MTAT.03.231
Business Process Management (BPM)
(for Masters of ETM)
Lecture 3
Process Implementation & Monitoring
Marlon Dumas
marlon.dumas ät ut . ee
Business Process Lifecycle Management
• Process identification
•
•
•
•
•
Process modelling (as-is)
Process analysis
Process redesign (to-be)
Process implementation
Process monitoring
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2
Process Implementation
Harmon’s Process-centric Enterprise
Architecture
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Harmon (2004)
Process Implementation
• Organisational Change and Enablement
– User Participation
– User Training
– Change Planning and Management
• IT Implementation
– Custom Software Application
• In-house development
• Outsourced
– Packaged Enterprise System
– Business Process Management System (BPMS)
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IT Implementation – Packaged
Enterprise Systems
Typically classified into:
• ERP: Enterprise Resource Planning, including
– Manufacturing, inventory control, procurement, financials, human
resources
• SCM: Supply Chain Management, including
– Material acquisition (forecasting, planning), logistics/transportation
– Supplier relationship management
• CRM: Customer Relationship Management
– Marketing, lead management, sales
• These functions may come together, or acquired separately
– E.g. Salesforce (mainly CRM), SAP Business Suite, Oracle E-Business
Suite, Microsoft Dynamics AX.
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ERP Systems
• Multi-module application that helps a company manage
key parts of its business in an integrated fashion.
• Key features include:
– standardized environment with shared database independent of
applications and integrated applications
– enables information flow across organizational boundaries to
support common transactions and business processes
– intended to be customized for specific companies
• database configuration
• bolt-on software
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ERP System
Legacy
Systems
Data Warehouse
ERP System
On-Line Analytical Processing
(OLAP)
Bolt-On Applications
(Industry Specific Functions)
Suppliers
Customers
Core Functions [On-Line Transaction Processing (OLTP)]
Sales
&
Distribution
Business
Planning
Shop Floor
Control
Logistics
Operational Database
Customers, Production,
Vendor, Inventory, etc.
© Sumit Lodhia
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Business Process Execution Engines
Big Vendors
• Oracle SOA Suite
• IBM BPM
• Microsoft BizTalk
• Microsoft Windows Workflow
Foundation
• SAP NetWeaver BPM
Other closed-source
•
•
•
•
BizAgi
Progress Savvion
Metastorm BPM
TIBCO
ActiveMatrix BPM
Commercial
Open-Source
• Intalio|BPM
• Activiti
• BonitaSoft
Community
Open-Source
• YAWL
• Enhydra
Shark
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Danske Bank: Customer Package
Process
Create Card
Customer
Create Account
Advisor
Juni 2003
August 2003
Create Credit
October 2003
December 2003
Marts 2007
Introduction of Customer packages.
Word template to collect info
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© Steen Brahe, Danske Bank
Danske Bank: Customer Package
Process
Create Card
Customer
Create Account
Email
Advisor
Juni 2003
Backoffice workers
August 2003
October 2003
December 2003
Create Credit
Marts 2007
Backoffice group created
Handles the creation process
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© Steen Brahe, 2007
Danske Bank: Customer Package
Process
Create Card
Customer
Not valid
Create Account
Advisor
Juni 2003
August 2003
Case Transfer System
October 2003
Backoffice workers
December 2003
Create Credit
Marts 2007
Case Transfer System
Automatic validation and transfering
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© Steen Brahe, 2007
Danske Bank: Customer Package
Process
Create Card
Create Account
Backoffice workers
Customer
Not valid
XML
Advisor
Case Transfer System
Create Credit
Backoffice workers
Juni 2003
August 2003
October 2003
December 2003
Marts 2007
Workflow enabled creation process v. 1
Automatic process control, 0% automated activities
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© Steen Brahe, 2007
Danske Bank: Customer Package
Process
Service
A
Service
B
Service
C
Customer
Not valid
XML
Advisor
Case Transfer System
Create Credit
Backoffice workers
Juni 2003
August 2003
October 2003
December 2003
Marts 2007
Workflow v. 6
80% automated activities
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© Steen Brahe, 2007
Process Monitoring & Mining
Process Monitoring
Process
design
Strengths/
weaknesses
Process
design
Implementation
Process
execution
(Re-)
implementiation
Process
Monitoring
Analysis
Process
execution
© Michael zur Muehlen
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Types of Process Monitoring
• Runtime Monitoring (Business Activity Monitoring)
– Viewing the load of the process
– Identifying problematic cases
– Identifying late cases (risk of missing deadlines), etc.
• Post-mortem Monitoring (aka Business Process Analytics)
– Performance KPIs: cycle times, resource utilization, error rates, …
– Identification of bottlenecks
• See for example:
– BizAgi BAM: http://wiki.bizagi.com/en/index.php?title=Analysis_Reports_BAM
– Analytics: http://wiki.bizagi.com/en/index.php?title=Analysis_Reports_Analytics
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Process Monitoring: Dashboards
Process Cycle
Time
of Order
Processing
Process
Frequency
of Order
Processing
Process Cycle Time
of Order Processing
split up to different
Plants
IDS (2003)
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Process Mining Tools
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•
•
•
•
ARIS Process Performance Manager
Perceptive Process Mining
Fujitsu Interstage (BPM Analytics)
Fluxicon
ProM (open-source)
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Process Mining – The ProM Framework
supports/
controls
information
system
operational
process
records
refers to
models
configures
process
discovery
(un)desired
properties
process
models
conformance
testing
event
logs
log-based verification
www.workflowcourse.com
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ProM Demo
http://www.processmining.org/
www.workflowcourse.com
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Beyond Monitoring - Process Controlling
• Collation and analysis of runtime data
• Comparison of actual- and target data
• Active impact on current process execution as well as
future process modeling (target)
Goal:
Improvement of an enterprise‘s adaptability
to changes in the environment and in the
enterprise itself
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Process Controlling
 Objective:
 Establish a system for controlling the process and providing
feedback to the people involved
Establish Control Points
• Control points are activities such as
– Inspection, verification, auditing, measuring, counting…
– Usually considered business value adding
• Without control points and a control system the only way
of assessing process performance is customer feedback
 The process ends up in a reactive mode
 Poor quality is discovered too late
• Location of control points is determined by
– Criticality – impact on customer satisfaction
– Feasibility – physically and economically possible
Laguna & Marklund
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Process Controlling (cont.)
Develop and Implement Measurements
• Involves answering the questions
1.What is to be measured and controlled?
2.What is currently measured (available data)?
3.Can a business case be made for a new measurement
system?
4.What is an adequate sampling method, sampling size &
frequency?
Laguna & Marklund
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Reference Models
Performance Measures in SCOR
Overall Inventory Turns
Annual cost of goods sold (company info)  average total inventory
Raw Materials Inventory Turns
(manufacturing companies only)
Annual cost of raw materials purchased (3)  average raw material
inventory
Work-in-Process Inventory Turns
(manufacturing companies only)
(Annual cost of raw materials purchased (3) + Annual cost of conversion
(4))  average work in process inventory
Finished Goods Inventory Turns
Annual cost of goods sold (company info)  average finished goods
inventory
Average safety stock  total inventory
Percentage of safety stock
Purchase order cycle time (in days for
purchasing department and excludes
supplier lead time)
Average amount of time (in days) elapsed from point of intention to
place order to receipt of order by vendor
Supplier lead time
Average amount of time (in days) elapsed from point of order to delivery
Supplier on-time delivery
Percentage of orders supplier delivers on scheduled due date
Find more at:
http://www.exinfm.com/workshop.html
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Benchmarking: SCORcards
T. Gulledge & T. Chavusholu: “Automating the construction of supply chain
key performance indicators”, Industrial Management & Data Systems, 2008.
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Exercise
• CVS Case Study
– Which performance measures is your to-be process
intended to improve?
– How would you monitor these performance measures?
– How would you ensure that pharmacies are indeed
applying the principles of the to-be process?
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Recap: The Layers of BPM Activities
BPM Setup
Strategic
Alignment
BPM
Governance
BPM
Methodology
Process-aware
Infom. Systems
Culture &
People
Process
Measurement
Process
Analysis
Process
Improvement
Process
Training
Process
Testing
Change
Management
Process
Perform. Mgt.
Process
Controlling
Process Analysis
Process
Identification
Process
Modelling
Process Implementation
Lean/
Six
Sigma
Process
Configuration
Process
Development
Process Execution and Controlling
Process
Execution
Process
Monitoring
Process
Mining
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