Business Process Management

Business Processes Defined

l A business process is a collection of interrelated tasks,
which are designed to deliver a particular result
l 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
Business process
l A business process is a collection of interrelated tasks,
which are designed to deliver a particular result.
l Business processes span potentially multiple departments
l Process can be
l Large and complex
l Dynamic
l Widely distributed
l Long running
l Mix of business and technical steps
l Involve human intelligence and judgement

l Processes can be defined in workflows or process flows

define the sequence of steps and any logic associated 3

l These can be automated but do not have to be

What is Business Process Management
(BPM)?
l BPM is a discipline combining software capabilities and business
expertise through people, systems, and information to accelerate
time between process improvements, facilitating business
innovation

l BPM software supports the definition and automation of workflows

involving individuals and systems
l The definition and automation of workflows
l Monitoring and optimisation of running workflows

l BPM also enables flexible deployment, monitoring and tracking,

process focus and efficiency.
BPM and process re-engineering

l The concept of Business Process Management came from

l Process re-engineering: Analysing and redesigning key
processes within an organisation in order to improve
performance
l Workflow automation (typically person-centric processes such as
purchase order approval)

l BPM is complementary to process re-engineering and six-

sigma projects but can also be used for any process
automation project.
l Process re-engineering/six sigma is a business driven initiative to
measure and optimise performance at a business level.
l Process re-engineering/six sigma does not require IT integration,
it may simply add reports to existing systems.
 Examples of processes suitable for BPM:
Setting up a new customer account
Collect new customer
details.
Pending

Branch Set-up account

network

Account
Verify compliance with system
money laundering laws

Blacklist DB Compliance
systems
 Opportunities and benefits of process
automation
Capture new customer
details. Automate process to enhance
Pending Out sourced provider
self-service

Branch Account set-up and

network provisioning
Account
Verify compliance with system
money laundering laws
Capture existing process
Compliance knowledge.
Blacklist DB
systems Support future out sourcing
Reduce errors
decisions.
Automates roll-out of change
An example of a simple process
defined
1. Process starts at
a scheduled time.
2. Collected
information from
1 2 3 database
3. Format the email
to the customer
4. Email the invoice
5. Format the email
with the late
5 reminder
6 4 6. Add a new
activity (a
reminder if not
7 paid for a week)
7. Wait for the week
8 8. Send the late
payment
reminder

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

9
Other examples of processes for
automation 2:
l Process: Employee Termination
l Removal of computer access rights
l Collection of company-issued phone, pager, access card
l Removal from employee directory
l Problem: Not all equipment is collected, access rights
remain after an employee leaves
l Automating the process coordination ensures that no
step is forgotten

l Automation Goal: Compliance

10
Business Process Management:
Evolution from simple workflow
Stage 1 workflow in the
head

UI
Screens

Conformance Rules
Background Check

Application

Mod Acct

Del Acct
List Accts

New Acct
Logic
in
Multiple
systems

Enterprise Application
Account Management

l 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
l Each step involves the user using the individual systems
2007 Workflow management coalition
Stage 2- Workflow Assist in Sequence

Human BPM/Workflow:

background check create

2007 Workflow management coalition

check guidelines account

Launches User accesses

UI original UI directly
UI
Screens
Conformance Rules
Background Check

Mod Acct

Del Acct
List Accts

New Acct
Application
Logic
in
Multiple Enterprise Application
systems Account Management
l The original workflow systems assisted the user by ensuring that
the right systems were invoked in the right sequence
l The original systems are still directly interacted with
Stage 3- Supporting collaboration

background check create

check guidelines account

Launches

UI
Screens
Conformance Rules
Background Check

Mod Acct

Del Acct
List Accts

New Acct
Application
Logic
in
Multiple
systems
Enterprise Application
Account Management

l Workflow systems evolved to allow multiple individuals to

participate in a single workflow
2007 Workflow management coalition
Stage 4 - Using a process
engine UI connects user
to process engine, not
the back-end
applications

2007 Workflow management coalition

enter bg create
rules Review
info check account

Exposed
Web
Services
Conformance Rules
Background Check

Mod Acct

Del Acct
List Accts

New Acct
Application
Logic
in
Multiple
systems Enterprise Application
Account Management
l A distinct process engine automates the workflow and deals with
interactions with the backend systems the user no longer directly
interacts with these systems
The process engine
l A process is an entity that typically encapsulates an interaction of a
user with business entities (applications).

l Can includes user-centric interactions (email reminders, task lists etc) and
system interactions
l .

l A process typically updated and changes the state of the business entities
indirectly
l The business application mediates these changes

l 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.
l The duration of the state may be very long

l Process state may be transient or persistent.

16
 Human Activities Have Three Phases
User Interface
(while waiting)

Review

Automated phase before Automated phase after

to prepare for the task to take care of results
of the task
Wait phase for
Human to do the work,
includes timers and
escalation logic

2007 Workflow management coalition

Separation of Responsibility
Business Retains Control of
Assignment of Responsibility
Groups, Roles, Skills
Deadlines
Alerts, Reminders, Escalations
Order of Tasks enter bg
rules Review
create
info check account
Addition of Manual Tasks
User Interface
Exposed
Web
Services
IT Retains Control of

Mod Acct

Del Acct
List Accts

New Acct
Computational Logic

Conformance Rules
Background Check
Data Representations Application
Logic
Scalability / Performance in
Interoperability Multiple
Master Data Management systems

Enterprise Application
Account Management

l BPM supports the separation of tasks between the business analyst

(defining the business level elements) and IT (retaining control of systems
and data)
2007 Workflow management coalition
Use cases for BPM
l BPM can also be tactically to automate or optimise processes
l Removing manual processing steps ensures appropriate processes are
followed.

l To formalise and capture knowledge

l The activity of defining the process means that knowledge in peoples
heads is captured (and hence supports out-sourcing).

l To reduce the opportunity for human error

l The defined process is enforced with the BPM software and opportunity
for human error reduced.

l To ensure compliance with legal or organisational requirements

l The process definitions can be audited and the execution of the
processes tracked
Key components of a BPM software
product
l Modelling and simulation
l Support the design and simulation of business processes.
l Uses graphical tools and standardised specification
languages to define the process

l Monitoring (Business Activity Monitoring)

l Track performance of processes and operational activity

l Process orchestration and optimisation

l Execute the process definitions
l Modify and evolve the definitions to improve performance.
Example of monitoring dashboard
Second example of dashboard
Where BPM is appropriate

l Business Process Management is not suitable for all areas of

business as it requires processes which can be formalised.
l Clearly needs a well-defined business case to support the potential
changes in the operational process,

l Finding matches for the strengths of BPM

l Areas which are already well-defined.

l Areas where there is either complexity or rapid change or both

l Areas where the cost of error is much greater than the cost of
fixing the problem.
COMPARING APPROACHES
TO BUSINESS PROCESS
AUTOMATION 24
Comparing EAI, ERP and BPM

App1 App2 App 3 App1 App2 App 3

l EAI integrates primarily behind the scenes

Most of the user interaction is unchanged
l Process changes occur only for the integrated process
25
Benefits of EAI/SOA based
process automaton
l Integrates with existing process and data models handling
incompatibilities when necessary
l Allows the high value integration problem to be addressed without
disrupting the other applications
l Integrates with existing process and data models handling
incompatibilities when necessary
l Minor/moderate changes to the user interaction causes
minor/moderate changes to the business as a whole

26
Comparing EAI, ERP and BPM

App1 App2 App 3

Module
Module
2
1
Module
3

l ERP changes both user interaction and applicaton

All user interaction, data/process models are changed

27
Benefits of ERP based process
automation
l Creates a set of processes and associated data models
which are mutually compatible and comprehensive
l Equally effective at automation within a single
department or across multiple departments
l ERP vendor typically provides standard/template
processes already proven for a particular industry

28
Comparing EAI, ERP and BPM

App1 App2 App 3 BPM layer

App1 App2 App 3

l BPM integrates the user interaction layer across multiple

applications
All user interaction related to the integrated process changed
l Process and interaction changes occur only for the 29

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

30
BPM versus EAI and SOA
l BPM can use different technologies to implement the process.
l Like SOA, it can be implemented using different technologies

l EAI products typically claim to provide BPM capabilities

l Typically support processes defined as system to system
interactions (i.e. does not include human interactions)

l SOA and BPM are partially complementary

l BPM can build upon SOA using the services already defined.
l However, it is not usual to attempt to combine a move to SOA
and a move to BPM
BPM and ERP
l BPM provides process integration
l 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)
l SAPs Business One tool:
System interaction step

User
interaction
steps