Business Process
Analysis and Modelling
Integrerade affärssystem och
affärsprocesser
Contents
 ARIS
– eEPC method
 Business process management
– Process measures
– Process cost analysis: ABC-costing
ARIS Background
 ARIS: a recognized market leader in
business modelling (Gartner Group, 1997)
 Developed by Prof. August-Wilhelm Scheer
at Department of Information Systems,
University of Saarland, Germany, in
collaboration with SAP AG.
 ARIS: a product of IDS Prof. Scheer GmbH
(set up in 1992; a public company IDS
Scheer AG in 1999; merged with
Changeware Group in 2006)
ARIS
(Rob Davis, 2001)
 ARIS: Architecture of Integrated
Information Systems
– a method rather than one technique
– a framework for business modelling (not only
limited to process modelling, but focus on the
support of business processes)
– support requirement definition, conceptual
design to logical design and physical
implementation descriptions
 ARIS Toolset
– software tool/environment for modelling
following the ARIS method
ARIS
 Business process models in accordance with
the ARIS concept and framework
 ARIS provides a modelling framework and
method
– a semi-conceptual method for describing
process-organizational issues (organization
charts, network diagrams moved one step
further in ARIS)
– helps to captures a wide range of descriptive
aspects of business process
– tools for generating, constructing and
configuring models
ARIS Method
 Aims at modelling all aspects of a complex
business. It can model:
– processes, data, organizations, systems, information,
products, knowledge, business objectives, information flows
 ARIS:
– supports software system modelling using UML
– uses Event-driven Process Chain (EPC) methodology
– has a strong focus on modelling complex business
relationships
– is a multi-user process design tool
– is capable of fully distributed model development
 One main use is defining business implementations
of the SAP R/3 ERP systems
Business process models in ARIS
 Business process models should address
multiple aspects of business processes:
process structure, organization, document
resources, etc. – numerous description
methods are necessary
 ARIS was developed independently of any
particular method; ARIS concepts
especially excel in creating enterprisewide as well as inter-business business
models and production models
ARIS Background
 Process models need to be linked to the achievement
target and objects, with metrics gathering built into
them
 Regulations places additional requirements on a business
 More complex relationships between businesses: no
longer is there a simple business-to-business competitor
or supplier-customer relationships. The interfaces
between businesses are now many and complex.
 The move to e-business operations will make these
interfaces more common and will require them to be
automated.
 How the nature of business has changed over the last
few decades and how business modelling has changed
with it?
ARIS models
 Acknowledge links between models
 It is becoming necessary to share parts of
your business model with other businesses,
suppliers, quality assessment organizations,
regulators, etc.
 a global business modellling method will be
ideal, but of course no such method exist
– a number of well-known, slightly different
business modelling methods exist: ARIS,
Catalyst, Zackman Framework
– language standards, BPML (www.bpmi.org),
UML
ARIS
 A framework that provides a way of
expressing business concepts sufficiently
precise to allow detailed analysis
 An architecture for describing business
 A set of modelling methods with an
associated meta-model
 The core of ARIS concept is the
representation of business processes in
diagramatic forms as chains of events and
process tasks.
 It can also model other business objects
and relationships between any objects
ARIS Concepts
 Business modelling: a single large model
from one single viewpoint is not so useful
 It is more useful to build many small models
from specific viewpoints and relate them to
one another
 Each model may contain many objects and
relationships. Objects used in one model
may be used in another model.
 For any specific purpose, only one or two
models will be built, supplemented by a
small number of special models focusing on
certain small aspects
The ARIS Concept
 Different models can be built from four different
views:
– Organizational view: What types of organizational devices
exist? (e. g. purchase, distribution, accountancy)
– Data view: What types of information are relevant? (e. g.
customers, suppliers, article, list of materials)
– Functional view: What types of functions are to be
executed? (e.g. create enquiries, verify accounts)
– Control view: Coherency of data, functions and
organizational devices
 The ARIS House or ARIS House of Business
Engineering (HOBE)
ARIS House
ARIS Model types
Different description levels in ARIS
ARIS Concepts and principles
 ARIS supports all phases of business
design:
–Phase I
–Phase II conceptual development
(capture and model requirements;
capture and model conceptual design)
–Phase II logical development
ARIS
 Analysis and simulation tools can be used to test
the models at each stage and validate it against the
objectives and requirements
 Conceptual design:
– defines in very broad terms how the objective can be
reached
 Logical design
– decompose these ideas into a detailed design, but
does not tell how the design will be implemented
 Physical design:
– shows in details how the design will be implemented
using specific equipment, software applications or
communication devices
ARIS model - Function tree
ARIS model - Organigram
ARIS model – Technical term model
ARIS model – eEPC (enhanced
Event-driven process chain)
eEPC combines the different views (data,
organization, function, resources) in one single model
Business process management
- process measures and cost
analysis
Business Process Management
 5 steps:
– Business process
– Business process
– Business process
– Business process
– Business process
evaluation
identification
analysis
modelling
change/implementation
monitoring, control and
Business Process Performance Variables
(Alter, 2002)








Activity rate
Output rate
consistency
productivity
cycle time
downtime
security
cost
 What is important is to find the right value
for each process performance variable, and
find balance between the measures.
How to evaluate business processes?
 Measuring process performance
– achieved business objective or not?
– how well does it support business goals?
– how to estimate process performance?
• simulation
– Performance measurement:
• qualitative measures
• quantitative measures
– DEA method: a technology for the empirical
calculation of the most effective combination of
resources that can be used to perform a process
that is performed in many different places (of
similar organization)
Cost Analysis
 One of the most common motivation of BPM is to
reduce costs.
 Cost is one dimension of measurement of inputs and
outputs.
 It may prove to be difficult to decide how much a
process costs:
– one problem is in deciding how to allocate costs that arise
from multiple processes.
– infrastructure (overhead) is a major problem
 Beyond the concept of cost, the main concern is
about the bottom line (i.e. margin or profit).
Reducing costs does not automatically lead to
increased benefits.
Cost analysis
 Pay attention to different types of costs:
– variable and fixed costs
– average costs, total costs, opportunity costs…
 Charts of accounts can be a useful source of
cost information
 Cost classification:
– employment expenses, employee travel,
property occupancy costs, utilities, buildings, raw
materials, office supplies…
– Some costs are related to infrastructure where
as other costs are related directly to production
and delivery of goods and services.
Cost analysis
 Conventional approach to cost allocation:
– overhead per person
– overhead per machine hour
– overhead per square meter
 Opportunity costs: consider alternatives to
the decision to do the process
– could resources be used for a different process?
– could the process be done by someone else at a
lower cost?
– would a different process lead to higher
revenues or higher added value?
Cost analysis – cost drivers
 Cost drivers are a step towards
Activity based costing
 Cost drivers can be identified from
activities performed – in other
words identifying the components
of business processes
 Events and inputs are usually the
cost drivers of processes.
Cost analysis – Activity Based Costing
 Conventional approach to cost allocation
poses problems because it allocates costs
to functions rather than processes
 Activity Based Costing is an alternative
approach, which is concerned with
identifying activities (processes) that
contribute the most to the emergence of
overhead costs.
 Determines how a process and its subprocesses consume resources by
identifying cost drivers to activities
Example: ABC-costing
A
B
Units produced
10000
50000
Labor input (hrs) (cost: 10€/hrs)
1000
500
Machine hours input (cost: 5€/hrs) 2000
5000
Overhead: 25000 €
Total costs= (1000 +500)*10 + (2000+5000)*5 + 25000= 75000
Direct production costs of A and B can be defined, but what about allocation of
overhead? We can use ”units produced”: Overhead/unit= 25000/60000=0.4166
Production costs A= (1000*10) + (2000*5) + (10000*0.4166)=24166,66
Production costs B= (500*10)+ (5000*5) + (50000*0.4166)=50833,33
ABC-costing (2)
 We need to identify the cost drivers of the
production process:
– Labor? Machine hours?
– Labor as cost driver:
• Labor cost driver 25000/(1000+500)=16,666
• Production costs A= (1000*10) + (2000*5) +
(1000*16,666)=36666,66
• Production costs B= (500*10)+ (5000*5) +
(500*16,666)=38333,33
– Machine hours as cost driver:
• Machine hours cost driver: 25000/(2000+5000)= 3,571
• Production costs A= (1000*10) + (2000*5) +
(2000*3,571)=27144
• Production costs B= (500*10)+ (5000*5) +
(5000*3,571)=47856
ABC-costing (3)
 Depending on how overhead is
alllocated, costs will be different
 When performing process analysis, it is
important to consider how the cost
calculation method will be influenced by
different cost drivers.
 ABC helps understanding the cost
structure.