Amity Business School

Business Process Optimization

Module 1

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Business Process
A business process: 1. Has a Goal 2. Has specific inputs 3. Has specific outputs 4. Uses resources 5. Has a number of activities that are performed in some order 6. May affect more than one organizational unit. Horizontal organizational impact 7. Creates value of some kind for the customer. The customer may be internal or external.

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Business Process

A business process is a collection of activities designed to produce a specific output for a particular customer or market. It implies a strong emphasis on how the work is done within an organization, in contrast to a product's focus on what. A process is thus a specific ordering of work activities across time and place, with a beginning, an end, and clearly defined inputs and outputs: a structure for action.

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What is Business Process ?

Its everything we do!!
Is triggered by an external business event.

Is comprised of all the activities necessary to provide the appropriate business outcomes in response to the triggering business events.
Transforms inputs of all types into outputs, according to guidance (policies, standards, procedures, rules etc.) employing reusable resources of all types.

Contains activities which usually cross functions and often organizational units.
Has performance indicators for which measurable objectives can be set and actual performance evaluated. Delivers a product or service to an external stakeholder or another internal process. Usually connects to other processes.

Its HOW we do what we do!

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Business Process Breakdown

Provide Take-out/Delivery Service
Core Business Process

WHAT

WHAT

Greet Custome r

Serve Customer

Close Transaction

Sub-Process (Activity)

HOW

Take Order

Prepare Order

Schedule Delivery

Deliver Order

Activity (cross-functional)

WHO

Server

Server

Chief & Staff

Server

Driver

Recipe

Workflow

Get utensils ready Preheat oven Combine ingredients. Place in cooking dish, place in oven...

Task/Steps (specifically related to an individual

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Cross-functional business activities

Customer Place Order Receive Order

Customer Service Take Order Credit Food Preparation

Prepare food Schedule Delivery

Logistics

Deliver Order Delivery

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Types of Business Processes

CORE business processes are linked directly to external customers and their values.

CORE business processes meet marketplace demands on a day to day basis.

CORE business processes guide, control, plan, enable or provide resources to the CORE and other SUPPORT business processes.

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Why Business Process Management

Enterprises are seeking to transform themselves into customer-focused, processcentric organizations and consider this transformation critical to their business success. A key part of that transformation is to reorganize information resources as substantially independent reusable services.
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BPM goals are to efficiently align the organization with the customers wants and needs BPM attempts to continuously improve processes seeking process optimization by
Defining Measuring Improving your process
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People
Customer facing staff are best suited to understand customer needs and must be empowered to make improvements.
Many improvements can be done without involving technology

Business Technology Divide

Business processes are managed by business people. Information moves between software packages

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Bridging IT and Business

Bringing the power of technology to business staff and reducing their work should be the BPM group credo. BPM is the bridge between Business and IT. BPM systems will develop to be industry specific. A cyclical BPM life-cycle exists:
Design Modeling Execution Monitoring Optimization

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BPM Vs Workflow

Whats the Difference?

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BPM: characterizes a series of activities independent from specific applications. BPM is a superset of workflow It is distinguished by its ability to coordinate activities and tasks among users BPM connects disparate systems enabling seamless data sharing and universal control from a single interface Business processes, once defined, are modeled, automated, managed and optimized to be effective, cost efficient and achieve high operational performance It is used to capture, evaluate and analyze information from outside sources efficiently and effectively With the ability to distinguish between execution rules and the actual flow of the process, BPM rules allow you to govern your processes
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Workflow: facilitates simple routing of tasks or activities from person to person. Workflow Automation uses application-specific sequencing of tasks established with predefined rules, including either automated or manual activities The ability to integrate between workflow-specific systems and other external systems is often limited, only allowing document and data retrieval Workflow Software is very basic in its ability to analyze and report on content analysis The process flow is fixed, meaning cannot adapt to or provide for multiple possible paths to the same goal

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Whats in Common?...
The need to automate core processes to eliminate bottlenecks, cut out redundancies, and achieve operational efficiency.

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Work Flow Automation

Benefits of Workflow Automation
Workflow Software is a simple automation tool for directing documents and tasks to the responsible users in a business process for further actions. It provides information and support for each step of the process and business cycle. Materials and documents pertaining to the process may either be physically transferred from one user to the next, or they may be maintained in a database or server with access given to the appropriate users at the appropriate time. In this system alarms and triggers can also be set to alert executives and process owners when the tasks are overdue. This automated system of operations ensures that work is moved through the system in a timely fashion and is processed correctly by the appropriate users.

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Mapping out your companys business processes is no small feat, as process discovery can be a huge project in itself. Workflow automation, the next step in improving your operational performance, delivers many key benefits to your company including: Online data capturing through web forms Eliminating human error (often part of manual process execution) Automatic task escalation Visibility into the process

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Workflow Automation is not the end-all in your Business Process Initiative (BPI); rather it is just one piece of the puzzle.
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Taking Workflow to the Next Level

Workflow applications only provide the ability to automate and manage processes, while a BPMS provides for all four phases: Modeling, Automating, Managing, and Optimizing. The goal of each of these phases is to control the costs of executing the business process, reduce the time spent by process participants to execute their process tasks, and also improve visibility into the process itself. If you are utilizing just a workflow application, then you are taking a blind leap of faith, in that you have no way to analyze, test, and model your new business process before it is made live. Dont stop short with your workflow - BPM can take it to a whole new level in several ways:

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From a technical perspective a Business Process Management Suite (BPMS) includes seamless code-free integrations with existing systems, business rules, recipients, business data, forms and templates. A true BPM Suite not only provides routing engine capabilities, but also provides vital full process life-cycle functions including: 1. Process Modeling- simulates a process PRIOR to automation 2. Integrated Business Rules Engine business process rules can be created and updated separate from the underlying business processes 3. Out-of-the Box Forms Designer- allows for easy to build forms to emulate your current offline document 4. Process Simulation allows you to test your business processes in the same way your end users will use the processes 5. Patented Process Optimization Methodologies (Adaptive Discovery)- supports Lean Six Sigma 6. Business Activity Monitoring and Reporting- visibility is a must for any process

Coupling your Workflow Automation initiatives with BPM Software can give your company a more robust, complete tool set to leverage the full benefits of process automation.
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Process Design
Identify existing processes Design the to-be processes Key Terms
Representations of process flow Actors within a process Alerts & Notifications Escalations Standard Operating Procedures Service Level Agreements Task hand-over mechanisms

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Modeling
Starting with the Design (theoretical) introduce variables such as cost of materials, introduction of more people, etc. to determine how the processes might operate differently.
What if analysis
What if only 90% of the people had to do the work?

What if only 50% were available (baby-boomers retiring)

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Monitoring
Individual process tracking (state and statistics)
State of a customer order, state of a delivery, how many delivered on-time, right-quantity, right-place, etc. Identify problems and correct Work with customersonce the problem is identified, fix the connectivity issues (information rollups, data exchange, people communications, etc.)

Measures: Cycle time, defect rate, productivity Business Activity Monitoring (BAM)
Real time or Ad-hoc

Process Mining
Compare event logs with a-priori model to analyze bottlenecks, breakdowns in process, etc.

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Optimizing
Identifying process failures, bottlenecks, under performance issues
Cause-effect analysis Redesign or modification of process to Reduce Cost Improve Quality Increase Responsiveness

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Business Process Reengineering (BPR) focuses on the analysis and design of processes within an organization. Business Process Intelligence (BPI) focuses on providing real-time monitoring of business processes and activities as they are executed within computer systems, and in assisting in optimizing these activities and processes by identifying and detecting situations that correspond to interruptions and bottlenecks. Business Process Improvement (BPI) focuses on the optimisation of processes.

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BPO
planning, designing, measuring and managing of an organisation's business processes in order to maximise the effectiveness and profitablility of the whole business system. This is a shift from cost-led pricing to pricing-led costing.
Peter Drucker Management Challenges of the 21st Century.

This change is from forecast-driven inventory style systems to responsive, flexible and demanddriven mass customization, globally.
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Business Process Optimisation

Business Process Optimization involves optimizing process flows of all sizes, crossing any application, company boundary and connects process design and process maintenance. The Business Process Optimization aims to change a Business Process to reach a higher Quality Of Service Level for a specific service composition. The Business Process Optimization aims to change a Business Process to reach a higher Quality Of Service Level on a specific service infrastructure. A Business Process Optimization aims to adapt the business process needs (in terms of calculation power, bandwith, memory, etc.) for it to run properly on a specific service execution platform.
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What is Business Analysis? Business analysis is the discipline of identifying business needs and determining solutions to business problems. Solutions often include a systems development component, but may also consist of process improvement or organizational change or strategic planning and policy development. The person who carries out this task is called a business analyst or BA. 30 30 5

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Business Analysis
Business Analysis is the set of tasks, knowledge and techniques required to identify business needs and determine solutions to business problems.

Solutions often include a systems development component, but may also consist of process improvement or organizational change.
International Institute of Business Analysis Body of Knowledge (BABOK)

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A Business Analyst works as a liaison among stakeholders in order to elicit, analyze, communicate, and validate requirements for changes to business processes, policies, and information systems.

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Business Analysis
Business Analysis is the set of tasks, knowledge and techniques required to identify business needs and determine solutions to business problems.

Solutions often include a systems development component, but may also consist of process improvement or organizational change.
International Institute of Business Analysis Body of Knowledge (BABOK)

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