Post on 17-May-2015
Institute for Certification of Computing ProfessionalsKewal Dhariwal © 2008
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National Collegiate Conference
Business Process Management (BPM)
How to get beyond ERP and move into the 21st Century
Kewal Dhariwal, PhD, CCP, I.S.P.
Manager, ICCP & Supply Chain Research
Athabasca University
Institute for Certification of Computing ProfessionalsKewal Dhariwal © 2008
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National Collegiate Conference
What is ICCP creating for a BPM Exam?
1.0. BPM Concepts and Roles1.1 Definitions1.2 Organizational Roles & Responsibilities
2.0. Business Management Perspective2.1. Business Concepts, Principles and Guidelines2.2. Performance Management2.3. Ongoing Monitoring and Controlling Execution
3.0. BPM Methodology Approaches and Techniques3.1. Enterprise Process Planning3.2. Process Analysis and Design3.3. Process Management Improvement
4.0. BPM Technology4.1. BPMS Implementation4.2. BPMS Technology Types
Institute for Certification of Computing ProfessionalsKewal Dhariwal © 2008
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National Collegiate Conference
Why BPM?
• “BPM is going to be the dominant management discipline in the 21st Century and is already the way that leading companies manage their businesses as a management discipline.”
• “The convergence of BPM and the continually increasing capabilities of BPM software enable organizations to manage and execute change in an increasingly hypercompetitive environment – to adapt, thrive and survive.”– Brett Champlin, CCP, CDMP, President - ABPMP
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Why BPM?
• “Enterprises are seeking to transform themselves into customer-focused, process-centric organizations and consider this transformation critical to their business success.”
• “A key part of that transformation is to reorganize information resources as substantially independent reusable services.”
• “A service oriented architecture (SOA) embraces this concept of reusable services and represents the next major step in the evolution of IT strategies.”
– Tom Dwyer, V.P. Research, Brainstorm Group– Mike Rosen, Editor SOA Magazine, Brainstorm Group
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What is happening in BPM?Results from a survey of 1200 companies (2007)
Carilu Deitrich, BEA BPM Product Manager
• Market consolidation and technical convergence
• 150 vendors providing small to large enterprise-class vendors with powerful solutions and modeling tools. Consolidation occurring to reduce that number to 25 for enterprise wide solutions.
• Spanning multiple packages• BPM increasingly being used to manage
processes that bridge multiple packaged applications.
Institute for Certification of Computing ProfessionalsKewal Dhariwal © 2008
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What is happening in BPM?
• People process problems• Organizational challenges such as internal politics
and change management outweigh technical challenges in deploying BPM.
• Continuous process improvement is the key to fostering BPM as an imperative business strategy
• BPM, Collaboration with Competitors• Companies are seeking ways to better support ad-
hoc, collaboration • BPM today does not support this well enough, but
BPM companies are moving towards this direction.
Institute for Certification of Computing ProfessionalsKewal Dhariwal © 2008
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What is happening in BPM?
• BPM adoption mostly departmental• Some leading-edge companies are tackling
enterprise-wide processes (more the exception than the rule).
• 1200 companies surveyed – 18% currently employing enterprise wide BPM
• 50% of surveyed group are focusing on departmental process problems
• BPM rapid growth attributable to bringing business strategists and technologists together to solve process problems
Institute for Certification of Computing ProfessionalsKewal Dhariwal © 2008
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What is BPM?Let’s explore it in detail
• BPM goals are to efficiently align the organization with the customers’ wants and needs
• BPM attempts to continuously improve processes – seeking process optimization by– Defining– Measuring– Improving your process
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What is BPM?• “Executives need to organize and manage, not only the
cost chain, but also everything else – including strategy and product planning – as one economic whole, regardless of the legal boundaries of individual companies.”
• “This is a shift from cost-led pricing to pricing-led costing.” – Peter Drucker – Management Challenges of the 21st Century.
• This change is from forecast-driven inventory style systems to responsive, flexible and demand-driven mass customization, globally.
Institute for Certification of Computing ProfessionalsKewal Dhariwal © 2008
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National Collegiate Conference
What is BPM?
• People• Customer facing staff are best suited to understand customer
needs and must be empowered to make improvements. • Many improvements can be done without involving
technology
• Business –Technology Divide• Business processes are managed by business people.• Information moves between software packages with requires
a service oriented architecture (SOA) often driven or governed by IT.
Institute for Certification of Computing ProfessionalsKewal Dhariwal © 2008
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What is BPM?
• Modeling• Modeling a business process is a business domain• Perfecting a business process is a staff domain.• Business modeling is Business Process
Management (BPM).
• Business –Technology Connection• The size and complexity of tasks often requires the
use of technology to model efficiently.• Business people, especially customer facing staff
must control and do the modeling.
Institute for Certification of Computing ProfessionalsKewal Dhariwal © 2008
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What is BPM?• Bridging IT and Business
• Bringing the power of technology to business staff and reducing their work should be the BPM group credo.
• BPM is the bridge between Business and IT.• BPM systems will develop to be industry specific.• A cyclical BPM life-cycle exists:
– Design– Modeling– Execution– Monitoring– Optimization
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What is BPM?
• Process Design• Identify existing processes• Design the “to-be” processes• Key Terms
» Representations of process flow» Actors within a process» Alerts & Notifications» Escalations» Standard Operating Procedures» Service Level Agreements» Task hand-over mechanisms
Institute for Certification of Computing ProfessionalsKewal Dhariwal © 2008
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What is BPM?
• Process Design– Techniques & notations
– IDEF0 – IDEF nn (U.S. Air Force- public domain)– IDEF0 – Function Modeling– IDEF1 – Information Modeling– IDEF1X – Data Modeling– IDEF3 – Process Description Capture
– Event Driven Process Chains (originally inside SAP/R3), now also through IDS Scheer, MS Visio, other tools.
– BPMN (simple diagrams with a small set of graphical elements) – developed by BPM Institute handed over to Object Management Group (OMG – maintained).
– Flow Objects– Connecting Objects– Swimlanes– Artifacts
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What is Business Process Modeling Notation (BPMN)?
• BPMN simple diagram (www.wikipedia.org )
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What is BPMN?
• BPMN larger example (www.wikipedia.org )
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What is BPM?
• Modeling– Starting with the Design (theoretical) introduce
variables – such as cost of materials, introduction of more people, etc. to determine how the processes might operate differently.
– What if analysis • What if only 90% of the people had to do the work?• What if only 50% were available (baby-boomers
retiring)
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What is BPM?
• Execution• Off-the-shelf BPM tools are available:
– http://bpm-directory.omg.org/vendor/list.htm» BEA, ID Scheer, Borland, etc.
• Enterprise-wide tools include all of the following and more:
– Graphical tools– Text language based modeling tools– Visual programming using metaphors– Business Rules – definitions governing system behavior-
leading to a business rule engine
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What is BPM?
• Monitoring• Individual process tracking (state and statistics)
– State of a customer order, state of a delivery, how many delivered on-time, right-quantity, right-place, etc.
– Identify problems and correct– Work with customers…once the problem is identified, fix the
connectivity issues (information rollups, data exchange, people communications, etc.)
• Measures: Cycle time, defect rate, productivity• Business Activity Monitoring (BAM)
– Real –time or Ad-hoc
• Process Mining– Compare event logs with “a-priori model” to analyze
bottlenecks, breakdowns in process, etc.
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What is BPM?
• Optimizing• Identifying process failures, bottlenecks, under
performance issues– Cause-effect analysis– Redesign or modification of process to
» Reduce Cost» Improve Quality» Increase Responsiveness
Institute for Certification of Computing ProfessionalsKewal Dhariwal © 2008
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Where does SOA fit in?
• Service Oriented Architecture (SOA) is a way of executing BPM more efficienty and effectively
• SOA provides the architecture to provision how processes exchange data in a flexible manner across business processes, both in the company and between collaborating companies (supply chains)…following the value chain more closely.
• SOA unifies business processes by structuring large applications as an ad-hoc collection of smaller modules called services.
Institute for Certification of Computing ProfessionalsKewal Dhariwal © 2008
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National Collegiate Conference
Where does SOA fit in?• XML has been used extensively in SOA to create data which is
wrapped in neat descriptive containers. • The services are described by Web Service Description Language
(WSDL) and SOAP a protocol for exchanging XML based messages over the internet using HTTP/HTTPS.
• The goal of SOA is to allow programs or applications to be strung together to form new ad-hoc applications which are built almost entirely from existing software services.
• WS-BEL – Web Services Business Execution Language (serialized XML) – processes in WS-BEL exclusively import and export functionality by using web interfaces.
• Software reuse is one goal without reconfiguring the existing application – So this is systems integration in a totally different manner than the 1980s and 1990s ERP methods which often required the company to change its processes to fit in with the ERP environments.
Institute for Certification of Computing ProfessionalsKewal Dhariwal © 2008
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New Rules for the Process-Managed EnterpriseHoward Smith and Peter Fingar (BPM-the Third Wave) 2003
Item Old Rule Disruption New Rule
1 Process-based clerical work and practice-based skilled work are
different
Process Desktop All forms of work can be described and managed by a single system
2 Processes are rigid scripts, focused mainly on the inputs and outputs of
discrete steps
Process Calculus Processes are fluid, dynamic, amoebic and adaptable
3 Executing a process means locating it in one place and under centralized
control
Distributed process execution and end-to-end processes
Processes can be as easily managed in a federated environment as a centralized
one
4 Collaboration requires standard approaches
Business process modeling languages
Firms are free to innovate because collaboration rests on a standard
representation for processes, not on standard processes
5 Companies have to start over Process discovery, introspection and projection combined with application componentization
Companies build on and transform what exists
6 Process must be kept simple in order to be manageable
Process participants Processes can be as complex as they need to be, yet still be manageable
7 Processes have to be changed in order to reduce the manual checking
required of accountants, auditors and supervisors
Process metrics and process lifecycle
Processes can monitor themselves
Institute for Certification of Computing ProfessionalsKewal Dhariwal © 2008
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National Collegiate Conference
New Rules for the Process-Managed EnterpriseHoward Smith and Peter Fingar (BPM-the Third Wave) 2003
ITEM OLD RULE DISRUPTION NEW RULE
8 A choice must be made between incremental process improvement, and
radical engineering
Lifetime process lifecycle management
There are no discontinuities
9 Incremental process improvements produce minor gains
Process analysis and transformation
Processes evolve in fits and starts, sometimes incrementally and
sometimes radically, but always non-disruptively
10 Radical change is painful and disruptive
Computer-aided process engineering
Replacement of organizational change with technological implementation
11 Companies need a large, dedicated, long-standing reengineering team
Process portal Process management vanishes becoming a part of everybody’s job
12 Process innovation is an art form, with uncertainties and ambiguities
Process calculus Process management is a precise science
13 Radical change takes a long time to implement
Process deployment and execution
Not all radical changes require radical changes to IT systems or organization
14 No team can reengineer more than one process at once
Process management system Continuous process improvement across many processes
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New Rules for the Process-Managed EnterpriseHoward Smith and Peter Fingar (BPM-the Third Wave) 2003
15 Radical change is top-down and continuous changes is bottom-up
Integrated process model There is no distinction – circumstances govern the approach you take. Process models developed quite independently
can be easily combined.
16 Reengineering never happens from the bottom-up
Process intranet Insights for process streamlining and process re-design arise naturally in the business, and are readily accepted by
those affected
17 Managers make all process design changes
Collaborative process design and closed loop process optimization
Change-making is part of everyone’s job
18 There must be a single process owner Collaborative process analysis Everyone that needs to be involved in the process improvement can be
involved
19 Processes can be designed only by the process team
Shared process repository As many designers as required can be involved, deep within the business
20 It takes work to have to find out where you are in a given process
Process metrics Processes measure themselves and tell you where they are
21 Every process team needs a human coach
Process training built into process designs
Processes as coaches
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New Rules for the Process-Managed EnterpriseHoward Smith and Peter Fingar (BPM-the Third Wave) 2003
ITEM OLD RULE DISRUPTION NEW RULE
22 Plans get revised only periodically Process modeling language Plans are processes, guiding the enterprise in real time
23 The only feasible processes are those supported by the existing IT systems
Process virtual machine Any process can be modeled and executed; it may have nothing to do
with IT
24 As few people as possible should be involved in the execution of a process
End-to-end processes, process data correlation, distributed
process execution
Everyone and every system can be involved without degradation of automation or efficiency through
manual hand-offs
25 Don’t bury reengineering in the middle of the corporate agenda
Process modeling methodology Value analysis, process analysis, quality management and costing are
combined into one analysis
26 Tradition counts for nothing Process discovery Tradition is everything, and must be built upon. Those who fail to learn
from the past are condemned to repeat it
27 Design processes so that only a small number of variants are needed
Process customization and process patterns
Any process can be reused to construct or constrain the design of hundreds,
even thousands of variants
28 A company has no more than ten to twenty processes of interest to process
engineers
Process discovery Organizations are more complex than they think
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New Rules for the Process-Managed EnterpriseHoward Smith and Peter Fingar (BPM-the Third Wave) 2003
29 The processes to be improved must be carefully selected and prioritized
Process optimization, analysis and transformation
Process improvement is built into the methodology; pain points emerge
naturally
30 Processes must be designed to eliminate excessive information exchange and data redundancy
Process data Strong processes are those that include all required participants who can freely and efficiently exchange and re-process
all required information
31 Work must be structured so that suppliers and customers can plan and
schedule their respective activities independently
Collaborative processes Coordination of independent activities is built into new processes
32 Divide overly complex processes into smaller number of simpler processes
Enterprise process model Manage processes as intellectual property and derive what is required for
execution automatically
33 Technology only participates in the process (as cogs in an engine)
Third wave Technology implements the process (drives the pistons; orchestrates the
cogs)
34 Processes change only when people change them
Capability passing, external process participants, business
rules
Processes can change themselves within limits set by process design
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New Rules for the Process-Managed EnterpriseHoward Smith and Peter Fingar (BPM-the Third Wave) 2003
35 Processes take a long time to design
Real-time process manufacturing; the real-
time enterprise
Just-in-time, single-purpose, throw-away processes are all
possible and useful and reflect the way business is
really done – experimentally and systematically
36 Changing processes across organizational boundaries is
virtually impossible
Process interface definition language and
end-to-end processes
Process management knows no organizational boundaries
37 There is a divide between “business” and “IT”
Third wave BPM Process owners design and deploy their own processes,
obliterating, not bridging, the business IT divide
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Future for BPM?
• Move from mechanistic systems to more complex environments where Human Intuition and Judgment are allowed for in the work flow.
• Better capture and adhere to business rules – Business Rules driven systems.
• Intelligent software agents will be used to replicate business rules behavior and model optimizing responses.