Graduate Program in
Business Information Systems
BIS 581
Business Process Management
Lecture-1
Aslı Sencer
Department of Management Information Systems
1
Business Process Management-1
Definition
Basic Properties
Classification
Process Hierarchy
Process Interactions
2
What is Business Process
Management?
Motivation:
• The business landscape is full of challenges, uncertainties and
opportunities. Due to globalization and advances in IT, these
challenges are becoming more significant.
• BPM helps an organization’s business become more flexible
and responsive to change. It increases the efficiency and
effectiveness of the processes.
Definiton:
• BPM is a discipline combining software capabilities and
business expertise to accelerate business improvement and
facilitate business innovation towards its organizational goals.
3
Priorities and goals
Who needs
process
management?
Difficulties
4
Reasons for Business Process
Improvement
• Your customers, clients or suppliers complain about the business
processes.
• Your department makes numerous errors and makes the same mistake
again and again.
• You want to understand how your department can improve its efficiency
so that your employees can spend their limited time on more valuable
work.
• You have accepted responsibility for a new business or department, or you
want to understand the work.
• You discovered challenges with the handoffs between departments.
• You want to increase your department’s productivity.
• You discovered dublication of data or tasks in multiple departments.
• You started a new job and want to understand how the department works
5
What is a business process?
Definition 1: A business process is a sequence of activites that converts a
set of inputs in the form of raw materials, energy and knowledge into a set
of outputs in the form of goods and services.
Definition 2: A business process is a set of activites with logical
interdependencies, performed to create a set of valuable output by using
the resources of the company and serve them to internal and external
customers.
6
Basic Properties of a Business Process
Existence of a triger condition
Existence of internal and external customers
Existence of a responsible person with sufficient authority
Repeatability
Measurability
Structural independence
Input
Process
Output
7
Business Process Classifications
Classification 1
Classification 2
Processes for external
customers
Basic Processes
Processing of activities to produce an
output for the external customers in
the market
Processes for internal
customers
Processing of activites to produce an
output required by the departments
and executives within the
organization so as to achieve the
organizational goals and efficient
processing
Processes that start due to an external customer
request.
Managerial Processes
Processes that take place to fulfill the
organizational goals such as setting targets,
screening the performance measures, preparing
reports for the executives, etc.
Support Processes
Processes that take place to support an ongoing
basic process such as stock replenishment
processes, cleaning and maintenance processes.
8
Critical Activity
 Activites or processes that primarily affect the main output of
the organization. These should be restructured, reengineered
in the first place.
 A delay in a critical activity causes a delay in the whole process
completion time.
 In parallel activities, the activites on the longest path are
critical.
Critical
Process1
(5 min)
Process 2
(3 min)
Process 3
(6 min)
Critical
9
Process Hierarchy
•
•
Basic processes can be divided into managable subgroups to form sub
processes, sub-sub processes and activities in an hierarchy.
An activity is the smallest component of a process that can not be further
divided into sub processes.
Basic process: Meal delivery process in a fast food restaurant
Start
Recieve
the order
Prepare the
meal
Deliver the
meal
End
Basic process: Cargo delivery process
Start
Recieve cargo
from customer
Send cargo to
the distribution
center
Deliver cargo to
the address
End
10
Example: Process Hierarchy
Basic Process Model: New Product Development
Start
Do market
research
Design the
product
Develop the
production
processes
Introduce the
product to the
market
End
Start market sales
End
Sub Process Model: Introduce the product to the market
Start
Prepare the sales
documents
Train the sales
staff
Start sales (pilot
sales)
Sub-sub Process Model: Start market sales
Start
Design the
product flyer
Approve the
content
Design the artistic
format
Print the flyer
Print the flyer
End
11
Process Maps
• A process map is one of the best ways to help people understand any
business process. It helps everyone involved in creating the process map
learn how the process works, what activites constitute most of the work,
where the handoffs occur between departments, and where the
opportunities for improvement exist.
• There are two approaches depending on the technique that someone
subscribes to quality or reengineering.
– Reengineering focuses on the future state , driven by customer needs and does not
focus on the current process.
– Quality is also concerned with the customer needs but examines the current process.
12
Process Modeling: Definitions
• A process map is a visual representation of a series of connected
activities that, when strung together, deliver a meaningful outcome
to the client/customer.
• A process map is composed of sub processes or activities that add
value to the next step in the process.
• Each activity is composed of a series of tasks, that are used to
define the activity.
• Each activity should start with an action verb that demonstrates
doing or performing something. Examples of action verbs include
words like develop, approve, update, run, and communicate.
– Ex: Develop the business case, approve the expense report, update the
forecast, run a report, communicate the status.
Modeling Process Interactions
Process interactions are defined usually by the use of flowcharts. These
business process models are actually the flowcharts generated by using
a set of symbols.
Basic symbols used in business process models
Data
On page reference
Process/activity
Document
Off page reference
Decision
Screen input-output
Beginning/end of the process
Process connector
Name of the data
Process that is also used
by other processes
Data base input-output
input-output connector
Process Map Example:
A Product Quality Test Process in a Fast Food Restaurant
Start
Take samples
Take to
laboratory
Analyze
Decision?
Healthy
Not healthy
Fail
document
Prepare an
approporiate
condition
document
Prepare a fine
document
Send to
approval
End
Pass
document
Cross Functional Process Map
• Sometimes two or more groups of people are responsible for
the activities, say managers and analysts for ex. The analysts
reside in a different department from the managers who
request and approve the awards.
• In representation, a process map may include several cross
functional bands, one for each responsible person/department.
• In a cross functional process map, it is easy to see when
responsibility for a step in a process moves from one
department to another, known as handoffs.
Ex: Cross Functional Process Map
A Product Quality Test Process in a Fast Food Restaurant
Test Team Member
Laboratory Analyst
Start
Take
samples
Take to
laboratory
Handoff
Analyze
Decision?
Not healthy
Fail
document
Prepare a fine
document
Healthy
Prepare an
approporiate
condition
document
Pass
document
Send to
approval
Handoff
End
17
Business Process Instance
• A business process instance represents a
concrete case in the oprational business of a
company, consisting of activity instances.
For example, each scenario for a product
tested in a fast food restaurant is an instance.
Process Orchestrations
• The ordering of activities in a business process are controlled
by a BPMS as centralized software component run by the
reseller company. This centralized component is very similar
to a conductor who centrally controls the musicians in an
orchestra; therefore business processes are also called
process orchestrations. There are different languages to
express orchestrations.
Process Interactions
• The following process model represents the activites that a buyer
performs to process an order. This process interacts with the business
process of the corresponding reseller.
+
Represents the parallel activities that take place. This symbol is
different than the decision module, since the instance has to
dublicate itself to simultaneously flow along the parallel paths.
Ex: Process Interactions
1.
2.
3.
4.
5.
6.
The business processes of buyer and the reseller can interact in the
following way:
The buyer sends an order message to the reseller (Place Order
activity)
The reseller accepts the order message in the Receive Order
activity . The order information is extracted from the message and
order processing continues.
The reseller sends an invoice (Send Invoice) and ships the ordered
products (Ship Products)
The buyer receives the invoice in the Receive Invoice activity
The buyer sends the payment in the Settle Invoice activity
Buyer receives the ordered products in the Receive Products
activity
Process Choreography
• The interactions of a set of business processes
are specified in a process choreography. This
term indicates the absence of central agent that
controls the activities in the business process.
• The interaction can be achieved by sending and
receiving messages. In order to realize correct
interactions, the interacting business processes
need to agree on a common choreography before
they start interacting.
Ex: Process Choreography
Use of BPM Systems (BPMS)
• Large parts of the interacting business processes or
process orchestrations can also be implemented by
software systems.
• The buyer might use a Web browser to search the online
catalogue, makes her choice, inputs her info and presses
the Submit button.
• The message flow from buyer to reseller is no longer
implemented by surface mail, but by Internet protocols.
The buyer’s Web browser sends a message to the
reseller’s Web server, which calls a software module that
places the order in the reseller’s ordering system.
Modifications in the Choreography
• The realizations of business processes by participants can change without
affecting the business process interactions.
Ex: The buyer interacts with a different reseller, Reseller-A
The reseller is protected
from fraudulent buyers,
but execution time is
longer!
Summary: Basic Terminology
• A business process consists of a set of activities that are performed
in coordination in an organizational and technical environment.
These activities jointly realize a business goal.
• Business process management (BPM) includes concepts, methods
and techniques to support the design, administration,
configuration, enactment and analysis of business processes.
• A business process management system (BPMS) is a generic
software system that is driven by explicit process representations to
coordinate the enactment of business processes.
• A business process model consists of a set of activity models and
execution constraints between them.
26
Exercise 1: Process Modeling
Consider the registration process that you follow at the beginning
of every semester.
1)
Describe its inputs, resources, trigger condition, customers
(internal/external), responsible person, repeatability,
measurability, structural independence, output
2)
Develop the cross functional map of the registration process.
3)
Choose one of the sub processes and develop the process
choreography for its subsub-processes.
27