Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Business Plug-In B2 Business Process (on OLC)

B2-2 LEARNING OUTCOMES 1.Describe business processes and their importance to an organization. 2.Differentiate between customer facing processes and business facing processes. 3.Compare the continuous process improvement model and business process reengineering. 4.Describe the importance of business process modeling (or mapping) and business process models. 5.Explain business process management along with the reason for its importance to an organization.

B2-3 INTRODUCTION Business process improvement will, at a minimum, double the gains of a project by streamlining outdated practices, enhancing efficiency, promoting compliance and standardization, and making an organization more agile Business process improvement involves three key steps: 1.Measure what matters to most customers. 2.Monitor the performance of key business processes. 3.Assign accountability for process improvement.

B2-4 EXAMINING BUSINESS PROCESSES The process steps are the activities the customer and store personnel do to complete the transaction Business Process—A standardized set of activities that accomplish a specific task, such as processing a customer’s order Business processes transform a set of inputs into a set of outputs (goods or services) for another person or process by using people and tools

B2-5 EXAMINING BUSINESS PROCESSES Business process characteristics: –Have internal and external users –Are cross-departmental –Occur across organizations –Are based on how work is done in the organization –Should be documented and fully understood by everyone participating in the process –Should be modeled to promote complete understanding

B2-6 EXAMINING BUSINESS PROCESSES Customer Facing Process—Results in a product or service that is received by an organization’s external customer Business Facing Process—Invisible to the external customer but essential to the effective management of the business

B2-7 BUSINESS PROCESS IMPROVEMENT Companies are forced to improve their business processes because customers are demanding better products and services Continuous Process Improvement Model—Attempts to understand and measure the current process, and make performance improvements accordingly Business Process Reengineering (BPR)—Analysis and redesign of workflow within and between enterprises

B2-8 BUSINESS PROCESS DESIGN Business Process Modeling (or mapping)—The activity of creating a detailed flow chart or process map of a work process showing its inputs, tasks, and activities, in a structured sequence Business Process Model—A graphic description of a process, showing the sequence of process tasks, which is developed for a specific purpose and from a selected viewpoint –As-Is Process Model –To-Be Process Model

B2-9 SELECTING A PROCESS TO REENGINEER Criteria to determine the importance of the process: –Is the process broken? –Is it feasible that reengineering of this process will succeed? –Does it have a high impact on the agency’s strategic direction? –Does it significantly impact customer satisfaction? –Is it antiquated?

B2-10 SELECTING A PROCESS TO REENGINEER Criteria to determine the importance of the process: –Does it fall far below best-in-class? –Is it crucial for productivity improvement? –Will savings from automation be clearly visible? –Is the return on investment from implementation high and preferably immediate?

B2-11 BUSINESS PROCESS MANAGEMENT Business Process Management (BPM)—Integrates all of an organization’s business process to make individual processes more efficient IS BPM FOR BUSINESS OR IT? –The key requirement for BPM’s success in an organization is the understanding that it is a collaboration of business and IT, and thus both parties need to be involved in evaluating, selecting, and implementing a BPM solution

B2-12 BUSINESS PROCESS MANAGEMENT BPM benefits include: –Update processes in real-time –Reduce overhead expenses –Automate key decisions –Reduce process maintenance cost –Reduce operating cost –Improve productivity –Improve process cycle time –Improve forecasting –Improve customer service

B2-13 BUSINESS PROCESS MANAGEMENT Business Process Management Tool—An application that designs business process models and simulates, optimizes, monitors, and maintains various processes BPM RISKS AND REWARDS: –One factor that commonly derails a BPM project has nothing to do with technology and everything to do with people –The new organizational structure and roles created to support BPM help maximize the continuous benefits to ensure success

B2-14 CRITICAL SUCCESS FACTORS Six critical success factors that ensure government BPM initiatives achieve the desired results: 1.Understand reengineering. 2.Build a business and political case. 3.Adopt a process management approach. 4.Measure and track performance continuously. 5.Practice change management and provide central support. 6.Manage reengineering projects for results.

B2-15 BUSINESS PROCESS MODELING EXAMPLE