Chapter 2

PROCESS IDENTIFICATION
 Process a set of activities aiming to
systematically define the set of business
processes of a company and establish
Identificati clear criteria for selecting specific
processes for improvement
on
PROCESS FOCUS
IMPROVEMENT
PORTFOLIO
 ---- define ----
business
goals
using the structure
of
a balanced
scorecard
 1. define a process architecture
Metho to gain an understanding of the processes an
organization is involved in as well as their
interrelationships
d 2. Process selection
aims to develop a prioritization of processes for the

2 BPM activities

phase
 Phase 1 - define a process
architecture
1. Process Categorize
Michael Porter’s Value Chain
model
provide directions, rules, and practices
for the core and support processes.

essential value creation of a company,

that is the production of goods and
services for which customers pay

enable the execution of these core

processes and support them
 • if only a small number of processes is
identified then each of these will cover numerous
operations

• redesigning such a large process would be

difficult and time-consuming
 Phase 1 - define a process
architecture
2. Relationships Between Processes

Sequence : horizontal relationship, continuous input-

output

Decomposition : Specialization :
essential value enable the execution
creation of a company, of these core processes
production of goods and services and support them
 The definition of a
process
architecture often
proceeds in a
top-down fashion
 Phase 1 - define a process
architecture
3. Reuse of References Models
When a company like wants to create a processes for the
first time, they can use references models from another
company
They can find some references from industry consortia,
non-profit associations, government research programs,
and academia
The best known examples are the Information Technology
Infrastructure Library (ITIL) by AXELOS, The Supply Chain Operations
Reference Model (SCOR) by APICS, The Process Classification
Framework (PCF) by the American Productivity and Quality Center
(APQC), and the Performance Frameworkby Rummler & Brache
 Phase 1 - define a process
architecture
4. Process Landscape Model
The steps to define the process landscape model in a
systematic way
1 - Clarify terminology
2 - Identify end-to-end processes
3 - For each end-to-end process, identify its sequential processes
4 - For each business process, identify its major management and
support processes
5 - Decompose and specialize business processes
6 - Compile process profile
7 - Check completeness and consistency
 Phase 1 - define a process
5. The Example of SAP’sarchitecture
Process
Architecture • SAP is one of the
largest software
vendors worldwide.
• Those processes on
Level 1 shown in are
subdivided into more
detailed processes
on Level 2 and Level
3 using the same
value-chain notation
for the sequence of
core processes.
Phase 2 – Process Selection
1. Selection Criteria
Importance
• Which processes have greatest impact on the
organization‘s strategic objectives?
Health (Dysfunction)
• Which processes are in deepest trouble?

Feasibility
• Which processes are most susceptible to successful
process management?
 Phase 2 – Process Selection
2. Process Performance
Measurement
Cycle Time
• Processing Time: The time that resources,
such as process participants; spend on
actually handling the case.
• Waiting time: Queueing time waiting time
due to the fact that no resources are
available to handle the case and other
waiting time.
Different Perspectives on Cost
• Fxed Cost: Not affected bythe intensity
of processing
• Variable Cost: Correlated with some
variable quantity
• Operational Cost: Related to the
outputs of a business process
Different Angles
• External: The client’s satisfaction
with either the product or the process.
a) Churn rate: Calculated by dividing
this amount by the number of all
interactions
b) Net promoter score: How far
customers would be willing to
recommend a product or service.
• Internal: The level that a process
participant feels in control of the
work performed, the level of
Ability to React
variation to Changes
experienced
• Ability of resources to execute
different tasks within a business
process setting
• Ability of a business process as a
whole to handle various cases &
changing workloads
• Ability of the managementto change
the structure & allocation rules
• Organization’s ability to change the
structure and responsiveness of the
 Performance Objective

For each performance

objective, identify the
relevant performance
Formulate performance
dimension(s) and
objectives of the process
aggregation function(s),
at a high level, in the
and from there, define
form of a desirable state
Define a more refined one or more performance
that the process should
objective based on this measures for the objective
ideally reach, e.g.,
performance measure, in question, e.g., the
customers should be
such as percentage of customers
served in less than 30
ST(30) >99%. served in less than 30
minutes.
minutes. Let us call this
measure ST(30).
Balanced scorecards
with cascading
process performance
measures
Process Portofolio
 Get a modern PowerPoint
 Process architecture definition aims at enumerating
major processes of organization.
 Process architecture defines relationship between
processes.
 Seven-step method for definition of process
architecture including process landscape model.
Recap

 Process selection is concerned with prioritizing

processes.
 Priorities upon importance of processes, health, and
feasibility of improvements.
 Assessed by process owners or grounded on process
performance measures and objectives.
 Most common performance dimensions are time,
cost, quality, and flexibility.
 Process portfolios help in selection of processes for
improvement.
 Selected processes become subject of remaining
phases of BPM lifecycle.
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