Manage process diversity
• Executive Sponsorship/Governance and Institutionalise Practices
− Provide continuous improvement
− Manage process governance
− Enable change management
− Leverage BPM tools
• Define Organisation-Wide Business Process Value Chains
− Map the organisation’s core activities
− Assign executive responsibility for/sponsorship of process chains
• Measure Process Chain Performance
− Manage to process measures and chains of accountability

July 3, 2010 66
Alignment of Strategy, Value Chain and Business
• Most successful organisations implementing BPM pay
attention to the alignment of business strategy, value-
chain definitions and business processes
• BPM relies on key business strategies that set the primary
direction of the enterprise
− Value propositions for goods and services delivered
• Business strategy leads to enterprise and business unit
goals as the basis for action plans and business tactics

July 3, 2010 67

• Business goals are most often an output of an
organisations strategic planning efforts
− Typically decomposed to include functional goals which align an
organisations functional areas to overall strategy
• Process goals align business processes with overall
organisation strategy

July 3, 2010 68
Executive Sponsorship/Governance

• Assigning executive leadership responsibility to oversee the
performance of key processes is an indicator of maturity and
• Performance of a process is measured with accountability falling
under the executive leadership and reported throughout the
• Important to have organisational discipline to utilise methodologies
to document, store, manage and continuously improve the business
processes, particularly those that make up the value chains
• Includes governance mechanisms to support BPM and associated
• Institutionalised across all functional areas in order to optimise the
impact on value chain performance
July 3, 2010 69
Process Ownership

• Successful BPM implementations recognise that the role of
a process owner is critical
• Process owner is responsible for the entire end-to-end
process across functional departments
• Success of this role depends on the authority the individual
has to control the budget and make decisions that effect
the development, maintenance and improvement of the
business process

July 3, 2010 70
Metrics, Measures and Monitoring

• Management requires measurement
• Business process measurement and monitoring provides
critical feedback on process design, performance and
• Necessary to measure process performance in terms of a
variety of possible metrics related to how well the process
meets its stated goals

July 3, 2010 71
Institution Practices

• Effective attainment of BPM success factors to create
value for an organisation depends on
− Organisational practices
− Mastery of concepts and skills by individuals with accountability
for managing business processes

July 3, 2010 72
BPM Role Operating Environment and Influences
BPM Role and Influences

Outside But Linked to
Within Organisation External BPM Environment

Business Strategy and Organsation’s Operating
Governance Environment

BPM Professional Practices
Outsourced Business BPM Practice
and Management of
Processes Influencers
Business Processes

BPM Professional
Business Processes
Development Programs

Data and IT Platform

Values, Beliefs, Leadership
and Culture
July 3, 2010 73
Process Modelling

July 3, 2010 74
Process Modelling Topic Scope

Business Process Modelling
Purpose of Benefits of Standards Modelling Levels of Modelling Capturing Modelling Process
Process Modelling Techniques
Modelling Modelling and Perspectives Models Approaches Information Participants Simulation
Modelling Quality and Tools

Process Model
Diagrams, Validation Enterprise Direct
Maps and and Domain Observation
Models Simulation

Business Business
Attributes and Interviews
Domain Models

Operations Survey/
and Work Written
Flow Feedback

Systems Structured
Domain workshops

Builder and Web-Based
nt and
Operator Conferences

July 3, 2010 75
Business Process Modelling

• 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 organisations
primary, supporting and management processes
• Modelling is a means to an end and not an end in itself
− You model to get results and reach conclusions

July 3, 2010 76
Process Diagrams, Maps and Models

• Diagrams
− Process diagram often depicts simple notation of the basic workflow of a
− 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 modelled
− 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
analyse and understand the process
July 3, 2010 77
Process Attributes and Characteristics

• Attributes and characteristics that describe the properties, behaviour, purpose
and other elements of the process
• Process attributes are captured in a tool in order to organise, analyse and manage
an organisation’s portfolio of processes

• Inputs/Outputs • Arrival Patterns/Distributions
• Events/Results) • Costs (indirect and direct
• Value Add • Entry Rules
• Roles/Organisations • Exit Rules
• Data/Information • Branching Rules
• Probabilities • Join Rules
• Queuing • Work/Handling Time
• Transmission Time • Batching
• Wait Time • Servers (number of people
• available to perform tasks)

July 3, 2010 78
Purpose of Process Modelling

• A model is rarely a complete and full representation of the actual
− Focus on representing those attributes of the process that support continued
analysis from one or more perspectives
• Objective is to create a representation of the process that describes
it accurately and sufficiently for the task at hand
− Understanding the business process through the creation of the model
− Creating a visible representation and establishing a commonly shared
− Analysing process performance and defining and validating changes
• To be model is an expression of the target process state and
specifies the requirements for the supporting resources that enable
effective business operations

July 3, 2010 79
Purpose of Process Modelling

• Models are simplified representations that facilitate
understanding of that which is being studied and making
decisions about it
• Mechanism for understanding, documenting, analysing,
designing, automating and measuring business activity as
well as measuring the resources that support the activity
and the interactions between the business activity and its
• For process managed business, process models are the
primary means for
− Measuring performance against standards
− Determining opportunities for change
− Expressing the desired end state preceding a change effort
July 3, 2010 80
Reasons for Process Modelling

• To document an existing process clearly
• To use as a training aide
• To use as an assessment against standards and compliance
• To understand how a process will perform under varying loads or in
response to some anticipated change
• As the basis for analysis in identifying opportunities for improvement
• To design a new process or new approach for an existing process
• To provide a basis for communication and discussion
• To describe requirements for a new business operation

July 3, 2010 81
Benefits of Modelling

• Models are relatively fast, easy and inexpensive to
• Models are easy to understand (when compared to other
forms of documentation)
• Models provide a baseline for measurement
• Models facilitate process simulation and impact analysis
• Models leverage various standards and a common set of

July 3, 2010 82
Modelling Standards and Notations

• Range of number of modelling and notational standards and
• Models provide a language for describing and communicating as-is
and to-be process information
− Like all new languages must be learned
• Benefits of using a standards based approach
− A common symbology, language and technique which facilitate communication
and understanding
− Standards-based models provide common and consistently defined processes
definitions which eases the process of design, analysis and measurement and
facilitates model reuse
− An ability to leverage modelling tools based on common standards and
− An ability to import and export models created in various tools for reuse in
other tools
− Some tool vendors are leveraging standards and notations for developing the
ability to be exported from a modelling notation to an execution language (for
example BPMN to BPEL)

July 3, 2010 83
Modelling Standards and Notations

• Commonly used standards (not complete)
− Business Process Modelling Notation (BPMN)
− Flow Charting
− Swim Lanes
− Event Process Chain (EPC)
− Value Chain
− Unified Modelling Language (UML)
− IDEF-0
− Systems Dynamics
− Value Stream Mapping
July 3, 2010 84
Business Process Modelling Notation (BPMN)

• Widely used and supported standard for business process
• Provides a graphical notation for specifying business
processes in a Business Process Diagram (BPD)
• Uses a flowcharting technique similar to activity diagrams
from Unified Modelling Language (UML)
• Can output BPMN to Business Process Execution Language
− Standard executable language for specifying interactions with
Web Services
• Emerging standard
July 3, 2010 85
Business Process Modelling Notation (BPMN) –
Simplified Structure

Flow Objects Swimlanes Artefacts

Events Activities Gateways Sequences Messages Associations Pool Lane Data Object Group Annotation

Start Event Task

End Event Sub-Process


July 3, 2010 86
BPMN – Events

• Event denotes something that happens
• Classifications
− Catching – triggered by external event
− Throwing – generating an output
• Types
− Start Event – acts as a trigger for the process
− End Event – represents the result of a process
− Intermediate Event – represents something that happens
between the start and end events

July 3, 2010 87
BPMN – Activities

• Activity describes the kind of work that must be done
• Types
− Task – represents a single unit of work that is not or cannot be
broken down to a further level of business process detail
− Sub-Process – used to hide or reveal additional levels of business
process detail
− Transaction – a form of sub-process in which all contained
activities must be treated as a whole

July 3, 2010 88
BPMN – Gateway

• A Gateway determines forking and merging of paths
depending on the conditions expressed

July 3, 2010 89
BPMN – Connecting Objects

• Flow objects are connected to each other using connecting
• Types
− Sequence Flow – shows in which order the activities will be
− Message Flow – shows what messages flow across organisational
− Association – associate an Artefact to a Flow Object and can
indicate directionality

July 3, 2010 90
BPMN – Swim Lanes

• Visual mechanism of organising and categorising activities,
based on cross functional flowcharting
• Types
− Pool – represents major participants in a process and contains one
or more lanes
− Lane – used to organise and categorise activities within a pool
according to function or role

July 3, 2010 91
BPMN – Artefacts

• Used to bring some more information into the
• Types
− Data Objects – show the data is required or produced in an
− Group – used to group different activities but does not affect the
flow in the diagram
− Annotation – used to provide the model/diagram with
understandable details

July 3, 2010 92
Flow Charting

• Simple type of diagram that represents a process, showing
the steps as boxes of various kinds and their order by
connecting these with arrows
• Widely used

July 3, 2010 93
Swim Lanes

• Swim lanes are an addition to the boxes and arrows
process flow view of flow-charting that show how the
work flows across organisational units or is handed-off
from one role to another
• Overall process is divided into lanes, with one lane for
each person, group or subprocess
• Processes and decisions are grouped by placing them in
• Arranged horizontally or vertically and are used for
grouping the sub-processes according to the
responsibilities of those swim lanes
July 3, 2010 94
Event Process Chain (EPC)

• An EPC is an ordered graph of events and functions
• Provides various connectors that allow alternative and parallel execution of processes
• Tasks (activities) are followed by outcomes (events) of the task, developing a process model
• EPC method was developed within the framework of ARIS (BPM toolset)
• EPC elements
− Event – describe under what circumstances a function or a process works or which state a function
or a process results in
− Function – model the tasks or activities
− Organisation Unit – determine which person or organisation within the structure of an enterprise is
responsible for a specific function
− Information, Material or Resource Object – portray objects in the real world
− Logical Connector – logical relationships between elements in the control flow
− Logical Relationships – Branch/Merge, Fork/Join and OR
− Control Flow – connects events with functions, process paths or logical connectors creating
chronological sequence and logical interdependencies between them
− Information Flow – show the connection between functions and input or output data
− Organisation Unit Assignment – show the connection between an organisation unit and the
function it is responsible for
− Process Path – show the connection from or to other processes

July 3, 2010 95
Value Chain

• Value chain notation is used to demonstrate a single
continuous flow from left to right of the sub-processes
that directly contribute to producing value for the
organisation’s customers (clients/constituents)
• Value chain is a chain of activities for a firm operating in a
specific industry
• Chain of activities gives the products more added value
than the sum of added values of all activities

July 3, 2010 96
Unified Modelling Language (UML)

• UML provides a standard set of 14 diagramming
techniques and notations primarily for describing
information systems requirements
• Primarily used for systems analysis and design
• Can use UML activity diagrams for business process
• UML can be very verbose

July 3, 2010 97
IDEF-0 (Integration Definition for Function
• Function modelling methodology for describing
manufacturing functions
• Federal Information Processing Standard (FIPS) that was
developed by the US Air Force for documenting
manufacturing processes
• Part of the IDEF family of modelling languages in software
− IDEF0 produces a function model that is structured
representation of the functions, activities or processes
− IDEF1 produces an information model that represents structure
and semantics of information
− IDEF2 produces a dynamics model that represents time-varying
behavioural characteristics

July 3, 2010 98
LOVEM-E (Line of Visibility Engineering Method –
• Notation set and a modelling technique that was
developed as part of IBM’s Business Process Reengineering
• Based on the process path management concept
• Introduces concepts of the customer encounter and the
collaborative nature of work between external and
internal parties and the supporting information systems
• Not widely used

July 3, 2010 99
SIPOC (Supplier, Input, Process, Output and
• Style of process documentation used in Six Sigma

July 3, 2010 100
Systems Dynamics

• Approach to understanding the behaviour of complex
systems over time
• Deals with internal feedback loops and time delays that
affect the behaviour of the entire system
• Systems Dynamics models are “activity on arrow”
diagrams rather than “activity on node” diagrams
• Useful in developing dynamic lifecycle type models that
focus on the overall business system’s performance and
the impact of changing the key variables that affect overall

July 3, 2010 101
Value Stream Mapping

• Technique used in Lean Manufacturing
• Expresses the physical environment and flow of materials
and products in a manufacturing environment
• Used to analyse the flow of materials and information
currently required to bring a product or service

July 3, 2010 102
Process Modelling Quality

• Most process analysis and design efforts require the use of models
to describe what is happening during the process
• Useful to have some standards and measures of quality as it relates
to process modelling
• Quality of model defined by its accuracy, amount of detail and
• Can have multiple versions or iterations of models are created over
time to capture more detail and improve the quality of the model
• During the modelling of a process, several disconnections,
restrictions and/or barriers may become apparent
• Items should also be noted on the model as well as any other
information discovered that will help create a common
understanding of the current state

July 3, 2010 103
Requirements of a Process Model

• The business environment including the customers, suppliers,
external events or market pressures that effect or interact with the
• The organisational structure which includes the hierarchical or
functional view of the organisation and how the people work
together (this information helps understand who the key decision
makers are within the process)
• The functional or departmental structure of the organisation which
explains how the functions or departments work together in the
• The business rules which control the decisions that are made during
the process and workflow
• The activities or actions that take place within the process and who
does those actions

July 3, 2010 104
Model Validation and Simulation

• Useful or necessary to validate the model through
simulation before finalising the analysis
• Validate the model through simulation is to compare
simulated outputs to real-world results
• Significant differences should be understood and
corrected before the model is used for detailed analysis
• Assemble a group of people who work in the process and
simulate the process by having one person in the group
describe each activity and its product(s)
− Real-world participants should be able to tell if the model is

July 3, 2010 105
Modelling Perspectives

• Processes can be modelled from many perspectives
• In a BPM environment an organisation’s strategy is
enacted through process performance, which is linked to
the operations model that must be supported by the
information technology platform
• To keep these aligned, there needs to be a line of visibility
from one perspective to the other in a coherent
framework, typically maintained in a process repository

July 3, 2010 106
Modelling Perspectives
Operations Enterprise

System Build Business

System Design Operations

July 3, 2010 107
Modelling Perspectives

• Enterprise Perspective
− See how the enterprise operates overall and that the primary processes are
arranged in some category that gives a sense of their interaction
− View supports those who must align overall enterprise strategy with
aggregated process performance
• Business Perspective
− Supports each of the process owners who is accountable for and has the
authority to address overall process performance
− Required as the business context that describes each major business process
and defines the scope and reach of major transformation efforts
• Operations Perspective
− More detailed models support the perspectives of those managers who are
responsible for monitoring performance and look for ways to continuously
improve operational performance

July 3, 2010 108
Modelling Perspectives

• System Design Perspective
− Identifies how work gets done and how the systems support that
work is the systems perspective
− Describes requirements for systems support and performance in
support of tasks and procedures
• System Build Perspective
− Support the individuals who have to build the system
• Systems Operations Perspective
− Support the individuals who have to build all of the support
systems to enable work and to operate the systems that are
required to continue to perform that work

July 3, 2010 109
Levels of Models

Business Model

Operational Model

Workflow Model

Systems Model

Measurement and Control

July 3, 2010 110
Enterprise Models

• Typically a highly abstracted business classification model that is
used to describe the focus of the organisation and to organise the
business processes in an overall business architecture
• Each of the high level business processes are then described in more
detail by their major components (sub-processes)
• An enterprise model will typically have two or more levels of detail
and serve as a high level business blueprint or business architecture
− May or may not include support and management processes
• Processes may be mapped to Key Performance Indicators (KPIs) and
strategic goals in a process portfolio and used to prioritise resources
and project efforts
• Can be mapped to formulate strategies for alternate future
scenarios or to develop high level estimates and forecasts
July 3, 2010 111
Business Models

• Business models depict the major events, activities and
results that describe each of the major end-to-end
processes, their sub-processes and their interactions with
their environment
• Business models also typically describe the support and
management processes as well and how they interact with
or support the primary processes

July 3, 2010 112
Operations and Work Flow Models

• Describe how the business model is carried out
• Detailed models mapped down to activity, task and
procedural level details
• Describe the physical implementation details of the
operating processes

July 3, 2010 113
Systems Models

• Depict the triggering events, software processes, data
flows and system outputs required to support business

July 3, 2010 114
Measurement and Control Models

• Indicate points in the operation where key performance
measure and control points are monitored

July 3, 2010 115
Modelling Approaches

• Approaches to process modelling: top-down, middle-out and
• Iterative process approach where several successive passes are used
to develop the model
• Approach used varies depending on the purpose and the scope of
the effort
• Bottom-up approaches, centered on very detailed activity and task
oriented work flows, work best for projects aimed at improving
narrowly focused functions within a single department or operation
• Top-down methods work well for projects aimed at improving and
innovating large scale, end-to-end, cross-functional business
processes and as a means to manage performance of these business
− Develop a new business model first and then determine what needs to be
done to be capable of its implementation
− Align business processes with business strategies

July 3, 2010 116
Capturing Information

• Techniques for capturing information for process
− Direct Observation
− Interviews
− Survey/Written Feedback
− Structured Workshops
− Web-Based Conferencing

July 3, 2010 117
Direct Observation

• Good way to document current procedural detail
• May uncover activities and tasks that might not be
otherwise recognised
• Can be effective in identifying variations and deviations
that occur in day-to-day work
• However limited to a relatively small sample size
− May not capture the range of variations across groups and
• Direct observation also entails the risk of the performers
doing what they think you want to see rather than what
they normally do (Hawthorne effect)
July 3, 2010 118

• Can create a sense of ownership and participation in the
process of modelling and documenting business processes
• Requires minimal time and disruption of normal duties
from the participants
• May take more overall elapsed time to schedule and
conduct the interviews than other methods
• May be difficult afterward to build a cohesive process flow
and to map the different views into a single view
− Generally requires follow up
• Sometimes does not uncover all of the activities to
completely describe the process
July 3, 2010 119
Survey/Written Feedback

• Written feedback requires minimal time and disruption of
• Liable to the same problems as are encountered with one-
on-one interviews such as
− Taking more time
− Missing some information
− Time spent reconciling differences of opinion
− Where the same work has just been described differently by
different people, it may require follow up

July 3, 2010 120
Structured Workshops

• Focused, facilitated meetings where enough subject
matter experts and stakeholders are brought together to
create the model interactively
• Offers the advantage of shortening the elapsed calendar
time required to develop the models and gives a stronger
sense of ownership to the workshop participants than
other techniques
• Workshops may be more costly than other methods
• Models produced in workshops require less follow up and
generate a commonly agreed upon description of a
process faster and with higher quality than other

July 3, 2010 121
Web-Based Conferencing

• Gain similar benefits to face-to-face workshops, but work
best with smaller groups
• Workshops done this way can be more difficult to monitor
and manage individual participation in the group work

July 3, 2010 122
Modelling Participants

• Number of roles involved in developing process models due to the wide range of
• Models can be created by individuals expressing their personal knowledge
• Models can be created by groups outlining the scope and depth of the business
they are addressing
− Development of process models may involve many people to create a set of models
that fully represent the process
• Business strategists
• Business managers
• Financial analysts
• Auditors
• Compliance analysts
• Process performance analysts
• Requirements analysts
• Systems analysts
• Business analysts
• Subject matter experts depend on modelling approach
− Executives expressing high level business dynamics
− Mid-level managers defining monitoring and control mechanisms
− Workers who actually perform the work being modelled

July 3, 2010 123
Modelling Techniques and Tools

• Many modelling tools and techniques available from paper
to specialised BPM tools
− White Boarding and Flip Charts
− Paper and Post-Its
− Drawing Tools and Reports
− Electronic Modelling and Projection
• Process analysis can be done effectively and efficiently
using any type of tool
− Focus of the analysis or design should be on the process and not
on the tool itself

July 3, 2010 124
White Boarding and Flip Charts

• Draw the process flows and flip charts to capture other
• Later transcribe the results into drawing or modelling and
reporting tools
• Common method used in workshops, interviews or
structured/facilitated modelling sessions

July 3, 2010 125
Paper and Post-Its

• Cover the walls of a room with taped up paper
• Have workshop participants put removable sticky-notes on
the paper until they have arranged the activities into the
sequence on which they agree
• Done either the participants directing the facilitator in the
placement of these activities or the participants place the
notes depicting activities
• Resulting model must then be transcribed into a drawing
or modelling and reporting tool later

July 3, 2010 126
Drawing Tools and Reports

• During or after interviews and workshops, participants
capture the process flows and notes using inexpensive
drawing tools, such as Visio, PowerPoint or any other
electronic drawing tool

July 3, 2010 127
Electronic Modelling and Projection

• Use electronic drawing or modelling tools and projecting
the images to large screens to capture and view the
developing models
• Model is visible and can be modified during the workshop
• No transfer to another toolset required
• Repository-based tools allow the reuse of objects or
patterns that have already been defined in previous efforts

July 3, 2010 128
Capturing Information and Modelling Techniques
and Tools
Modelling Techniques and Tools

White Boarding Paper and Post- Drawing Tools
Modelling and
and Flip Charts Its and Reports

Techniques for
Capturing Survey/Written
Information Feedback

July 3, 2010 129
Process Simulation

• Form of models which provide valuable insight to process dynamics
• Simulations require sufficient data which typically allows the process
to be mathematically simulated under various scenarios, loads, etc.
• Simulations can be manual or electronic using process simulation
• Identify exceptions and handoffs while providing important insights
on existing and required communication between tasks, functional
areas, teams and systems
• Benefits
− Validate a model by demonstrating that real transaction sets, when run
through the model exhibit, produce the same performance characteristics as
those in the actual process
− Predict the process design’s performance under differing scenarios (vary the
number of transactions over time, the number of workers, etc.)
− Determine which variables have the greatest affect on process performance
− Compare performance of different process designs under the same sets of
July 3, 2010 130
Modelling Summary

• Process models are simplified representations of some business
• A process model serves as a means to communicate several different
aspects of a business process
• Process models are used to document, analyse or design a business
• Process models are useful as documentation, a means for
communication and alignment, design and requirements or a means
to analyse aspects of the process, training and explanation
• Different levels or perspectives of business processes are expressed
by models showing different scopes and levels of detail for different
audiences and purposes
• There are many different styles of process modelling notation and
ways to develop process models
July 3, 2010 131
Process Analysis

July 3, 2010 132
Process Analysis Topic Scope
Process Analysis

Preparing to Analysis Issues
Overview of Purpose of When to Perform Process Analysis Performing the Document the
Analyse and
Process Analysis Process Analysis Process Analysis Roles Analysis Analysis
Processes Considerations

Continuous Choose the Understanding Business
Monitoring Process the Unknown Environment

Event-Triggered Scope the Depth Organisational Performance
Analysis of Analysis Culture/Context Metrics

Choose Analytical Customer
Frameworks Interactions

Business Rules Capacity

Bottlenecks Variation


Process Controls Other Factors

Analysing the
Analysing the

Analysing Human
July 3, 2010 133
Process Analysis

• Process analysis is the first step in establishing a new process or
updating an existing process is creating a common understanding of
the current state of the process and its alignment with the business
− Process is a defined set of sequential or parallel activities or behaviours to
achieve a goal
− Process analysis is creating an understanding of the activities of the process
and measures the success of those activities in meeting the goals
• Accomplished through various techniques including mapping,
interviewing, simulations and various other analytical techniques
and methodologies
• May include a study of the business environment and factors that
contribute to or interact with the environment such as government
or industry regulations, market pressures and competition
July 3, 2010 134
Process Analysis

• Other factors to be considered
− The context of the business
− Business strategy
− Supply chain (the inputs and outputs of the process),
− Customer needs
− Organisational culture
− Business values
− How the process will perform to achieve business goals
• Information gained through the analysis should be agreed upon by
all those that interact with the process
• Should represent what is actually happening and not what is thought
or wished to be happening
• Unbiased view without placing blame for existing inefficiencies
July 3, 2010 135
Purpose of Process Analysis

• Analysis generates the information necessary for the
organisation to make informed decisions assessing the
activities of the business
− Without it, decisions are made based on opinion or intuition
rather than documented, validated facts
• Due to business change the processes of an organisation
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 organisation

July 3, 2010 136
Purpose of Process Analysis

• Analysis generates an understanding and measurement of process
effectiveness and its efficiency
− Effectiveness of a process is a measurement of achieving the purpose or need
for the process whether the process
• Meets the needs of the customer
• Satisfies the objectives of the business
• Is the right process for the current business environment or context
• Measuring the efficiency of the process indicates the degree of
resources utilised in performing the activities of the process
• Measures whether the process is costly, slow, wasteful or has other
deficiencies and is a measurement of the performance of the
− Uncovers important facts about how work flows in the organisation
− Helps in the design and/or redesign of processes to better meet the goals of
the business

July 3, 2010 137
Purpose of Process Analysis

• Information generated from analysis includes
− Strategy, culture and environment of the organisation that uses the process (why the process
− Inputs and outputs of the process
− Stakeholders, both internal and external, including suppliers, customers and their needs and
− Inefficiencies within the current process
− Scalability of the process to meet customer demands
− Business rules that control the process and why they must exist
− What performance metrics should monitor the process, who is interested in those metrics and
what they mean
− What activities make up the process and their dependencies across departments and business
− Improved resource utilisation
− Opportunities to reduce constraints and increase capacity
• Information becomes a valuable resource to management and leadership to understand
how the business is functioning
• Help them to make informed decisions on how to adapt to a changing environment
• Ensure that the processes running the business are optimal for attaining business objectives

July 3, 2010 138

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