Business Process Modeling

K.B.C. Saxena Fortune Institute of International Business New Delhi

July 2011

Business Events
A business event is a happening that activates a business process. The business process responds to the business event in a pre-determined manner. An event can be internal or external to an organisation. External events are initiated by external agents outside the boundary of the business area. Events can also be temporal, which are triggered by the passage of time. They are characterised by a frequency of execution but no agents are behind them and they do not generate an incoming flow of data into a process.

Business Process Modeling

Discovering Business Processes

Invite the users to describe their job functions, within the context of the business domain under study. Identify the business processes that create, delete, or update important business entities. Identify the business processes that are activated by external or internal business events. Identify the core business processes that are used to plan, procure, utilise, dispose, and control the use of various business resources. Identify the business processes that are required to produce core products and services. Observe the users while they perform their business tasks in their business environment.
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Process Architecture
Roles
(Whom?)

Inputs Suppliers

Activities
(What?)

Process Goal Outputs (Why?) Customers

Rules (How?) Policy Procedures Responsibility Standards

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Developing Process Overview

Suppliers (other processes/departments/external suppliers) of the inputs to the process. Customers (other departments/processes/organisations) of the outputs of the process. Other processes it interacts with (drivers or enablers). Supplier Process Other Process
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Customer

Process Hierarchy
Subprocesses
A process can be subdivided into subprocesses that are logically related activities that contribute to the mission of the process.

Elementary processes
Smallest set of basic activities that must be performed by a business unit in response to the activities of a discrete business event, such as a customer who places an order. It cannot be further divided into other subprocesses.

Activities
Actions required to produce a particular result. They are the things that go on within all processes/subprocesses.

Tasks (work items)

Work items performed by an individual or by small teams.
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Holistic View of Process Hierarchy

Process Subprocess Elementary Process Activities Tasks
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Significance of Process Hierarchy

Level 1: Business Processes.
Defining processes at this level is important to ensure that the components lower in the hierarchy correspond to the business objectives and the critical success factors (CSFs). May not be more than 20 in an organisation.

Level 2: Activities.
A significant operation to partially fulfill a particular process and usually causing a significant object state transition. The activity is recognised by managers as one of the main stages in the process.

Level 3: Tasks.
A piece of work which is part of the activity that can usually be completed immediately, but can be broken down further into subtasks (the smallest division of work).
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Example of Decomposition for Process Obtain property listing (in real estate business)
Level 1: Business process. Obtain property listings. Level 2: Activities 1. Register vendor. 2. Inspection preparation. 3. Inspection appointment. 4.a. Follow up inspection - IF listing instructions obtained. 4.b. Follow up inspection - IF listing instructions NOT obtained. (exception) Level 3: Tasks for ensure listing obtained 1. Prepare initial property particulars. 2. Remind negotiator to handle sale to contact vendor. 3. Send property particulars. 4. Instruction to sell with draft PMA details. 5. Contact vendor to obtain PMA on particulars.
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How to Distinguish Between Sub-processes?

Ask these questions: 1. Is there a change in performer of the work or the customer? 2. Is there a change of resources or documents used (either as input or output)? 3. Is there a different objective for the sub-process? 4. Is there a change in object state transition? If the answer to any of these questions is yes, then a new sub-process has been identified.
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Process Modeling
Define: tasks performed by different users and details of sub-tasks; deliverables produced on task completion; input data and resources needed by process and sub-processes; and deendencies between tasks -- business rules which define when one task is complete and the next can start.
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Iterative Approach to Process Modeling

Step 1: Decompose the high-level processes into subprocesses. Verify and validate this step with the end users for completeness and accuracy. Step 2: Identify all major business events driving the business area with the active participation of the users. Step 3: Describe and document the elementary processes along with the detailed business-oriented procedural tasks that are used to perform them.
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Process Identification through Entity Analysis

1. Identify the entities (things) or objects with which the organisation deals. An entity is an abstraction that is realised in one or more specific instances. 2. Define the states that each entity can be in and identify which interaction causes each state change. 3. Processes emerge from the analysis of state change sequence.

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Entity State Change Analysis

Entity: Product States: 1. Product idea 2. Design model 3. Production model 4. Mould 5. In production 6. In stock 7. Out-of-stock 8. Picked 9. Packed 10. Dispatched
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Entity State Change Analysis (contd.)

Interaction causing state changes: 1. Market research report 2. Product design 3. Product design test and approval 4. Mould design 5. Production order release 6. Quality inspection and warehouse receipt 7. Sales order picking 8. Sales order picking 9. Packing of picked sales order 10. Dispatching
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Entity State Change Analysis (contd.)

Entity: Product States: 1. Product idea 2. Design model 3. Production model 4. Mould Process: Develop Product Entity: Order States: 1. Booked 2. In process 3. Picked 4. Packed 5. Part dispatched 6. Full dispatched 7. Received 8. Billed 9. Completed Process: Fulfill Orders
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Business Process Modeling

Process Definition Methods

Activity Based Methods
Defines processes, dependencies between processes and resources needed by the processes and the outputs. Use: Work flow management systems (production-based)

Communication Based Methods

Based on contracts drawn-up between workflow participants. Use: Administrative workflows

Object-oriented Methods
Each workflow object incorporates both data and methods operating on it.
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Activity Based Process Definition

1. Process Mapping 2. Process Decomposition 3. Process Dependencies

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Process Mapping
At an early stage, before detailed activities are identified, we need to identify where in the organisation processes occur and who is responsible for them. This procedure is often known as process mapping.

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Process Map for Process Prepare Proposal

Activity 1. Cost estimation 2. Assess financial risk 3. Publicity presentation 4. Review 5. Authorisation M = Major role Marketing Engg. M m M M m M M m m = Minor role m M M Finance Sr. Mgt.

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Process Decomposition
A good starting point for defining a business process involves a functional decomposition of the tasks that occur within a business process.

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Techniques for Process Decomposition

High-level flowcharting Business process resource life cycle Business process specialisation

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High-Level Flowchart
A high-level flowchart is composed of four to ten sub-processes, enough to define process operations but not so many that one cannot understand them. A high-level flowchart does not indicate who performs the sub-processes.

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Constructing High-Level Flowcharts through Backward Chaining

Identify the outputs of the process, then move backward through the process to identify the essential high-level sub-processes needed to produce each output. Backward chaining ends when you reach the inputs to the process.

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Drawing High-Level Flowcharts

1. Begin with the process output and ask: What is the last essential subprocess that produces the output of the process?. 2. For the subprocess, ask:What input does it need to produce the process output?. For each input, test its value to ensure that it is required. 3. For each input, identify the source. In many cases, the input will be the output of the previous sub-process. In some cases, the input may come from external suppliers. 4. Continue backward, one sub-process at a time, until each input comes from an external supplier. At this point, draw the left boundary of the box. 5. Use backward chaining at the sub-process level only if you are not sure what activities would occur within a sub-process or if a sub-process has multiple inputs or multiple outputs.
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High-level Flowchart Drawing

3 4 Subprocess 1 2 Customer Needs & Wants

Inputs

Subprocess 3 1 Subprocess 2

Outputs

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Business Process Resource Life Cycle (BPRLC)

Used to break down high-level processes into sub-processes by studying the core business resources managed by the business:
Suppliers, customers, employees, partners Physical equipment and objects Financial entities Products and services

Discrete stages in resource life cycle: PLAN PROCURE UTILISE MANAGE DISPOSE Decomposition by questioning: What are planning sub-processes? Acquisition sub-processes? Etc. Example: Forecast parts; procure parts; procure raw material; procure finished parts; etc.
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Business Process Specialisation

Take Customer Sales Order Process

Order by Telephone Sub-process

Order by EDI Subprocess

Order by Fax Subprocess

Order by Web Subprocess

Order by Post Subprocess

Captured Order Sub-process

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Business Process Specialisation

(contd.) Process generates almost identical products or services, but some variations exist in the set of activities that produce or deliver them. Process is triggered by similar events that use slightly different means to provide input data. Process execution is characterised by several exception cases rather than a mere standardised set of generic activities.

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Process Dependencies
Process dependencies simply indicate the order in which activities occur according to the business rules that govern the processes. Normally, activities occur in a sequence and are serial, sometimes activities can occur in parallel when they are known as parallel.

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Types of Process Dependencies

Sequential Conditional
ApBpCpD C ApB D C E

Parallel Concurrent

B D

(B,C,D may start and end at different times.)

(B,C,D must start and end at the same time.)

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Process Flowcharts for Showing Process Dependencies

Swimlanes BPMN diagrams

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Process Swimlane Diagram

Order Fulfillment Process Customer

Sales Order Entry Inventory

Order Process Setup Process

Approved orders

Production

Manufacturing Process
Parts

Delivery

Delivery Process Ship Parts

Supplier

External supplier process

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Business Process Modeling

Decisions & Junctions in Swimlane Diagram

Receive Order
Order incomplete

Review Order
Order accepted

Order rejected Decision Junction

Fill Order

Ship Order Send Invoice

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System as Swimlane Element

S Y S T E M

Company Web Portal Order System

Receive Order Review Order

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Business Process Modelling Notation

(BPMN)

Developed by Business Process Management Initiative (BPMI) to provide a notation that is readily understandable by all business users, from the business analysts who create the initial drafts of the processes, to the technical developers responsible for implementing the technology that will perform those processes, and finally, to the business people who will manage and monitor those processes.

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BPMN Basics
Flow objects
Event, Activity, Gateway (diamond)

Connecting objects
Sequence flow, Message flow, Association

Swimlanes
Pool, Lane

Artifacts
Data object, Group, Annotation

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Types of Models Using BPMN

Collaborative (Public) B2B Processes
Shows interactions between two or more business entities (shown as pools).

Internal (Private) Business Processes

Generally focus on the point of view of a single business entity.

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