Lecture 3. Business process automation
Lecture plan 1. Business process architecture. 2. Business process automation. 3. Process block diagram. 4. Attributes for business process.
1. Business process architecture is a blueprint that allows a company to create a fixed design for outlining the specific tasks necessary to complete a task or activity. Basic steps covered in the architecture include determining the task’s purpose, who completes the task, the information needed to complete the task and where the company desires to complete the task. The overall purpose for creating business process architecture is to have a plan that is repeatable for future job tasks or activities.
Business process architecture design methods, these mainly include: • composition, which represents that one business process is composed of a number of other business processes, also called the sub-processes; • specialization, which represents that one business process specializes another; • trigger, which represents that one business process causes another business process to instantiate and start; • information flow, which represents that information or other objects flow from one business process to another.
When defining the purpose of a business task or activity, owners and managers can review the firm’s corporate governance. The governance typically includes information about why the company has a set group of tasks in its business operations. Outside of the corporate governance, companies can also define a purpose for a task in the business process architecture. Defining a new purpose occurs when a company enters a new market, creates a new product line or changes its operations for improving quality or reducing costs associated with business processes.
Another piece of an architectural frame in business is listing who or how many individuals are necessary to complete a task or activity. This part is necessary because many companies will need to increase their labor force when expanding business operations. Additionally, new tasks or activities may require a shift from unskilled labor to skilled labor. This can increase the company’s operating costs. As costs increase, the business process architecture must be able to increase the firm’s revenue, creating an offset that justifies the increase in operating costs.
Information is often an essential part of any business architecture. Advancements in technology allow a company to capture date and other information in real-time or near real-time capacity. The business process architecture must also define how information flows through the tasks within the process. Like the flow of water, information must have an inflow and an outflow. Without these, the company may experience information stagnation, which can result in the company’s inability to properly manage or control the business process.
The architecture also outlines the place or places where a company will complete tasks and activities. This place can be within the company’s current location or at a separate location necessary to house new operations. The company’s management team may make this decision based on the operational costs associated with the facility. These considerations may need to include some level of flexibility to ensure that future growth will not hinder the completion of tasks and activities.
Fig. Aspects of the business represented by business architecture
Business architecture reflects the design decisions for process, resources, rules, roles, regulations, and responsibilities that will maximize business value and minimize overhead. As such the business architecture is employed as the blueprint for operating and transforming the enterprise.
Key elements of the business architecture are: v A motivation model which encapsulates an organization's business goals, objectives, initiatives, and metrics that define success factors v Business Functional models that define what value is provided by one organization to another - including both internal and external functions. v Organizational model which depicts roles, responsibilities, and collaborations, defining how and by whom functions are to be provided and used.
v Business process models that define the activities, steps, and information flows between processes to carry out business functions. v Associated business rules and policies which are utilized by a Governance framework to ensure that stakeholders adhere to and enforce these policies. v Information and the business semantic vocabulary. v A roadmap to define the steps to achieve business transformation objectives.
Whether business architecture is part of an overall enterprise architecture discipline or it is simply an input into enterprise architecture seems to be a matter of opinion and varies between organizations. Either way, to truly reap the potential rewards that BPM offers, organizations need to adopt a more comprehensive view of business processes, as well as taking the overall enterprise architecture into account, rather than automating and managing individual business processes.
2. Business process automation Business Process Automation (BPA) is a process of managing information, data and processes to reduce costs, resources and investment. BPA increases productivity by automating key business processes through computing technology. The BPA process is geared toward implementing software applications to automate routine business tasks through initiation, execution and completion, while achieving enterprise-wide workflow efficiency. An Enterprise Resource Planning (ERP) system is often conceived as a BPA implementation outcome.
BPA is designed to maintain efficiency and increase the stability and operational productivity of an underutilized workforce by integrating business critical software applications. BPA works by analyzing critical and noncritical business processes and their relationship and dependency on other business processes and external partners, in addition to developing or sourcing automated software and computing processes.
Fig. Fundamental principles of BPA
Analysis can be performed on the process model to understand the impact of process or resource changes. This analysis leads to better prediction of the performance of proposed changed business process, and to a better version being placed into production. Doing so creates a better automated process versus simply automating the current business process in place.
Fig. A typical business process
Every process is executed the same way, ensuring that every account opening process is done the same way, and progress no longer depends on who was manually working on the account creation. All people are involved in the execution of the process as defined in the process model based on their roles, skills, and abilities. A modeled business process is put between the process participants and the IT systems. A process engine navigates through the process model, extracts and stores the process data, and interacts with the correct people at the correct time.
Fig. An automated IT service in place
3. Process block diagram A process block diagram is a simple flowchart that represents an overview of the business process. Process block diagrams are used to simplify a complex process. A process block diagram does not show inputs and outputs to the process. Process block diagrams are not generally used to give a detailed understanding of the process. Another type of flowchart, the ANSI standard flowchart, is used for this purpose.
Types and Uses of Block Diagrams A block diagram provides a quick, high-level view of a system to rapidly identify points of interest or trouble spots. Because of its high-level perspective, it may not offer the level of detail required for more comprehensive planning or implementation. A block diagram will not show every wire and switch in detail, that's the job of a circuit diagram. A block diagram is especially focused on the input and output of a system. It cares less about what happens getting from input to output. This principle is referred to as black box in engineering. Either the parts that get us from input to output are not known or they are not important.
Block Diagram: Best Practices q Identify the system. Determine the system to be illustrated. Define components, inputs, and outputs. q Create and label the diagram. Add a symbol for each component of the system, connecting them with arrows to indicate flow. Also, label each block so that it is easily identified. q Indicate input and output. Label the input that activates a block, and label that output that ends the block. q Verify accuracy. Consult with all stakeholders to verify accuracy.
Process block diagram symbols: § Each step or activity in a process block diagram is represented by a rectangle. Each rectangle is named to describe the activity it represents. The label on the rectangle should begin with a verb and should accurately describe the activity completed within the box. Action verbs followed by an object are good descriptive labels that improve the understanding of process block diagrams. § The rectangles are connected with arrows. The arrows represent the flow of information between the process steps. Alternatively the arrows represent the sequence of the steps or relationships between steps.
§ Elongated circles are used to denote the beginning and end of the process. § Process block diagrams can be drawn vertically or horizontally. A vertical presentation is generally easier to follow. It is also easier to work with because there is ample room beside each activity to add notes or handwritten comments during review sessions. However, a horizontal presentation may be necessary if the process contains many steps. Organizing the activities horizontally may allow the process to be contained on a single page.
Fig. Standard Flowchart Symbols
Steps to prepare a process block diagram: ü Identify the start and completion of the process. ü Break the process down into discrete steps or activities. ü List all steps. ü Label each step appropriately. ü Organize the steps into the correct sequence. ü Place an elongated circle at the start of the process. ü Draw a rectangle for each step, in a horizontal or vertical line. ü Label the rectangle. ü Connect each rectangle with an arrow to show the flow of steps. ü Place an elongated circle at the end of the process. ü Review the diagram with the person responsible for the process.
When preparing a process block diagram for an existing business process, refer to any existing procedure documentation. In addition, you must also learn how the process is actually completed. This can be accomplished using a number of Data Gathering techniques. Tips and Hints For a small or simple business process, a process block diagram may not be required. Depending on the size and complexity of the process to be documented, it may be acceptable to prepare a ANSI standard flowchart for the entire business process.
Example The example shows a simple process block diagram representing the employee review process in a matrix management model. In this model, each employee has a career manager who helps manage the employee's career aspirations. Each employee also has a line manager, who is responsible for managing the employee on a daily basis.
4. Attributes for business process Use attributes to define the content of your report in Business Process Choreographer Explorer, and to filter the results. The attributes that are available depend on the report type. Each attribute defined as report content is the name of a column in the report. In addition, use attributes to filter the results of your query. You can also define filter criteria for attributes that you have not included in your report.
Many managers believe that processes are either in place or they are not; however, it is many times not as straightforward as that. Actually, processes always exist because simply put, a process is a way of doing things, and there is always a way of doing things, whether the process is good or bad. Sometimes processes are formally documented, where other times they are not. Sometimes processes are flexible and sometimes they are not.
When a new company is just starting out, managers often believe that they don’t have time to implement processes because they are too busy generating revenue and breaking even. Interestingly, even when companies think they don’t have any processes, as soon as a company starts doing business it has processes—revenues are generated, receivables are received, bills are paid, employees are hired and compensated. Unfortunately, often these processes are not well thought out, documented, measurable, flexible, extensible, or repeatable. All processes have attributes that are important in determining how successful they are in getting a job done, and getting it done well. Some process attributes, or types of processes, include informal, measurable, flexible, extensible, and repeatable.
These can be defined as follows: v Effective. First, and most important. the process must do what it is supposed to; it must be simple and make life better for all concerned. It must demonstrably deliver value to the customers. It must satisfy and delight them. In satisfying them, it must meet their needs and fulfill the contract or agreement that has been made with them. So it must deliver what was agreed, on time and for the price that was agreed. The product or service must work, and it must continue to work for a reasonable period of time. This applies whether the process is delivering to an external customer or to other departments or users in the same organization.
Often these customer requirements are called the “Voice of the Customer, ” which may also include service level guarantees imposed by a regulator on behalf of the customer. Being “customer focused” or taking what is often called an “outside in” approach, is a major goal of process effectiveness, but it is not the only goal. The process must also align with the ‘Voice of the Business, ” which defines the business’ strategy, values, and policies. We can’t just respond to everything the customer wants as this may be too costly or not part of the business strategy.
v Efficient. The “Voice of the Business” is also concerned with the efficiency of the process and will impose constraints that ensure the business is profitable or ensures that a not-for-profit organization operates within its budget. The process must be devoid of waste, unnecessary steps, multiple hand-overs and other wasteful characteristics. The process must use available resources to best effect and, ideally, as I will mention later, reuse common processes and IT services. So the design and operation of a “good process” must serve two masters – the “Voice of the Customer” and the “Voice of the Business. ” The way in which it does that or, rather, the measurement of how effectively it does it, is often called the “Voice of the Process”.
v Relevant. We use processes because “we don’t want to leave the operation of our business to chance. ” For most businesses, it is important that the main activities are consistent, repeatable, and of a high quality. We want our customers to have a good experience and essentially the same experience each time they contact us. In the first instance, we want to concentrate on those processes that deliver and maintain the service to the customer and the cash flow to the business. It is important to look at the whole rather than the part and not to dwell on isolated subprocesses, but to look along the length of the “end-to-end” process that takes a customer order at the start, delivers the product, and receives payment at the end.
v Valid. A good process must be valid; that is to say, it should be sufficiently correct to be valuable and usable. That means we must verify and validate it against the customer and business requirements. The thing to keep in mind is that a process design (and a process model) is only a representation of the real thing. It can never represent absolutely every aspect of the real world so it must be “correct enough” for the purpose for which it will be used. If it is going to be used to develop a completed automated IT driven process, then the model must be tested against all likely scenarios to ensure that it will be robust in all eventualities. If, on the other hand, it is going to be used as a training aid for managers, it might only be necessary to cover a few key scenarios at a high level of abstraction.
v Usable. The process, and particularly the process model, should be realistic and usable. That is to say, it should capture business elements that really are processes; i. e. , business aspects that are repeatable and predictable. It should contain the right amount of information to make it valuable. A process model is a “model” in the true sense of the word. Just like the model of a building or an aircraft, it is built to a certain scale. and it has a certain level of detail. Normally it will have been built for a particular purpose and will have a particular audience and viewpoint. A process model is the same; it will have been created for a purpose – for instance, for training process operators or for providing the specification for IT system development.
v Used. It is no good putting all this effort into creating an effective and efficient process, making it usable and visible, if no one actually uses it. Making sure that your process design makes a difference is one of the key challenges for creating good processes. Because processes are mainly about what people do (despite all the IT automation), implementing a new process is essentially a “change management” activity. All of the normal change management activities – getting buy-in, training, barrier removal, reward, and monitoring – are essential for getting processes used. Just as with the process owner, having the right reward structure in place is essential for encouraging the desired behavior.
v Reused. Reuse is a key enabler for improving business efficiency. It is widely employed for IT systems and software development, and there is a huge desire to employ similar techniques for processes. We can employ reuse in many ways. Employing best practice is one form of reuse; process standardization is another; reusing process components or business services is another. A good process is one that does not reinvent everything from scratch, but reuses many process and IT components.
v Managed. A good process must be managed and improved. We can’t just design a process and leave it to its own devices. A process must have an owner who is responsible for directing its design, ensuring it aligns with requirements and business strategy. The owner will ensure that measures and KPIs are in place and will most likely have their own performance scorecard based on the process measures. The owner oversees the day-today operation of the process, which may be managed by a number of different subprocess managers. The process owner is responsible for coordinating the local management of process components to ensure that endto-end process performance is maintained.
v Informal processes are those that just happen, and become “the way that we do things around here, ” often as an agreed way of working between two or more colleagues. Informal processes can work well when two or more co-workers work together cohesively, and when nobody else is impacted by the process apart from the individuals involved. Problems with informal processes can arise when members of the cohesive group begin to leave the company or move on to other teams, and there is no formally agreed process in place.
v Formal processes are usually documented procedures. They are often established by agreement between two or more key players, teams, or departments in a business, or between different businesses. Formalized processes should work well to help businesses become more efficient and effective. If a formal process is well thought out, documented, and understood, it is less likely that costly mistakes will occur, since in theory everyone understands the processes and potential conflicts are easier to identify.
v Measurable processes. A measurable process is exactly that—one that can be measured for its effectiveness. If it is not possible to measure processes, then it is also impossible to quantifiably figure out whether or not they are effective, and whether they might benefit from improvements. Good processes should be measurable either overall or in their component parts, because some bits of a process may work well, while other bits might benefit from improvement.
Fig. Business Process Measures
v Flexible processes. A process that is flexible is one that can be adapted to fit a number of different situations, or most possibilities that may arise. If a process is not flexible, this can cause huge problems for organizations. Processes need to be flexible and adaptable in order to deal with situations that fall outside of the norm, without causing problems for the business and without negatively impacting revenues.
v Extensible processes. Similar to flexibility, processes need to be extensible so that they can be adapted for different and new situations that might arise, but also so that they can be scaled up as businesses get larger. Extensible processes are those that can handle the launch of new products or services and can be easily broadened over time as needed. Processes need to be extensible in order to be able to easily accommodate changing business needs and priorities.
v Repeatable processes. A repeatable process is one that time and time again yields a consistent outcome. Repeatable processes are usually documented, making it considerably easier for the participants to follow them time after time. Repeatable processes can be informal, but more often are formalized, so that they can be carried out by anyone, even if they are new to the organization or partnership.
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