1. Marlon Dumas marlon.dumas ät ut . ee
MTAT Business Process Management (BPM) (for Masters of ETM) Lecture 3 Process Implementation & Monitoring
Marlon Dumas
marlon.dumas ät ut . ee

2. Business Process Lifecycle Management
Process identification
Process modelling (as-is)
Process analysis
Process redesign (to-be)
Process implementation
Process monitoring
In the following we will specify the process modelling task. Especially, we will understand the characteristics of a model, the difference between a meta and a reference model, and how the event-driven process chains (EPC) can be used to design process models. 2

3. Process Implementation

4. Harmon’s Process-centric Enterprise Architecture

5. Process Implementation
Organisational Change and Enablement
User Participation
User Training
Change Planning and Management
IT Implementation
Custom Software Application
In-house development
Outsourced
Packaged Enterprise System
Business Process Management System (BPMS)

6. IT Implementation – Packaged Enterprise Systems
Typically classified into:
ERP: Enterprise Resource Planning, including
Manufacturing, inventory control, procurement, financials, human resources
SCM: Supply Chain Management, including
Material acquisition (forecasting, planning), logistics/transportation
Supplier relationship management
CRM: Customer Relationship Management
Marketing, lead management, sales
These functions may come together, or acquired separately
E.g. Salesforce (mainly CRM), SAP Business Suite, Oracle E-Business Suite, Microsoft Dynamics AX.

7. ERP Systems
Multi-module application that helps a company manage key parts of its business in an integrated fashion.
Key features include:
standardized environment with shared database independent of applications and integrated applications
enables information flow across organizational boundaries to support common transactions and business processes
intended to be customized for specific companies
database configuration
bolt-on software

8. On-Line Analytical Processing (Industry Specific Functions)
ERP System
Data Warehouse
Legacy
Systems
ERP System
On-Line Analytical Processing
(OLAP)
Bolt-On Applications
(Industry Specific Functions)
Suppliers
Customers
Core Functions [On-Line Transaction Processing (OLTP)]
Sales
&
Distribution
Business
Planning
Shop Floor
Control
Logistics
Operational Database
Customers, Production,
Vendor, Inventory, etc.
© Sumit Lodhia

9. Business Process Execution Engines
Big Vendors
Oracle SOA Suite
IBM BPM
Microsoft BizTalk
Microsoft Windows Workflow Foundation
SAP NetWeaver BPM
Other closed-source
BizAgi
Progress Savvion
Metastorm BPM
TIBCO ActiveMatrix BPM
Commercial Open-Source
Intalio|BPM
Activiti
BonitaSoft
Community Open-Source
YAWL
Enhydra Shark
A lot of choice. In large commercial projects, the engines on the left column are an option, since upfront licensing costs can be absorbed either by a project, or more frequently, by multiple projects (BPM program). It is worth noting that Microsoft offers two options: BizTalk which has a large number of integration features (all sort of adapters and integration tools), and Windows Workflow Foundation, which is more geared towards smaller projects.
In smaller projects/companies, the other closed-source engines are an option. These compete with open-source solutions, among which we can clearly distinguish between commercial open-source (companies making revenue out of consultancy, training and branding), and community open-source.
In this course we well use YAWL for 3 reasons:
Very easy and relatively lightweight installation (both on Windows and Mac), and small footprint – Cf. YAWL4Study
Quite advanced resource management features, good for illustrating various ways of assigning tasks to actors
Freely available, no restriction

10. Danske Bank: Customer Package Process
Juni 2003
August 2003
October 2003
December 2003
Marts 2007
Introduction of Customer packages.
Word template to collect info
© Steen Brahe, Danske Bank

11. Danske Bank: Customer Package Process
Juni 2003
August 2003
October 2003
December 2003
Marts 2007
Backoffice group created
Handles the creation process
© Steen Brahe, 2007

12. Danske Bank: Customer Package Process
Juni 2003
August 2003
October 2003
December 2003
Marts 2007
Case Transfer System
Automatic validation and transfering
© Steen Brahe, 2007

13. Danske Bank: Customer Package Process
Juni 2003
August 2003
October 2003
December 2003
Marts 2007
Workflow enabled creation process v. 1
Automatic process control, 0% automated activities
© Steen Brahe, 2007

14. Danske Bank: Customer Package Process
Juni 2003
August 2003
October 2003
December 2003
Marts 2007
Workflow v. 6
80% automated activities
© Steen Brahe, 2007

15. Process Monitoring & Mining

16. Strengths/ weaknesses
Process Monitoring
Process
design
Process execution
(Re-)
implemen-
tiation
Monitoring
Analysis
Strengths/ weaknesses
Process design
Imple- mentation
Process execution
© Michael zur Muehlen

17. Types of Process Monitoring
Runtime Monitoring (Business Activity Monitoring)
Viewing the load of the process
Identifying problematic cases
Identifying late cases (risk of missing deadlines), etc.
Post-mortem Monitoring (aka Business Process Analytics)
Performance KPIs: cycle times, resource utilization, error rates, …
Identification of bottlenecks
See for example:
BizAgi BAM:
Analytics:
For a long time “monitoring” was only known has measuring the performance of hardware (e.g. response time).
Organisational monitoring means the analysis of processes from an IT but also and especially from an organisational viewpoint.
With an efficient process monitoring it should be possible to answer
immediately to a customer request like “What is the current status of my order?”
What is my beginning to end cycle-time, system response-time, or system queue-time for each business process?
I want to improve my supply chain’s responsiveness to customer demands by reducing my “Order to Cash” cycle time by 10%. What specific business process areas and users do I need to improve and train to achieve this goal?
What are the slowest business process areas? How do today’s averages compare to the last months average?
Who are my slowest users for the transaction, “Create sales order”? How do their individual averages compare to our departments benchmark?
Is my system secure? Which users executed the payroll process today?
Based on these trends, Forrester and Gartner Group are both calling for a new kind of technology management at the process level: e-business process monitoring. The justification for this call is that in e-business environments, automatic interpretation and routing of online information about the status of business process execution will become routine, and messages automatically deriving from inside the company will seamlessly integrate with those from business partners.
Established online brands are already starting to integrate external services. Take the example of Sony Corp., which recently announced a new credit card, mileage program, and online bank. For the online Sony customer, the lines separating the different business divisions of Sony and its partnering bank are no longer visible. Thus, IT service management for such complex services has to guarantee the continuity of business processes regardless of the business unit or service partner performing the action. Only better communication and information integration can achieve this goal.

18. Process Monitoring: Dashboards
Process Cycle Time
of Order Processing
Process Frequency
of Order Processing
Process Cycle Time
of Order Processing
split up to different Plants
IDS (2003)

19. Beyond Monitoring – Process Mining
1) basic performance metrics
2) process model
3) organizational model
4) social network
5) performance characteristics
If …then …
6) auditing/security

20. Process Mining Tools ARIS Process Performance Manager
Perceptive Process Mining
Fujitsu Interstage (BPM Analytics)
Fluxicon
ProM (open-source)

21. Process Mining – The ProM Framework

22. ProM Demo

23. Beyond Monitoring - Process Controlling
Collation and analysis of runtime data
Comparison of actual- and target data
Active impact on current process execution as well as future process modeling (target)
Goal:
Improvement of an enterprise‘s adaptability to changes in the environment and in the enterprise itself
In addition to process monitoring data are aggregated within the process controlling task. This is the prerequisite for elaborated data analysis and the first step towards a process-oriented executive information system (EIS).

24. Process Controlling Establish Control Points Objective:
Establish a system for controlling the process and providing feedback to the people involved
Establish Control Points
Control points are activities such as
Inspection, verification, auditing, measuring, counting…
Usually considered business value adding
Without control points and a control system the only way of assessing process performance is customer feedback
The process ends up in a reactive mode
Poor quality is discovered too late
Location of control points is determined by
Criticality – impact on customer satisfaction
Feasibility – physically and economically possible
Laguna & Marklund

25. Process Controlling (cont.)
Develop and Implement Measurements
Involves answering the questions
What is to be measured and controlled?
What is currently measured (available data)?
Can a business case be made for a new measurement system?
What is an adequate sampling method, sampling size & frequency?
Laguna & Marklund

26. Reference Models Performance Measures in SCOR
Overall Inventory Turns
Annual cost of goods sold (company info)  average total inventory
Raw Materials Inventory Turns (manufacturing companies only)
Annual cost of raw materials purchased (3)  average raw material inventory
Work-in-Process Inventory Turns (manufacturing companies only)
(Annual cost of raw materials purchased (3) + Annual cost of conversion (4))  average work in process inventory
Finished Goods Inventory Turns
Annual cost of goods sold (company info)  average finished goods inventory
Percentage of safety stock
Average safety stock  total inventory
Purchase order cycle time (in days for purchasing department and excludes supplier lead time)
Average amount of time (in days) elapsed from point of intention to place order to receipt of order by vendor
Supplier lead time
Average amount of time (in days) elapsed from point of order to delivery
Supplier on-time delivery
Percentage of orders supplier delivers on scheduled due date
Find more at:

27. Benchmarking: SCORcards
T. Gulledge & T. Chavusholu: “Automating the construction of supply chain key performance indicators”, Industrial Management & Data Systems, 2008.

28. Exercise CVS Case Study
Which performance measures is your to-be process intended to improve?
How would you monitor these performance measures?
How would you ensure that pharmacies are indeed applying the principles of the to-be process?

29. Recap: The Layers of BPM Activities
BPM Setup
Strategic Alignment
BPM Governance
BPM Methodology
Process-aware Infom. Systems
Culture & People
Lean/ Six Sigma
Process Analysis
Process Identification
Process Modelling
Process Measurement
Process Improvement
Process Implementation
Process Configuration
Process Development
Process Training
Process Testing
Change Management
Process Execution and Controlling
Process Execution
Process Monitoring
Process Mining
Process Perform. Mgt.
Process Controlling