Business Process Mangement

Business Process

Background Knowledge

Information systems play an important role to realize these activities

Cost, time and quality are important factors and are the basis of competitive advantage

Products and services are provided through a number of activities

business process is a collection of inter-related
events, activities, and decision points that involves
a number of actors and objects, which collectively
lead to an outcome that is of value to at least one
customer.

the improvement maybe of different meanings depending on the objectives of the organization

BPM is about improving a chains of events, activities and decisions that ultimately add value to the organization

Processes & Outcomes

every process leads to one or more outcomes

positive outcomes deliver value

negative outcomes reduce value

Examples

order to cash

quote to order

procure to pay

detailed example in lecture1 slide 17

Ingredients

Activities

Events

Business objects (data)

Actors

active elements (e.g. enter sales order)

time-consuming, resource demanding

state changing

passive elements (e.g. 'sales order has been entered')

represent conditions or circumstances

atomic, instantaneous

the organizational artifacts that undergo state chamges

physical or electronic information

e.g. sales order, digital object, consulting proposal

the entities performing process activities and generating events

human & systems

e.g. financial officer, house clerk

BPM is a body of methods, techniques, and tools to identify, discover, analyze, redesign, execute, and monitor business processes in order to optimize their performance

Related Disciplines

Total Quality Management

Operations Management

Lean

Six Sigma

focus on continuously improving and sustaining the quality of products and services

TQM puts emphasis on products and services themselves, while BPM focuses on improvement of processes

applications of TQM are primarily in manufacturing while BPM more in service organizations

concerned with managing physical and technical functions of organization, particularly those relating to production and manufacturing

using probability theory, queuing theory, decision theory, decision analysis, mathematical modeling, and simulation for optimizing efficiency of operations

such techniques are also useful in context of BPM initiatives

often concerned with controlling an existing process, while BPM making changes to an existing process in order to improve it

originates from manufacturing, in particular, Toyota Production System

eliminates waste (activities that don't add value to the customer)

BPM puts more emphasis on use if information technology as a tool to improve business processes and to make them more consistent and repeatable

originates from manufacturing, in particular, from production practices at Motorola

focuses on minimization of defects (errors)

strong emphasis on measuring output of processes, especially in terms of quality

popular approach to blend lean with six sigma, leading to lean six sigma