1. 1 Review Topics 1.Process Discovery 2.Process Optimization 3.Process Analysis

2. 2 Process Discovery Discovering the vision, mission, and strategy of the organization Discovering the major processes of an organization Discovering the sequence of activities in a process Discovering the structure of the organization Discovering the application of technology to automate the process

3. 3 A process is work performed on, or in response to, incoming data or control flow or conditions. A System is a Process Process Discovery (Contd.)

4. 4 Decomposition is the act of breaking a system into its component subsystems, processes, and sub-processes A decomposition diagram shows the top-down functional decomposition of a system –Each process in the diagram is either a child, a parent, or both –A parent must have 2 or more children –Generally, a child may have one parent –A child may have its own children

5. 5 Process Discovery (Contd.) Logical processes are work or actions that must be performed no matter how you implement the system There are three types of logical processes –Function is set an ongoing activities of business with no start and end, e.g. quality management, inventory control. Functions are named with nouns that describe the entire function –Events is a unit of work that must be completed as a whole. Is triggered by an input and is completed when the process has responded with appropriate outputs. Events are also called transactions.. –Elementary Processes are detailed activities or tasks that are required to complete the response to an event. They are the lowest level of detail in a process model. A common synonym is primitive process

6. 6 Process Discovery (Contd.) Discovering the sequence of activities in a process can be carried out using conventional fact-finding or information gathering techniques, e.g. interviewing, JAD etc. –Identifying activities –Identifying dependencies (mandatory, discretionary, external) –Sequencing activities using network diagramming tools such as PDM, AON, GERT Discovering the sequence of activities in a process can also be carried out using data mining techniques

7. 7 Process Optimization (Step Optimization) Role 4 Role 3 Role 2 Role 1 A4 A3 A2 A5 A6 A7

8. 8 Process Optimization (Step Optimization)

9. 9 Process Analysis Assign probabilities to control connectors Simulate the process using the probabilities assigned to activities and control connectors Process path probability Determine activity duration Determine resource Determine cost Optimize the process

10. 10 Process Analysis - Instrumenting a Process Collect Credit Information Assess Risk Accept Credit Request Approval Reject Credit 30%50% 70% 80% 20%

11. 11 Process Analysis – Path Probability Collect Credit Information Assess Risk Accept Credit Request Approval Reject Cresit 30%50% 70% 80% 20% 56%

12. 12 Process Analysis – Path Probability Collect Credit Information Assess Risk Accept Credit Request Approval Reject Credit 30%50% 70% 80% 20% 15%

13. 13 Process Analysis – Path Probability Collect Credit Information Assess Risk Accept Credit Request Approval Reject Credit 30%50% 70% 80% 20% 14%

14. 14 Process Analysis – Path Probability Collect Credit Information Assess Risk Accept Credit Request Approval Reject Credit 30%50% 70% 80% 20% 14%

15. 15 Process Analysis – Path Probability Collect Credit Information Assess Risk Accept Credit Request Approval Reject Credit 30%50% 70% 80% 20% 14%

16. 16 Process Analysis – Path Probability

17. 17 Process Analysis – Time Determination

18. 18 Process Analysis – Time Determination

19. 19 Process Analysis – Activity Frequency

20. 20 Process Analysis – Time Per Role Using a 40 hour work week, we need seven loan officers and seven financial officers to perform 1000 weekly processes

21. 21 Process Analysis – Activity Costs @ 36/hr. rate for the loan officer, and $54 for a financial officer, the cost of a single process is $25.20 for personnel

22. 22 Process Analysis – Optimizing a Process More than half of the cost is associated with the approval done by the financial officer If cost reduction is one of he objective, reducing the approval activity could be a starting point We could reduce the traffic on the Approval route by increasing the traffic on the Assess Risk route We could do that by increasing the threshold on Risk Assessment activity.