Business Process Management

1. Business Process Management Process Modeling and Analysis Workshop Using BPMN Instructor: Laura Graham Wi – Fi: Madison Room 1 / Madison Room 2 Password: AnchorT3ch

2. Introductions • Name, title, company • Any background in process mapping / BPMN? • What process modeling tools do you use? • What do you hope to get out of this class?

3. Objectives At the end of this presentation, you should know: • How to utilize BPMN for better process design and analysis • Considerations in developing individualized / corporate standards to process models • Factors to consider in choosing process modeling tools • How process models documented in BPMN enable process faster technology-based improvements

4. What is BPM

5. What is BPM Source: BPM Common Body of Knowledge – Association of BPM Professionals • Is a management discipline enabled by technology • Continuously monitor and improve business process • Performance • Visibility • Agility • Facilitate business innovation • Addresses end to end work • delivers value to customer • distinguishes between processes, sub-processes, activities, and functions • Requires organizational commitment Software

6. Business Process ManagementAn Approach to Management • Improve profitability • Focus on corporate throughput • Reduce non-value add activity • Collaborate improvements between IT and business • Ensure that business units and systems are aligned • Improve understanding of business • Exploit intellectual property • Identify means of differentiation System: a regularly interacting or interdependent group of items forming a unified whole

7. Insert PowerPoint Presentation Name Here How Do you Do BPM? • Plan Identify business objective and goal Clarify external and internal customer requirements • Analyze Understand current process Document “as-is” • Design and Model Utilize process improvement methodologies Develop “to-be” Simulate • Implement Change Management, IT deployment, re-organization • Monitor and Control Identify business objective and goal • Refine

8. Insert PowerPoint Presentation Name Here Process Innovation: Led by Business or IT?

9. Insert PowerPoint Presentation Name Here How Do Business and IT Work Together? Business Users IT Users Application / IT Development Meet Business Requirements Educate on Technology to help improve business processes Manage / Improve IT processes “Run” and grow the Business Utilize Information Business Process Analysis Identify new business opportunities Process Metrics Process Improvement Methodologies Change Management Process Mapping BPMN Data Modeling Workflow SDLC UML SOA BPEL JAVA

10. Insert PowerPoint Presentation Name Here Business Process ManagementSupporting Technologies • Business Process Analysis • Modeling: Graphically represent process for analysis • Simulation: Plays what-if scenarios • Business Intelligence (BI)Metrics, information from historical viewpoint • Business Activity Monitoring (BAM)Metrics, information on what’s happening now • Workflow: Automates hand-offs in a manual process • Business Rules Management systems: Extrapolates business rules from process and IT code • Business Process Management Suites (BPMS): Supports all aspects of process improvement: includes all of the above plusIT service oriented architecture (SOA) Improve utilization of corporate assets

11. Maturity Model Enterprise Architecture Stages Business Silos Technology Standards Optimized Core Enterprise Business Modularity

12. Business Process Competency Center

13. Insert PowerPoint Presentation Name Here Process MappingWhy Process MapTypes of Process MapsWhy Standard NotationHow to Approach Process Mapping

14. Insert PowerPoint Presentation Name Here Why Process Map • External Requirements: • ISO: Process exists and management for ensuring it is followed and for improving process metrics • SOX: “Management understands the process, including the IT hand-offs, well enough to understand the point at which a mis-statement could arise” [and works to reduce those risks] • Other external auditors; SEC, Federal Reserve, EPA, etc. • Internal Benefits: • Training of new employees • Prioritization and alignment of improvement initiatives – help build the business case • Scope improvement projects – develop project milestones vs. capital appropriate needs Just because a process isn’t formalized or mappeddoesn’t mean one doesn’t exist If there is not a clear process, there are usually un-intended consequences

15. Focusing on the process Leads to Innovation • Focus on redesigning a tool: I need a database • Focus on limited actions I need a method to record XYZ • Focus on actions and results I need a method to communicate status to management OR I need a method to meet records and retention policy Focus on what you want to ACHIEVE and the verbs to get there, Before you focus on the tools to use

16. Insert PowerPoint Presentation Name Here What is a process? • Process: • Series of activities that transform something (an input) into something else (output) • Means of delivering customer requirements • Living entity that changes over time • Three types: • Operational (or executional) • Managerial (governance) • Planning (strategy)

17. What is on a process map? • Activities • Decisions • Dependencies • Milestones • Errors • Performers • Systems / Tools • Inputs / outputs • Metrics The modeler makes decisions about the purpose of the model The interpretation of the model is always up to the reader All models need to contain a certain amount of rigor to be meaningful BPMN is capable of representing many different levels of details and different sorts of diagrams for different purposes

18. Types of Process Maps – Business Analysis BPMN is capable of representing many different levels of details and different sorts of diagrams for different purposes.

19. Insert PowerPoint Presentation Name Here Types of Process Maps – Systems Analysis Software should be a tool to help users do their job better. This requires that we work hard to understand their job. We need to gain understanding beyond the tasks they must complete and instead strive to understand their goals…  Replacing a file cabinet with a computerized file cabinet is not application development, it's called shifting the burden. – Joseph Reddy “If business processes don’t change when new technology is installed, the investment has less value.” - Ross, Weill, Roberston

20. http://www.google.com/search?q=process+models&hl=en&tbo=u&tbm=isch&source=univ&sa=X&ei=hmkUUdyeKYXM9QTT1YGYBg&ved=0CD4QsAQ&biw=1132&bih=658http://www.google.com/search?q=process+models&hl=en&tbo=u&tbm=isch&source=univ&sa=X&ei=hmkUUdyeKYXM9QTT1YGYBg&ved=0CD4QsAQ&biw=1132&bih=658 Why standard notation? The modeler makes decisions about the purpose of the model The interpretation of the model is always up to the reader All models are wrong – some are useful. - Charles Box.

21. Insert PowerPoint Presentation Name Here Why Standard Approach?

22. Why standard notation? Do Work Do Work What is the difference between the diagrams? Do Different Work Do Different Work Do Other Work + Do Other Work Do Still More Work Do Still More Work Do Work Do Work Do Different Work Do Other Work Do Other Work Do Still More Work Do Different Work Do Still More Work

23. Insert PowerPoint Presentation Name Here Benefits of a standard notation • Quickly and clearly communicate: • Picture is really worth 1,000 words • Reduces ambiguity • Re-use or reference other process maps to get “big picture” • It makes you think • Assists in process analysis • Question English (you know what I mean) • Enables faster automation • Link between process model and IT code • First step in utilizing BPMS tools • Establish a basis for re-usable technology

24. Process Modeling Notations According to ABPMP CBOK • BPMN • Flow charting – ANSI standards – loosely defined • Swim lanes – RummlerBrache • Event Process Chain (EPC) – activity diagram [UML] or ARIS - syntax varies • Value Chain – VRM notation, SCOR • UML – activity diagrams • IDEF-0 • LOVEM-E (IBM process methodology) • SIPOC • Systems Dynamics • Value Stream Mapping (TQM / Lean)

25. Notation Options – Why BPMN?

26. Insert PowerPoint Presentation Name Here Approaches to Process Mapping

27. Insert PowerPoint Presentation Name Here Approaches to Capturing “As Is”

28. Process Modeling Best Practices? • Define scope – at the high level – 1 hour – Estimate the Discovery Project • What starts / triggers process? • What is end result? • What groups are involved? Where are they? • Who manages them? • What is feedback from end-customer? What are their goals? • What IT systems do they use? • Document As Is – bottoms up approach – depends on scope – Estimate the Implementation Project • Start with SMALL groups at local level (1-5 people) • Review process documentation at local level • Connect the Dots to produce an ACCURATE big picture • Process Workshop: Broad group workshop – Used for Change Management • Define goals – align vision • Present any as-is metrics • Review As Is: Clarify and discuss – park ideas to improve until walk through complete • Brainstorm: to-be process • Prioritize: What are process goals • Discuss with IT: what tools do we already have that can achieve process objectives? What is on watch list? • Develop To Be / Project Scope and Milestones • Build business case based on as-is

29. Insert PowerPoint Presentation Name Here “As Is” Approaches • Start with “happy path” • Include major decisions / check points as normal process • What business rules / policies are used to direct process flow? • Add exceptions and errors - At each task ask: • What kinds of errors occur? • What causes them to occur? • What do you do when they occur? • What happens if information isn’t available for a particular task? • When are there exceptions to the rules? • What else does a participant do in a given week? • What causes these tasks to be done? The 80-20 Rule applies to the end result of the process. Represent all “Regularly Recurring” instances

30. Insert PowerPoint Presentation Name Here “As Is” Interview QuestionsLink Between Process and Data Models • Discuss business rules: • How do you know? • On what basis are decisions within executional process made? • Consider metrics: • What are customer expectations – what are they willing to pay for? • What decisions do managers need to make? • Staffing / resources / investment in new capacity • New products / services to offer • Pricing • Etc. • What metrics do managers use (or want to have) to manage the business? • Is there an existing SLA? When should managers be notified of particular instances? • How do participants know if they are successful at their job? • What does the customer care about? Status updates, etc…

31. Translating [English] into Process Models • Activities = verbs • Inputs / Outputs = Direct objects • “How do you know” = Business Rules • Conjunctions = Dependencies • Be wary of: • “And” vs. “And Then” • “If” “Else” “Sometimes” • Numbers and Codes – usually equal business rules • Reference to any IT system – what is the business verb?

32. Process Mapping Exercise A chef selects and reviews a recipe and then checks the pantry to confirm all ingredients are in-house. If any ingredients are missing the chef can either go back and select another recipe and repeat or go to the store to purchase missing ingredients. If / when all ingredients are in-house, the chef cooks the recipe for each customer, plates the dish and serves. Identify the process activities from chef’s perspective Document the order of activities HOW MANY ACTIVITIES ARE THERE?

33. Insert PowerPoint Presentation Name Here To What Level of Detail • Map to the level of detail • Appropriately matched to the business context • At which you can see areas for improvement • Where a new employee could understand how they do their job to contribute to corporate goals • Levels of Detail: • Process = series of actions towards an end goal – • Has specific start / trigger and end result • ~1-30 days, could be more, depends on process • Sub-process = compound activity • Modeler’s choice “art” • Company guidelines for re-usability • ~1-14 days, could be more, depends on process • Task / Activity = piece of work to be done • Specific verb – can’t be broken down further • Is NOT a work instruction • ~0-4 hours to complete, depends on process • Expect to include between 8 and 50 elements on a diagram

34. Insert PowerPoint Presentation Name Here To What Level of Detail On One Page? • Strong Cohesion and Loose coupling • Miller’s Law: 7 ± 2

35. Insert PowerPoint Presentation Name Here To What Level of Detail? To What Degree of Accuracy? • “When we don’t understand the details • it’s easy to miss inefficiencies. • we may be enabling subversive or counterproductive activity.” • “Detail does not go away because it is ignored.  If we intend to engineer our processes we need the detail” • “Detail charts may be intimidating at first glance. However, a chart is a reflection of the process. If the chart is complicated, the process is complicated.” – Ben Graham, Detail Process Charting

36. Process Hierarchy Laura Grahams recommendations • Level 0 – Enterprise Process Model: • Visual depiction of ALL value chains used throughout the enterprise and relationships • Identifies core processes • Used in corporate governance / funding approvals – prioritization of projects across value chains • Otherwise known as: Enterprise Reference Model, Process Framework, Business Process Architecture • Level 1 – Value Chain • Provides value to end-customers • Is a chain of processes: Activities within value chain have independent triggers that require coordination to provide value. • Enables: strategic planning – prioritization of projects within value chains • Otherwise known as : Value Stream, High Level Process; Core Processes • Level 2 – Scenario: • Is a value chain for a specific business unit, product/service, and geographical locations (of customers and producers) • Used to define operating model: when to differentiate or standardize on process activities • Level 3 – Process • Sequence of repeatable activities, decisions, and events • Enables: Process design and assessment • Otherwise known as: business flow; “low level of process” in process framework” (VRM level 3, APQC level ¾)

37. Process Hierarchy • Level 4 – Activity / Sub Process Level • Sequence of repeatable activities, decisions, and events • Completed by single a department • Finer grained than process – sub-processes completed within 2 weeks time period (usually less) • Enables: Process design and improvement – discuss sequence of activities, decisions, causes / results of events • Otherwise known as: Activity, Tasks, Function, Service, Sub Process • Level 5 – Finite Tasks • No further break down of activity • Completed by a single user • Finer grained – activities completed within 24 hours or less (usually minutes). User tasks all completed within a single “screen” or “session” of an IT application / system. • Enables: Process design and improvement – identify where inputs / outputs / rules / etc. are created and used • Otherwise known as: Activity, Tasks • Level 6 – Finite Tasks for Execution • Activities are associated to data objects with specific data fields identified • Business rules are documented and conditions associated with gateways • Systems are identified for services / integrations • Level 7 – Executable Process Map in BPMS • Level 8 – Work level instruction (not really a process) • Activity detail changes with tools, system, or application • Enables: User education of new tools used to improve process performance • Otherwise known as: Training details, user guide; “how” things are done

38. Thoughts for defining tasks within an executable environment • Tasks are always completed by a single user • Discuss with tool vendors what options exist for re-assignments • Tasks should include all common exceptions paths that involve multiple roles – each role has a different task • Tasks may include more than one user interface or “screen” • # of screens based on amount of data required to complete a task, UI standards, BPMS UI toolkits • SLAs and customer experience should be considered Discuss when information becomes available and consider whether additional tasks make sense

39. Process Framework • Is a view of business process architecture • Processes • Inputs and Outputs (Data) • Key Process Indicators (Metrics) • Provides common definition of processes • Is a method for organizing and cataloging processes • Enables benchmarking across companies • Helps prioritize process improvement efforts and Capital Expenditures

40. Process Frameworks • APQC PCF: American Productivity and Quality Center Process Classification Framework • e-TOM: Enhanced Telecommunications Operation Map • SCOR: Supply Chain Operations Reference-Model • Plan, Source, Make, Deliver, and Return • VRM: Value Reference Model • Eclipse Modeling Framework (EMF): • Modeling framework and code generation facility based on structure data models. • JAVA, UML, XML • ITIL: Information Technology Infrastructure Library • TOGAF: The Open Group Architectural Framework • DODAF: The Department of Defense Architectural Framework

41. The Value Chain Group’s VRM

45. Process Scope Diagram: IGOE: Inputs, Guides, Outputs, Enablers • Process = • Action • Start / trigger • End / result • Inputs • Come from other processes (internal or external) • Types include: • Physical materials to be transformed • Information to be created, read / reviewed, updated, deleted (CRUD) • Guides: • Come from other processes (internal or external) – planning or managerial processes • Formal or informal policies, rules, regulations, guidelines, best practices, tribal knowledge, etc. • Outputs • Go to other processes (internal or external) • Types include: • Physical materials to be transformed • Information to be read / reviewed, updated, deleted (RUD) • Enablers • Managed, allocated, acquired, assigned in other processes • Types include: • People • Technologies • Facilities • Machines

46. Scoping a process Example: The latest reports shows that it takes us 25% longer to make our products then our competition, and it costs 10% more. Moreover, national accounts are twice as likely to complain about our quality. I want you to fix our manufacturing process, and I want the complaints to stop! Design tolerances Quality targets OSHA regulations Labor union contracts Processes: Design product Manage labor relations Monitor OSHA regulations Inputs Guides Outputs Processes: Invoice order Deliver order Verify receipt Process: Manufacture Vehicle Sub-processes: Assemble vehicle Test / Inspect Fix / Repair Orders, sequenced Materials, line side Work instructions Vehicles Invoice Title Certificate of Origin Enablers Processes: Receive orders Schedule orders Order materials Transfer inventory Design mfg process Employees Plants Machinery / Tooling Processes: Hire employees Pay employees Acquire assets

47. Approaches to Process Analysis and Process Improvement

48. Insert PowerPoint Presentation Name Here “As Is” Analysis: Using a Process Model For Analysis: What do you look for? • Excessively sequential activities • “Yo-Yo” effect: many handoffs • Excessive rework • Decisions late in the process • Multiple loops back • Similar sounding activities • Spaghetti mess – complex process • Delays

49. Insert PowerPoint Presentation Name Here “As Is” Analysis:Process Improvement Questions • Is focus on what is being DONE? • Strong verbs in activities • Tools / systems are extrapolated • Business rules are extrapolated • What information is needed for each step? How are decisions made? • Formal or informal rule • Tribal knowledge • Experience vs. values based • Because we’ve always done it that way • How often do rules change? Will they be relevant tomorrow, next month, next year? • Is the Law of Conservation Met? • If there is an input, there must be an output and vice versa • Where are the inputs coming from? Are they on-time? • What metrics do we need to manage the process?

50. Seven Principles of Process Design • Whether work should be done • Under what circumstance • How precisely should it be done • What information is needed to make decisions • When or in what order should it be performed • Who should perform it • Case work vs. Sequence / work-flow • Where should it be performed • Centralized vs. local • What should be done • What tools should we use to do it? - Hammer and Hershberger