1. Chapter 14 Business Process Management Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

2. Outline Objectives Definition of business process management Generic steps Basic principles Tools and techniques 14-2

3. Objectives When you finish this chapter, you should be able to: –Explain what business process management is and how it is related to your study of accounting information systems. –List and discuss some basic principles of business process management. –Identify and describe tools and techniques commonly used in managing business processes. –Apply the basic principles, tools and techniques in diverse organizational contexts. 14-3

4. Definition of BPM Like internal control, BPM can be defined in various ways, including: –a business improvement strategy based on documenting, analyzing, and redesigning processes for greater performance –a method of efficiently aligning an organization with the wants and needs of clients –a systematic approach to analyzing, redesigning, improving and managing a specific process Notice the common elements in the definitions: –Focuses on processes –Involves analysis –Improves performance in some way –Approached systematically 14-4

5. Generic steps Select the process and define its boundaries. Observe, document and map the process steps and flow. Collect process- related data. Analyze the collected data. Identify and prioritize potential process improvements. Optimize the process. Implement and monitor process improvements. 14-5

6. Basic principles Understand the relationship between processes and strategy. Be open to alternatives rather than stuck in the past. Enlist top management support. Focus on people, not technology. Use external consultants sparingly, and only with well- defined outputs. Communicate, communicate, communicate! 14-6

7. Tools and techniques Information technology –Often a part of BPM, but not essential –Beware of “IT for its own sake” –Examples Systems documentation Database applications Enterprise resource planning systems 14-7

8. Tools and techniques Activity-based management –Outgrowth of activity-based costing –Classifies activities based on “value added” –Focus is on reducing or eliminating activities that add little or no value Systems documentation –Useful in BPM with or without information technology –Flowcharts, data flow diagrams and others –Provide a starting place for understanding and critiquing current processes 14-8

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