1. Business Process Management

2. Business Processes Defined A business process is a collection of interrelated tasks, which are designed to deliver a particular result Types of business processes  Management processes - processes that govern the operation of a system  Operational processes - processes that constitute the core activities of the business and delivers the primary value of the organization  Supporting processes - which support the core processes

3. 3 A business process is a collection of interrelated tasks, which are designed to deliver a particular result. Business processes span potentially multiple departments Business process Process can be Large and complex Dynamic Widely distributed Long running Mix of business and technical steps Involve human intelligence and judgement Processes can be defined in workflows or process flows define the sequence of steps and any logic associated These can be automated but do not have to be

4. What is Business Process Management (BPM)? BPM is a discipline combining software capabilities and business expertise through people, systems, and information to accelerate time between process improvements, facilitating business innovation BPM software supports the definition and automation of workflows involving individuals and systems The definition and automation of workflows Monitoring and optimisation of running workflows BPM also enables flexible deployment, monitoring and tracking, process focus and efficiency.

5. BPM and process re-engineering The concept of Business Process Management came from Process re-engineering: Analysing and redesigning key processes within an organisation in order to improve performance Workflow automation (typically person-centric processes such as purchase order approval) BPM is complementary to process re-engineering and six- sigma projects but can also be used for any process automation project. Process re-engineering/six sigma is a business driven initiative to measure and optimise performance at a business level. Process re-engineering/six sigma does not require IT integration, it may simply add reports to existing systems.

6. Examples of processes suitable for BPM: Setting up a new customer account Collect new customer details. Verify compliance with money laundering laws Set-up account Blacklist DB Compliance systems Compliance systems Pending Branch network Account system

7. Verify compliance with money laundering laws Opportunities and benefits of process automation Capture new customer details. Account set-up and provisioning Blacklist DB Compliance systems Compliance systems Pending Branch network Account system Capture existing process knowledge. Support future out sourcing decisions. Out sourced provider Reduce errors Automates roll-out of change Automate process to enhance self-service

8. An example of a simple process defined 1. Process starts at a scheduled time. 2. Collected information from database 3. Format the email to the customer 4. Email the invoice 5. Format the email with the late reminder 6. Add a new activity (a reminder if not paid for a week) 7. Wait for the week 8. Send the late payment reminder (c) SAP 12 3 4 5 6 7 8

9. Other examples of processes for automation 1: Process: New Hire Integration Background Check Allocation of office space Reservation of phone, pager Creation of access rights in operational systems Problem: Lost productivity due to late provisioning of work infrastructure Automating the process coordination reduced cycle time from 2 week average to 2 days Automation Goal: Performance 9

10. Other examples of processes for automation 2: Process: Employee Termination Removal of computer access rights Collection of company-issued phone, pager, access card Removal from employee directory Problem: Not all equipment is collected, access rights remain after an employee leaves Automating the process coordination ensures that no step is forgotten Automation Goal: Compliance 10

11. Business Process Management: Evolution from simple workflow

12. Stage 1– “workflow in the head” Application Logic in Multiple systems UI “Screens” © 2007 Workflow management coalition In an organisation without integration across multiple systems, the workflow is managed ‘manually’ by the user ensuring that the correct steps are executed in multiple applications Each step involves the user using the individual systems Enterprise Application “Account Management” Background CheckConformance Rules List AcctsNew Acct Mod AcctDel Acct

13. Stage 2- Workflow Assist in Sequence UI “Screens” background check create account check guidelines Launches UI User accesses original UI directly Human BPM/Workflow: Enterprise Application “Account Management” Background CheckConformance Rules List AcctsNew Acct Mod AcctDel Acct © 2007 Workflow management coalition Application Logic in Multiple systems The original workflow systems assisted the user by ensuring that the right systems were invoked in the right sequence The original systems are still directly interacted with

14. Stage 3- Supporting collaboration UI “Screens” background check create account check guidelines Launches © 2007 Workflow management coalition Application Logic in Multiple systems Enterprise Application “Account Management” Background Check Conformance Rules List AcctsNew Acct Mod AcctDel Acct Workflow systems evolved to allow multiple individuals to participate in a single workflow

15. Stage 4 - Using a process engine Exposed Web Services enter info Review UI connects user to process engine, not the back-end applications © 2007 Workflow management coalition Application Logic in Multiple systems Enterprise Application “Account Management” Background Check Conformance Rules List AcctsNew Acct Mod AcctDel Acct create account bg check rules A distinct process engine automates the workflow and deals with interactions with the backend systems – the user no longer directly interacts with these systems

16. 16 The process engine A process is an entity that typically encapsulates an interaction of a user with business entities (applications). Can includes user-centric interactions (email reminders, task lists etc) and system interactions. A process typically updated and changes the state of the business entities indirectly The business application mediates these changes A business process may have its own state which may exist only for the duration of the process; at the completion of the process the state ceases to exist. The duration of the state may be very long Process state may be transient or persistent.

17. Human Activities Have Three Phases Review Automated phase before to prepare for the task Wait phase for Human to do the work, includes timers and escalation logic Automated phase after to take care of results of the task User Interface (while waiting) © 2007 Workflow management coalition

18. Separation of Responsibility Business Retains Control of Assignment of Responsibility Groups, Roles, Skills Deadlines Alerts, Reminders, Escalations Order of Tasks Addition of Manual Tasks User Interface IT Retains Control of Computational Logic Data Representations Scalability / Performance Interoperability Master Data Management © 2007 Workflow management coalition Exposed Web Services enter info Review Application Logic in Multiple systems Enterprise Application “Account Management” Background Check Conformance Rules List AcctsNew Acct Mod AcctDel Acct create account bg check rules BPM supports the separation of tasks between the business analyst (defining the business level elements) and IT (retaining control of systems and data)

19. Use cases for BPM BPM can also be tactically to automate or optimise processes Removing manual processing steps ensures appropriate processes are followed. To formalise and capture knowledge The activity of defining the process means that knowledge in people’s heads is captured (and hence supports out-sourcing). To reduce the opportunity for human error The defined process is enforced with the BPM software and opportunity for human error reduced. To ensure compliance with legal or organisational requirements The process definitions can be audited and the execution of the processes tracked

20. Key components of a BPM software product Modelling and simulation Support the design and simulation of business processes. Uses graphical tools and standardised specification languages to define the process Monitoring (Business Activity Monitoring) Track performance of processes and operational activity Process orchestration and optimisation Execute the process definitions Modify and evolve the definitions to improve performance.

21. Example of monitoring dashboard

22. Second example of dashboard

23. Where BPM is appropriate Business Process Management is not suitable for all areas of business as it requires processes which can be formalised. Clearly needs a well-defined business case to support the potential changes in the operational process, Finding matches for the strengths of BPM Areas which are already well-defined. Areas where there is either complexity or rapid change or both Areas where the cost of error is much greater than the cost of fixing the problem.

24. COMPARING APPROACHES TO BUSINESS PROCESS AUTOMATION 24

25. Comparing EAI, ERP and BPM EAI integrates primarily behind the scenes  Most of the user interaction is unchanged Process changes occur only for the integrated process 25 App1App 3App2App1App 3App2

26. Benefits of EAI/SOA based process automaton Integrates with existing process and data models – handling incompatibilities when necessary Allows the high value integration problem to be addressed without disrupting the other applications Integrates with existing process and data models – handling incompatibilities when necessary Minor/moderate changes to the user interaction causes minor/moderate changes to the business as a whole 26

27. Comparing EAI, ERP and BPM ERP changes both user interaction and applicaton  All user interaction, data/process models are changed 27 App1App 3App2 Module 1 Module 2 Module 3

28. Benefits of ERP based process automation Creates a set of processes and associated data models which are mutually compatible and comprehensive Equally effective at automation within a single department or across multiple departments ERP vendor typically provides ‘standard’/template processes already proven for a particular industry 28

29. Comparing EAI, ERP and BPM BPM integrates the user interaction layer across multiple applications  All user interaction related to the integrated process changed Process and interaction changes occur only for the integrated process 29 App1App 3App2 App1App 3App2 BPM layer

30. Benefits of BPM based process automation Improvement in the redesigned process, Reduction in risk/error (due to missed or wrongly executed steps) Auditability of completed processes – needed for compliance and other purposes Makes it easier to deploy process changes (for instance caused by outsourcing, regulation changes, business changes etc) 30

31. BPM versus EAI and SOA BPM can use different technologies to implement the process. Like SOA, it can be implemented using different technologies EAI products typically claim to provide BPM capabilities Typically support processes defined as system to system interactions (i.e. does not include human interactions) SOA and BPM are partially complementary BPM can build upon SOA using the services already defined. However, it is not usual to attempt to combine a move to SOA and a move to BPM

32. BPM and ERP BPM provides process integration If the organisation is using an ERP system, the BPM system integrates into the capabilities of that system and integrates with other systems and users (via Email etc) SAP’s Business One tool: System interaction step User interaction steps