ARTS Retail Business Process Model Roundtable Panel Discussion

Moderators Thomas Sterling Dennis Blankenship September 13, 2010

ARTS Retail BPM Roundtable

Complexity made Simple - ARTS

Linking Business Strategy to Business Process Modeling

Mission Vision Values

Customers And Demands Go to Market Strategy Capacity Required To Execute Strategy Business Architecture To Organize & Provide Structures for Capacity Business Process Models (part of Business Architecture

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Retailer Capacity
1 People Retailer Mission, Vision and Values Principles

Needs & Wants 2 Customers Opportunities Threats

Process

ACT
Retailer Strategy 3 Needs & Wants Measures

Who we sell to and What needs we meet

(Incorporate (Managements learning and adapt Strategy The entities that a retailer must build or buy which is a to improve To provide the material , labor and knowledge working Resources required to execute their Hypothesis) strategy. performance)
Retailer Capacity Strengths Weaknesses 4 Business Architecutre

Technology & Systems

PLAN

Our strategy for Profitably serving our customers

Retailer Strategy

Retailer Cpacity to Execute its Strategy

CHECK

DO
(Executing the plan) Zachman Framework
Retail Business Architecture What How Who Where When Why

(Measure actual results against hypothesis)

Enterprise IT Architecture

Scope ARTS DM context ARTS Enterprise Process Model System Model Technical Model Detailed ARTS XML Represent. Executable

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Zachman Framework Context for ARTS Retail Business Process Model

1 3 ART S Data Model ART S P rocess Reference Model

Figure 1:

What? data Scope contextual

List of thing s important to the business
ART S XML Standards

How? function
L ist of processes the business perf orms Business Process Model

Where? locations
L ist of location s whe re the b usine ss ope rates Business Logistics model Distributed System A rchitecture Techn ical In fra stru ctu re Architecture N etwo rk co nfigu ration a nd scri pts

Who? people
L ist of org aniza tio ns im portan t to the bu sin ess Business Process Flow M odel Human Interface A rc hitec ture

When? time
L ist of even ts a nd cycles imp ortant to the busine ss Corporate Calendar and events Pro ce ss De pen den cy and syn ch ro nization mo del Pro ce ss cho reog rap hy & o rchestra tio n ar ch itectu re Process c ontrol logic c ode Operations Sc hedule & Ev ents

Why? motivation
List of balanc ed scorecard objectives

Business
r e l i a t e R c i f i c e p S

Technical

Enterprise Model Conceptual System Model Logical Technology Model Physical Detailed Representation Out of context Functioning System Executable Objects

Semantic Model

Business Plan

Log ic al D ata Model

Application Architecture

Business Rules

Physical Data Model Database D efinition & XML doc code

Sy stem Design

Presentation A rc hitec ture

Business rules desig n

Prog ram Code

Sec urity & ac cessc ontrol code

Business rule code & engine Strateg y Execu tio n w ith fe edb ack

Database

Executable Code

Network

Organization

ARTS Retail BPM Roundtable

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ARTS Retail Business Process Model Will Address the Following Questions
What information the process consumes, creates and modifies; How a process is executed (execution steps, decision points, primary and alternative flows, resources consumed, pre/post conditions, inputs, outputs, monitoring and control rules); Where a process is executed; Who is involved in the process as a performer, owner, supporter, as well as internal or external actor etc.; When a process is performed (i.e. event driven, periodic, exception based, etc.); and Why the process is performed (why is this process important to the retailers strategy and how does it contribute to the successful execution of that strategy).
ARTS Retail BPM Roundtable

Complexity made Simple - ARTS

Planned Work Products

Business Area Model A high-level list of the major types of organizational units within a retail enterprise; Functional Decomposition Diagrams Provide a top down taxonomy of retail business functions included in the ARTS Process Reference Model. Functions names are always expressed in the form of a noun phrase. Examples include customer relationship management, inventory control, store operations, web site design, etc. Process Decomposition Diagrams For each function, a decomposition model of the processes which execute a business function. Processes always exist within the context of a business function. Processes names are always expressed as an active verb phrase. Examples include: register customers, perform physical inventory count, schedule store employees, transfer item, etc. Processes may be decomposed into lower level processes; Process Dependency Diagrams Graphical descriptions of the dependency of processes (execution sequence) within a process level. Process dependency diagrams are only defined at the lowest level of process decomposition.
ARTS Retail BPM Roundtable

Complexity made Simple - ARTS

Planned Work Products

Business Process Modeling Diagrams Detailed, graphical description of the events, activities, decisions, primary and alternate paths that make up a business process. Business Process Modeling Diagrams use a formal modeling language called Business Process Modeling Notation (BPMN). The transition from Process Dependency Diagrams to BPMDs reflects the transition from inventorying business processes to defining the logical steps they execute and the business rules governing that execution. BPMDs incorporate business rules, pre-conditions, post conditions, etc. Business Proessing Diagrams use horizontal divisions of the diagram to designate pools and lanes. Pools may be used to designate different actors that perform the activities that make up a process. Lanes allow the pools to be subdivided into lower levels. Pools and lanes enable activities to be visually aligned with organizations and individuals that perform them. This approach has been used to define as is and to be processes for business process reengineering. It may also be called line of site diagram, swim-lane diagram, etc. BPMN defines the business process architecture for a retailer and establishes the context for further development of business services.
Complexity made Simple - ARTS

ARTS Retail BPM Roundtable

Planned Work Products

Association Matrices An association matrix is a simple table that lists objects (like data model entity types) as row headings and another set of objects (like processes) as column headings and assigns on or more property value(s) to cells where rows and columns intersect. Create-Read-Update-Delete matrices are an example of an association matrix. The Zachman Framework shown in Figure 1 is another example of an association matrix. These simple tables provide the basis for identifying important relationships between different kinds of modeling objects. Retail Use Cases Retail use cases provide a business description of how a process works based on a defined set of preconditions and application of business rules. Use cases provide an important tool for discovering and defining business process activites and activity flows. They also provide useful narrative explanations of processes and process variants. The notion of process variants is important as a way of explaining how the core common business processes of a retail model can be extended to handle different kinds of retail business problems based on types of items, business strategy and other factors that distinguish retailers from one another.
ARTS Retail BPM Roundtable

Complexity made Simple - ARTS

Planned Work Products

Retail Business Glossary Common set of business terms, abbreviations, formulas and other references useful in establishing a common retail language. Additional narrative documents, spreadsheets, PowerPoint presentations and other work products will be created to support the formal products. In addition to these work products, the ARTS Retail Business Process Model will reference other ARTS models including the ARTS Data Model, the ARTS XML Standard Schemas and the ARTS Data Warehouse Model. For example, where appropriate, the relationships between specific ARTS Data Model entity types and business processes will be represented in association matrices. Likewise, the relationship between ARTS Standard XML-based messages and business processes (including components of the processes) will be represented in association matrices. Other ARTS work products (e.g. white papers, Request for Proposal Templates, etc.) will be consulted and used to identify business process topics to be addressed in the ARTS Retail Business Process Model.

ARTS Retail BPM Roundtable

Complexity made Simple - ARTS

BPM Levels
Figure 2:

High Overview

Detailed High Resolution View

ARTS Retail BPM Roundtable

Complexity made Simple - ARTS

BPM Levels
Enterprise The retail business entity that serves as a container of business area and all lower level process-related components. Business Area A major collection of functions that is reflected as a high-level organization component of the Enterprise. In a retail enterprise customer relationship management, merchandising, store/channel operations, inventory and distribution, finance and administration are examples of business areas. While not traditionally considered a retail business area, shoppers are treated as part of the retail enteprise for process modeling purpose Function A collection of business processes expressed as a noun-phrase carried out within a business area. A function defines what the enterprise does. Examples of functions include category management, marketing planning, store operations management, labor scheduling, etc. Process A defined business action carried out to perform a function. A process is always expressed as an action verb phrase. A business process may be composed of other lower level business processes or business tasks. Examples of business processes include set up a category, update market plan forecast, define store holidy schedules, etc. Activity A defined business action that yields one or more specific work products and/or clearly defined outcomes. A business process is composed of one or more tasks. An activity may consist of transformation actions, move actions, inspect actions, decisions, waits (inaction) and inspect-transformation actions. For retailer understanding which activities add value and which just consume resources is important to optimizing operational costs. Service A fined grain action executed as part of an activity. The service level used in the ARTS Process Modeling hierarchy is the touch point between the business architecture and a more, technically oriented services architecture. Services may be composed of lower level services.

ARTS Retail BPM Roundtable

Complexity made Simple - ARTS

Extending ARTS BPM to Retail Segments

Our approach to addressing this balancing act consists of the following tactics: Process Variants Built Into Base Model FIFO/LIFO Retail Method / Average Cost Account Methods Process Variants Built into Retail Segment Extended Models Product Categories Apparel, Grocery, etc Promotions EDLP, High / Low, etc Manage Business Context At Process Level For example a ItemRetailGet service will do the same things, take in the same inputs, yield the same outputs, adhere to the same quality of service rules whether it is invoked as part of a sales transaction process or an inventory reporting process. This may not always be possible (i.e. there may be instances where we need business context specific, single use services) but it is strongly preferred as illustrated in next two slides.
ARTS Retail BPM Roundtable

Complexity made Simple - ARTS

Business Area High Level Process Model Template

Plan Customer Relationship Management Merchandising Do Check Act

Planning Hypothesis what we think will happen Doing Execute our plan and see what happens

Shopping Store & Channel Operations Inventory & Distribution Finance & Administration

Checking Measure what happened Acting Learn Change our plan and/or execution to improve performance Repeat the cycle

ARTS Retail BPM Roundtable

Complexity made Simple - ARTS

Extending ARTS BPM to Retail Segments

ARTS Retail BPM Roundtable

Complexity made Simple - ARTS

Extending ARTS BPM to Retail Segments

ARTS Retail BPM Roundtable

Complexity made Simple - ARTS

Draft ARTS Process Model

PLAN Business Areas: CRM Merchandising Shopping Store/Channel Ops Inventory & Dist. Finance and Admin DO CHECK ACT

ARTS Retail BPM Roundtable

Complexity made Simple - ARTS

Merchandsing Plan

ARTS Retail BPM Roundtable

Complexity made Simple - ARTS

Customer Relationship Management Planning

ARTS Retail BPM Roundtable

Complexity made Simple - ARTS

Customer Relationship Management Doing

ARTS Retail BPM Roundtable

Complexity made Simple - ARTS

QUESTIONS & DISCUSSION

ARTS Retail BPM Roundtable

Complexity made Simple - ARTS