Business Management Presentations Process Analysis Process Management

Understand your Business processes


A business process represents a specific business need or goal, such as hiring an employee, processing a sales order, or reimbursing a business expense. Business processes are broken down into logical steps called activities, each of which can comprise one or more tasks. Tasks are assigned roles that determine which participants will perform the tasks. The transitions between activities determine the order in which they are performed and the basic workflow for the process.

WorkSpace lets you interact with business processes based on your assigned roles within your company.


Understand your Business Processes
The Context
Businesses are faced with customers who demand
Quality of service
Value for money
To deliver on this, an enterprise needs to function
in an integrated manner across functional
It is precisely to address the need to move from
piece-meal solutions to integrated systems that
ERP was introduced
• There are many cases of companies which have
begun ERP implementation, but dropped it midway
• There are many incidences of companies where the
expected business results have not materialized
• Deloitte Survey: After ERP systems went live, one
in four firms suffered some performance drop
The Issues
• An ERP solution is a technology enabled business
• The organization’s business processes may not be
ERP ready
• Clients with fundamental business problems expect
ERP to function as an expensive (but effective)
magic wand
• Systems cannot function in isolation of people,
process and structure issues
• What is optimal for a part may be sub-optimal for
the whole
The Full Picture….
Structure Process
The Model Transformation Process
Input OutputTransformation
A business process is initiated by an EVENT (Trigger), consumes
RESOURCES, performs ACTIVITIES and produces Goods and
The Various Transformation Routes
Transformed Resources-
Location Change
Possession Change
Storage Change
Physical Conversion
Transforming Resources-
•Human Resources
Business Processes
“It is possible to group processes in an organization
into a small number of business transformations”
There are three types of Business Processes-
End-to-End Process
Funnel Process
Composite Process
Sample Process Breakdown
Business Process
Process Element
Properties of the Process Elements
•Value Chain (Value adds vs. Non-value adds)
•Variability (Controllable vs. Uncontrollable
•Logical Network
•Automation (Simple & Integrated)
Process Element
• A series of activities that transforms an
• Should be judged by its contribution to achieving
business strategy.
Reengineering Activity Based
Psychology based
Function Function Function
Departments Departments Departments
Business Process Business Process Business Process
Sub Process Activity Duties
Tasks Tasks Tasks
Operation Steps Operation Steps Action Steps
Types of Process Performance
• End of process- originate primarily from
customer requirements
• Functional boundaries- at point of interface
between various functions.
• Major sub product – identifying problems at
sub process level that constitute the final
• Variances – unplanned “break points”.
What To Measure?
• Cycle time: Total elapsed time to complete a
specific process.
• Costs: Calculated by aggregating all costs
within a process
• Quantity: Counts the number of “units”
processed within a certain period of time
• Quality: Measured by degree of meeting
customer’s desired product/service attributes
(e.g.. Six Sigma standards)
• Customer user standards: Includes service
level agreements and standard operating
Ways To Develop Process
Performance Mapping
•Process Maps
•Activity Charts
•Task Analysis
Process Maps
A Process map helps to identify the
critical activities within a process
• Map from customer to the job that which is
most critical to the customer and then to
other supporting jobs.
• Indicate boundary crossings (between jobs,
departments, organisation, etc.)
• Map the task in process from left to right,
following the continuum of time.
• Tasks appearing under each other indicate
that they can be undertaken simultaneously
Process Maps
Steps and information sources used
A) Map from customer down-customer, stakeholders
B) Identify process starts and stops- process owners
C) Identify activities (tasks) and boundary crossings
Process Maps
Steps and information sources used
D) Identify hand-offs and bottlenecks- stakeholders
E) Estimate cost of each activity- finance,
F) Standardise performance measures- management,
process owners
Activity Charts
• Show relationship between activity in process and
related systems/sub systems
• Provide more explicit information-help to develop
better performance measures
• Can be used in conjunction with process maps to
identify and ultimately reduce number of
boundary crossings
Sample Activity Chart
Taking customer order
Greet customer
Ask for first and last name
Ask for order
Ask for item characteristics
Ask for credit/ATM card number
Verify card number
State order number
Inquire about additional items
Offer sales items
Indicate delivery dates
Thank customer for order
Sample Activity Chart
Taking customer order
Order Entry System
Log in names
Check availability
Log- in order
Verify order
Number of screen accessed
Sample Activity Chart
Taking customer order
Credit System
Input card number
Verify card number
Verify credit availability
Task Analysis
• Provide a comprehensive listing of task-level
• Graphic illustration of work flow across a process
• It does not add any additional information about
the process itself.
Sample Task Analysis
Some of the activities Task symbols
Greet customer
Ask for order
Ask for credit/ATM card #
Verify card number
Pick and pack order
Move to shipping
Gap Analysis
a) Compare performance measures and identify
gaps in terms of:
• Current vs. ideal
• Current vs. benchmark (ERP)
b) Compare process to process through:
-Activity charts
-Cause effect diagrams
-Pareto analysis
c) Identify actions to bridge gaps
Benchmarking:The Paradigm Shift
Companies are looking for a
direct support for their
 Objectives
 Priorities
 Mission
Goal achievement
Problem Solving
What is asked from Benchmarking?
 To break the ideology of not learning from others
 To search for and implement the best practices of –
• Competitors
• Industry leaders
 To understand and prioritise the processes that will
have the greatest impact on the company’s objectives
• Management consensus
• Contribution to a major goal
• Rank-Order methods followed
 To gain superiority and become new benchmarks.
Benchmarking Tasks
Establish Support Sustain
User Process “A N- step Process”
“Benchmarking is an organization wide
phenomenon and needs to be driven with
strong management support.”
Benchmarking Targets
• Benchmarking should be conducted on
 Products and Services
(E.g Product Planning, Design and Development)
 Business processes
 Performance Measurement Tools
Types of Benchmarking
• Internal (In- house learning)
• Competitive (From the same industry)
• Functional (From outside the industry but with
similar processes)
• Generic
Focus levels of Benchmarking
• Strategic
(In a Scanning Mode)
 Technological Direction
 Industry Trends
 Investment Selection
 Competitive Products and Services.
• Operational
(Realigning processes to become the ‘vendor of
The Benchmarking Process
•What is Supplied •Sequence of Work-
•Best practice at each
•What is Delivered •Performance
Inputs Work Process Outputs Results
5-Phase of Benchmarking Process
• Planning
• Analysis
• Integration
Decide-What to Benchmark
Identify-Whom to Benchmark
Plan- Which best practices
Determine- Current performance gap
Project- Future performance levels
Communication-gain Acceptance
Revise-Performance Goals
5-Phase of Benchmarking Process
• Action
• Maturity
Develop- Action plans
Implement- Actions and monitor Progress
Determine-when leadership position is
Assess- Benchmarking as an ongoing
Elements of a Work Process
• Results
Critical performance measures serving as a report card
• Outputs
What is products and delivered to the customer
• Process
The decision points, handoffs and practices
Steps = What is done
Practices = How it is done
• Inputs
Items provided by suppliers that go into the work process
Benchmarking Matrix
Known Unkno
Implemented Not
Known Implemented
Subject Company’s Best practices
Business process Re-engineering
• What is Re-engineering???????
Over Again”
It’s the process of reinventing a company…….
Defining Re- engineering
• It is-
“The Fundamental rethinking and Radical
redesign of business Processes to achieve
Dramatic improvements in critical,
contemporary measures of performance,
such as Cost, Quality, Service and Speed.”
Key Words
• Fundamental
– Begin with no Assumptions and no Givens
– Ignore what is and concentrate on what should be
– Why we do what we do?? Why we do it the way
we do????
• Radical
– Getting to the root of the things
– Its about Business Reinvention and not about
Business Improvement/Enhancement/Modification
Key Words
• Dramatic
– Its about Quantum Leaps and not about
Marginal or Incremental Improvements
– Should be undertaken when there is a need of a
Heavy Blasting
• Processes
– Focus on processes and not on tasks/jobs/people/
– The process is right only if it delivers the
Case of IBM Credit
• Reinventing the process of credit issuance…
Original IBM Credit Re-engineered IBM Credit
Field sales person
Call Logger
Credit Worthiness Checker
Business Practices Department
Dispatch Clerk
Field sales person
Deal Structurer
Case of IBM Credit
• What they achieved??
– 90% reduction in cycle time (7 days to 4 hours)
– Hundred-fold improvement in productivity
– A head- count reduction
• How they did that??
– They improved the process of Credit issuance
and not the task of credit checking……
– They shattered the assumption that they need
specialists to perform specialized tasks……
– They cleared all redundancies from the process
Case of Ford Motor
Original Ford Re-engineered Ford
procurement process procurement process
Receiving Dock
Receiving Dock
Case of Ford Motor
• Mazda made them re-engineer the “Accounts
payable” department…..
– The department could not be re-engineered but what it
does could be..!!!
– So they eventually reengineered the process of
• The ground Rule of
“We pay when we receive Invoices”
was replaced by
“We pay when we receive the Goods”
Case of Kodak
Original Product Re-engineered Product
Development Process Development Process
Body Designers
Shutter Designers
Film advance
mechanism designers
Manufacturing Engineers
Tooling Engineers
Design Groups
Case of Kodak
• Re-engineering the product development
• How they did it??
– By “Concurrent Engineering”
• What they achieved??
– Cut down the product development time from 70 weeks
to 38 weeks
– Involvement of Tooling Engineers in the design,
ensured easy and inexpensive manufacturing
– 25% reduction in costs……
What needs to adapt?
Business processes or ERP software!!
• Research findings on “reengineering policies”
of firms-
– Choose applications that fit their business and
customise a bit – 37%
– Customise applications to fit their business – 5%
– Reengineer business to fit application – 41%
– No policy – 17%
When is “AS IS” model needed?
“As Is” requirement
analysis is not necessary
“As Is” requirement
analysis is critical
Potential problems of using “AS IS”
Lost chance to choose
software that meets
Potential to back slide
to existing processes
Minimal Extensive
What kind of “TO BE” model is
“To Be” analysis is clean
sheet reengineering
“To Be” analysis is
technology enabled
portfolio choice
Minimal Extensive
Small-r versus Big-R reengineering
“Big R”
“Small r”
Minimal Extensive
Failure or Success!
Potential project
Potential project
High probability of
Potential project
Minimal Extensive
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Thank you
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