1 Understanding Process Basics

BA 553: Business Process Management2 What is Systems Thinking? Systems thinking is a holistic approach to analysis that focuses on the way that a system's constituent parts interrelate and how systems work over time and within the context of larger systems. The systems thinking approach contrasts with traditional analysis, which studies systems by breaking them down into their separate elements. (SearchCIO) Systems thinking is a way of understanding reality that emphasizes the relationships among a system's parts, rather than the parts themselves. (Pegasus Communications)

BA 553: Business Process Management3 Why is Systems Thinking Important? "End-to-end business processes are dynamic systems, but today's business professionals are generally not trained in general systems thinking. Too often constrained to a perspective limited by ingrained business practices, rigid scripts and structured input-output work, few professionals have a wide- angle view of, or experience dealing with, end-to-end business processes.” “It concentrates on the interfaces and boundaries of components, on their connections and arrangement, on the potential for holistic systems to achieve results that are greater than the sum of the parts. Mastering systems thinking means overcoming the major obstacles to building the process-managed enterprise – for every business process is a whole system.” "Business Process Management," Howard Smith and Peter Fingar

BA 553: Business Process Management4 Guidelines for Developing Systems Diagrams A systems diagram or SIPOC diagram is one application of systems thinking It is a tool used by a team to identify all relevant elements of a process project before work begins. It helps define the boundaries of the process, and some of the critical handoffs The tool name prompts the team to consider the Suppliers (the 'S' in SIPOC) of your process, the Inputs (the 'I') to the process, the Process (the 'P') your team is documenting, the Outputs (the 'O') of the process, and the Customers (the 'C') that receive the process outputs. Before starting the systems diagram, agree on the processes that precede and follow the process being studied

BA 553: Business Process Management5 Basic Systems Diagram (System Model) Work Process Transformation Process CustomerOutputInputSupplier You may find it’s easier to develop the systems diagram in the following order: outputs, customers, inputs, suppliers There is likely to be some iteration in these steps (for example, after documenting the inputs, you may add extra outputs) Prior process Next process

BA 553: Business Process Management6 Process Inputs Process inputs can be grouped into categories. Some examples are shown below, but these can be divided in any manner that suits the process. Input Equipment Environment People Methods Materials Work Process Transformation Process CustomerOutput

BA 553: Business Process Management7 “People Area” Inputs to a Process Input Equipment Environment People - Involvement - Technical Skills - Effectiveness Skills - Communications Methods Materials Work Process Transformation Process CustomerOutput People as inputs are only the main people working on the process – most other people related to the process with be either suppliers or customers

BA 553: Business Process Management8 Guidelines for Systems Diagrams (Cont’d.) Not all inputs will be or need to be in place before the process begins Some inputs are brought in or made available during the process Can you name some examples for the process “taking your car in for repair”? The same is true for outputs: some outputs are passed to other processes/groups in the middle of our process Can you name some examples for the process “manufacturing a computer hard drive”?

BA 553: Business Process Management9 Process Inputs and Suppliers Inputs: When input list is complete, ask “If I only had these items, would I be able to perform this process?” Another method for checking completion is to look at the process and see whether there are any tasks that require inputs not listed on the systems diagram Suppliers: Sometimes it’s hard to identify a supplier for an item, e.g., “system-generated errors” One way to think about it is “Who do we go to if there’s a problem with the input?”

BA 553: Business Process Management10 Process Outputs and Customers Outputs: There should be at least one output for every input – sometimes there are multiple outputs from a given input If there is an output that doesn’t have a corresponding input, may need to add an input Outputs should be worded to include all possibilities, e.g., for a maintenance process, “Equipment fixed” as an output doesn’t include all possible outcomes Can you name some other possibilities? Customers: Often your customer list will closely align with your supplier list, with minor differences – this is okay Sometimes it’s hard to identify a customer for an item, e.g., “system-generated errors resolved”. The question is “who benefits from the activity being done?”

BA 553: Business Process Management11 Systems Diagram When completed, the systems diagram shows all the inputs and outputs of the process, and their suppliers and customers. It also shows the process boundaries, either by indicating the starting point and ending point of the process, or by explain the process immediately preceding and following the process being analyzed. CustomersInputsOutputs Work Process Transformation Suppliers Prior process Next process

BA 553: Business Process Management12 Constraints and Enablers These two items provide additional information related to the process. Constraints: Constraints are factors that restrict the way in which the process can be undertaken It is helpful to understand the process constraints, as it may be possible to reduce or eliminate some of them Enablers: Enablers are individuals or groups, processes, and work environment factors that improve the efficiency and effectiveness of the process and output value It is helpful to understand the process enablers, as it may be possible to increase them

BA 553: Business Process Management13 Examples of Constraints and Enablers Constraints: Government regulations Inadequate budget Technically unskilled workforce Lack of teamwork Lack of problem-solving tools and skills Satisfaction with status quo (lack of focus on improvement) Enablers: Leadership support Active process owner Supportive organizational culture Supportive organizational infrastructure (e.g., promotion and reward systems, lines of communication, equipment) Clearly documented process description Ongoing measures of process performance

BA 553: Business Process Management14 Complete Systems Diagram Enabling Mechanisms Facilitating individuals, groups, processes, and work environment factors that improve the efficiency and effectiveness of the transformation process and output value Transformation process Environment Equipment Methods People Materials Suppliers Who is the input coming from, or who do you see if it is defective? Customers Environment Equipment Methods People Product/scrap Inputs What is being delivered? Constraints Factors that restrict the way in which the transformation process can be undertaken Who is the output going to, or who will care if it is defective? Outputs New thing (everything that goes in must come out in some form)

BA 553: Business Process Management15 Understanding Work Processes Behind every organizational product and service is the work process that produces it. Some work processes result in delivering a product or service to an external customer. Can you name some examples for someone getting a car repaired? Some work processes receive inputs from an external supplier and provide products or services to an internal customer. Can you name some examples for someone getting a car repaired? Some work processes are internal to the organization (internal suppliers and customers). Can you name some examples for someone getting a car repaired? Organizational performance depends upon the efficiency and effectiveness of these processes.

BA 553: Business Process Management16 Traditional Functional Hierarchy Can you explain this picture? CEO Dept. 1Dept. 2Dept. 3Dept. 4

BA 553: Business Process Management17 Functional Hierarchy vs. Product/Service Flow Can you explain this picture? Direction of Process Flow Direction of Control CEO Dept. 1Dept. 2Dept. 3Dept. 4 FunctionalHierarchy