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

2. Agenda
Introduction
Course Material
Course Evaluation
Course Contents

3. 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)
At least 26 Publications

4. Group Webpage

5. 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

9. 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

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

11. 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.

12. 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

13. Lab Work
Lab Exercises. To be submitted individually

14. 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

15. 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

16. 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

17. 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

18. Process and the organization

19. 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

20. 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

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

22. 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

23. Terminology around

24. 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

25. Assembly line

26. Traditional Process (as-is)

27. The first computers

28. The computer gets several and data moves between them

29. Optimization continues

30. 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.

31. My washing machine won’t work

32. 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)

33. 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

34. 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

35. 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.

36. Business Process Lifecycle

37. 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

38. 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

39. 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

40. 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

41. 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

42. 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

43. 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

44. 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

45. 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

46. 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

47. Business Process Lifecycle

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

49. 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

50. 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

51. 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

52. 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

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

54. 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

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

56. 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

57. 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

58. 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