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Business Process Management

Ahmad Tariq Bhatti FCMA, FPA, MA (Economics), BSc Dubai, United Arab Emirates 2/18/13

Key Concepts
Business Process Management (BPM) is a systematic approach that is used to make an organization's workflow effective, efficient and responsive to changing environment.

Business Process Management

Purpose of BPM
To reduce human error and avoid miscommunication. Link operational processes to corporate strategies. Measure performance indicators from processes for evaluation of business success.

Business Process Model

A Business Process Model (BPMd) typically consists of workflow diagrams, descriptions, inputs and outputs, KPIs and data that provide both overview and detailed information about an organizations business processes.
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Key Concepts
Utility of Business Process Model
It helps to measure requirements of a process and eliminates the risk of losing value through inefficient or inappropriate activities.

BPM Software
Software that allows users to create BPM diagrams and integrate process content with critical business entities (departments, resources, etc.) Please refer to Appendix A for more details about BPM soft-wares.

Business Process Re-engineering (BPR)

The realignment of business process strategies through the use of an analytic tool and an intense consultation process. BPR is an off-shoot of BPM implementation that involves a great deal of risk due to change management.
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Key Concepts
Business Process Design (BPD) BPD is the systematic working by which an organization understands, defines and documents the business activities that enable it to function efficiently, effectively and economically. Business Process Model (BPMd) Illustrated description of business processes, usually created with flow diagrams. The model contains the relationship between activities, processes, sub-processes and information, as well as roles, the organization and resources. It is also termed as Business Process Mapping. Workflow Simulation & Analysis An executable specification of a workflow that is used to 2/18/13 simulate the behavior of the workflow under different

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Important Terms
Sequence of interdependent and interlinked activities which, at every stage, consume one or more resources (employee time, energy, machines, money) to convert inputs (data, material, parts, etc.) into outputs.

Process

A sub-process is a compound activity that is included within a task (process). Each task may have its own sub-processes. Each sub-process can also contain other sub-processes.

Sub-process Activities

Activities are the lowest-level process steps in modeling software where actual work is performed. Activities cannot be broken down into further steps.

Process Owner
The person (Resource) responsible for the process.

KPIs are descriptive time, cost or quality indicators used to capture the performance of a process. 5 5

Key Performance Indicators (KPIs)

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Important Terms
Job Description or Roles Roles represent specific skill sets, responsibilities or positions in a business environment. Roles allow the modeler to define criteria required for performing the activity, rather than the specific individuals who will perform the activity. Scope of a Process It describes the boundaries of a process and includes start and end points, the context in which the process is performed and elements excluded from that context. Workflow Diagram It refers to a simple form of flowchart depicting the flow of tasks or actions from one person or group 2/18/13 to another. It

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Benefits of BPM
1. 2. 3. 4.

5.

6. 7. 8. 9.

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10.

Improves process quality, reliability and output. Helps for continuous process improvement that provides foundations for BPR. Maximizes process visibility that helps in reducing costs. Improves strategic decision-making by providing correct information at correct time. It provides end-to-end performance visibility and optimization of resources. Improves operational efficiency that results in the avoidance of wastage and loss. Consistent execution reduces process cycle time. Improves customer satisfaction by delivering better value. Promotes organizational flexibility and business agility. Promotes communication and collaboration between departments. 2/18/13 Helps in standardization of procedures.

Process Composition
Process

Sub-process 1

Subprocess 2

Subprocess 3

Subprocess 4

Subprocess N

Activity 1 8 8

Activity 2

Activity 3

Activity 4

Activity N

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BPM Life-Cycle
BPM Life-Cycle includes the following stages that are applied in the order given as below:
1. 2. 3. 4. 5.

Designing, Modeling, Executing, Monitoring & Optimizing.

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1.

Designing

BPD is the systematic working by which an organization understands, defines and documents the business activities that enable it to function efficiently, effectively and economically. The purpose of BPD is to ensure that processes are optimized, effective, meet customer requirements, support and sustain organizational development and growth. Designing a process that improves corporate performance is a challenging task that requires multi-disciplinary expertise and a plethora of inputs (for instance, organizational strategies, goals, constraints, human and technical capabilities, etc.).
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The most common requirements of a BPD are: q Customer and supply chain management 2/18/13 q Operational performance improvement

2. Modeling
The output of a BPD project is a streamlined, comprehensive, easy-to-use model of the ways in which a business delivers output to its customers. One of the key purposes of process modeling is to provide a process view of the business. BPMd typically consists of a set of diagrams, textual descriptions and data elements that provide both overview and detailed information about the business processes in a format that is easily understood by everyone. The key components of a typical BPMd are as given below: q The set of processes and activities that take place within an organization q A written description of each process or activity or task q Workflow diagrams q Inputs & outputs q KPIs
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3. Executing
It refers to automating processes by using BPM application software that executes the required steps of a process. BPM soft-wares are either purchased or developed to fit to the requirements of a company. Please refer to Appendix A for BPM soft-wares.

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4. Monitoring
Monitoring refers to tracking of individual processes, so that information about them can be checked. An example of the tracking is being able to determine the stage of a customer order (e.g. order arrived, awaiting delivery, invoice paid) so that problems in its operation can be identified and corrected. The degree of monitoring depends on what information a business requires to evaluate and analyze and how that business needs it to be monitored, in real-time, near real-time or ad-hoc. Here, business activity monitoring extends and expands the monitoring tools generally provided by Business Process Management Suites (BPMS).

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5. Optimizing
Refers to retrieving process performance information from monitoring phase, identifying the potential or actual problems, recognizing the opportunities for cost cuttings or further improvements and then, applying those enhancements in the design of the process. In more specific terms, optimizing may include the following activities:
q

q q q

Improve processes and performance by reducing inefficiencies identified during monitoring. Simulate these changes using what-if simulation. Determine which changes will deliver the maximum improvement. Build the processes on firm footing.
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An example of Workflow for Purchase of Materials

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An example of Workflow for Project Delivery

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Abbreviations Used
# Abbreviati Complete Term ons 1 IT Information Technology 2 BPD Business Process Design 3 BPM Business Process Management 4 BPMd Business Process Model 5 BPMS Business Process Management Suites 6 KPIs Key Performance Indicators
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Appendix A: List of BPM soft-wares

# 1 2 3 4 5 6 7 8 BPM Software
Accu Process Modeler

RunMyJobs BPMS BPM from IBM ProcessMaker Appian BPM Suite webMethods BPMS
Ultimus BPM & Workflow Solution Software

Website http://www.accuprocess.com http://www.runmyjobs.com http://www.sydle.com http://www-142.ibm.com http://www.processmaker.co http://www.appian.com http://www.softwareag.com http://www.ultimus.com

9 Progress Savvion, http://www.progress.com

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10 Sequence KineticsTMBPM

2/18/13 http://www.pnmsoft.com/

Appendix B: Books on BPM

# 1 2 Title of Book Publisher Business Process Management Springler BusinessProcess Management Emereo Pty Ltd BPM 100 Success Secrets
Accenture Delivering the Value of BPM Springler Handbook on BPM 2 BH BPM: Practical Guidelines for Successful Implementation Business Process Management Edenhoven Demystied: A Tutorial on University of 2/18/13 Models Technology

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Thank You!
Presentation by:

Ahmad Tariq Bhatti

Contact details:
Email id: at.bhatty@gmail.com

The End
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