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Business Process Management

Business Process Management 25
CA441: Business Process Management Class: EC 4 Lecturer: Martin Crane 1 CA441 BPM Admin 19 Sep 2011What are Business Processes anyway Def: A collection of interrelated work tasks, initiated in • response to an event, achieving a specific result for the customer and other stakeholders of the process (Sharp McDermott) No Result – No Process • + Customer Relationship Management is not a process + Confirm Market Opportunity is a process BPM = Management of Business Processes • 2 CA441 BPM Admin 19 Sep 2011 A Simple Business Process Example Customer Buying Cup of Coffee • Different Actors involved: Customer, Cashier, Chef • Give Coffee Prepare Coffee to Customer Take Order Collect Payment Place Order Make Payment Collect Coffee 3 CA441 BPM Admin 19 Sep 2011 Customer Cashier ChefBPM Timeline Origins in manufacturing (1700s): • + One person making an item from start to finish + Specialisation: division of labour (Adam Smith) Analysis of Specialised Tasks/ 'Time Motion' Studies (1900s) • Work Process Flow (early to mid1900s) (Frank Gilbreth) • + Disenchantment with the Assembly Line (1930s) Workflow (mid1970s): • + Documentbased at a departmental process level The Quality Era (1980s): • + Continuous Improvement (Total Quality Mgmt Deming Juran) Business Process Reengineering (BPR) (1990s) • + Revolution V Evolution (Hammer Champy) Business Process Modelling (2000s) • + Multilevel, whole organization process integration modelling 4 CA441 BPM Admin 19 Sep 2011BPM Caveats.... BPM has potential to transform organizations into more nimble, • agile entities, leveraging both human tech capital effectively. However, often BPM efforts are spoiled by an emphasis on • technology, diagrams, or other pedantry. BPM is not primarily about these; its purpose is to improve • business. If you cannot demonstrate the business value of a BPM effort, go back to the drawing board. Processes are a view on organizations, but are an abstraction • from reality do not cover all aspects of a complex system. Don’t mix up the map with the territory it represents. 5 CA441 BPM Admin 19 Sep 2011BPM Caveats....cont'd BPM efforts require structure methodology. • + structure to guide efforts at different levels of abstraction (separating what from how), i.e. a level framework. + also need a structure to navigate among the processes of your organization, i.e. a process architecture. + need a methodology to retain leverage what you have learned about managing conducting BPM projects Shouldn't try to improve everything at once, but review the most • important aspect (i.e. 'Pinchpoints') of an organization. 6 CA441 BPM Admin 19 Sep 2011Relationship Between Concepts Relationship Between Concepts Business Process (i.e what is intended to happen ) Is defined in a Is managed by Workflow Management System Process Definition (a representation of what is intended (controls automated aspects of the to happen) business process via) Used to manage and create Composed of SubProcesses Process Instances (a representation of what is actually happening) Activities Include one or more Which may be Activity Instances During execution or are represented by Which include Manual Activities Automated Activities And/Or (which are not managed as part of the Workflow system) Work Items Invoked Applications (tasks allocated to a workflow (computer tools/applications used to participant) support an activity) SOURCE: WFMC 7 CA441 BPM Admin 19 Sep 2011Course Objectives Examine the main concepts of Business Process Management • and Business Process Redesign Examine techniques for modelling Business Processes. • Examine the environmental conditions and the enabling • technologies. Compare BPR with other management techniques. • 8 CA441 BPM Admin 19 Sep 2011Course Structure Lectures • Introduction scope, objectives. •Workflow Modelling (understanding current WF/ designing new WF) • Introduction to Business Process Redesign •Business Process Reengineering • Successful Reengineering Projects •SocioTechnical Systems • Workflow Tools •Workflow Management • WF Management in Practice: PetriNets •Business Process Modelling 9 CA441 BPM Admin 19 Sep 2011Timetable Lectures Monday 12 1 CG05 Thursday 2 3 CG04 Labs None Tutorials Monday 2 3 CG05 as required 10 CA441 BPM Admin 19 Sep 2011EndofSemester Mark Assignments 50 • Exam 50 • Assignments Essay in form of a research paper • Details to be announced • 11 CA441 BPM Admin 19 Sep 2011Information See my web page at: http://www.computing.dcu.ie/mcrane/CA441/ Research Papers/Lecture Notes on various topics will be put on this page throughout the course 12 CA441 BPM Admin 19 Sep 2011BOOK LIST Jackson, Michael Twaddle, Graham Business Process Implementation Addison Wesley. Hammer, Michael Champy, James Reengineering the Corporation Nicholas Brealey. Sharp, Alec McDermott, Patrick Workflow Modelling Artech House. Davenport, Thomas H. Process Innovation Harvard Business School Press. Other books and articles will be recommended for reading from time to time. 13 CA441 BPM Admin 19 Sep 2011Workflow Modelling (Sharp McDermott) 1 CA441 BPM Workflow Modelling 20 Sep 2010Method Frame the Process Understand the current (“asis”) process Design the new (“tobe”) process Develop usecase scenarios 2 CA441 BPM Workflow Modelling 20 Sep 2010Process Enablers Workflow design Workplan for responding to an event • Information technology Focus on information systems • Motivation and measurement Explicit and implicit reward systems • People do what they are measured on • Human resources Knowledge, skills and experience • Training, organisational structure, job definitions … • Policies and rules Internal and external • May be obsolete • Facilities design Workplace design and infrastructure • 3 CA441 BPM Workflow Modelling 20 Sep 2010Context Framework (aka a FW for putting analysis of Bps in context with analysis of IS Requirements) Mission, strategy and goals Business process Information system Presentation • Logic • Data management • 4 CA441 BPM Workflow Modelling 20 Sep 2010Modelling techniques Business process: process workflow models (“swimlane” diagrams) Presentation: use case scenarios Application logic: various Data management: various 5 CA441 BPM Workflow Modelling 20 Sep 2010Process Workflow Model Submit Resubmit etc. registration registration Student by post Sort post by Deliver Mailroom department post yes Open post, Sort Department decide if registrations secretary no no misdirected by advisor Enrollment Decide if Request assistant form is admission yes complete status Registrar’s office Print student Batched and run summary etc. overnight report Department advisor 6 CA441 BPM Workflow Modelling 20 Sep 2010Workflowdriven Methodology Understand Design Frame the Develop use Design user asis tobe process cases interface process process Describe application processes (transactions) and business rules Build overall process map Develop logical data model 7 CA441 BPM Workflow Modelling 20 Sep 2010Framing the Process •Identify a set of related processes, and develop an overall process map. •Establish the scope of the target process. •Review or document mission, strategy, goals. •Initial process assessment. •Process vision and performance objectives •Glossary of terms and definitions. •Observations on culture, core competences, management systems. 8 CA441 BPM Workflow Modelling 20 Sep 2010A business process is ... A collection of interrelated work tasks, initiated in response to an event, that achieves a specific result for the customer of the process. achieves a specific result for the customer of the process initiated in response to a specific event work tasks a collection of interrelated 9 CA441 BPM Workflow Modelling 20 Sep 2010Framing the Process (document the scope of the process) Process name in verbnoun format Event that triggers the business process Result achieved by the process Customer that receives the result Other stakeholders and the result(s) they expect 5 – 7 major activities or milestones Actors with a rôle in the process Mechanisms Timing and frequency Related processes 10 CA441 BPM Workflow Modelling 20 Sep 2010Overall process map Simply a set of related processes: Define Item Establish Procure Pay Supply Item Vendor Agreement Qualify Vendor Overall process map for Supply Management area. 11 CA441 BPM Workflow Modelling 20 Sep 2010Identifying processes (bottomup) Identify ‘milestones’ (results from processes) Link the milestones Identify cardinality (1:1), (1:m), (m:1) Set of (1:1)s identifies a process Name the process Identify the triggering event Identify stakeholders and expected results 12 CA441 BPM Workflow Modelling 20 Sep 2010“Milestones” Prospect is Contract is Payment is identified established received Order is Invoice is assembled Order is issued Marketing shipped meeting is conducted Amount due is calculated Order is received 13 CA441 BPM Workflow Modelling 20 Sep 2010Analyse Links 1:1 1:1 1:1 1:M 1:1 C C C C C C C Co o o o o o o on n n n n n n nd d d d d d d du u u u u u u uct ct ct ct ct c c ct t t IIIIIIIIId d d d d d d d de en en en en e e e en n n n nt t t t t t t t tiiiiiiiiif f f f f f f f fy y y y y y y y y S S S S S S S Sch ch ch ch ch ch ch ched ed ed ed ed ed ed edu u u u u u u ulllllllle e e e e e e e E E E E E E Est st st st st st stab ab ab ab ab ab abllllllliiiiiiis s s s s sh sh h h h h h R R R R R Recei ece ece ece ece eceiiiiiv v v v v ve e e e e e A A A A Asse sse sse sse ssem m m m mb b b b bllllle e e e e Identify M M M M M M M Ma ar ar ar ar ar ar ar rke ket ket ket ket ket ket ket tiiiiiiiin n n n n n n ng g g g g g g g P P P P P P P P Pr r r r r r r r ro o o o o o o o osp sp sp sp sp s s s sp p p pect ect ect ect ect e e e ect ct ct ct E E Es s st t tab ab ablllM M M M M M M M iiish sh sh eet ee ee ee ee ee ee ee t t t t t t tiiiiiiiin n n n n n n ng g g g g g g g R R R R R R R R Recei ecei ecei ecei ecei ecei ecei ecei eceiv v v v v v v v ve e e e e e e e e C C C C C C Co o o o o o on n n n n n nt t t t t t tr r r r r r ra act act act act act act ct O O O O O Or r r r r rd d d d d der er er er er er O O O O Or r r r rd d d d der er er er er Prospect M M M M M M M Meet ee ee ee ee ee ee eet t t t t t tiiiiiiiin n n n n n n ng g g g g g g g C C Co o on n nt t tr r rac ac act t t P P P P P P P P Pay ay ay ay ay ay ay ay aym m m m m m m m men en en en en en en en ent t t t t t t t t 1:1 A A A A Assem ssem ssem ssem ssemb b b b bllllle e e e e IIIssu ssu ssue e e IIIIIss ss ss ss ssu u u u ue e e e e IIIIIn n n n nv v v v vo o o o oiiiiice ce ce ce ce O O O O Or r r r rd d d d der er er er er IIIn n nv v vo o oiiic c ce e e C Co on nd du uc ct t S S S S S Sh h h h h hiiiiiip p p p p p O O O O O Or r r r r rd d d d d der er er er er er M Mar arket ketiin ng g M:1 1:1 1:1 1:1 C C Cal al alcu cu culllat at ate e e Issue Receive Distribute M Mee eet tiin ng g S S S Sh h h hiiiip p p p O O O Or r r rd d d der er er er Issue Invoice A A Am m mo o ou u un n nt t t D D Du u ue e e Invoice Payment Payment C C C C C C Cal al al al al al alcu cu cu cu cu cu culllllllat at a a a a at t t t te e e e e e e A A A A A A Am m m m m m mo o o o o o ou u u u u u un n n n n n nt t t t t t t D D D D D D Du u u u u u ue e e e e e e R R R Rece ece ece eceiiiiv v v ve e e e O O O Or r r rd d d de e e er r r r (Add extra steps if necessary) 14 CA441 BPM Workflow Modelling 20 Sep 2010Analyse Links 1:1 1:1 1:1 1:M 1:1 Conduct Identify Schedule Establish Receive Assemble Identify Marketing Prospect EstabliM sh eet ing Receive Contract Order Order Prospect Meeting Payment Contract 1:1 Assemble Issue Order Invoice Conduct Ship Order Marketing M:1 1:1 1:1 1:1 Receive Distribute Calculate Meeting Issue Invoice Ship Order Payment Payment Amount Due Calculate Amount Due Receive Order (Add extra steps if necessary) 15 CA441 BPM Workflow Modelling 20 Sep 2010Form Processes 1:1 1:1 1:1 1:M 1:1 Conduct Identify Schedule Establish Receive Assemble Marketing Prospect Meeting Contract Order Order Meeting 1:1 M:1 1:1 1:1 1:1 Calculate Receive Distribute Ship Order Issue Invoice Amount Due Payment Payment 16 CA441 BPM Workflow Modelling 20 Sep 2010Name Processes Acquire Customer Conduct 1:1 1:1 1:1 Identify Schedule Establish Marketing Prospect Meeting Contract Meeting 1:M Fulfil Order 1:1 1:1 Receive Assemble Ship Order Order Order M:1 Collect Accounts Receivable 1:1 1:1 1:1 Calculate Receive Distribute Issue Invoice Amount Due Payment Payment 17 CA441 BPM Workflow Modelling 20 Sep 2010Identify stakeholders and expected results Customer may not be the only stakeholder Results must satisfy customer, but also the organisation e.g. Customer order is satisfied (customer receives) and paid for (other criteria met) 18 CA441 BPM Workflow Modelling 20 Sep 2010Initial Assessment 2 Questions: What’s wrong with the process anyway • What will be better when we’re done • Perspectives: Stakeholders • Enablers • Metrics • 19 CA441 BPM Workflow Modelling 20 Sep 2010Metrics ● Give a guide of where to focus efforts no point in optimising a process that occurs infrequently, or uses few resources. ● Allow us to evaluate success. ● Collect all the metrics available: ● Volumes ● Frequencies ● Effort ● Exceptions ● Need to be appropriate for the process , not the function 20 CA441 BPM Workflow Modelling 20 Sep 2010What metrics How many How long How much effort Who’s involved Efficiency Cost 21 CA441 BPM Workflow Modelling 20 Sep 2010Assessment by stakeholder 3 essential groups: Customers • Performers • Owners • May also consider: Suppliers • Government other regulatory agencies • General public • Industry bodies • 22 CA441 BPM Workflow Modelling 20 Sep 2010Assessments by SH: Customer Performers Managers Owners Suppliers Other Groups Assessment 1 Customer •Has the product or service got the right characteristics •How much effort is required of the customer •Does the process require too many interactions •Is the customer the only one monitoring the process •Are the rules requirements reasonable 23 CA441 BPM Workflow Modelling 20 Sep 2010Assessments by SH: Customer Performers Managers Owners Suppliers Other Groups Assessment 2 Performers •Is this how you’d do it if you had a choice •Does this process help you meet your goals •Remember that the performers are not the customers 24 CA441 BPM Workflow Modelling 20 Sep 2010Assessments by SH: Customer Performers Managers Owners Suppliers Other Groups Assessment 3 Managers Owners •Process must be efficient and profitable. •In a notforprofit setting, it must be fiscally responsible. •Consider opportunity cost as well as actual cost. 25 CA441 BPM Workflow Modelling 20 Sep 2010Assessments by SH: Customer Performers Managers Owners Suppliers Other Groups Assessment 4 Suppliers “How easy is it to do business with us as compared to other customers” “What errors or actions on our part cause difficulties for you” 26 CA441 BPM Workflow Modelling 20 Sep 2010Assessments by SH: Customer Performers Managers Owners Suppliers Other Groups Assessment 5 Other groups General public – ethics, safety, environment. Local community – involvement in local initiatives. Regulators. Don't assume ask 27 CA441 BPM Workflow Modelling 20 Sep 2010Process Enablers (review) Workflow design Workplan for responding to an event • Information technology Focus on information systems • Motivation and measurement Explicit and implicit reward systems • People do what they are measured on • Human resources Knowledge, skills and experience • Training, organisational structure, job definitions … • Policies and rules Internal and external • May be obsolete • Facilities design Workplace design and infrastructure • 28 CA441 BPM Workflow Modelling 20 Sep 2010Workflow design Information technology Motivation and measurement Human resources Policies and rules Facilities design Enabler perspective Workflow design: Examine • + steps + precedence + flow + handoffs + decision points What is the one thing you would do to improve this • process What aspect of this process causes you the most • problems 29 CA441 BPM Workflow Modelling 20 Sep 2010Workflow design Information technology Motivation and measurement Human resources Information Technology Policies and rules Facilities design • Primarily manifested as systems. In many cases the system is the business process. What’s old and doesn’t work • What’s new and might work … or has become a necessity • • Not only need to do things right – need to do the right thing. Many application development projects automate the root cause of the problem. • Work from the bottom up in the framework: + Are the right data being maintained, and is the right information being presented to each step + Are the right activities being automated + Are the user interfaces appropriate for the task and the person using them + Is the flow of work automated wherever possible and appropriate 30 CA441 BPM Workflow Modelling 20 Sep 2010Workflow design Information technology Motivation and measurement Human resources Policies and rules Facilities design Motivation and Measurement • People don’t pay much attention to what management says; they pay attention to what management measures. • Do the measures of performers support or impede process goals • NHS example – waiting lists 31 CA441 BPM Workflow Modelling 20 Sep 2010Workflow design Information technology Motivation and measurement Human resources Policies and rules Facilities design Human Resources • How do organisational structures, job definition and skills impact the process • Will the workforce need to change • Will new staff skills and training be required • Keep the unions involved. 32 CA441 BPM Workflow Modelling 20 Sep 2010Workflow design Information technology Motivation and measurement Human resources Policies and rules Facilities design Policies and Rules Rules reflect the organisation’s bias. e.g. two possible policies on refunds could be: “refunds up to a certain amount can be handled by a • sales person on the retail floor, at their discretion, whether or not the customer has a receipt.” “all refund requests must be accompanied by a sales • receipt and a completed refund reason form; they will be processed by the Customer Service and Accounts departments, and a cheque will be posted.” The process will be different in each case. 33 CA441 BPM Workflow Modelling 20 Sep 2010Workflow design Information technology Motivation and measurement Human resources Policies and rules Facilities design Facilities Design •Workflow design/physical infrastructure getting more attention •Design of eg Offices detrimental to work being done Cubicle seems private but can be overheard/disturbs others • For highly collaborational Workgroups with meetings etc need • a meeting room and usually not enough available. •Space, quiet, privacy ability to avoid interruptions are key productivity enablers that are frequently ignored in modern office layouts (openplan) 34 CA441 BPM Workflow Modelling 20 Sep 2010Approve customer credit application Event Subprocesses Result Customer is Credit notified, Complete Evaluate Decide on Inform Set up application is recorded and application application application customer customer submitted enabled to place orders Case for action Vision • We’re losing market share to competitors offering fast or instant credit, and • We will offer instant, secured credit to small Customers. our image is declining. • Applications from large Customers will be handled in two days or less. • Our paperbased workflow involves many starts and stops, and involves • All staff will perform highervalue work, and have more authority – Credit Reps several departments and job functions. will focus on large clients, and Credit Admin Clerks will handle small • We don’t capture the right information on the application, so we need to go applications completely. back to the Customer repeatedly. • Independent surveys show that Customers perceive us as the Customer • We can’t answer Customer queries about inprocess applications. Service leader in our industry. • The effort and delay aren’t justified for small Customers who pose minimal risk • Once the new process is implemented, our market share decline will slow, as a group. and within one year we will again be growing at 12 per year. • Credit Representatives spend most of their time on small accounts, not on large ones where their expertise is needed. • Unless we fix the process, our market share will continue to erode and closure of the operation is likely Actors Mechanisms Metrics • Applicant • Credit Application • 1 to 4 hours and up to 7 elapsed days per application • Sales Representative • Credit Report • 6 Credit Representatives • Credit Representative • Notification Letter • 150 applications per month, growing 10 per year • Credit Administration Clerk • Sales System • 75 approved, 25 declined • Credit Bureau • 85 of applications come from small customers • Word Processing Clerk • 90 of sales volume comes from 10 of customers • Marketing Administration Clerk • 10 of applications come from previously denied Applicants, and 10 from • Customer Data Maintenance Clerk former Customers • Small Customer bad debt writeoffs are less than .2 of sales, and overall they are approximately 1 of sales A “poster” summarising the results of framing the process 35 CA441 BPM Workflow Modelling 20 Sep 2010The Environment Any redesigned process must fit into the environment and ‘culture’ of the organisation. Issues: Mission and strategy, especially strategic • differentiation. Organisational culture. • Core competences. • Business context and focus. • 36 CA441 BPM Workflow Modelling 20 Sep 2010Mission and strategy. Organisational culture. Core competences. Business context focus. Business mission, strategy and goals Mission: what we do, and who we do it for. • Strategy: Why would a customer choose us • Goals: performance targets, to focus effort and gauge • progress. 37 CA441 BPM Workflow Modelling 20 Sep 2010Mission and strategy. Organisational culture. Core competences. Business context focus. Strategic discipline Study by Treacy Wiersema (in The Discipline of Market Leaders) shows that leading companies choose to excel in one of three disciplines: Operational excellence • Product leadership • Customer intimacy • “Also rans” make no choice or choose to be good at all three 38 CA441 BPM Workflow Modelling 20 Sep 2010Mission and strategy. Organisational culture. Core competences. Business context focus. Strategic disciplines The Three Disciplines Operational Excellence Product Leadership Customer Intimacy Core business Sharpen distribution Nurture ideas, Provide solutions and processes that… systems and provide no translate them into help customers run hassle service products, and market their business them successfully Structure that… Has strong central Acts in an adhoc, Pushes authority and a finite looselyknit and empowerment close level of empowerment everchanging way to the point of customer contact Management Maintain standard Reward individuals’ Measure the cost of systems that… operation procedures innovative capacity providing service and and new product of maintaining successes customer loyalty Culture that… Acts predictably and Experiments and Is flexible and thinks believes “one size fits thinks “out of the “have it your way” all” box” Adapted from Fortune, Feb. 6 1995, p. 96. 39 CA441 BPM Workflow Modelling 20 Sep 2010Mission and strategy. Organisational culture. Core competences. Business context focus. Some process improvement goals… • Flexible in meeting the needs of individual customers • Easier for an entrylevel workforce to adopt with relatively little training and support • Fewer customer interactions • Absolute auditability and adherence to applicable regulations • Accessible anytime, anywhere, via any medium • Easier to standardise and maintain at international locations • Less time and effort to integrate new suppliers or customers into the process • More suitable for support by commercial offtheshelf (COTS) software 40 CA441 BPM Workflow Modelling 20 Sep 2010Mission and strategy. Organisational culture. Core competences. Business context focus. Beliefs and Culture •Organisational behaviour stems from a few basic beliefs: “There’s always a better way” • “We have a bias towards informed action” • “Decisionmaking should be close to the action” • “Our clients are trying to cheat us, the public misunderstands • us and the media are out to get us. (and our employees couldn’t care less)” 41 CA441 BPM Workflow Modelling 20 Sep 2010Mission and strategy. Organisational culture. Core competences. Business context focus. Identifying Culture 1. Are there stories or corporate legends that provide examples 2. What factors continually get in the way 3. What factors are seen as expediting progress 4. How are decisions made 5. Are all employees free to offer opinions or challenge decisions 6. Is the orientation towards the individual or the group 7. Whose opinion is valued 8. Are there any identifiable behaviours that are rewarded or punished 9. Is there a high tolerance for ambiguity 10. Does the organisation favour results or following procedure 11. Is the organisation cautious or will it take risks 12. Is the emphasis on relationships and social interactions, or on tasks and getting on with the job 42 CA441 BPM Workflow Modelling 20 Sep 2010Mission and strategy. Organisational culture. Core competences. Business context focus. Core Competences •What are we really good at •Worldclass organisations have up to five or six core competences that their core products or services are based on. “Core competence is the collective learning of the organisation, especially the • capacity to coordinate diverse production skills and integrate streams of technologies. It is also a commitment to working across organisational boundaries.” “organising around strategic business units is problematic because they under • invest in core competences, imprison resources and bind innovation” (Prahalad Hamel) •We can scale down the idea of a Core Competence to the process level design processes that play to the strengths of the performers. 43 CA441 BPM Workflow Modelling 20 Sep 2010Mission and strategy. Organisational culture. Core competences. Business context focus. Scoping questions 1 1.What is the primary business objective driving this project 2.What is the current situation 3.Is this essentially a business process improvement project 4.What is the technical or project objective 5.Which business data will or will not be involved 6.Organisationally who will be impacted by this 7.What areas outside the process will be impacted, or will require interfaces 44 CA441 BPM Workflow Modelling 20 Sep 2010Mission and strategy. Organisational culture. Core competences. Business context and focus. Scoping questions 2 8.Are there other initiatives we should be aware of 9.What could go wrong 10.What could go right 11.Have any significant issues or difficulties arisen 12.Are there any constraints we need to take into account 13.Have any important decisions already been made 14.Have project structure and personnel been identified 15.Are you really the sponsor 45 CA441 BPM Workflow Modelling 20 Sep 2010References Sharp, A. McDermott, P. (2001), Workflow Modelling, Artech House, Boston London. Prahalad, C. K. Hamel, G. “The Core Competence of the Corporation” Harvard Business Review, MayJune 1990, pp. 7991. Treacy, M. Wiersema, F. (1995), The Discipline of Market Leaders, AddisonWesley, Reading, MA. 46 CA441 BPM Workflow Modelling 20 Sep 2010Business Process Redesign. Introduction Based on: Malhotra, Business Process Redesign: An Overview, http://www.brint.com/papers/bpr.htm. 1 CA441 BPM L2 BPR: IntroductionProcesses Identified in terms of: beginning and end points, • interfaces, • organisation units involved, particularly the customer unit. • High Impact processes should have process owners. Examples of processes include: developing a new product; • ordering goods from a supplier; • creating a marketing plan; • processing and paying an insurance claim; • etc. • 2 CA441 BPM L2 BPR: IntroductionProcesses Defined based on three dimensions: Entities: Processes take place between organisational • entities. They could be Interorganisational (e.g. EDI), Interfunctional or Interpersonal (e.g. CSCW). Objects: Processes result in manipulation of objects. • These objects could be Physical or Informational. Activities: Processes could involve two types of • activities: Managerial (e.g. develop a budget) and Operational (e.g. fill a customer order). (Davenport Short 1990) 3 CA441 BPM L2 BPR: IntroductionRelationship between BPR Information Technology • IT is the key enabler of BPR (Hammer). • Use IT to challenge the inherent assumptions from before the advent of modern computer and communications technology. • Core of reengineering is "discontinuous thinking or recognising and breaking away from the outdated rules and fundamental assumptions underlying operations... These rules of work design are based on assumptions about technology, people, and organisational goals that no longer hold." 4 CA441 BPM L2 BPR: Introduction“Principles of reengineering” (Hammer) (a) Organise around outcomes, not tasks; (b) Have those who use the output of the process perform the process; (c) Subsume information processing work into the real work that produces the information; (d) Treat geographically dispersed resources as though they were centralised; (e) Link parallel activities instead of integrating their results; (f) Put the decision point where the work is performed, and build control into the process; (g) Capture information once and at the source. 5 CA441 BPM L2 BPR: Introduction“The new industrial engineering” (Davenport Short) BPR requires broader view of both IT and business activity, and relationships between them. IT — more than an automating or mechanising force: to • fundamentally reshape the way business is done. Business activities — more than a collection of individual or • even functional tasks. IT and BPR have a recursive relationship. IT capabilities should support business processes, and business processes should be in terms of the capabilities IT can provide. 6 CA441 BPM L2 BPR: IntroductionRecursive relationship between IT capabilities and BPR How can IT support business processes Information Technology capabilities Business Process Redesign How can business processes be transformed using IT 7 CA441 BPM L2 BPR: Introduction“The new industrial engineering” (Cont.) Business processes represent a new approach to coordination across the firm IT impact is as a tool for reducing the costs of coordination. 8 CA441 BPM L2 BPR: Introduction“The new industrial engineering” (Cont.) Awareness of IT capabilities can – and should – influence process design. How IT capabilities affect the organisation – 1 Transactional — can transform unstructured processes into routinised transactions Geographical — can transform information with rapidity and ease across large distances Automational — can replace or reduce human labour in a process Analytical — can bring complex analytical methods to bear on a process 9 CA441 BPM L2 BPR: Introduction“The new industrial engineering” (Cont.) How IT capabilities affect the organisation – 2 Informational — can bring vast amounts of detailed information into a process Sequential — can enable changes in the sequence of tasks Knowledge Management — allows capture and dissemination of knowledge Tracking — allows detailed tracking of task status Disintermediation — can be used to connect two parties within a process that would otherwise communicate through an intermediary 10 CA441 BPM L2 BPR: IntroductionBPR IT (Teng) The way related functions participate in a process (functional coupling of a process) can be differentiated along two dimensions: degree of mediation the extent of sequential flow of input and • output among participating functions degree of collaboration the extent of information exchange • and mutual adjustment among functions when participating in the same process. 11 CA441 BPM L2 BPR: IntroductionDegree of Mediation (Teng) R K K P P P P Q Q Q Q P T T T T P X X X X X X 6 5 4 3 2 1 HIGH LOW Degree of Mediation (Indirect) (Direct) 12 CA441 BPM L2 BPR: IntroductionDegree of Collaboration •Frequency and intensity of information exchange between two functions ranges from none (completely insulated) to extensive (highly collaborative). •Many process can be improved by increasing the degree of collaboration. 13 CA441 BPM L2 BPR: IntroductionFunctional Coupling Framework of Business Processes Degree of Collaboration Low High Insulated Collaborative A A B B C C Coupling Pattern: Functions participate in the process Coupling Pattern: Functions participate in the process sequentially with no mutual information exchange. sequentially with mutual information exchange. Environment: Participating functions are sequentially Environment: Participating functions are sequentially dependent and face low level of uncertainty in I/O dependent and face high level of uncertainty in I/O requirements. requirements. Example: Sales function (A) sends customer order to Example: Engineering (A) provides manufacturing design inventory function (B) for shipping. specifications to production (B) with frequent consultation between A and B. A A B B C C Coupling Pattern: Functions participate directly in producing Coupling Pattern: Functions participate directly in producing the process outcome with no mutual information exchange. the process outcome with mutual information exchange. Environment: Participating functions are sequentially Environment: Participating functions are sequentially independent and face low level of uncertainty in I/O independent and face high level of uncertainty in I/O requirements. requirements. Example: Recruiting workers (A) and equipment requisition Example: Advertising (A) and production (B) directly (B) participate directly in establishing a new plant with no participate in launching a new product with frequent consultation between A and B. consultation between A and B. 14 CA441 BPM L2 BPR: Introduction Degree of Mediation Low High Direct IndirectBPR IT (Teng) •IT reduces the Degree of Mediation and enhances the Degree of Collaboration. •Innovative uses of IT leads many firms to develop new, coordinationintensive structures, enabling them to coordinate their activities in ways that were not possible before. •Such coordinationintensive structures may raise the organization's capabilities and responsiveness, leading to potential strategic advantages. 15 CA441 BPM L2 BPR: IntroductionBPR Methodology. (Davenport and Short) fivestep approach to BPR: Develop the Business Vision and Process Objectives: • + prioritise objectives and set stretch targets Identify the Processes to be Redesigned: • + Identify critical or bottleneck processes Understand and Measure the Existing Processes: • + Identify current problems and set baseline Identify IT Levers: • + Brainstorm new process approaches Design and Build a Prototype of the New Process: • + Implement organisational and technical aspects 16 CA441 BPM L2 BPR: IntroductionWhat is Business Process Redesign "the analysis and design of workflows and processes within • and between organisations" (Davenport Short 1990). "the critical analysis and radical redesign of existing business • processes to achieve breakthrough improvements in performance measures." Teng et al. (1994) 17 CA441 BPM L2 BPR: IntroductionWhat is a Business Process "a set of logically related tasks performed to achieve a defined business outcome.” structured, measured set of activities designed to produce a specified output for a particular customer or market. Implies a strong emphasis on how work is done within an organisation" (Davenport). Processes have two important characteristics: (i) They have customers (internal or external), • (ii) They cross organisational boundaries, i.e., they occur across or • between organisational subunits. 18 CA441 BPM L2 BPR: IntroductionHow Does BPR Differ from TQM In recent years, increased attention to business processes is • largely due to the TQM. TQM and BPR share a cross functional orientation. (Teng) Quality specialists tend to focus on incremental change and • gradual improvement of processes, while proponents of reengineering often seek radical redesign and drastic improvement of processes. (Davenport) 19 CA441 BPM L2 BPR: IntroductionBPR vs. TQM Quality management (TQM or continuous improvement), refers • to programs initiatives that emphasise incremental improvement in work processes outputs over an openended period of time. Reengineering, also known as business process redesign or • process innovation, refers to discrete initiatives that are intended to achieve radically redesigned and improved work processes in a bounded time frame. (Davenport) 20 CA441 BPM L2 BPR: IntroductionProcess Improvement (TQM) versus Process Innovation (BPR) From Davenport (1993, p. 11) Improvement Innovation Level of Change Incremental Radical Starting Point Existing Process Clean Slate Frequency of Change Onetime/Continuous Onetime Time Required Short Long Participation BottomUp TopDown Typical Scope Narrow, within functions Broad, crossfunctional Risk Moderate High Primary Enabler Statistical Control Information Technology Type of Change Cultural Cultural/Structural 21 CA441 BPM L2 BPR: IntroductionReferences 1 Bashein, B.J., Markus, M.L., Riley, P. (1994 Spring). "Preconditions for BPR Success: And How to Prevent Failures," Information Systems Management, 11(2), pp. 713. Caron, M., Jarvenpaa, S.L. Stoddard, D.B. (1994, September). "Business Reengineering at CIGNA Corporation: Experiences and Lessons Learned From the First Five Years," MIS Quarterly, pp. 233 250. Davenport, T.H. Short, J.E. (1990 Summer). "The New Industrial Engineering: Information Technology and Business Process Redesign," Sloan Management Review, pp. 1127. Davenport, T.H. (1993). Process Innovation, Harvard Business School Press, Boston, MA. 22 CA441 BPM L2 BPR: IntroductionReferences 2 Davenport, T.H. (1994 July). "Reengineering: Business Change of Mythic Proportions" MIS Quarterly, pp. 121127. Davenport, T.H. Beers, M.C. (1995). "Managing Information About Processes," Journal of Management Information Systems, 12(1), pp. 5780. Earl, M.J., Sampler, J.L. Short, J.E. (1995). "Strategies for Business Process Reengineering: Evidence from Field Studies," Journal of Management Information Systems, 12(1), pp. 3156. Grover, V., Jeong, S.R., Kettinger, W.J. Teng, J.T.C. (1995). "The Implementation of Business Process Reengineering," Journal of Management Information Systems, 12(1), pp. 109144. 23 CA441 BPM L2 BPR: IntroductionReferences 3 Hammer, M. (1990, JulyAugust). "Reengineering Work: Don't Automate, Obliterate," Harvard Business Review, pp. 104112. Kettinger, W.J. Grover, V. (1995). "Special Section: Toward a Theory of Business Process Change Management," Journal of Management Information Systems, 12(1), pp. 930. King, W.R. (1994 Spring). "Process Reengineering: The Strategic Dimensions," Information Systems Management, 11(2), pp. 7173. Stoddard, D.B. Jarvenpaa, S.L. (1995). "Business Process Redesign: Tactics for Managing Radical Change," Journal of Management Information Systems, 12(1), pp. 81107. Teng, J.T.C., Grover, V., and Fiedler, K. Business process reengineering: Charting a strategic path for the information age. California Management Review 36, 3 (Spring 1994), 931. 24 CA441 BPM L2 BPR: IntroductionBusiness Process Reengineering Based on: Teng, Grover Fiedler, Business Process Reengineering: Charting a Strategic Path for the Information Age, CA441 BPM Business Process Reengineering 20 Sep 2010Facilitators for BPR IT shared databases • imaging • Telecommunication LANs • Email Bulletin Boards • groupware • Others Quality movement (continuous improvement V drastic change) • CA441 BPM Business Process Reengineering 20 Sep 2010Degree of Mediation Dimension of Business Processes R K K P P P P Q Q Q Q P T T T T P X X X X X X 6 5 4 3 2 1 HIGH LOW Degree of Mediation (Indirect) (Direct) CA441 BPM Business Process Reengineering 20 Sep 2010Reducing Mediation through IT Ford Motor Corp. Old process involved 3 functions purchasing, • inventory and accounts payable participated indirectly • sequential document flow • New process uses shared database • every function participates directly • 75 reduction in workforce (500 125) • CA441 BPM Business Process Reengineering 20 Sep 2010Functional Coupling Framework of Business Processes Degree of Collaboration Low High Insulated Collaborative A A B B C C Coupling Pattern: Functions participate in the process Coupling Pattern: Functions participate in the process sequentially with no mutual information exchange. sequentially with mutual information exchange. Environment: Participating functions are sequentially Environment: Participating functions are sequentially dependent and face low level of uncertainty in I/O dependent and face high level of uncertainty in I/O requirements. requirements. Example: Sales function (A) sends customer order to Example: Engineering (A) provides manufacturing design inventory function (B) for shipping. specifications to production (B) with frequent consultation between A and B. A A B B C C Coupling Pattern: Functions participate directly in producing Coupling Pattern: Functions participate directly in producing the process outcome with no mutual information exchange. the process outcome with mutual information exchange. Environment: Participating functions are sequentially Environment: Participating functions are sequentially independent and face low level of uncertainty in I/O independent and face high level of uncertainty in I/O requirements. requirements. Example: Recruiting workers (A) and equipment requisition Example: Advertising (A) and production (B) directly (B) participate directly in establishing a new plant with no participate in launching a new product with frequent consultation between A and B. consultation between A and B. CA441 BPM Business Process Reengineering 20 Sep 2010 Degree of Mediation Low High Direct IndirectApplication of Communication Technologies and Shared Information Resources Path Z Application if IT in Alternative Paths for Process Reengineering Low Degree of High Collaboration A A Path X B B Primarily through application of Communication Technologies C C A B A B Shared Shared Path X Resource Resource C C CA441 BPM Business Process Reengineering 20 Sep 2010 Low High Degree of Mediation Path Y Primarily through application of Shared Information Resources Path YIT creates a “public good” Resource that can be accessed by many functions. Shared information resource is not “used up” by • usage, and retains its value for other users. Provides comprehensive information that facilitates • accomplishment of process objectives on a more global basis. CA441 BPM Business Process Reengineering 20 Sep 2010Other enablers Behavioural organisational techniques: selfdirected teams • process generalists • + Kodak example + IBM Credit CA441 BPM Business Process Reengineering 20 Sep 2010IBM Credit IBM Credit Corporation finances the computers, software, and services that the IBM Corporation sells. five steps: 1. On a request from an IBM field sales representative an operator in the central office wrote down the request on a piece of paper. 2. The request sent to credit department where a specialist checked the client's creditworthiness, wrote the result on the piece of paper and sent it to the business practices department. 3. The business practices department customised the standard loan covenant to the client. Special terms attached to the request if necessary. 4. Request went to the price department where a pricer determined the appropriate interest rate. 5. Administration department wrote a quote letter for the field sales representative. CA441 BPM Business Process Reengineering 20 Sep 2010IBM Credit Make Quote to Go back to financing customer customer Field Sales request Rep Record Central Office request no Check Credit credit Department yes worthyness Customise Business loan Practices agreement Department Price Determine Department interest rate Admin Department Write a quote CA441 BPM Business Process Reengineering 20 Sep 2010IBM Credit – problems • Process took six days on average. • In this time the customer could be seduced by another computer vendor. • Request couldn’t be tracked. CA441 BPM Business Process Reengineering 20 Sep 2010IBM Credit – attempted fixes • Install a control desk, so they could answer the sale representative's question about the status of the request. • Instead of forwarding the request to the next step in the chain, each department returned the request to the control desk for logging before sending out the request again. • Solved tracking problem, but took yet more time. CA441 BPM Business Process Reengineering 20 Sep 2010IBM Credit Make Quote to Go back to financing customer customer Field Sales request no Rep Record log log log Central Office request yes Check Credit credit Department worthyness Customise Business loan Practices agreement Department Price Determine Department interest rate Admin Department Write a quote CA441 BPM Business Process Reengineering 20 Sep 2010IBM Credit investigation • Two senior managers at IBM Credit took a request and walked themselves through all five steps. • Performing the actual work took ninety minutes. • The problem was not in the tasks and the people performing them, but in the structure of the process. • IBM Credit replaced its specialists the credit checkers, pricers and so on with generalists. Now, a generalist processes the entire request from beginning to end. CA441 BPM Business Process Reengineering 20 Sep 2010IBM Credit rationale • How could one generalist replace four specialists • Old process design based on the assumption that every bid request was unique and difficult to process. • Assumption false; most requests simple and straightforward: Find a credit rating in a database • Plug numbers into a standard model • Pull clauses from a file. • • Easily done by single individual supported by an easytouse computer system which IBM Credit developed. • In most cases, the system provides guidance and data to generalists. • In hard cases, help available from a small pool of real specialists assigned to work in the same team. CA441 BPM Business Process Reengineering 20 Sep 2010IBM Credit gains • Turnaround reduced from six days to four hours. • Dramatic performance breakthrough by making a radical change to the process i.e. reengineering. • IBM Credit did not ask, "how do we improve the calculation of a financing quote How do we enhance credit checking" It asked "How do we improve the entire credit issuance process“ • In making its radical change, IBM Credit shattered the assumption that every request needed specialists. CA441 BPM Business Process Reengineering 20 Sep 2010References 1 Hammer, M. (1990, JulyAugust). "Reengineering Work: Don't Automate, Obliterate," Harvard Business Review, pp. 104112. Moad, J. (1989). ”Navigating Crossfunctional IS Waters" Datamation, March 1989, pp. 7375. Foster, L. Flynn, D. ”Management Information Technology: Its Effects on Organisational Form and Function" MIS Quarterly, December 1984, pp. 229236. McDonnell, E. Somerville, G.. (1991). ”Corporate Reengineering that follows the Design of Document Imaging," Information Strategy: the Executive’s Journal, Fall 1991, pp. 510. Berger, J., Angiolillo, P. Mason, T. “Office Automation: Making it Pay Off,” Business Week, October 12, 1987, pp 134146. CA441 BPM Business Process Reengineering 20 Sep 2010References Stewart, T. (May 10, 1992). ”The Search for the Organisation of Tomorrow," Fortune, pp. 110117. Porter, M. Millar, V. (1985). “How Information Gives You Competitive Advantage,” Harvard business Review, 63/4, pp 149160. CA441 BPM Business Process Reengineering 20 Sep 2010Successful Reengineering Projects Based on: Teng, Jeong Grover, Profiling Successful Reengineering Projects. Communications of the ACM, Vol 41. No. 6 June 1998 CA441 BPM Successful ReEngineering Projects 20 Sep 2010The questions • Are reengineering projects aimed at more radical change resulting in higher implementation success • If limited attention and resources must be allocated among the different stages of a reengineering project, which stage (or stages) should receive more emphasis in order to achieve higher implementation success CA441 BPM Successful ReEngineering Projects 20 Sep 2010Research Model Reengineering Project “Radicalness” Reengineering Project Implementation Success Reengineering Project StageEfforts Profile CA441 BPM Successful ReEngineering Projects 20 Sep 2010Comparison of variables: • Reengineering project radicalness Measured in seven dimensions • • Reengineering project stageefforts profile Eight typical stages in a project • • Reengineering project implementation success Perceived level of success • Goal fulfilment. • CA441 BPM Successful ReEngineering Projects 20 Sep 2010Project stages and tasks (see Klein) Stage 1: Identification of BPR opportunities Stage 5a: Solution: Technical design Esatablish a steering committee Develop and evaluate alterantive process designs Secure management commitment Detailed process modelling Align with corporate and IT strategies Design controls for process integrity Identify major business processes with an “business model” IS analysis and design for the new process Understand customers’ requirements Prototype and refine the process design Prioritise processes and select one for implenetation Stage 5b: Solution: Social design Stage 2: Project preparation Empower customer contact personnel Plan for organisational change Define jobs and incentives Organise a BR team for the selected process Develop nad foster shared values Train the team members Define skill requirements and career paths Plan the project Design new organisational structure Stage 3: Analysis of existing process Design employee performance measurement Analyse existing process structures and flows Design change management prrogramme Identify valueadding activities Stage 6: Process transformation Identify opportunities for process improvement Develop and test rollout plans Stage 4: Development of a process vision Implement the social and technical design Understand process customers requirements Train staff and pilot new process Identify process performance measures Stage 7: Process evaluation Set process performance goal Monitor performance Identify IT that enables process redesign Continuous improvement Deveelop a vision for the redesigned process CA441 BPM Successful ReEngineering Projects 20 Sep 2010Project Radicalness Extent of change to: 1. Patterns of process workflow 2. Rôles and responsibilites 3. Measurements and incentives 4. Organisational structure 5. Information technology 6. Shared values 7. Skills CA441 BPM Successful ReEngineering Projects 20 Sep 2010Success • Perceived level of success • Goal fulfilment Cost reduction • Cycletime reduction • Customer satisfaction level increase • Worker productivity increase • Defects reduction • CA441 BPM Successful ReEngineering Projects 20 Sep 2010Research sample • Questionnaires sent to members of the Planning Forum, a professional association focussing on strategic management. • 239 responses out of 853. • 105 of the 239 had completed at least one BPR project • 2/3 of respondents were in manufacturing, financial or service industries • Most were large companies CA441 BPM Successful ReEngineering Projects 20 Sep 2010Research sample • 3 most popular processes were: Customer service (13.7) • Product development (13.7) • Order management (10.5) • • Others were: Business planning and analysis (5.7) • Financial systems (4.8) • Accounting processes (3.8) • CA441 BPM Successful ReEngineering Projects 20 Sep 2010Effort by Stage (averaged from 1 5) Stage 3: Analysis of existing process 3.94 Stage 1: Identification of BPR opportunities 3.80 Stage 4: Development of a process vision 3.63 Stage 2: Project preparation 3.46 Stage 6: Process transformation 3.39 Stage 5a: Solution: Technical design 3.37 Stage 7: Process evaluation 3.21 Stage 5b: Solution: Social design 3.09 CA441 BPM Successful ReEngineering Projects 20 Sep 2010Correlation of radicalness with success Project Patterns of Rôles and Performance Organi Information Shared value Skill reqire Overall Success process respon measure sational technology (culture) ments extent of workflows sibilities ments and structure applications change incentives Overall .427 .324 .351 .102 .280 .173 .166 .409 success level Cost reduction .269 .159 .231 .260 .165 .139 .129 .291 .092 .194 .093 .030 .000 .058 .022 .110 Cycle time .191 .134 .198 .033 .033 .111 .098 .171 reduction .127 .050 .194 .157 .021 .029 .008 .052 Customer .258 .187 .282 .180 .022 .019 .112 .182 satisfaction .242 .129 .366 .242 .039 .024 .168 .098 increase Worker .122 .107 .159 .131 .011 .047 .043 .125 productivity .061 .197 .431 .069 .187 .053 .132 .134 increase Defects .124 .041 .151 .113 .091 .058 .218 .015 reduction .073 .109 .044 .011 .380 .133 .272 .173 CA441 BPM Successful ReEngineering Projects 20 Sep 2010Correlation of radicalness with success Project Patterns Rôles and Performance Organi Information Shared Skill Overall Success of process respon measure sational technology value reqire extent of workflows sibilities ments and structure applications (culture) ments change incentives Overall success level Cost reduction Cycle time reduction Customer satisfaction increase Worker productivity increase Defects reduction CA441 BPM Successful ReEngineering Projects 20 Sep 2010Correlation of stage efforts with success Project Identification Project Analysis Development Solution: Solution: Process Process Success of BPR Preparation of the of a process technical Social transformation evaluation opportunities existing vision design design process Overall .247 .244 .139 .242 .199 .390 .432 .547 success level Cost .134 .103 .013 .095 .165 .314 .220 .386 reduction .116 .205 .269 .188 .000 .203 .339 .577 Cycle time .039 .042 .072 .219 .033 .274 .267 .342 reduction .126 .122 .196 .225 .021 .108 .222 .455 Customer .248 .064 .156 .232 .022 .354 .211 .374 satisfaction .122 .147 .280 .392 .039 .360 .310 .404 increase Worker .092 .080 .038 .214 .011 .294 .213 .314 productivity .000 .115 .261 .193 .187 .470 .299 .619 increase Defects .184 .171 .020 .172 .091 .399 .257 .351 reduction .025 .154 .285 .064 .380 .071 .275 .551 CA441 BPM Successful ReEngineering Projects 20 Sep 2010Correlation of stage efforts with success Project Identification Project Analysis Development Solution: Solution: Process Process Success of BPR Preparation of the of a process technical Social transformation evaluation opportunities existing vision design design process Overall success level Cost reduction Cycle time reduction Customer satisfaction increase Worker productivity increase Defects reduction CA441 BPM Successful ReEngineering Projects 20 Sep 2010Stage efforts vs. impact on perceived project success Stage Avge Correlation with effort perceived success Stage 3: Analysis of existing process 3.94 .139 (8) Stage 1: Identification of BPR opportunities 3.80 .247 (4) Stage 4: Development of a process vision 3.63 .242 (6) Stage 2: Project preparation 3.46 .244 (5) Stage 6: Process transformation 3.39 .432 (2) Stage 5a: Solution: Technical design 3.37 .199 (7) Stage 7: Process evaluation 3.21 .547 (1) Stage 5b: Solution: Social design 3.09 .390 (3) CA441 BPM Successful ReEngineering Projects 20 Sep 2010References •Teng, J.T.C., Jeong, S.R., Grover, V., Profiling Successful Reengineering Projects. Communications of the ACM, Vol 41. No. 6 June 1998 •Davenport, T. Short, J., The New Industrial Engineering: Information Technology and Business Process Redesign. Sloan Management Review 31,4 (1990) 1127 • Kettinger, W.J., Guha, S. and Teng, J.T.C., Business Process Reengineering: Building the Foundation for a Comprehensive Methodology, J. Info. Sys. Manage., (Summer 1993), 1322 •Klein, M.M., Reengineering Methodologies Tools, Info. Sys. Manage., 11, 2 (1994),3035 CA441 BPM Successful ReEngineering Projects 20 Sep 2010Aspects of BPR Success due to National Culture: China India 1Introduction  BPR originating mainly in US/Europe important for (all) large organisations.  “Large”, nowadays usually means multinational/ multicultural but in context of certain countries means current or former State Owned Enterprises (SOEs)  BPR came from US but really a reimplimentation of TQM from Japan (showing some cultural adjustments possible)  Now and in future, China India's economic preeminence in the world makes understanding cultural and national aspects influencing BPR more important  BPR has been defined earlier as a radical redesign of business processes using IT to achieve drastic improvements (Davenport).  Focuses mainly on the process, a set of logically related tasks performed to achieve a defined business outcome. 2 CA441: BPR National Cultural Aspects of BPRNational Culture Aspects of BPR • Two Questions: o To what extent is radical readjustment possible o When does national culture act as a brake for BPR • First need a definition of National Culture: o Hofstede (2003), defines it as “the collective programming of the mind which distinguishes the members of one group or category of people from another”. o Suggests that people share a collective national character that represents their cultural mental programming. • Information is “culture specific”: o According to Cochrane Atherton (1980) “for considering information services”, should consider “'cultural community' which is composed of potential users who may have distinct values, beliefs, and attitudes towards external information services." o Result is: info is "incommunicable unless it has been 'acculturated'" • Consider here 2 cases China India: o China: Fastest growing global major economy (avg 10 growth over past 30yrs) o India: Large offshoring impact in past 20 years • How to examine Cultural/ National Aspects of a Country o Set out most influential theories of national culture 3 CA441: BPR National Cultural Aspects of BPRNational Culture Aspects of BPR cont’d • How to quantify dimensionally the Cultural/ National Aspects of a Country o Outline most influential theories of NC (Defs below from Jayaganesh Shanks 2009) 1. Power Distance (see Hofstede 2003, House et al 2004) “the extent to which members of institutions organizations within a country expect accept that power is distributed unequally.” 2. Individualism/Collectivism (see Hofstede 2003, House et al 2004) “the strength of ties within a social network.” 3. Uncertainty Avoidance (see Hofstede 2003, House et al 2004) “the extent to which the members of a culture perceive ambiguous or unknown situations as threats as opposed to opportunities.” 4. Performance Orientation (House et al 2004) “extent to which a society rewards innovation, quality performance improvement.” 5. High/Low Context (Hall 1976) “degree of explicit background information required for effective communication.” 6. Masculine/Feminine (Agrawal and Haleem 2003) “extent to which society differentiates between the sexes and places emphasis on „masculine‟ values of assertion, competition, performance visible achievements versus „feminine‟ values of intuition, team building and cooperation.” 4 CA441: BPR National Cultural Aspects of BPRCulture Use of IT/IS • Know already that IT is a key enabler in BPR (Hammer). • Given that IT is of itself neutral, is there a universal regard/use of IT in different cultures • Or, put another way are there factors (irrespective of technological development level) that are culture specific • Theories in sociology, psychology and organisational behaviour suggest that just because a theory applies in one culture, that theory does not carry over to others (Hofstede Bond, 1988) o National differences substantially contribute to variations in managers‟ beliefs attitudes (2/3 national, 1/3 individual) (Haire et al 1966). o Results by Herbig Day (1990) indicate that certain sociocultural conditions have to be in place for innovation to occur. = implications for BPR • People, after all, interact with IS thro a human interface and so culture impacts on attitudes towards the use of computers. 5 CA441: BPR National Cultural Aspects of BPRCulture Use of IT/IS cont’d • Often main problem is concerning the acceptance of IT. o Even if the technology exists, or a company can purchase it, the technology could be challenged by workers, reluctant to modern technology, computer oriented jobs and services. o More true when talking about a company with a lot of experienced (and therefore old) workers. o These workers might not accept the changes imposed and the obligation to use IT on an everyday basis as easily as the new/ young workers. • This is more of a social problem than a cultural one. But can say for some cultures, IT would be accepted more readily than others. o “the technical knowledge, creativity and energy of a younger generation that holds lowlevel positions would have to be accommodated by a culture that has a deeply embedded tradition of deference to superiors and respect for experience.” (Martinsons and Hempel, 1998) • Also ITenabled changes suffer from the fact that most new technologies come from the West/USA. So it can be hard for Middle Eastern workers, to even accept using US tools, on principle o Doesn‟t apply to all in these countries, but can be a risk that this causes a problem in workers‟ minds, at least at the beginning of the BPR attempt. 6 CA441: BPR National Cultural Aspects of BPRChineseSpecific Cultural Aspects • China PRC made up of mainly ethnic Han Chinese, though other significant ethnic groupings exist. • China also can be said to vary according to dialect group identity (probably arising out of geographical location) • Chinese ethical philosophical system developed from teachings of Confucius. • Although difficult to generalise over 1.5Bn + people, can say that Confucianism remains predominant social reference in China (Martinsons and Hempel, 1998) • Difference exists between cultural traits of Chinese Nationals and those of Chinese born overseas (mainly US, UK, Indonesian, Malaysianborn Chinese). • Also cultural differences exist between Asian societies e.g. regarding Teamwork (Martinsons and Hempel, 1998) o Japanese tend to consider the society as a unit. o Chinese tend to give more importance to family. 7 CA441: BPR National Cultural Aspects of BPRRelationship Face in Chinese Business Relationships • Other aspects of Chinese Society Relevant to Doing Business: o GUANXI关系 (“relationship”) – Refers to value of an ongoing relationship between people including its future network possibilities which are cultivated with energy, subtlety in China. – Amounts to currency of getting things done/ getting ahead in China. – It is a relationship between two people containing implicit mutual obligation assurances. – In business, serves as the informal channel for movement of information money. – Based on personal interest mutual trust, constraining use of formal coordination control mechanisms o MIANXI 面子 (“face”): – Face refers to one‟s moral character is a person‟s most precious possession in the Chinese context as without it, cannot function in society. – Also refers to a person‟s reputation / prestige is based on personal accomplishments, political status, or bureaucratic power. – Can be enhanced by acts of generosity in terms of time, gifts or praise of others. – In business context, can act as a major barrier to change in an organisation 8 CA441: BPR National Cultural Aspects of BPRAspects of Chinese Cultural Relevant to BPR o Power Distance: According to Confucianism “All humans are born unequal”, making the idea of uneven power distributions more acceptable in China other countries influenced by Confucianism (e.g. Japan, Korea, Vietnam, Taiwan). o Individualism/Collectivism: – Chinese tend to achieve social order thanks to a “harmonywithinhierarchy” arrangement (Zhang et al 2005), in contrast to (western) emphasis on individual rights and freedoms. – Chinese workers tend to score high in collectivism (Hofstede 2003, House et al 2004) poorly outside group setting, (Early, (1989) o Performance Orientation: st – Chinese companies (into the 21 C) tend towards subjective, activitybased rather than processbased performance measures. – Individuals not rewarded only on their results but rather according to relationships. o Uncertainty Avoidance: – Tendency among Chinese companies to accept difficult situations as they are rather than problems to solve, (Lu Xiang 2008) – Compounded by Confucian ideas of respect for superiors/authority figures and concept of “face” 9 CA441: BPR National Cultural Aspects of BPRComparative Study of BPR in China • He (2005) surveyed 195 Senior Managers at Tsinghua U‟s Mgmt Training Class to ascertain their attitudes to BPR success. • 63 of the (110) respondents were at Pres, VP,CFO or CIO level • Results: 1. Potential benefits of BPR a) BPR facilitates comms improves info sharing (92 agreed) b) BPR enforces competitiveness (87 agreed) c) BPR helps improve productivity reduce costs (86 agreed) d) BPR enhances corporate strategy (86 agreed) o Compare Contrast w CSC/Index (Ranganathan, Dhaliwal, 2001) study of BPRs – Top 3 benefits of BPR to US firms: Improves BP speed; cost cutting; service quality improvement. – Improving efficiency and cutting costs are important to US firms but facilitating communications improving info sharing has special importance to Chinese Bosses 2. Major obstacles to BPR in China a) A culture that resists change and new ideas (73 agreed) b) Lack of innovation incentives to SOEs (72 agreed) c) Seniority, not performance, based promotion (62 agreed) d) Unemployment pressure of process restructuring (57 agreed) e) Lack of senior management commitment (55 agreed) f) Lack of a coherent BPR strategy (50 agreed) 10 CA441: BPR National Cultural Aspects of BPRMartinsons Hempel (1998) on BPR in China • In an influential and muchcited paper Martinsons Hempel (1998) make the following conclusions on BPR in China o Preparing for radical, ITenabled change, Chinese Businesses tend to have difficulty: – ignoring status quo use cleanslate thinking in their IT enabled change effort – justifying formal planning design – constructing Westernstyle formal business models than their US counterparts o Designing ITenabled change, Chinese Businesses tend to: – be less able to unilaterally design ITenabled change – be less likely to choose radical forms of ITenabled change – find it more difficult to design performance appraisal reward systems – find it less difficult to make use of processbased work teams than their US counterparts o In implementing change, Chinese Businesses tend to have: – less difficulty initiating a radical, ITenabled change effort – more difficulty completing a radical, ITenabled process change effort – more difficulty rapidly implementing radical forms of ITenabled change – more difficulty implementing procbased performance appraisal reward systems – more internal discomfort from radical ITenabled proc change effort than their US counterparts o As a result, authors conclude, Chinese BPR will evolve to be characterized by less formal planning documentation (Context/Face/Collectivism), more gradual implementation (UA) more authoritarian management (PD) than US BPR efforts. 11 CA441: BPR National Cultural Aspects of BPRSurvey on Indian National Culture BPR Success • Agrawal Haleem (2003) surveyed 800 organisations in US India to determine if/how 4/6 factors above determined BPR Success. • Can summarise findings as: o Power Distance (PD): In India, values for PD are high relative to their US counterparts 1. Agrawal found that these high values helps in success of BPR applications (+ive corr) 2. However, also found that employees don‟t want bosses to monitor them while learning BPR technology, wanting to operate in a free environment. Values for US firms for PD corroborate these correlations. o Uncertainty Avoidance (UA): In India, values for UA are low relative to their US counterparts 1. Agrawal found low values of UA helps success of BPR applications (ive corr). 2. Values for US firms for UA corroborate these correlations. o Individualism: In India, values for this are low wrt to their US, due to family ties. 1. Agrawal found this to be ively correlated with success of BPR applications due, he says, to more individual control of processes having possible adverse effects. 2. Values for US firms for Individualism corroborate these correlations. o Masculinity: In India, values for this are high wrt to their US 1. Agrawal found Masculinity to be ively correlated with success of BPR applications 2. Values for US firms for Masculinity corroborate these correlations. 12 CA441: BPR National Cultural Aspects of BPRIndian Case Study 1: MNCCo from Jayaganesh Shanks (2009) • Established in Japan in 1940‟s, MNCCo manufactures retails consumer durables. • A subsidiary (est‟d post Indian Economic Liberalization in 90‟s) is a nd leader with 2 position in terms of Indian market share • Early 2000‟s, lack of integration btw systems id‟d as causing lack of insight into initiatives across org various other tactical/ operational bottlenecks. • Solution Implementation o Senior mgmt saw limits in existing way of working impl‟d an ERPenabled BPM citing their: – Commitment to engagement in BPM – Understanding of adv of adhering to global process standards – Belief that local needs considered wrt global standards thro representative project team with global, regional and local members o Process KPIs aligned with organisational objectives o Establishment of – Processbased Organisational structure – Processrelated roles responsibilities – Process definition documentation: in place but only used for new recruits – Process standards QA: Global standards for core processes as none available in context of Indian subsidiary. 13 CA441: BPR National Cultural Aspects of BPRIndian Case Study 2: IndCo from Jayaganesh Shanks (2009) • Est‟d 1955: IndCo a market leader in manuf of consumer durables. • Leadership position in domestic market due to ability to supply high quality products at affordable prices. • Mgmt believes survival of company based on progressive philosophy embracing ability to change while emphasizing essentially Indian id. • Company wants to explore possible export opportunities so set up a subsidiary in US. o At the same time prior leadership position perceived insufficient for future strategic plans. o Hence an emphasis on operational excellence introduced to complement brand design capabilities. • ERPenabled BPM Strategy at IndCo o Senior mgmt – Committed to ERP but did not explicitly define BP Strategy – Implied in IT strategy = ERP sys: tech proj under IT dept‟s mgmt/ctrl o Process objectives not explicitly defined or aligned with corporate goals. o Processoriented org structure – Established during ERP system implementation maintained since o Processrelated roles responsibilities: as no exp BPM strategy est‟d, processrelated decisions focussed on IT rather than on business. 14 CA441: BPR National Cultural Aspects of BPRIndian Case Study Analysis • Power Distance: o At MNCCo, two trends apparent: 1. Senior/Middle mgmt levels: – More impersonal mgmt style observed. – Relationships are shortterm, formal egalitarian as employees are either expats or Indians who have worked globally as expats. – Asynchronous communications (email etc) used extensively. 2. Operational level of mgmt: – Employees establish emotional bonds thro longterm relationships. – Subordinates look to their superiors for direction appreciation. – Informal communication thro facetoface conversation. o At IndCo – Respect for authority expertise reflected by need for their favour. – This in turn motivates employees to be compliant to org‟l processes. – In the event of noncompliance, employees are reprimanded/coaxed into line in a quasiparentchildlike manner. – Communication dependent on established relationships constrained by power distance. 15 CA441: BPR National Cultural Aspects of BPRIndian Case Study Analysis cont’d • Individualism: o At MNCCo – Emp‟ees often moved across projects, geo borders = short term r‟ships. – Employee‟s relationship with org is mainly impersonal = high attrition rates in middle mgmt. – At lower levels of mgmt employees identify strongly with org, relating its fate to their own = motivator for performance. o At IndCo – Employees at all levels of mgmt identify strongly with org, relating its fate to their own. o Common: at lower levels (MNCCo), all levels at IndCo: – Stronger bonds formed with members of same functional unit, providing a basis for all workrelated activity. – Most employees tend to stay in the org, with the length of relationship with org further increasing ties between employee and org. 16 CA441: BPR National Cultural Aspects of BPRIndian Case Study Analysis cont’d • Uncertainty Avoidance: o At both MNCCo IndCo ambiguity prevails over every aspect of BPM. o Mgmt of BPMrelated activities is thro individual expertise on ad hoc basis. o Only exception to this is at MNCCo are those processes requiring interaction with global partners which are standardised documented with care. • Performance Orientation: o Both orgs conform to the tendency in India towards low P.O. to varying degrees, with one exception: – Theory suggests that orgs in India place less emphasis on results. – Authors found that employees in both orgs (esp at operational level) „focussed on delivering outcomes over adherence to defined processes.‟ – Achieved this thro high task skill levels and adaptability/ capability to improvise „without much regard for rules‟. o Reward systems in both orgs emphasize results over processes being followed. • Results in broad accordance with Agarwal Haleem (2003): o Collectivism high Power Distance –ively affect BPR impl in an Indian context. o However, contradicting these, Jayaganesh Shanks (2009) found that low UA results in less emphasis on setting up of process roles, definition standards 17 CA441: BPR National Cultural Aspects of BPR with high value placed on relationships/loyalty less on training devpt, results rewardsReferences • Agrawal Haleem (2003), Culture, Environmental Pressures, and the Factors for Successful Implementation of Business Process Engineering and ComputerBased Information Systems, Global J. of Flex Sys Mgmt, Vol 4(12), pp2748 • Cochrane Atherton (1980), The cultural appraisal of efforts to alleviate information inequity, J. Am Soc for Info Sci, Vol 31(4), pp 283–292. • Earley (1998), Social loafing and collectivism: A comparison of the United States and the PRC. Administrative Science Quarterly, 34, pp565581. • He (2005), A Comparative Study of Business Process Reengineering in China, Communications of the IIMA, Vol 5(1), pp2530 • Hofstede (2003). Culture's Consequences, Comparing Values, Behaviors, Institutions, and Organizations Across Nations Sage Publications • House, Hanges, Javidan, Dorfman, Gupta. (2004). Leadership, Culture, and Organizations: The GLOBE Study of 62 Societies. Sage Publications. nd • Jayaganesh Shanks (2009) Cultural Analysis of ERPRelated BPM Strategy, 2 Austalasian Conference on Information Systems, Melbourne 2009 • Lu Xiang (2008). Cultural Aspects of IS In China, PACIS2008 • Ranganathan Dhaliwal (2001), A survey of Business Process Reengineering Practice in Singapore, Information and Management, 16(1), pp121133 • Zhang, Lin, Nonaka, Beom (2005), Harmony, Hierarchy and Conservatism: A CrossCultural Comparison of Confucian Values in China, Korea, Japan, and Taiwan, Communication Research Reports, Vol. 22, No. 2, pp. 107/115 18SocioTechnical Systems CA441 BPM SocioTechnical Systems 20 Sep 2010 1Information Systems Failure Study by Lucas (1975) of over 2000 systems in 16 companies found: “It is our contention that the major reason most information systems have failed is that we have ignored organisational behaviour problems in the design and operation of computerbased information systems.” Other researchers have made similar findings. Bostrom Heinen 1997 (1) CA441 BPM SocioTechnical Systems 20 Sep 2010 2Reasons for failure Information technology is commonly blamed, because it is seen as inflexible. However, IT is neutral. What has more effect is System Designers implicit theories. Most subscribe to “Theory X”. Bostrom Heinen 1997 (1) CA441 BPM SocioTechnical Systems 20 Sep 2010 3Rationale for SocioTechnical Design Methodology Faulty design System cause cause choices; and the lead lead Bad Designers’ Behavioural MIS problems failure to perceive designs to frames of to problems and failures better design reference alternatives reflected in Seven Conditions: 0. “Implicit” theories held by systems designers about organisations, their members, and how to change them. 1. The concept of responsibility held by systems designers. 2. Limited conceptualisations of frameworks for organisational work systems or user systems used by systems designers in the design process, i.e. nonsystemic approach. 3. Limited view of the goal of an MIS implementation held by designers. 4. Failure of the system designers to include relevant persons in the design referent group. Who is the user 5. The rational / static view of the systems development process held by systems designers. 6. The limited set of change technologies available to systems designers who attempt to improve organisations. a. Reframe MIS design methodology within Demonstrated the STS approach; and Bostrom Heinen 1997 (1) the need to: b. change systems designers’ frames of reference. CA441 BPM SocioTechnical Systems 20 Sep 2010 4Principles of SocioTechnology Joint optimisation of Social and Technical system Social • + Attributes of people (attitudes, skills, values, etc.) + Relationships among people + Reward systems + Authority structures Technical • + Processes, tasks, technology Optimisation of one at the expense of the other is suboptimal • Quality of Work Life Participation Semiautonomous work groups Munkvold (2000) CA441 BPM SocioTechnical Systems 20 Sep 2010 5Quality of Work Life Historically only included: Wages • Hours • Physical conditions. • These are still included in the concept, but it is expanding to include other concerns such as : Meaningful and satisfying work • Control and influence • Opportunities for learning • Working definition: involves an interesting, challenging and responsible job as perceived by the job holder CA441 BPM SocioTechnical Systems 20 Sep 2010 6Example methodology – Pasmore (1988) 1. Define scope of system to be redesigned 2. Determine environmental demands 3. Create vision statement 4. Educate organisational members 5. Create change structure 6. Conduct sociotechnical analysis 7. Formulate redesign proposals 8. Implement recommended changes 9. Evaluate changes / redesign Munkvold (2000) CA441 BPM SocioTechnical Systems 20 Sep 2010 7Applying SocioTechnical Principles Make the system designer’s frame of reference more explicit Focus more on the interrelationship between social and technical design 3 stages: 1. Strategic design process – making the goals and responsibility of the project explicit 2. Sociotechnical design process – joint consideration of technical system requirements and social system requirements 3. Continuing management process (action research process) – constant monitoring of the new system to see if it is meeting its goal, with necessary adjustments being made. Munkvold (2000) Bostrom Heinen 1997 (2) CA441 BPM SocioTechnical Systems 20 Sep 2010 8Mumford – ETHICS (Effective Technical and Human Implementation of Computerbased Work Systems) 1. Essential systems analysis 2. Sociotechnical systems design 3. Setting out alternative solutions 4. Setting out compatible solutions 5. Reworking sociotechnical solutions 6. Preparing a detailed work design Munkvold (2000) CA441 BPM SocioTechnical Systems 20 Sep 2010 9Stages of the ETHICS Methodology Step 3: Describe existing system Step 4: Specify key objectives Step 5: Identify key tasks Step 6: Identify sets of tasks Step 7: Identify information needs Step 8: Identify variance Step 10: Forecast future needs Step 1: Identify problem Step 2: Identify system boundaries Step 11: Set and rank efficiency and job satisfaction needs Step 9: Diagnose job satisfaction needs Step 12: Identify technical and business constraints Step 16: Specify priority technical and business objective Step 19: Step 14: Take technical decisions Identify technical resources available Step 18: Check that technical and social objectives are compatible Step 20: Step 15: Take social decisions Identify social resources available Step 17: Specify priority social objectives Step 13: Identify social constraints Step 21: Set out alternative technical solutions Step 23: Step 24: Step 25: Set out compatible socio Rank compatible pairs of Prepare detailed work technical solutions sociotechnical solutions design Step 22: Set out alternative social solutions Source: Hirscheim, R, “Realizing emancipatory principles in information systems development: The case for ETHICS.” MIS Quarterly, March 1994. CA441 BPM SocioTechnical Systems 20 Sep 2010 10Four fundamental objectives of ETHICS 1. Encourage participation 2. Improve the general conditions of work 3. Produce systems that are “technically efficient and have social characteristics that lead to high job satisfaction” 4. Follow the sociotechnical philosophy of trying for joint optimisation http://www.enid.unet.com/C1book1.htmThe Design Challenge CA441 BPM SocioTechnical Systems 20 Sep 2010 11Mumford – ETHICS Specifies the formation of two design teams, focussing on technical and social design. Facilitator used to overcome obstacles related to: lack of trust, • conflicts of interest, • time pressure and stress • low morale • effects of authority • communication gaps • Does not seek to increase Quality of Work Life at the expense of economic efficiency – increased QWL will increase quality and efficiency. Munkvold (2000) CA441 BPM SocioTechnical Systems 20 Sep 2010 12Criticisms of Sociotech • Emphasis on balance and consensus ignores political conflicts in organisations • Participative design will only function when employee numbers are small Munkvold (2000) CA441 BPM SocioTechnical Systems 20 Sep 2010 13Use of STS in Organisational Design Changed environment in the last two decades: Increasing global competition • Deregulation of markets • Increasing customer selectivity on price, quality and • service Environmental protection issues • Rapid technological development • Munkvold (2000) CA441 BPM SocioTechnical Systems 20 Sep 2010 14Organisational Design New organisational forms fashionable, e.g.: virtual organisations • dynamic networks • key characteristics in common Focus on business processes instead of traditional functional • organisation Focus on team organisation • Decentralised decisionmaking • IT as an important enabler • + Sometimes deflects attention from other important organisational factors such as power and authority. Munkvold (2000) CA441 BPM SocioTechnical Systems 20 Sep 2010 15Total Quality Management (TQM) Based on quality theories of W. Edwards Deeming, Joseph Juran and Kaoru Ishikawa. Became very popular in US, initially in industry, but then in other organisations: health care, public service, voluntary organisations, education… Now fashionable in most of the industrial world. CA441 BPM SocioTechnical Systems 20 Sep 2010 16TQM philosophy • Primary purpose of an organisation is to stay in business so that it can: promote the stability of the community • generate products and services that are useful to customers • provide a setting for the satisfaction and growth of organisation • members. • Focus on preservation and health of the organisation • 4 interlocking assumptions about quality, people, organisations and the role of senior management CA441 BPM SocioTechnical Systems 20 Sep 2010 17Assumptions • Quality is less costly to an organisation than poor workmanship • Employees naturally care about the quality of their work, and will take initiatives to improve it. • Organisations are systems of highly interdependent parts. Crossfunctional problems must be addressed collectively by • representatives of all relevant functions • Quality is ultimately and inescapably the responsibility of senior management. CA441 BPM SocioTechnical Systems 20 Sep 2010 18Change Principles • Focus on work processes. • Analyse variability. Identify root causes of variability and control them. • Management by fact. Collect data, use statistics, test solutions by experiment. • Learning and continuous improvement. CA441 BPM SocioTechnical Systems 20 Sep 2010 19Interventions • Explicit identification and measurement of customer requirements. • Creation of supplier partnerships. • Use of crossfunctional teams to identify and solve problems. • Use of scientific methods to monitor performance, and to identify points of high value for performance improvement. Control chart • Pareto analysis • Costofquality analysis • • Use of processmanagement heuristics to enhance team effectiveness. Flowcharts • Brainstorming • Causeand effect diagram • CA441 BPM SocioTechnical Systems 20 Sep 2010 20TQM in practice – techniques • Use of shortterm problemsolving teams to simplify and streamline work practices. • Training in quality practices: Interpersonal skills • Qualityimprovement processes and problemsolving • Team leading and building • Running meetings • Statistical analysis • Supplier qualification • Benchmarking • • Topdown implementation. • Developing relationships with suppliers. • Obtaining data about customers: Freephone complaint lines • Market research • Focus groups • CA441 BPM SocioTechnical Systems 20 Sep 2010 21Additional interventions Competitive benchmarking – gathering information about ‘best practices’ from other organisations. Serves several functions: Determining what customers can expect from the competition • Learning alternative work processes • Indicating qualityimprovement goals • Employee involvement: Suggestion schemes • Quality meetings between managers and employees • ‘Quality days’ • Selfmanaging teams • CA441 BPM SocioTechnical Systems 20 Sep 2010 22Divergences • Reduced use of scientific methods • Relating reward systems to achievement of quality goals CA441 BPM SocioTechnical Systems 20 Sep 2010 23Relating BPR to STS Similarities: (re)design of business processes • Use of semiautonomous teams • Empowerment • Differences: Radical change (BPR) vs. continuous change (STS) • Purpose of teambuilding and empowerment in BPR is to support • business goals, rather than to improve quality of work life. While reengineering has led to improvements in performance, it has • failed to produce the number of highlymotivated employees needed to ensure consistently highperforming organisations. CA441 BPM SocioTechnical Systems 20 Sep 2010 24Relating TQM to STS Key principles: Customer focus • Focus on work processes • Use of crossfunctional teams • Employee involvement • Selfmanagement • Analysis of variability • Benchmarking • Learning and continuous improvement • Focus on empowerment conflicts with strong focus on topdown implementation. CA441 BPM SocioTechnical Systems 20 Sep 2010 25References 1 Munkvold, Bjorn Erik (2000) Tracing the Roots: The Influence of Socio Technical Principles on Modern Organisational Change Practices in Coakes, Willis LloydJones (eds) The New SocioTech, Springer, London. Bostrom, Robert. P. Heinen, J. Stephen (1977 September). “MIS Problems and Failures: A SocioTechnical Perspective. Part I: The Causes," MIS Quarterly, pp. 1732. Bostrom, Robert. P. Heinen, J. Stephen (1977 December). “MIS Problems and Failures: A SocioTechnical Perspective. Part II: The Application of SocioTechnical Theory," MIS Quarterly, pp. 1128. Hirscheim, R, (1994 March). “Realizing emancipatory principles in information systems development: The case for ETHICS.” MIS Quarterly, pp 83109. Mumford, Enid (online) “Designing Human Systems: The ETHICS Method” http://www.enid.unet.com/C1book1.htm CA441 BPM SocioTechnical Systems 20 Sep 2010 26References 2 Lucas, Henry C. (1975) Why Information Systems Fail, Columbia University Press, New York. (658.403/LUC) Pasmore, William A. (1988) Designing Effective Organisations, John Wiley Sons. New York. CA441 BPM SocioTechnical Systems 20 Sep 2010 27Source: Hirscheim, R, “Realizing emancipatory principles in information systems development: The case for ETHICS.” MIS Quarterly, March 1994. CA441 BPM SocioTechnical Systems 20 Sep 2010 28Software for WorkFlow Management Workflow Management Systems Virtual Enterprises: Web Services, SOA, WSBPEL etc 1 CA441: WFMS. SOAs Web Services Recap on Workflow • Workflow (definition from WorkFlow Management Coalition): – “The computerised facilitation/automation of a BP, in whole or part” – Workflow technology is often an appropriate solution to BPR activities. – Traditionally managed by software (Workflow Management Systems WFMS) • Thus workflows involve the coordinated execution of multiple ‘tasks’/’activities’ performed by different processing entities, nowadays mostly in distributed heterogeneous environments • These are very common in enterprises of even moderate complexity • A workflow system can be defined as a collection of processing steps organized to accomplish some BP 2 CA441: WFMS. SOAs Web Services Recap on Workflow (cont’d) • Note: A task may represent – a manual operation by a human or – a computerizible task to (a) execute legacy applications, (b) access databases, (c) control instrumentation, (d) sense events in the external world, or (e) even affect physical changes • In addition to the collection of tasks, a workflow defines the order of task invocation or condition(s) under which tasks must be invoked (i.e. controlflow) and dataflow between these tasks • Workflow is the process by which individual tasks come together to complete a transaction a clearly defined business process within an enterprise. 3 CA441: WFMS. SOAs Web Services Recap on Workflow: (cont’d) WFMS 4 CA441: WFMS. SOAs Web Services Changes in Context: (cont’d) Recent Broad Goals/Trends Goals: Business Trends – Low cost • Scalewise: – Streamlined efficient process – IntraEnterprise – Monitor track process execution – Detect and manage exception – InterEnterprise – Intime response, etc – Solution: IT – Global Interaction IT Trends • Timewise – Mainframe – Manual – Set of Servers – Electronic – Web – Set of Services 5 CA441: WFMS. SOAs Web Services Changes in Context: (cont’d) Problems their Current Solution • Different parties (even in the same company) may have different – Operating system, interface, data format, infrastructure, interaction protocols, language, etc • Automating supply chain implies bringing all of these together • The Solution to this problem is Integration • Current Integration solution is Enterprise Application Integration Comprised of interaction btw parties required to 6 produce products/services deliver them to customers CA441: WFMS. SOAs Web Services Changes in Context: (cont’d) Terminology • Enterprise Architecture (EA) – Process of translating business vision strategy into effective enterprise change by creating, communicating improving key requirements, principles models that describe the enterprise’s future state enable its evolution Gartner. – Informally: picture of enterprise in terms of the BPs, data model, org. structure… • Enterprise Application Integration (EAI) technology: the means of integrating existing s/w systems or applications within enterprises with each other in order to execute BPs involving many s/w systems – User Interface Integration – Data Integration – Method or Function Integration – Business Process Integration • Middleware is the communication facilitator in EAI. The Enterprise Service Bus (ESB) is a common realization of this (more later). 7 s/w layer that allows a collection of independent computers appear to its users as a single coherent system EAI: (Cont’d) Three Views The Low Level View The High Level View EAI technology Enterprise Architecture Business process step Data transformation EAI: Enterprise Service Bus Services 8 CA441: WFMS. SOAs Web Services Adapte r Adapte r Adapte r More Changes in Context: Specific Business Challenges to BPM • Methods of Business Process Management are useful when optimising BPs within an enterprise. • Problems come when trying to extend an enterprise: BPM is neither scalable nor adaptive by nature – So a framework based only on BPM can be used to build business applications but they will be so cohesive as to be inflexible to adapt to future changes. – For each change, business dept must interact with IT dept to develop software changes. • As explained, SOA supports agility in software development thro a loose coupling of services thus obviating the need to talk to IT • Still need BPM as processes will need to be optimised (Bajwa et al 2008) 9 CA441: WFMS. SOAs Web Services More Changes in Context: Specific Business Challenges to BPM (cont’d) • Need for increased agility in business processes and collaboration in looselycoupled networks (Virtual enterprises) (Kutvonen, 2005) • Some business environments require many different process designs (Smith and Fingar, 2004) • Masscustomization of processes =Automation of process creation (Example: patient health records) • Processes, which evolve dynamically as they execute, through the exchange of information among participants whose relationships evolve as a result (Smith and Fingar, 2004) 10 CA441: WFMS. SOAs Web Services Changes in Context: The Virtual Enterprise • Virtual Enterprise (VE): temporary alliance of businesses coming together to share skills or core competencies resources to better respond to business opportunities, and whose cooperation is supported by computer networks. • Generally SMEs but can include big companies (e.g. Nike or IBM) • Usually they “buy” services and things rather than “build” or “make” them 11 CA441: WFMS. SOAs Web Services Typical status quo in Many Enterprise IT Architectures • Functional and technical application monoliths ubiquitous – Stovepipe architectures, application scope creep, redundant implementations, data management and many other agility issues – Architectural governance or guidance missing • Development and integration projects costly and long running – Proprietary pointtopoint connections, often developed from scratch – File transfer is a frequently used integration pattern with numerous architectural drawbacks – ‘Rollyourown’ philosophy works short term, but leads to maintenance headaches • As a result, horizontal initiatives are much harder to implement than they have to be – Example: single customer relationship management solution on top of several lineofbusiness applications (packages and custom developed) 12 refers to "islands of automation" in an enterprise, designed independently with little commonality/ interoperability. Evolution into a ServiceOriented Architecture (SOA) Ecosystem ServiceOriented Architecture ComponentBased Development Enterprise Application Integration (EAI) Messaging Backbone  Integration and choreography of services through an Enterprise  EAI connects applications via a Service Bus (ESB) centralized hub  Flexible connections with well  Easier to manage larger defined, standardsbased number of connections  PointtoPoint connection interfaces between applications  Simple, basic connectivity Source: IBM SOA 13 © IBM Corporation CA441: WFMS. SOAs Web Services But what is SOA, Anyhow • Its an architectural style whose goal is to achieve “loose coupling” among interacting contracted services via communication protocol • Often seen as built on, evolving from older concepts of distributed computing/ modular programming • Formally “refers to an architectural style of building reliable distributed systems that deliver functionality as services, with the additional emphasis on loose coupling between interacting services.” OGSA Glossary 14 CA441: WFMS. SOAs Web Services But what is SOA, Anyhow (cont’d) • Architecture is not tied to a specific technology • SOA is commonly built using Web services standards • Can also be implemented using any servicebased technology at a higher cost • The model and the notation followed in this architecture mimics what has been done in traditional RPC technologies • First implementations are just extensions of existing platforms to accept invocations through web service interfaces 15 more later CA441: WFMS. SOAs Web Services 16 CA441: WFMS. SOAs Web Services SOA Principle 1: Modularity (i.e. Separation of Concerns) • Motivation: – Integrating monolithic applications (“stovepipes”) is hard (e.g., traditional Enterprise Resource Planning packages) • Solution Service Basket – Refactor to services, expose service interface only, hide implementation details (a.k.a. encapsulation) • Consequences – Service contracts have to be defined and interpreted (by tools and/or at runtime) – Services have to be located and invoked in a coordinated manner – Service invocations have to be free of undesired side effects (data mgmt) 17 CA441: WFMS. SOAs Web Services Q Qo oS S, , Se Sec cu uri ritty y, , M Ma an na ag ge em me en ntt M Mo on niitto ori rin ng g ( (IIn nffra ras sttr ru uc cttu ure re Se Serv rviic ce es s) ) IIn ntte eg gra rattiio on n A Arc rch hiitte ec cttu ure re ( (En Entte er rp pri ris se e Se Serv rviic ce e Bu Bus s) ) SOA principle 2: Layering (logical and/or physical) • Motivation – Service characteristics such as interface granularity lifecycle vary: e.g. technical logging service vs. claim checking business process B Bu us siin ne es ss s Pr Pro oc ce es ss s • Solution Se Ser rv viic ce es s – Organize SOA into C Co om mp po on ne en nts ts 3++ architectural layers • Consequences – More abstraction (i.e. services can be composed out of other services leading to composite applications), requiring communications infrastructure – First law of distribution: “the best remote call is the one you don’t make” 18 CA441: WFMS. SOAs Web Services SOA principle 3: Loose coupling through messaging • Motivation – Once applications have been modularized, dependencies between services occur Source: Hohpe • Solution – Couple services loosely (several dimensions: location, time, invocation context) – E.g. messaging system decouples in time, location, language dimensions • Consequences – Messaging means single impln/endpoint by default (no remote objects) – Asynchronous communication complicates systems management 19 CA441: WFMS. SOAs Web Services SOA principle n: Service virtualization and flexible infrastructure • Motivation –“I don’t care about a particular provider, just chose the one that at this point in time is best for me” • Solution –From WWW to service bus/cloud –Twolevel programming Source: Leymann • Consequences –Many open issues e.g., trust and privacy, precise semantics, QoS, multi tenancy • First isolated steps –Software as a service (SAAS), e.g. Salesforce.com CRM Amazon Storage Service –Dynamic matchmaking, grid and utility computing, on demand 20 CA441: WFMS. SOAs Web Services Recall: Changes in Context: (cont’d) Recent Broad Business Goals/Trends Goals: Business Trends – Low cost • Scalewise: – Streamlined efficient process – IntraEnterprise – Monitor track process execution – Detect and manage exception – InterEnterprise – Intime response, etc – Solution: IT – Global Interaction IT Trends • Timewise – Mainframe – Manual – Set of Servers – Electronic – Web – Set of Services 21 CA441: WFMS. SOAs Web Services SOA in Practice: Use of Web Services • Web Services = SOA + Standards (WSDL/SOAP/UDDI/XML etc) • Web Services is the natural evolution of middleware EAI platforms as they try to leverage: – the Web – the Internet – the globalization of society, particularly in its economic aspects • No difference from middleware except: – being invoked via Internet • A standardized means of dealing with integration, where traditional methods are vendors/application/language specific 22 CA441: WFMS. SOAs Web Services What are Web Services, Anyhow • Web Services is a model for using the Web: – To automatically initiate processes via the Web using programs – A method for describing, publishing initiating processes dynamically in a distributed environment – Not necessarily using a Web browser – Actually, the Web is not required • Contentoriented Web now complimented by Serviceoriented Web • If you can imagine a way of electronically delivering something: – Of value to a customer – That will solve a problem, or – Provide some service to them Then you have a viable example of a Web service 23 CA441: WFMS. SOAs Web Services More on Web Services • To put it simply, a Web service is nothing but a server that listens for and replies with SOAP generally via HTTP • A Web Service is an interface that describes: – a collection of operations XML – that are network accessible Client WEB Web – thro standardized XML Application Service Messaging • Web services encapsulate business functions: – Check credit card number, Payment processing, Stock quotes – Request for quote, bid processes • They can be used to compose business processes – Travel planning, Health care, Etc, etc 24 CA441: WFMS. SOAs Web Services More on Web Services • Benefits of Web Services Include: – Decoupling of service interfaces from the implementation – Enabling dynamic service binding – Providing interoperability among different platforms – Existing applications can be wrapped as Web services – Client Service can use different platforms programming languages – Services can be composed to make composite services XML Client WEB Application Web Service Existing Existing Application Application 25 CA441: WFMS. SOAs Web Services “PublishFindBind” Model of Web Services Service Specification Discovery Agency Query Publish Serv Service ice Spe Specific cifica at tio ion n Service Service Interact Requestor Provider Service Request Response R Req equiremen uirements ts 26 CA441: WFMS. SOAs Web Services Web Services: Technical Bits • An example of an XMLbased SOAP message. Requestor, Provider communicate using messages such as these. 28 CA441: WFMS. SOAs Web Services But what has all these Acronyms to do with Workflow Business Processes • WSPolicy: a specification allowing WS to advertise their policies (on security, QoS etc.) for WS consumers to specify their policy requirements. • WSBPEL or BPEL4WS: a language for definition execution of BPs using WS WSBPEL Business Processes WSDL, WSPolicy, UDDI Transactions Reliable Security QoS Messaging Coordination SOAP(logical messaging) Transport Other and protocols XML encoding Encoding 29 CA441: WFMS. SOAs Web Services Business Process Execution Language (BPEL) • WSBPEL: a language for describing BPs based on Web Services – Processes described using WSBPEL execute functionality by using Web Service interfaces exclusively – WSBPEL Specification is administered by OASIS • WSBPEL is an orchestration language, not a choreography language – Orchestration specifies an executable process that involves message exchanges with other systems, such that that the message exchange sequences are controlled by the orchestration designer. – Choreography specifies a protocol for peertopeer interactions, defining the legal sequences of messages exchanged with the objective of guaranteeing interoperability – Orchestration means that it actively describes the ways in which individual services can be composed to implement a more complex service. • WS BPEL can integrate external services as well as human interactions, so that typical business processes can be easily mapped to BPEL descriptions. • In most cases, users have a tool for designing and validating business processes, and another one for executing these processes. 30 CA441: WFMS. SOAs Web Services BPEL (Cont’d) • BPEL processes are executed rather than observed – they can be started by external actions – they can be started by some internal process (within the BPEL context) • BPEL processes can be longrunning transactions – if human interaction is required, processes may take weeks or months – BPEL engines store process state persistently to preserve the state information • BPEL processes are described like flow charts – BPEL defines a small number of basic building blocks – special controls are used for branching, joining, and exceptions – BPEL execution is the process of transporting data through the chart 31 CA441: WFMS. SOAs Web Services Example 1: A Simple WS for the Travel Booking Process 32 CA441: WFMS. SOAs Web Services Example 2: WS SOA in the Banking Industry • Brahe (2007) shows in a case study how SOA was adopted in Danske Bank. • Danske targeted all application development on SOA transformed legacy systems into web services by wrapping them up. • With a central service library repository, applications services developed for one part of the group can be located and reused by each other part of the group. • BPs were designed using an IBM BPM system implemented using BPEL. 33 CA441: WFMS. SOAs Web Services Example 2: WS SOA in the Banking Industry • The diagram shows a sample BP consisting of different actions. • Each action is either an automated task, implemented by a WS or a human task, performed by a user through a user interface of the system. • The figure shows how different types of applications (COBOL, Java, SAP etc.) can be wrapped into WSs therefore integrated into consistent processes and combined with human tasks. 34 CA441: WFMS. SOAs Web Services Example 2: WS SOA in the Banking Industry • Danske Bank tried to produce customer packages as a pilot to see how combining SOA/BPM influences their business performance. • Customer packages were a new sales concept, where customers can sign up for packages containing e.g. an account, a credit card and an internet bank account. • The package is then created by back office people from different legacy systems in a highly predictable and productionlike way. • Since the process involved applications from different departments, a WF would be able to link different applications together to integrate them in a continuous end toend process. • Following BPM methods, Danske tried to model the existing BP in a WF…. 35 CA441: WFMS. SOAs Web Services Example 2: Problems Resolutions • However they soon found the process to be more complicated than they thought. • As they had never tried to describe the BP in detail before, the first WF version only contained the main path thro the BP, without exceptions and special cases. • In the end, the model contained 30 different WFs 200 service invocations or human tasks. • After orchestrating the different task into an integrated WF system, Danske started to automate some tasks by developing automatic product creation services. • They did not choose a radical BPR approach, as they knew that stepwise optimisation allows for the chance to learn from experience execution statistics. • Also , since they could implement changes in a controlled matter, this gave the back office workers more time to adopt to changes. 36 CA441: WFMS. SOAs Web Services Example 2: Conclusions • Danske was able to achieve the following efficiencies: – Reducing the rate of manually created products to no more than 20. – Automating dataflow between different systems, thus making back office employees’ work easier and more efficient. • Besides those benefits, Brahe also discovered various challenges, which arise with the application of BPM and SOA: – It’s crucial for easy integration of different services that these have been designed for reusability and (especially) the documentation has been done properly. – BPM and SOA are concepts, methods techniques that are not easy to adopt, i.e. there has to be a commitment not only to technical but also educational effort. – Firms have to study best practice examples and need to keep a strong architectural governance to ensure that all future projects follow the given development process and standards as well as the serviceoriented guidelines. – Existing commercial standards and tools were not yet mature enough to support a modeldriven and serviceoriented development process efficiently. 37 CA441: WFMS. SOAs Web Services References • Bajwa, I. S., et al, 2008. SOA and BPM Partnership: A paradigm for Dynamic and Flexible Process and IT Management. International Journal of Humanities and Social Sciences, 47, 1622. • Brahe, S. 2007. BPM on Top of SOA: Experiences from the Financial Industry. Business process management, 4714, 96111. • Kutvonen, L. 2005. Addressing interoperability issues in business process management. Proceedings of the 2nd Interop workshop at EDOC2005, 2005 • Smith, H., Fingar, P. Process Management Maturity Models. Business Process Trends. July 2004. • Klauser, M., The use of Web Services in Improving Business Processes, Private Communication, 2012 38 CA441: WFMS. SOAs Web Services Modelling Workflow with Petri Nets 1 CA4 BPM PetriNetsWorkflow Management Issues Georgakopoulos,Hornick, Sheth Workflow =workflow Workflow Process Implementation application specification Executable Business Process application code Workflow model Modelling/ Enactment specification Reengineering Service/ Run language (BPM/R) time Support 2Workflows Petri Nets (PNs) WFMS give an explicit representation of the BP logic thus allowing for computerized support PNs are an established tool for modelling analyzing business processes: Can be used as a design language for the specification of complex WFs PN theory provides for powerful analysis techniques for verifying the correctness of WF procedures. PN primarily used to study dynamic concurrent behaviour of n/wbased systems with a discrete flow. 3 CA4 BPM PetriNetsWorkflows Petri Nets (cont'd) Workflows are casebased, i.e., every piece of work is executed for a specific case. Case: the subject of operation in a business process execution. E.g. mortgage application, hospital admission, insurance claim, tax declaration, order, request for information... A workflow process is designed to handle similar cases. Cases are handled by executing tasks in a specific order. 4 CA4 BPM PetriNetsA threedimensional view of a WF 5 (W.M.P. van der Aalst)Basics of Petri Nets ● Petri nets comprise two types of nodes: places and transitions. An arc exists only from a place to a transition or from a transition to a place. ● A place may have zero or more tokens. ● Graphically, places, transitions, arcs, and tokens are represented respectively by: circles, bars, arrows, and dots. p 1 t p 1 2 6 CA4 BPM PetriNetsDynamic modelling with Petri nets Transitions are the active components. often represent an event, an operation, a transformation or a transportation. Places are passive. usually represents a medium, a buffer, a geographical location, a state a phase or a condition. depends on how the token is place is interpreted Tokens often indicate objects. can play a role as physical object, e.g. a product/person; an info object, e.g. a message; an indicator of state a process is in or state of an object; an indicator of a condition, i.e. the presence of a token indicates 7 whether a certain condition is fulfilled.Object Life Cycle (OLC) with Petri Nets A Petri net attaches to a life cycle of objects of a class States correspond to places Initial state: state with token, there is only one initial state in an OLC Transitions correspond to events, conditions (verify a condition) or processes (or atomic process: method) that changes object state Tokens represent objects in this class 8Basics of Petri Nets (cont'd) P1 Place T1 P2 or Transition T2 P3 P4 Arc Token T3 P5 9Example – claims process place transition token Pay Ready Claim Record Under consideration Send letter S S S S St t t t ta a a a at t t t te e e e e: : : : : ( ( ( ( (2, 1, 3, 1, 2,1, 0, 0, 1, 0,0) 1) 1) 0) 2) 10Basics of Petri Nets (cont'd) ● Below is an example Petri net with two places and one transaction. ● Transition node is ready to fire if only if there is at least one token at each of its input places p 1 t p 1 2 state transition of form (1, 0) (0, 1) p : input place p : output place 1 2 11 CA4 BPM PetriNetsFormal Notation of Petri Nets A bipartite graph, PN=(P, T, I, O) P: finite set of places T: finite set of transitions I: (PT)→ N, I(p,t)=n, if n0, p∈P, t ∈T, then p is an input place of t; n is an input multiplicity (weight) for each input arc (p,t) O: (TP)→ N, O(t,p)=m, if m0, p∈P, t ∈T, then p is an output place of t; m is an output multiplicity(weight) for each output arc (t,p) By default, the weight of an arc is equal 1, otherwise it will be noted. The input multiplicity of an arc between an input place and a transition determines how many tokens have to be present in the place so that the transition is enabled 12Formal Notation of Petri Nets (cont'd) A state of a Petri net is a function s: P → N, assigning to each place p ∈P a number of tokens at this place. A state space of a Petri net is a set of all s(p), p∈P. (E.g. state space is (2,1, 0, 0, 0)) A transition t is enabled, t ∈ T in state s: P → N, if there are enough tokens present in each of the input places of t, i.e. if and only if ∀p∈P, s(p) ≥ I(p,t) A transition t can fire in a state s whenever it is enabled in this state. When it fires, it consumes I(p,t) tokens from each input place p and produces O(t,q) tokens in each output place q. If t fires in state s, this leads to a new state s’ where ∀p∈P, s’(p)=s(p) – I(p,t) + O(t,p) 13Properties of Petri Nets ● Sequential Execution Transition t can fire only after 2 the firing of t . This impose the 1 precedence of constraints "t p 2 1 t p t p 1 2 2 3 after t ." 1 ● Synchronization Transition t will be enabled 1 only when a token there are at least one token at each of its input places. t 1 ● Merging Happens when tokens from several places arrive for service at the same transition. 14 CA4 BPM PetriNetsProperties of Petri Nets (contd) ● Concurrency t and t are concurrent. 1 2 t With this property, Petri nets 1 can model systems of t 2 distributed control with multiple processes executing concurrently in time. 15 CA4 BPM PetriNetsProperties of Petri Nets (contd) ● Conflict t and t are both ready to fire 1 2 but the firing of one leads to t 1 the disabling of the other transitions. t 2 t 1 t 2 16 CA4 BPM PetriNetsProperties of Petri Nets (contd) ● Conflict (contd) ● the resulting conflict may be resolved in a purely nondeterministic way or in a probabilistic way, by assigning appropriate probabilities to the conflicting transitions. e.g: t t 1 2 17 CA4 BPM PetriNets t t 3 4Example: Patients a Specialist wait free end start start change documenting inside treated busy change Tokens : Patient Tokens : Specialist (W.M.P. van der Aalst) 18Example: Patients a Specialist (cont'd) The process of a specialist treating patients: end busy documenting free wait start chang inside treated e If a specialist always treats two patients at the same time 19Example: Patients a Specialist (cont'd) end busy documenting free 2 2 2 2 wait change start inside treated 20Example: In a Restaurant Waiter Customer 1 free Customer 2 Take Take order order wait Order wait taken eating eating Tell kitchen Serve food Serve food 21 CA4 BPM PetriNetsExample: In a Restaurant (cont'd) Two Scenarios Scenario 1: Waiter takes order from customer 1; serves customer 1; takes order from customer 2; serves customer 2. Scenario 2: Waiter takes order from customer 1; takes order from customer 2; serves customer 2; serves customer 1. 22 CA4 BPM PetriNetsExample: In a Restaurant (Scenario 1) Waiter Customer 1 free Customer 2 Take Take order order wait Order wait taken eating eating Tell kitchen Serve food Serve food 23 CA4 BPM PetriNetsExample: In a Restaurant (Scenario 2) Waiter Customer 1 free Customer 2 Take Take order order wait Order wait taken eating eating Tell kitchen Serve food Serve food 24 CA4 BPM PetriNetsExample: Vending Machine Take 15c bar Deposit 10c 15c 5c Deposit 5c Deposit Deposit 5c 0c Deposit 5c 5c Deposit 10c 20c 10c Deposit 10c Take 20c bar 25 CA4 BPM PetriNetsExample: Vending Machine (3 Scenarios) Scenario 1: Deposit 5c, deposit 5c, deposit 5c, deposit 5c, take 20c snack bar. Scenario 2: Deposit 10c, deposit 5c, take 15c snack bar. Scenario 3: Deposit 5c, deposit 10c, deposit 5c, take 20c snack bar. 26 CA4 BPM PetriNetsExample: Vending Machine (Token Games) Take 15c bar Deposit 10c 15c 5c Deposit 5c Deposit Deposit Deposit 5c 5c 0c 5c Deposit 10c 20c 10c Deposit 10c Take 20c bar 27 CA4 BPM PetriNetsExample: Insurance complaint process To manage different cases, two solutions: 1. Token is added a value (case identifier or colour) for distinguish different cases 28 2. Each case corresponds to a unique instance of the Petri netsPetri Nets over Time ● 1962 Carl Petri originally proposed Petri Nets without any notion of time. Concept of time was intentionally avoided because addition of time restricts the behavior of the net. ● 1970s Addition of time has been discussed in order to analyze the performance of modelled system. ● Many properties are still undecided for Petri nets extended with data and time. 29 CA4 BPM PetriNetsReferences http://www.wfmc.org/standards/model.htm “The Application of Petri Nets to Workflow Management”, W. van der Aalst, J. Circuits, Systems Computers, Vol. 8(1) (1998), pp. 2166 “Design and control of workflow process”, Hajo A.Reijers, LNCS Springer, 2003 “Coupling ObjectOriented and Workflow Modelling in Business and Information Process Reengineering”, Gregory N. Mentzas, IOS Press, 1999 “Workflow Management Coalition Terminology and Glossary” (WFMCTC1011). Technical report, Workflow Management Coalition, Brussels, 1996. 30 CA4 BPM PetriNetsBusiness Process Modelling 1 CA4 Business Process Modelling 15 Sep 2010Historical View of BP Modelling Work Process Flow (early to mid 1900s) • + Frank Gilbreth his 'Flow Process Charts' (= flowcharts) + First structured method for documenting process flow Work Flow (mid1970s) • + Motivation was disenchantment with the above + Acted as a genesis for BP Modelling Business Process Modelling (2000s) • + Trend towards new manuf'ing paradigm – Virtual Enterprise + VE=distributed parallel BP execution from each VE entity + Need effective process modelling with strict model analysis 2 CA4 Business Process Modelling 15 Sep 2010Business Process Modelling The “What” Business process modelling (BPM) is the activity of • representing processes of an enterprise, so that the current process may be analyzed and improved. Typically performed by business analysts managers seeking • to improve process efficiency and quality. The process improvements identified by BPM may or may not • require IT involvement, although that is a common driver behind modelling a business process. 3 CA4 Business Process Modelling 15 Sep 2010Business Process Modelling The “Why” Business process modelling (BPM) helps companies in the • following ways: + To become more processoriented + To optimise business processes thro Process Change Mgmt: long term planning, execution control of processes + To document and manage processes on an ongoing basis + To simulate processes using, i.a. Monte Carlo simulation Discrete Event Simulation 4 CA4 Business Process Modelling 15 Sep 2010Business Process Modelling Notation Why BPM Notation (BPMN) • + = a notation that can be understood by all business users. + i.e. business analysts (creating initial drafts of processes) + technical developers (implementing technology performing those processes). Where does BPMN fit in with tools so far (WF/PNs) • + swimlanes/WF not flexible for VE/whole organisations so BPMN encapsulates WF models thro use of swimlane diagrams + process is sound = for each state reachable from the initial state, a firing seq exists leading system to the final state. In a process model with formal execution semantics, these types of properties can be defined precisely verified automatically by tools. + BPM Diagrams can be translated to PNs for analysis verification. + Can be mapped to UML. 5 CA4 Business Process Modelling 15 Sep 2010BPMN – Yet Another Bloody Standard Business Process Management Initiative (www.bpmi.org) • + established to promote develop use of Business Process Management (BPM) through the use of standards for process design, deployment, execution, maintenance, and optimization of processes. BPMI has developed three standards to facilitate BPM • + BPMN, as a standard for modelling business processes, + Business Process Modelling Language (BPML), as the standard business execution language, + Business Process Query Language (BPQL), a standard management interface for the deployment execution of eBusiness processes. 6 CA4 Business Process Modelling 15 Sep 2010BPMN: Business Process Diagrams BPMN specifies one Business Process Diagram (BPD). • Diagram designed to do two things well: • + easy to use and understand, used to quickly easily model business processes, easily understandable by nontech users (usually mgmt). + offers expressiveness to model very complex business processes can be naturally mapped to business execution languages. Steps: • + model the events that occur to start a process, processes that get performed, end results of the process flow. + business decisions and branching of flows is modelled using gateways. + process can contain subprocesses, shown by another BPD connected via a hyperlink to a process symbol. – If a process is not decomposed by subprocesses, considered a task – the lowestlevel process. – A ‘+’ mark in the process symbol denotes that the process is decomposed; if it doesn’t have a ‘+’ mark, it is a task. 7 CA4 Business Process Modelling 15 Sep 2010BPMN: Business Process Diagrams The four basic categories of elements are: + Flow Objects + Connecting Objects + Swimlanes + Artifacts 8 CA4 Business Process Modelling 15 Sep 2010BPMN Diagrams Flow Objects BPM Notation: Flow Objects Connecting Objects Swimlanes Connecting Objects Artifacts Events • Flow Objects Activities • Gateways • Connecting Objects • 9 CA4 Business Process Modelling 15 Sep 2010BPMN Diagrams Flow Objects Connecting Objects BPM Notation: Flow Objects: Events Swimlanes Artifacts Represented with a circle • Denotes something that happens (rather than Activities which • are something that is done). Icons within the circle denote type of event (e.g. envelope for • message, clock for time). Events are also classified as • + Catching (ie catch an incoming message to Start process) or + Throwing (ie throw a message at End of process). Types: Start, Intermediate, End • 10 CA4 Business Process Modelling 15 Sep 2010BPMN Diagrams Flow Objects Connecting Objects BPM Notation: Flow Objects: Events Swimlanes Artifacts Start event: • + triggers process; + indicated by a single narrow border; + can only be Catch, so shown with open (outline) icon. End event: • + represents result of a process; + indicated by a single thick/bold border; + can only Throw, so shown with a solid icon. Intermediate event: • + something happening btw start end events; + indicated by a tramline border; + can Throw or Catch (using solid/open icons as appropriate) eg, task could flow to an event throwing a message to another pool a subsequent event waits to catch the response before continuing. 11 CA4 Business Process Modelling 15 Sep 2010BPMN Diagrams Flow Objects Connecting Objects BPM Notation: Connecting Objects Swimlanes Artifacts Sequence Flow: • + represented by a solid line with a solid arrowhead + used to show order (sequence) that activities will be performed in a Process. Message Flow: • + represented by a dashed line with an open arrowhead + used to show flow of messages btw 2 separate Process Participants (business entities/business roles) that send receive them. + in BPMN, 2 separate Pools in Diagram will represent two Participants. Association: • + represented by a dotted line with a line arrowhead + used to associate data, text, other Artifacts with flow objects. + used to show inputs outputs of activities.. 12 CA4 Business Process Modelling 15 Sep 2010BPMN Diagrams Flow Objects Connecting Objects Swimlanes BPM Notation: Example 1 Artifacts Example:A process with a normal flow with the • Business Process Modeling Notation. 13 CA4 Business Process Modelling 15 Sep 2010BPMN Diagrams Flow Objects Connecting Objects BPM Notation: Swimlanes Swimlanes Artifacts As seen, swimlanes are a mechanism to organize activities into • separate visual categories to illustrate different functional capabilities or responsibilities. BPMN supports swimlanes with two main constructs. The two types of BPD swimlane objects are: Pool: • + represents a participant in a process. + also acts as a graphical container for partitioning a set of activities from other Pools usually in the context of B2B situations. Lane: • + a subpartition within a Pool extending entire + length of the Pool, either vertically or horizontally. + used to organize categorize activities. 14 CA4 Business Process Modelling 15 Sep 2010BPMN Diagrams Flow Objects Connecting Objects BPM Notation: Swimlanes cont'd Swimlanes Artifacts 15 CA4 Business Process Modelling 15 Sep 2010BPMN Diagrams Flow Objects BPM Notation: Example 2: Swimlanes Connecting Objects Swimlanes Artifacts Pools are used when diagram involves 2 separate business entities or • participants are physically separated in the diagram. The activities within separate Pools are considered selfcontained • Processes. + = Sequence Flow may not cross the boundary of a Pool. Message Flow is defined as being the mechanism to show the communication between two participants, , thus, must connect between two Pools (or the objects within the Pools). 16 CA4 Business Process Modelling 15 Sep 2010BPMN Diagrams Flow Objects Connecting Objects BPM Notation: Artifacts Swimlanes Artifacts BPMN designed to allow modellers and modelling tools • flexibility in extending basic notation in providing ability to add additional context appropriate to a specific modelling situation. Any number of Artifacts can be added to a diagram as • appropriate for the context of the business processes being modelled. Current version of BPMN specification predefines only 3 • types of BPD Artifacts: 17 CA4 Business Process Modelling 15 Sep 2010BPMN Diagrams Flow Objects Connecting Objects BPM Notation: Artifacts cont'd Swimlanes Artifacts BPMN specification predefines only 3 types of BPD Artifacts: • Data Objects: • + mechanism to show how data is required or produced by activities. + connected to activities through Associations. Group: • + repr'ted by a rounded corner rectangle drawn with a dashed line + can be used for documentation or analysis purposes, but does not affect the Sequence Flow. + used to organize categorize activities. Annotations: • + repr'ted by an open rectangle containing annotation text. + mechanism for a modeller to provide additional text info for reader of a BPMN Diagram 18 CA4 Business Process Modelling 15 Sep 2010BPM Notation: Example 3 Simple BPMN Business Process Diagram for an online auction • system. 19 CA4 Business Process Modelling 15 Sep 2010BPM Notation: Example 4 A Segment of a Process with Data Objects, Groups, and • Annotations 20 CA4 Business Process Modelling 15 Sep 2010BPMN Software Every org'n has their very own distinct bps which • differentiate them from their competitors. Some have predefined processes, some have processes which • are defined by the employees themselves. + (eg Customer Support: Imagine what would happen if cs rep had his/her way of managing a customer. Need a proper bp to handle cs) Every org'n needs a practical step by step BPM approach • which works together with BPM solutions. Lately, with advanced webbased solutions, bps wfs can be • managed through BPMgmt solutions. 21 CA4 Business Process Modelling 15 Sep 2010BPMN Software cont'd These BPMgmt solutions can be used to easily create • applications to automate processes such as: + Change management + Quality control + Customer service + Claims management + Complaint management + Procurement There are many BPM / WF solutions out there. Will look at • some open source solutions to evaluate before looking at the proprietary/commercial ones. 22 CA4 Business Process Modelling 15 Sep 2010BPMN Software cont'd: ProcessMaker: open source, BPMgmt WF s/w designed for SMEs. • User friendly solution to manage WF effectively and efficiently. • Business users process experts without programming experience can • design run WFs, automate processes across systems ie HR, finance operations. Can easily create WF maps, design custom forms, extract data from • external data sources to optimize WF mgmt bus. ops. one advantage is online library with process templates to download • edit to reduce learning curve. Process templates include: + Credit card application + Expense report process Review at http://www.wareprise.com/2009/04/12/aninitial • reviewofprocessmakeropensourcebpm/ 23 CA4 Business Process Modelling 15 Sep 2010BPMN Software cont'd: Bonita Open Solution is an intuitive powerful open source • BPMgmt solution applicable to simple complex processes. The Bonita Studio which meets BPMN is part of the Bonita Open • Solution including Bonita Execution Engine Bonita User Experience. One strong point about Bonita Open Solution is its great user • experience which is quite similar to standard email Inbox to easily and quickly organize your work, follow up on tasks / cases and collaborate with colleagues. 24 CA4 Business Process Modelling 15 Sep 2010BPMN Software cont'd: Unlike ProcessMaker, CuteFlow is a web based open source document • circulation workflow system. Users able to define “documents” for sending step by step to every • station/user in a list. Cuteflow helps to automate document circulation process within office • internal environment. All operations like starting a WF, tracking, WFdefinition or status • observation done within a comfortable and easy to use web interface. Some key features of Cuteflow include: • + Integration of workflow documents in email message + Unlimited amount of sender, fields, slots, receiver… + Workflows can attach data and files + Flexible user management with substitutes + Wide user base 25 CA4 Business Process Modelling 15 Sep 2010BPMN Software cont'd: Commercial Figure 1 (from Gartner) • evaluated on: + Implementation of a Specific ProcessBased Application + Support for a Continuous Process Improvement Mentality + Redesign for a Process Based SOA + Business Transformation Initiatives Open source 26 CA4 Business Process Modelling 15 Sep 2010BPMN Software cont'd: Lombardi http://www.youtube.com/watchv=GEGdEiQ2WvM 27 CA4 Business Process Modelling 15 Sep 2010References “Introduction to BPMN”, Stephen A. White, IBM Corporation, available to download on http://www.bpmn.org/ “BPMN and Business Process Management: Introduction to the New Business Process Modeling Standard” Martin Owen and Jog Raj, Popkin Software available to download on http://www.bpmn.org/ “Process Management, A Guide for the Design of Business Processes”, By Jorg Becker, Martin Kugeler, Michael Roseman, Springer Verlag 28 CA4 Business Process Modelling 15 Sep 2010
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