It Lecture 1

7/22/2019 It Lecture 1

1/42

MTAT.03.231

Business Process Management (BPM)

Lecture 1: Introduction

Marlon Dumas

marlon.dumas t ut . ee


2/42

2

About This Course

Objective: To introduce the principles and methods of Business

Process Management

The course relates to: Enterprise System Integration

Integrating applications to automate or support businessprocesses

Data mining Mining business process execution logs

Software Economics Business case analysis: Benefit assessment of IT projects


3/42

3

Structure of the course

14 lectures covering: Principles of BPM

Process Modeling Using BPMN

Process Analysis (Qualitative and Quantitative)

Process Automation Process Monitoring and Mining

14 practice sessions

Intro to Process Modeling

Process Analysis & Re-design Process Automation using Business Process Management Systems

Process Monitoring and Mining (ProM)

Team Project with MBA Masters students

Practice coordinator: Fabrizio Maggi


4/42

4

Grading

Seven homeworks worth 25 points in total List available in the course web page

Note: there is also a bonus task (extra points)

Project (25 points)to be released week of 15 April

Jointly with students from the Masters of ETM

Exam (50 points)


5/42

5

Readings and Resources

Course material posted on course Web page

http://courses.cs.ut.ee/2013/bpm

Textbook

Dumas, La Rosa, Mendling & Reijers: Fundamentals of Business

Process Management, Springer 2013

Message board (for questions, discussion) http://www.quicktopic.com/50/H/RACpfMwnxRR
http://courses.cs.ut.ee/2013/bpmhttp://www.quicktopic.com/50/H/RACpfMwnxRRhttp://www.quicktopic.com/50/H/RACpfMwnxRRhttp://courses.cs.ut.ee/2013/bpm


6/42

Introduction to Business ProcessManagement

Marlon Dumas


7/42

7

What is a (Business) Process?

Collection of related events, activities anddecisions, that involve a number of actors andresources, and that collectively lead to an outcomethat is of value to an organization or its customers.

Examples:

Order-to-Cash

Procure-to-Pay Application-to-Approval

Claim-to-Settlement

Fault-to-Resolution (Issue-to-Resolution)


8/42

8

fault - report- to-resolut ionprocess

My washing machine wont work!

VALUE

Customer

Warranty?

Parts

StoreService

Dispatch

Technician

Customer

Call Centre

Customer

Michael Rosemann


9/42

9

Processes and Outcomes

Every process leads to one or several outcomes,positive or negative

Positive outcomes deliver value

Negative outcomes reduce value

Fault-to-resolution process Fault repaired without technician intervention

Fault repaired with minor technician intervention

Fault repaired and fully covered by warranty

Fault repaired and partly covered by warranty

Fault repaired but not covered by warranty

Fault not repaired (customer withdrew request)


10/42

10

What is a Business Process: Recap


11/42

11

BPM: What is it?

Body of principles, methods and tools to design,analyze, execute and monitor business processes

In this course, we will focus on BPM based on

process models.


12/42

12

Why BPM?

The first rule of any technology used in a business

is that automation applied to an efficient operation

will magnify the efficiency.

The second is that automation applied to aninefficient operation will magnify the inefficiency.


13/42

13

Why BPM?

InformationTechnology

Process

Change

Yields

Yields

BusinessValue

Index Group (1982)

Enables


14/42

14

How to engage in BPM?

Continuous Process Improvement (CPI) Does not put into question the current process

structure

Seeks to identify issues and resolve themincrementally, one step at a time and one fix at a time

Business Process Re-Engineering (BPR)

Puts into question the fundamental assumptions and

principles of the existing process structure Aims to achieve breakthrough, for example by

removing costly tasks that do not directly add value


15/42

15

The Ford Case Study (Hammer 1990)

Ford needed to review its procurement process to:

Do it cheaper (cut costs)

Do it faster (reduce turnaround times)

Do it better (reduce error rates)

Accounts payable in North America alone employed

> 500 people and turnaround times for processing

POs and invoices was in the order of weeks


16/42

16

The Ford Case Study

Automation would bring some improvement

(20% improvement)

But Ford decided not to do it Why?

a) Because at the time, the technology needed toautomate the process was not yet available.

b) Because nobody at Ford knew how to develop the

technology needed to automate the process.

c) Because there were not enough computers andcomputer-literate employees at Ford.

d) None of the above


17/42

17

The correct answer is

Mazdas Accounts Payable Department


18/42

18

How the process worked? (as is)


19/42

19



20/42

20



21/42

21



22/42

22



23/42

23



24/42

24

Reengineering Process (to be)


25/42

25



26/42

26



27/42

27



28/42

28



29/42

29



30/42

30

The result

75% reduction in head count

Material control is simpler and financial

information is more accurate

Purchase requisition is faster

Less overdue payments

Why automate something we dont need to do?Automate things that need to be done.


31/42

31

How to engage in BPM?

1. Process identification

and opportunity assessment

2. Process discovery (as-is)3. Process analysis

4. Process re-design (to-be)

5. Process implementation

6. Process monitoring/controlling

Process

Modeling

Tools

Process

Management

Systems


32/42

32

Process Identification

Core processes

Support processes

Management processes

Quote handling

Product delivery

Invoice handling

Detailed quotehandling process


33/42

33

Phase 1: Performance Measure

Identification and Selection

Cost perexecution

Resourceutilization

Waste

Cost

Cycle time

Waitingtime

Non-value-addingtime

Time

Error rates

SLAviolations

Customerfeedback

Quality


34/42

34

Phase 2: Process Discovery


35/42

35

Phase 3: Analysis

Qualitative analysis

Root-cause analysis

PICK charts

Issue register

Quantitative Analysis

Flow analysis Queuing analysis

Process simulation


36/42

36

Issue Register

Issue

No.

Short

Description

Issue Explanation Broad Consequence Assumptions Impact

2 Information

regarding

units does

not match

Units in Relocation

system do not match

information provided by

...

Wrongly calculated

entitlements cause

manual calculation...

5% of cases go to the wrong

queue, 5 minutes to sort

queue and redirect.

5% recalculating on average

10 minutes per calculation.

28,000x0.05x1

5 = 21,000

minutes

350 hours/7.5

47 hrs

9.5 working

days

5 Protected/Mandatory

data entry

fields

Not all fields in dataentry forms are relevant

but mandatory. So

"fuzzy" information is

entered

Resource intensive,incorrect data. Cases in

Clarify need to

physically be closed.

5% of cases taking 2minutes to locate and close.

5% of relocations requiring

entry that is not needed

taking 30 minutes each.

28,000x0.05x32 =

44,800

minutes

477 hours/7.5

99.5 hrs

20 working

days

11 Information

on

posting

orders

Time consuming to sort

through posting orders

to identify relocations....

MBR does not get Info

pack therefore cannot

process move. More

information could be

provided which could

be used later in process

...

Only 1/3rd of postings and

CIPCs are entitled to

relocation. 28000 relocations

then sorting through 84000

postings. 3 to 4 minutes on

average to sort through

each.

84,000x3.5 =

294,000

min/60/7.5 =

653 days /250

working days

in year.

2.61 FTE

Michael Rosemann


37/42

37

Simulation / What-If Analysis

Start End

Check forcompleteness

Perform checks Make decision

Deliver card

Receive reviewrequest

Request infoReceive info

Notify acceptance

Notify rejection Time out

complete? Decide

review request

Yes

No

reject

reviiew

accept

10 applications per hour

Poisson arrival process (negative

exponential)

0.5

0.7

0.3

0.5

0.2

0.8

Task Role Execution Time(mean, dev.)

Receive application system 0 0

Check completeness Clerk 30 mins 10 mins

Perform checks Clerk 2 hours 1 hour

Request info system 1 min 0


38/42

38

Simulation output: KPIs

Resource Utilization

18.82%

50.34%

5.04%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

Clerk Manager System

Resource Cost

$ 898.45

$ 4,260.95

$ 285.00

0.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

3,500.00

4,000.00

4,500.00

Clerk Manager System

Cycle Time - Histogram

0

2

4

6

8

10

12

0 10 20 30 40 50 60

Days

#

PI's


39/42

39

Costs

Quality

Time

Flexibility

Phase 4: Process Re-Design


40/42

40

Phases 5-6. When technology Kicks in..


41/42

41

Process Execution Engines

BPMN-based

BizAgi

Activiti

Progress Savvion BPEL-based

Oracle SOA Suite

ActiveVOS BPM

IBM BPM

Microsoft

BizTalk

Windows WorkflowFoundation


42/42

Next Week

Introduction to Process Modeling

Date post:	10-Feb-2018
Category:	Documents
Upload:	georges-abou-haydar
View:	227 times
Download:	0 times

It Lecture 1

Documents