Chapter 6: Business Process Transformation

, the processes that govern the operation of a system. Typical management processes include "Corporate Governance" and "Strategic Management".

Management processes

... is all about asking questions—after all, tough questions typically reveal the most accurate answers.

Process Value Analysis

... tools provide a way to describe a business process so that all participants can understand the process

Process-modeling

.... focuses on the organization's business processes

Re-engineering

Value Types:

Real value: value for which the customer is willing to pay Business value: value that helps the company run its business No value: an activity that should be eliminated

... puts business processes in the backburner and puts more emphasis on the Information System and often ignore business activities that are not part of the information system. As a result, these activities may not be considered when the new system is developed.

SDLC

...which support the core processes. Examples include Accounting, Recruitment, Call center, Technical support.

Supporting processes

Explain BPR Principle Principle # 2:"Have those who use the output of the process perform the process"

This principle consists in organizing the process so as "the individual who need the result of a process can do it themselves." For example, e‐Commerce is mostly based on this principle since the end‐customer is able to fill an order without requiring the assistance of another person within the company.

Before improvement can be made, the process must be .... Understanding the process flow and collecting the elapsed time and cost for each activity in the process flow, provides a good basis on which to identify improvements.

analyzed

...... is the systematic planning, analysis, altering, and design of business processes.

Business Process Management (BPM),

... is basically the fundamental re-thinking and radical re-design, made to an organization's existing resources. It is more than just business improvement.

Business Process Re-engineering (BPR)

... are activities specific to a functional area of operation.

Business functions

...) is the analysis and design of workflows and processes within an organization

Business process re-engineering (BPR

It is an approach for redesigning the way work is done to better support the organization's mission and reduce costs.

Business process re-engineering (BPR)

.....is a critical part of any project that leads, manages and enables people to accept new processes, technologies, systems, structures and values.

Change management

....is a structured approach to shifting/transitioning individuals, teams, and organizations from a current state to a desired future state. It is an organizational process aimed at helping employees to accept and embrace changes in their current business environment.

Change management

(Evaluating Process Improvement) Uses repeated generation of random variables that interact with a logical model of the process Predict performance of the actual system

Computer Simulation

Where are we Headed with BPM?

Crossing the next frontier of business process management: introducing process intelligence

Real Value: Value Added to Customers type of questions

Do customers recognize the value of the process step? Does the step specifically impact the service requirements of its customers? Is the step necessary to meet the timelines and expectations of those served? Are customers willing to pay for this step?

Business Value: Value Added to Operations type of questions

Does the step meet legal, health, safety, or environmental regulatory criteria? Is this process step being performed efficiently, or can it be refined? Could this process step be eliminated if a preceding step were performed differently? Could a technology application eliminate or automate this step? Does this process step fulfill an external regulatory requirement? Would eliminating this step impact the quality of the service positively or negatively?

(Evaluating Process Improvement) .... takes a basic process flowchart and puts it into motion -Uses computer simulation techniques to facilitate the evaluation of proposed process changes

Dynamic process modeling

How Do We Model Business Processes? Most common modeling diagrams are:

Flowcharts Use Case Diagrams Activity Diagrams Business Process Modeling Notation (BPMN) Diagrams Event-driven process chain (EPC) Diagrams

Kotter's Eight Step Change Model

Increase urgency - inspire people to move, make objectives real and relevant. Build the guiding team - get the right people in place with the right emotional commitment, and the right mix of skills and levels. Get the vision right - get the team to establish a simple vision and strategy focus on emotional and creative aspects necessary to drive service and efficiency. Communicate for buy-in - Involve as many people as possible, communicate the essentials, simply, and to appeal and respond to people's needs. De-clutter communications - make technology work for you rather than against. Empower action - Remove obstacles, enable constructive feedback and lots of support from leaders - reward and recognize progress and achievements. Create short-term wins - Set aims that are easy to achieve - in bite-size chunks. Manageable numbers of initiatives. Finish current stages before starting new ones. Don't let up - Foster and encourage determination and persistence - ongoing change - encourage ongoing progress reporting - highlight achieved and future milestones. Make change stick - Reinforce the value of successful change via recruitment, promotion, new change leaders. Weave change into culture.

There are three types of business processes:

Management processes, the processes that govern the operation of a system. Typical management processes include "Corporate Governance" and "Strategic Management". Operational processes, processes that constitute the core business and create the primary value stream. Typical operational processes are Purchasing, Manufacturing, Advertising and Marketing, and Sales. Supporting processes, which support the core processes. Examples include Accounting, Recruitment, Call center, Technical support.

processes that constitute the core business and create the primary value stream. Typical operational processes are Purchasing, Manufacturing, Advertising and Marketing, and Sales.

Operational processes

Business Process Management (BPM) principles

Principle # 1: "Organize around outcomes, not tasks". Principle # 2:"Have those who use the output of the process perform the process" Principle # 3:"Put the decision point where the work is performed, and build control into the process". Principle # 4:"Link parallel activities instead of integrating their results" . Principle # 5: "Capture information once at the source".

Explain BPR Principle Principle # 5: "Capture information once at the source".

Simply stated, this principle consists in avoiding to "collect information repeatedly." Collecting information about a purchase order and storing it in a shared database that could be used by different departments is a good example of the application of this principle.

No Value: Non-Value-Added questions

Steps that could be eliminated or changed without harming service levels or the organization What specific direct or indirect value does this step have for customers or operations?

Explain BPR Principle Principle # 4:"Link parallel activities instead of integrating their results" .

This principle consists in "forging links between parallel functions and to coordinate them while their activities are in process rather than after they are completed." The activity of updating inventory information while receiving a new shipment is a good example of the application of this principle.

Explain BPR Principle Principle # 3:"Put the decision point where the work is performed, and build control into the process".

This principle consists in organizing the work so that people "who do the work should make the decisions and that the process itself can have built‐in controls." Establishing pre‐approved purchasing expense levels for the company's employees is a good example of the application of such principle.

Explain BPR Principle Principle # 1: "Organize around outcomes, not tasks".

This principle requires that "one person performs all the steps in a process" which translates into organizing that person's work "around an objective or outcome, instead of a single task." The work of sales representatives is a good example of the application of this principle.

Activity ... is used to measure the business process prior to any business process improvement. It is also used after the business process has been improved. Based on the before and after measurements, the effect of the improvements can be determined.

Value Analysis

Every firm is a collection of activities that are performed to design, produce, market, deliver, and support its product. All these activities can be represented using a value chain." ..., Porter claims, are "... the discrete building blocks of competitive advantage."

Value activities

...are software programs that automate the execution of business processes and address all aspects of a process, including: Process flow (logical steps in the business process) People involved (the organization) Effects (the process information)

Worflow tools

A... is a set of work activities with preferred order, an identifiable beginnings and, inputs, and clearly defined outputs that add value to the customers.

business process

A...or business method is a collection of related, structured activities or tasks that produce a specific service or product (serve a particular goal) for a particular customer or customers.

business process

If you were to put business processes first and then build the information system as a result of this design process, then the organization must engage in ......and create the Information System components afterwards. This process works well for the business processes that are being developed and are under consideration but may cause problems later when you add more activities in the process that use the information system.

business process management (BPM)

.... focuses on improving process. By using a structured technique to evaluate what gets done, how it gets done, why you are doing it, and how to do it better, BPR can generate efficiency and effectiveness for an organization."

business process reengineering (BPR)

And the answer is: In theory, it is better to start with ... and work towards information systems so that business processes and information systems are aligned with the organization's strategy. However, in practice, organizations take both approaches.

business processes

(Evaluating Process Improvement) Disrupting the current process to make changes can be ...

costly and time consuming

The value of each activity is determined based on the ....requirements.

customer

Those activities that add no value to the output of the process and/or no value for the customer are considered for ...

elimination.

When people are confronted with the need or opportunity to change, especially when it is 'enforced', as they see it, by the organization, they can become ...... So can the managers who try to manage the change. Diffusing the emotional feelings, taking a step back, encouraging objectivity, are important to enabling sensible and constructive dialogue.

emotional

Business processes are designed to be operated by one or more business ...

functional units

Business processes work across ...to create competitive compatibilities.

functions

Reengineering starts with a high-level assessment of the organization's .,....

mission, strategic goals, and customer needs.

Value is determined by the..of the customer.

perspective

Value added is determined from the ...

perspective of customer

Emphasize the importance of the "...." rather than the individual units

process chain

"Process-oriented organizations break down the barriers of structural departments and try to avoid functional .... They take the ... view of the organization."

silos cross-functional

Business Processes are looked from the perspective of the customer and are designed to add ...for the customer

value

Each activity in the process is analyzed for the ...it adds to the product or service.

value

The ... is a concept from business management that was first described and popularized by Michael Porter in his 1985 best-seller, Competitive Advantage: Creating and Sustaining Superior Performance.

value chain

Advantages of process models

-Graphical representations are usually easier to understand than written descriptions -Provide a good starting point for analyzing a process -Participants can design and implement improvements -Document the business process -Easier to train employees to support the business process