Business Plug-In B2
Business Process
McGraw-Hill/Irwin
© 2008 The McGraw-Hill Companies, All Rights Reserved
LEARNING OUTCOMES
1. Describe business processes and their
importance to an organization
2. Differentiate between customer facing
processes and business facing processes
3. Compare the continuous process
improvement model and business process
reengineering
B2-2
LEARNING OUTCOMES
4. Describe the importance of business
process modeling (or mapping) and
business process models
5. Explain business process management
along with the reason for its importance to
an organization
B2-3
INTRODUCTION
• Business process improvement will, at a minimum,
double the gains of a project by streamlining
outdated practices, enhancing efficiency,
promoting compliance and standardization, and
making an organization more agile
• Business process improvement involves three key
steps
1. Measure what matters to most customers
2. Monitor the performance of key business processes
3. Assign accountability for process improvement
B2-4
Examining Business Processes
• The process steps are the activities the customer
and store personnel do to complete the transaction
• Business process - a standardized set of activities
that accomplish a specific task, such as processing
a customer’s order
• Business processes transform a set of inputs into a
set of outputs (goods or services) for another
person or process by using people and tools
B2-5
Examining Business Processes
• Business process characteristics:
–
–
–
–
The processes have internal and external users
A process is cross-departmental
The processes occur across organizations
The processes are based on how work is done in the
organization
– Every process should be documented and fully understood
by everyone participating in the process
– Processes should be modeled to promote complete
understanding
B2-6
Examining Business Processes
• Customer facing process - results in a
product or service that is received by an
organization’s external customer
• Business facing process - invisible to
the external customer but essential to the
effective management of the business
B2-7
Examining Business Processes
B2-8
Business Process Improvement
• Companies are
forced to
improve their
business
processes
because
customers are
demanding
better products
and services
B2-9
Business Process Improvement
• Continuous process improvement
model - attempts to understand and
measure the current process, and make
performance improvements accordingly
B2-10
BUSINESS PROCESS REENGINEERING
• Business process reengineering (BPR) analysis and redesign of workflow within and
between enterprises
B2-11
BUSINESS PROCESS REENGINEERING
• Managerial approach to reengineering
projects
1.Define the scope
2.Analyze
3.Evaluate
4.Plan
5.Approve
6.Execute
B2-12
Business Process Design
• Business process modeling (or mapping) - the
activity of creating a detailed flow chart or process
map of a work process showing its inputs, tasks,
and activities, in a structured sequence
• Business process model - a graphic description
of a process, showing the sequence of process
tasks, which is developed for a specific
– As-Is process model
– To-Be process model
B2-13
Business Process Design
B2-14
Business Process Design
B2-15
Business Process Design
B2-16
Business Process Design
B2-17
SELECTING A PROCESS TO
REENGINEER
• Criteria to determine the importance of the process:
– Is the process broken?
– Is it feasible that reengineering of this process will
succeed?
– Does it have a high impact on the agency’s strategic
direction?
– Does it significantly impact customer satisfaction?
– Is it antiquated?
– Does it fall far below best-in-class?
– Is it crucial for productivity improvement?
– Will savings from automation be clearly visible?
– Is the return on investment from implementation high and
preferably immediate?
B2-18
Business Process Management
• Business process management (BPM) - integrates all of an
organization’s business process to make individual processes
more efficient
B2-19
Business Process Management
• BPM allows business process to be executed more
efficiently and measures performance and identifies
opportunities for improvement, BPM benefits
include:
–
–
–
–
–
–
–
–
–
Update processes in real-time
Reduce overhead expenses
Automate key decisions
Reduce process maintenance cost
Reduce operating cost
Improve productivity
Improve process cycle time
Improve forecasting
Improve customer service
B2-20
BPM TOOLS
• Business process management tool - an application that
designs business process models and simulates, optimizes,
monitors, and maintains various processes
B2-21
CRITICAL SUCCESS FACTORS
1.
2.
3.
4.
Understand reengineering
Build a business and political case
Adopt a process management approach
Measure and track performance
continuously
5. Practice change management and
provide central support
6. Manage reengineering projects for
results
B2-22
Business Process Modeling
Examples
B2-23
Business Process Modeling
Examples
B2-24
Business Process Modeling
Examples
B2-25
Business Process Modeling
Examples
B2-26
Business Process Modeling
Examples
B2-27
Business Process Modeling
Examples
B2-28
Business Process Modeling
Examples
B2-29
Closing Case One
Streamlining Processes at Adidas
•
Over the past 15 years, Adidas-Salomon transformed itself
from a manufacturing organization to a global sports brand
manager with 14,000 employees located around the world
•
Previously, Adidas-Salomon operated in a decentralized
manner, and each operating unit chose software that
suited its geography and internal preferences
•
The company believed that implementing and creating
common processes, especially in its sales organization,
would help it establish global direction, streamline and
automate its business
•
Operations thereby improving flexibility, scalability, and
visibility across the extended enterprise
B2-30
Closing Case One Questions
1.
Describe business processes and their importance for
Adidas-Salomon
2.
Identify a few examples of customer facing processes and
business facing processes at Adidas-Salomon
3.
How could Adidas-Salomon use continuous process
improvement and business process reengineering to remain
competitive?
4.
How can a business process management tool help AdidasSalomon remain at the top of its game?
B2-31
Closing Case Two
3Com Optimizes Product Promotion Processes
•
To gain better control over the creation
and execution of its product promotions,
3Com uses Savvion’s business process
automation and management platform to
build a Web-based system that
streamlines the approval and
management workflow of product
promotions offered to distributors and
resellers
B2-32
Closing Case Two Questions
1.
Describe business processes and their importance to
3Com’s business model
2.
How can 3Com use continuous process improvement to
become more efficient?
3.
How can 3Com use business process reengineering to
become more efficient?
4.
Describe the importance of business process modeling (or
mapping) and business process models for 3Com
5.
How did 3Com use business process management software
to revamp its business?
B2-33