CSS 496 Business Process Re-engineering for BS(CS) Chapter 1: Introduction Khurram Shahzad mks@ciitlahore.edu.pk Based on P. Wohed, M. Dumas and M. Weske Lectures

Agenda Introduction Course Material Course Evaluation Course Contents

Muhammad Khurram Shahzad M Khurram Shahzad Assistant Professor M.Sc. from PUCIT, University of the Punjab, PK MS from KTH - Royal Institute of Technology, Sweden 2006 PhD from Information Systems Lab, KTH-Royal Intitute of Technology & Stockholm University, Sweden, (Jan’08 - Inshallah Nov’12) http://syslab.ning.com/profile/mks At least 26 Publications

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Research Area I Research in IS focuses on Enterprise Modeling Data Warehousing Academic Social Networks Business Process Management Process Model Repositories Process Improvement using data warehousing

Research Projects Digital Repository Service for Academic Performance Assessment and Social Networking in Developing Countries Centre for Academic Statistics of Science and Technology Productivity and Social Network Analysis of the BPM Community

Stockholm University, Sweden Technical University Eindhoven, The Netherlands University of Sri-Jayewardennepura, Sri Lanka

Course Material Reference Books Course Book Mathias Weske. Business Process Management: Concepts, Languages, Architectures, Springer, The Netherlands Reference Books M Dumas, W van der Aalst, Arther Hofstede, Process-aware Information Systems: Bridging People and Software through Process Technology, John Wiley & Sons Inc., NY.

Assignments Implementation/Research on important concepts. To be submitted in groups of 2 students. Include Modeling and Benchmarking of processes Implementation of processes in open source modeling software Literature Review paper on BPM social network May add a couple more

Lab Work Lab Exercises. To be submitted individually

Course Introduction BPM is based on the observation that each product that a company provides to the market is the outcome of a number of activities performed Business processes are the key instrument to organizing these activities and to improving the understanding of their interrelationships

Business Process Management (BPM) BPM is based on the observation that each product that a company provides to the market is the outcome of a number of activities performed Business processes are the key instrument to organizing these activities and to improving the understanding of their interrelationships

Business Process Management (BPM) A business process consists of a set of activities that are performed in coordination in the organizational and technical environment These activities jointly realize a business goal Each business process is enacted by a single organization, but it may interact with business processes performed by other organizations

Business Process Management (BPM) Business processes describe the organisation of work into work tasks, the distribution of work task into different resources and the provision of necessary information for the performance of the individual tasks. Examples Order-to-Cash Fault-to-Resolution (Issue-to-Resolution) Claim-to-Settlement Application-to-Approval

Process and the organization

Business Process Management (BPM) BPM includes concepts, methods and techniques to support the design, administration, configuration, enactment, and analysis of business processes The basis of BPM is the explicit representation of business processes with their activities and the execution constraints between them Once business processes can be defined, they can be subject to analysis, improvement and enactment

Business Process Management (BPM) Business process management systems (BPMS) are information systems aimed to support the business processes in an organization A business process management system is a generic software system that is driven by explicit process representation to coordinate the enactment of business processes

Business Process Management (BPM) A business process model consists of a set of activity models and execution constraints between them

Business Process Management (BPM) A business process instance represents a concrete case in the operational business of a company, consisting of activity instances. Each business process model acts as a blueprint for a set of business process instances, Each activity model acts as a blue print for a set of activity instances

Terminology around

The world without computers People performed the entire process The process was visible – one could observe what people did and ask questions There was no need to model the processes

Assembly line

Traditional Process (as-is)

The first computers

The computer gets several and data moves between them

Optimization continues

Consequences The process is hidden in the systems and no longer visible for the people. It is no more simple to “see” the whole by simply observing how people work. The IT-departments have unconsciously got the responsibility for big part of the business processes, which was of course never the intention.

My washing machine won’t work

Processes and Outcomes Every process leads to one or several outcomes, positive or negative Fault-to-resolution process Fault repaired without technician intervention Fault repaired with minor technician intervention Fault repaired and fully covered by warranty Fault repaired and partly covered by warranty Fault repaired but not covered by warranty Fault not repaired (customer withdrew request)

The Ford Case Study (Hammer 1990) Ford needed to review its procurement process to: Do it cheaper (cut costs) Do it faster (reduce turnaround times) Do it better (reduce error rates) Accounts payable in North America alone employed > 500 people and turnaround times for processing POs and invoices was in the order of weeks

The Ford Case Study Automation would bring some improvement (20% improvement) But Ford decided not to do it… Why? Because at the time, the technology needed to automate the process was not yet available Because nobody at Ford knew how to develop the technology needed to automate the process. Because there were not enough computers and computer-literate employees at Ford. None of the above

The result… 75% reduction in head count Material control is simpler and financial information is more accurate Purchase requisition is faster Less overdue payments Why automate something we don’t need to do? Automate things that need to be done.

Business Process Lifecycle

Design and Analysis Surveys on process and their organizational and technical environment are conducted Based on these surveys, processes are identified, reviewed, validated, and represented by business process models Explicit process models expressed in graphical notation facilitate communication about these processes, so that stakeholders can communicate efficiently refine and improve them

Design and Analysis Three good reasons for making models Gain Insights For a better understanding of a system Analysis Validation and verification Specification A blueprint of construction

Design and Analysis We will investigate languages to express business process models Modeling techniques as well as validation, simulation, and verification techniques are used during this phase Once initial design is developed, it needs to be validated (using workshop) Simulation techniques can be used to support validation because certain undesired execution sequences might be simulated that show deficits in the process models

Design and Analysis Process modeling has an evolutionary character in the sense that the process model is analyzed and improved so that it actually represents the desired business process and that it does not contain any undesired properties like deadlock We will investigate the verification of process models with respect to correctness properties

Configuration Once process model is designed and verified, the process needs to be implemented There are different ways for it: As a set of policies and procedures that enterprise has to comply with Realization without BPMS System is configured according to organizational environment It includes interaction of employees with system And integration of existing software systems with BPMS

Enactment Once configuration is completed, process instances can be enacted Enactment encompasses the actual runtime of the business process BPMS actively controls the execution of instances as defined in process models i.e. activities are performed according to the execution constraints specified in process model Monitoring component visualizes the stauts of process instances

Enactment Information is valuable, for instance to respond to a customer request that inquires about the current status of his case During enactment, valuable execution data is gathered, typically in some form of log file Log files consists of ordered sets of log entries, indicating events that have occurred during processes

Evaluation Uses the information available to evaluate and improve process models and their implementations Execution logs evaluation Business activity monitoring For instance, it can identify that a certain activity takes too long due to shortage of resources required Process Mining If applied on traditional IS, process models can be generated

Administration and Stakeholders Numerous artifacts at different levels of abstraction that needs to be organized and managed A well structure repository with powerful query mechanisms is essential Classification of roles of Stakeholders Chief Process Officer Responsible for standardizing and harmonizing processing Acknowledges important of BPM to top level managenment

Administration and Stakeholders Business Engineer; domain experts, non technical Process Designer; modeling processes by communicating with domain experts Process Participant; Knowledge Worker Process Responsible System Architect Developers

Business Process Lifecycle

Classification of Business Processes Organizational vs Operational Intra-organizational Processes vs Process Choreographies Degree of Automation Degree of Repetition

Classification of Business Processes Organizational vs Operational Ranges from high-level strategy to implemented processes Business Strategy describes long-term concepts to develop a sustainable competitive advantage e.g. cost leadership for products Strategy is broken down into operational goals e.g. Reducing the cost of material

Classification of Business Processes Organizational Processes High level Specified in textual form by Inputs Outputs Expected results Dependencies on other processes e.g. process to manage incoming raw materials provided by a set of suppliers

Classification of Business Processes Operational Processes There are multiple organizational processes that contribute to organizational process In operational processes activities and their relationships are specified Operational process are specified by process models

Classification of Business Processes Operational Processes are basis for developing implemented processes Implemented processes contain information on the execution of process activities technical and organizational environment in which they will be executed

Classification of Business Processes Organizational vs Operational Intra-organizational Processes vs Process Choreographies Degree of Automation Degree of Repetition

Classification of Business Processes Intra-organizational processes, no interaction with processes performed by other parties Primary focus is to streamline internal processes (eliminate activities that do not bring value) Allocate activities to persons who are skilled and competent Most business processes interact with processes in other organizations forming process choreographies Interaction protected by legally binding contracts More technical aspects are involved here because different organizations use different software platforms

Classification of Business Processes Organizational vs Operational Intra-organizational Processes vs Process Choreographies Degree of Automation Degree of Repetition

Classification of Business Processes Degree of automation Fully automated, no human is involved e.g. airline ticket using web interfaces Many processes require manual activities, but also include automated activities e.g. insurance claim

Classification of Business Processes Degree of Repetition Highly repetitive, include business processes without human involvement e.g. online ticketing Process that occur few times e.g. large engineering efforts like designing a vessel If repetitive  process modeling, automation If not repetitive  process modeling and automation is questionable due to high cost

Classification of Business Processes Degree of structuring Either highly structured (rigid) or flexible for knowledge workers. Data dependencies are used instead of control flow constraints