MIST QUIZ 4

History of BPM

-1776: Division of Labor: Adam Smith suggested breaking up process to speed it up. -Early 1900s: Time and Motion studies improves productivity and efficiency (reduced time and number of actions) -Early to mid 1900s "the one best way": First method for Documenting process flow -1930's disenchantment with the assembly line: Charlie Caplin's film modern times satirized mass production/assembly line. -Mid 1970s workflow: Research/development of office automation. -1980s Quality Era: Total Quality Management. Aim was to achieve incremental improvements to processes of cost, quality, service and speed. -1990s Business Process Re-engineering BPR: demanded radical change to business processes and performance. Said to be revolutionary, fast-track, and drastic. People said it was impossible to start from a clean slate in an already established organization -2000s Business Process Modeling:

How BPM evolved

-Demand of BPM is a result of 1. Increasing transparency and accountability of all organizations including public services and government 2. Increase in usage of information and communication systems 3. Modern Complexity of business -can be considered as a quality management tool because of its technical nature, process of emphasis and analytical approaches.

Flow of Objects

-FLow objects are the main deserving elements within BPMN and consist of three core elements: 1. Events, 2. Activities 3. Gateways.

Various Business Process Modeling Techniques

-Flow Chart Technique, Data flow diagrams, role Activity Diagrams, Role Interaction Diagrams, Gantt chart, Workflow technique, BPMN

2. Activity

-activity is represented with a rounded corner rectangle;e and describes the kind of work which must be done Types of activities include: -Task: represents a single unit of work that is not broken down to a further level of business process details without diagramming that steps in a procedure. -Sub-Process: used to hide or reveal additional levels of business process details. When collapsed it is indicated by a plus sign against the bottom line of rectangle. When expanded, the rounded rectangle expands to show all flow objects. -Transaction: form of sub-process in which all contained activities must be treated as a whole. They are surrounded by a double border. -Call Activity: a point in the process where a global process or a global task record. Indicated by a bolded border around the activity area

Enterprise Resource Planning (ERP)

-addresses accounting, financial and manufacturing processes -SAP is world's leading ERP vendor Able to: -Execute the process -capture and store process data -monitor performance Advantages: single point of data capture and single version of the truth (real-time information everywhere) -breaks down silos and stove pipes -enables you to integrate processes

Artifacts

-allows developers to bring some more information into the model/diagram. In this way the model becomes more readable There are three predefined artifacts: 1. Data Objects: show the reader which data is required or produced in an activity 2. Group: represented with a rounded-croner rectangle and dashed line. This group is used to group different activities. 3. Annotation: an annotation is used to give the reader of the model-diagram an understandable impression.

Weaknesses of BPMN

-ambiguity and confusion in sharing BPMN models -support for routine work -support for knowledge work -converting BPOMN models to executable environments -support for business rules and decision-making

Product Lifecycle Management (PLM)

-design, engineering, research and development, prototyping

BPM Features

-diagram representing sequence of activities -processes, actions, activities -includes both IT processes and People processes -cross-functional -BPM represented more in larger companies -has computers/tools to apply its methods

Functional Organization

-each unit has its own information system that optimizes its work -Example: Warehouse has warehouse system. Sales has sales system.

Business Process Model and Notation

-graphical representation in specifying business processes in a business process model -standard for business process modeling that provides a graphical notation for specifying business in a Business process Diagram (BPD) -BPMN

Connections

-how flow objects are connected to each other -three types: 1. Sequence Flow: represented with a sold line and arrowhead and shows in which order the activities are performed. A small diamond indicates one of a number of conditional flows from an activity while a diagonal slash indicates the default flow from a d excision of activity with conditional flows. 2. Message Flows: represented with a dashed line, an open circe at the start, and an open arrowhead at the end. It tells us what messages flow across organizational boundaries (between pools). 3. Association: represented with a dotted line. It is used to associate an artifact or test to a flow object and can indicate some directionality using an open arrowhead.

Pools (BPMN)

-independent organization entities -Examples: customer, supplier, clinics, hospitals, etc

Gateways (Exclusive Decision/Merge)

-indicates locations within a business process whee the sequence flow can take one or more alternative paths -only one of the paths can be taken -depicted by a diamond shape that MAY contain a marker that is shaped like an "X"

What causes the differences in performance?

-intensity of competition (motivates to eliminate inefficiencies) -labor regulations

Management v. Strategy

-managerial competence is more important and less imitable than strategy as it is the foundational support

Business Process Modeling

-mechanism for describing and communicating the current or intended furniture state of a business process -means of representing the steps, participants, and decision logic in business processes -combines process mapping, process discover, process simulation, process analysis and process improvement -method to improve organizational efficiency and quality

Issues with functional systems

-problem with functional systems is that these systems are isolated, or stove-piped from each other -different functions dont talk to each other

Gateways (Parallel Fork/Join)

-provide a mechanism to synchronize parallel flow and to create parallel flow -depicted by a diamond with a plus sign -Example could be Send invoice on one side and ship goods on the other. They don't have to happen at the same exact time though they may.

1. Event

-represented with a circle and denotes something that happens -can be classified as catching (incoming message starts a process) or by throwing (Such as throwing a completion message when a process ends) Start event: acts as a process trigger and is indicated by a single narrow border and can only be catch. Intermediate event: represents something that happens between the start and end events and is indicated by a double border, and can Throw or catch. End Event: represents the result of a process and can only throw.

3. Gateway

-represented with a diamond shape and determines forking, merging of paths, depending on the condition expressed\ Types of gateways: 1. Exclusive: used to create alternative flows in a process 2. Event based: the condition determining the path of a process is based on an evaluated event 3. Parallel: used to create parallel paths without evaluating any conditions 4. Inclusive: used to create alternative flows where all paths are evaluated 5. Exclusive Event Based: an event is being evaluated to determine which of mutually exclusive paths will be taken 6. Complex: used to model complex synchronization behavior 7. Parallel Event Based: two parallel process a re started based on an event, but there is no evaluation of the event

Lanes (BPMN)

-resource classes in the same organizational space and sharing common systems -Example: Sales department, marketing department

Customer Relationship Management (CRM)

-sales, customer support, marketing

Business Processes

-sequence of tasks or activities that take a set of inputs and converts them into desire outputs

Business Process Video

-set of one of more goal directed activities that are in sequence and/or parallel (it is still a start to goal series of activities) -because they have different business visions and goals, they have different business processes and people info and tech

Management and Strategy

-should be a crucial complement to strategy. Management Can help execute and ensure that that strategy gets best possible chance to succeed. -a firm needs to get the basics right no matter how brilliant the strategy is

Nike/Nintendo Example

-slaes, suppliers, and production did not communicate which resulted in overproduction of products for nike and underproduction for Wii which led to stock devaluation

Cross-Functional Enterprise System

-solution to functional systems

Supply Chain Management

-supplies, vendors

BPMN 2.0

-vision is to have one single specification for a new Business Process Model and Notation that defines the notion, meta-model, and interchange format

Swim Lanes

-visual mechanism of organizing categorizing activities, based on cross functional flow charting and consist of two types: 1. Pool: represents major participants in a process. Contains one or more lanes. A pool can be open (showing internal details) when it is depicted as a large rectangle showing one or more lanes or collapsed (hiding internal details) when it is depicted as en empty rectangle 2. Lane: used to organize and categorize activities within a pool according to function. It is depicted as a rectangle;e stretching the width or height of the pool.

Silo Effect

-workers complete their tasks in their functional silos without regard to the consequences for the other components of the process -there is a need for communication and collaboration between functions -the silo nature of the functional organizational structure and the cross-functional nature of processes are at odds with each other

Procurement Process

1. Create purchase requisition 2. Create/Send purchase order 3. Receive goods 4. Receive invoice from supplier 5. Send payment to supplier

What are the consequences of poor functional systems?

1. Delays (increased lead and cycle times) 2. Excessive Inventory (just in case) 3. Lack of visibility across the process (where is my order or how the process is doing)

How is workflow different from BPM?

1. Document-Based processes performed by people are the focus of workflow (compared to BPM people and system processes) 2. Workflow is concerned with processes within a department while BPM address processes spanning whole organization

Role of Enterprise Systems

1. Execute the process 2. Capture and store Process Data 3. Monitor performance

Obstacles to efficient Practices

1. False perceptions: -managers are unable to objectively judge how badly or well their firms are run. (overestimate cost of introducing new practices or underestimate how much difference they could make) 2. Governance Structure: -managers may be aware of the need to improve their practices but pass on this opportunity for fear that change may jeopardize private objectives. (Family owned businesses) 3. Skill Deficits: -good management practices require capabilities (such as numeracy and analytical skills) that may be lacking in a firm's workforce, especially in merging economies. 4. Organizations Poliitcies and Culture: -Adoption of core management processes can be a challenge. Management practices often rely on a complicated shared understanding among people within the firm. The inability to foster it can easily kill the efforts of the most able and well-intentioned managers.

What hinders the adoption of essential management practices?

1. False perceptions: managers unable to evaluate how well or bad their firm is ran 2. Governance Structure: Fear that change may jeopardize private objectives (Family business) 3. Skill Deficits: Capabilities that may be lacking in a firm's workforce. 4. Organizational Politics and Culture: Adoption of core management process can be a challenge (organization at large is resisting change)

BPMN's four basic elements are

1. Flow Objects (Events, activities, gateways) 2. Connecting objects (sequence flow, message flow, association) 3. Swim Lanes (pool, lane) 4. Artifacts (Data object, group, annotation)

Two Major findings from study in Competent Management Reading

1. Management quality varies across and within countries 2. Differences in managerial practices related to differences in firms performance

What does Competent Management focus on?

1. Managing Operations: -lean processes and techniques 2. Monitoring Performance: -performance monitoring: KPI's and documentation 3. Setting Targets: continuous -improvement, goal setting, and measurement 4. Managing Talent: -talent: mindset, development and retention, identify stretch goals

Four Core Managerial Practices

1. Operations Management (lean techniques) 2. Performance Monitoring (process documentation) 3. Target Setting (choice of targets, time horizon, level of challenge) 4. Talent Management (talented development, stretch goals) -Companies that management these fundamentals well tend to have high levels of overall excellence

Key Business Processes

1. Procurement 2. production 3. Fulfillment

Fulfillment Process

1. Receive Customer Order 2. Prepare Shipment 3. Send Shipment 4. Send Invoice to customer 5. Receive Payment

Family-Run Firms

tend to have weaker management -Why? -their adoption of management techniques may require personal cost to family. New practices may require them to hire outside the family