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Lecture 2 Title: Introduction to business modeling

Lecture 2 Title: Introduction to business modeling. By: Mr Hashem Alaidaros MIS 325. Resources. Process. Customers. Suppliers. Inputs. Outputs. What is a Business Process?.

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Lecture 2 Title: Introduction to business modeling

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  1. Lecture 2Title: Introduction to business modeling By: Mr Hashem Alaidaros MIS 325

  2. Resources Process Customers Suppliers Inputs Outputs What is a Business Process? A business process is a network of connected activities with well defined boundaries and precedence relationships, which utilize resources to transform inputs into outputs with the purpose of satisfying customer requirements

  3. Business Process Boundaries • Inputs and Outputs • Establish interaction between the process and its environment • Identify the process boundaries  theInputconsumed from the environment in order to produce the desiredOutput • Process inputs and outputs can be • Tangible (Ex. raw material, cash, products, customers) • Intangible (Ex. Information, time, energy, services)

  4. Business Process Resources • Resources • Tangible assets utilized to perform activities in a process • Can be divided into: • Capital assets – real estate, machinery, equipment, IT systems… • Labor –people and their knowledge and skills • Resources are utilized while inputs are consumed

  5. Outputs Process Inputs The transformation model of a process Business Process Transformations A process specifies the transformation of inputs to outputs • Different types of transformations • Physical (Ex. raw material  finished product) • Locational (Ex. flying from Jeddah to Paris) • Transactional (Ex. depositing money in a bank) • Informational (Ex. accounting data  financial statement)

  6. Example Business Process

  7. Different Types of Business Processes

  8. Example of a cross-functional business process The Order Fulfillment Process

  9. What is Business Process Modelling? Business process modelling is a means of representing the steps, participants and decision logic in business processes. There are three main types of process models: • Descriptive models: written explanations of the processes • Active models: a working model that represents the processes (eg. computer simulations) • Diagrammatical models: a diagram that shows the processes and the relationships between them (eg. Flowcharts and UML diagrams.)

  10. Business Process Modelling Real business process Model of business process

  11. Business Process Modeling Languages Petri Nets Event-driven Process Chains (EPC) UML Activity Diagrams Business Process Modeling Notation (BPMN)

  12. Business View IT View Business Analyst IT Architect Developer Advantages of business process modelling (1) • Better understanding of existing business processes • Basis for improving existing business processes • Basis for experiencing and simulating new concepts and impact on the organisation • Basis for optimisation in resource allocation • Basis for creating information systems that support the business processes • Basis for automation of repetitive steps of business processes

  13. Business Process Measurements Effectiveness Measures: Appropriateness  Customer Satisfaction  Quality  Price  Responsiveness  Profitability  Market Share Efficiency Measures: Cost  Cycle time  Wait time  Wastage

  14. Business Process Efficiency and Effectiveness • Effectivenessmeans doing the right thing • Efficiencymeans doing the thing right • Business processes have Efficiencyfactors and Effectivenessfactors. Sometimes they go along with each other well and sometimes, they may not. • E.g. a call center with many best personnel around so that no one is kept waiting on the phone, at all. And the customer service person stays on the phone as long as the customer is satisfiedfully. This however, we know, is not practical. The Effectivenessis good BUT the Efficiencyis poor.

  15. Example contd. • In order for efficiency to be good they may need to staff the call center with the minimum number of people at exactly the right times of the day so that every agent is fully utilized and each call takes exactly the amount of time needed to do a good job and keep the customer satisfied! • Here we see the opposing nature of EfficiencyMetrics like Average Handle Time and Effectiveness Metrics like Customer Satisfaction Index!

  16. Business Process Management Business Process Management is a general term describing a set of services and tools that provide for explicit process management including: • process modeling • analysis • simulation • execution • monitoring and • administration

  17. Why Business Process Management? • Organisations are a collection of business processes. • Processes reflect time, cost, quality. • Processes reflect products and services. • Processes reflect customer orientation. • Processes reflect flexibility. • Processes reflect complexity. • Processes reflect working styles and culture. • Organisational performance relies on business processes.

  18. Business Process Management Systems (BPMS) • BPMS is a new software category that supports the entire lifecycle of modeling, executing, and monitoring business processes • BPMS include: • Enterprise Resource Planning (ERP) • Workflow Management (WFM) • Enterprise Application Integration (EAI) • Business Intelligence (BI) /Dashboard and portals • Etc.

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