Business Process Automation (BPA)

Business Process Automation (BPA)

• The automation of complex processes.
• Extends beyond data manipulation and record-keeping.
• Achieved with advanced technologies.
• Enables replacing repeatable tasks like invoicing, data entry, and inventory management.
• Any organization with repeatable, labor-intensive processes is a candidate for BPA.
• Can improve finance, HR, sales, shipping, procurement, and underwriting.

BPA Implementation Steps

• Define the reasons for implementing BPA.
• Understand applicable rules and regulations.
• Document the process to be automated.
• Define SMART objectives: Specific, Measurable, Attainable, Relevant, Timely.
• Engage a business process consultant.
  • Consider their objectivity, experience, ability to recommend hardware/software/services, and expertise in articulating business value.
• Calculate the Return on Investment (ROI) for the project.
  • Engage stakeholders and convince business process owners and senior management of BPA's benefits.
• Develop the BPA.
  • Consultant develops it and developed BPA needs to meet objectives.
• Test the BPA.
  • Important to determine how well it works and identify where additional “exception processing” steps need to be included

Reasons to Implement BPA

• To correct errors in manual processes.
• To address paying for goods/services not received.
• To improve document retrieval during audits or lawsuits.
• To relieve recruitment/training burdens.
• To address a lack of management understanding of business processes.

Objectives / Goals for BPA

• Define the objectives using the SMART framework:
  • Specific: Clearly defined.
  • Measurable: Easily quantifiable e.g. in monetary terms.
  • Attainable: Achievable through effort.
  • Relevant: Necessary for the entity.
  • Timely: Achieved within a given time frame.

Benefits of BPA

• Cost savings due to efficiency and time savings (ROI).
  • Gartner states that 80% of organizations see a 15% or greater internal rate of return.
• Error reduction through automation.
• Increased innovation, as employees can focus on strategic work, design, planning.
• New insights from AI-driven analysis which helps uncover trends, spot issues, and analyze documents for process improvement.

Business Process Modeling and Notation (BPMN)

• BPMN is the global standard for modeling business processes.
• It's integral to Business Process Management (BPM).
• BPMN diagrams enable stakeholders to visualize processes for easier workflow streamlining.
• BPMN is a precise, graphical way to document processes.
• Resolves textual specification ambiguities by visually depicting activities and information flows to complete a process.
• Increasing recognition as the standard business process model and notation.
• BPMN diagrams allows stakeholders to visualize business processes.

Definition of BPMN

• BPMN empowers businesses to define and understand procedures via Business Process Diagrams.
• These diagrams, in turn, enable organizations to communicate procedures in a standard manner.

BPMN Version

• BPMN 2.0 is the latest version.
• Released by the Object Management Group (OMG) in 2011.

BPMN Elements

• Involves Events and Activities.
  • Events represent instantaneous occurrences.
  • Activities represent work units with a duration.
• Events and activities are connected logically.
• Core concepts include events, activities, and arcs.
  • Events: circles
  • Activities: rounded rectangles
  • Arcs (sequence flows): arrows
• Activities are represented as rounded rectangles.
• Control nodes (gateways) are represented using diamond shapes.
• Activities and control nodes are connected via arcs/flows.
• Provide the order of process execution.

BPMN Core Elements

• Activities: Capture work performed in a process.
• Events: Represent process triggers (start event) and outcomes (end event).
• Gateways: Capture forking and joining paths in the control flow.
• Sequence flows: Represent the order of activities and events.

Set of Diagram Elements

• Events signal something that "happens" during a business.
• Events affect the process flow.
• Events usually trigger a result, and can start, interrupt, or end the flow.
• Activities are work inside a business process that can be atomic or non-atomic (compound).
• The types of activities that are a part of a Process Model are Process, Sub-Process and Task
• A Sequence Flow is used to show the order that activities will be performed.
• A Message Flow shows the flow of messages between two entities

Gateway functions

• Gateways model elements control how Sequence Flows interact while converging/diverging within a process.
• A Gateway will not be needed when flow doesn't need control.

Start and End Events

• Start events captured with circles that have a thin border.
• End events are captured using circles with a thick border.
• The first activity is confirming the order.
• Indicates when instances of a process start with start events.
• Indicates instance completion with end events.

Process tokens

• In BPMN, it is an abstract concept.
• They refer to the current point of execution within a process
• A business process can have multiple tokens.
• Indicating process running in multiple paths.

Naming Conventions in BPMN

• Use clear verbs and nouns.
• Should accurately reflect the business.
• "Submit Order”, "Validate Payment," -“Customer Details"
• "Order Received"
• "Order Completed"
• Focus on the performed action and consistency.
  • Descriptive labels: Clear and concise explanation of the BPMN function
  • Active verbs to describe the action being performed: "Process Order," "Review Proposal," "Send Invoice". -Use relevant nouns.
  • Data/Objects - Ex: Customer Information, Product Data, Payment Details
  • Consistent Format ex: including capitalization and punctuation

ERM (Enterprise Risk Management)

• Aids organizations in identifying, assessing, and managing risks to achieve strategic objectives.
• ERM Process:
  • Identify risks: Potential risks that could affect the organization.
  • Assess risks: Likelihood and impact. -rated on a scale low to high.
  • Prioritize risks: Severity, cost, other factors.
  • Respond to risks: Develop strategies to mitigate and allocate resources.
  • Monitor risks: Track the risks and response effectiveness.

Key components of ERM:

• Internal Environment: -Factors: culture, governance, leadership & values.
  • Affect how risks: are perceived, managed.

ERM Objective Setting

• Organizations have to set objectives before they start measuring risks.
• Objective should support the company’s goals and risk appetite.

Control Activities in ERM

• The actions taken by a company to create policies and procedures to ensure management carries out operations while mitigating risk.

Risks in ERM

• Preventative controls: Stop activity.
  • mitigate risk by disallowing certain events from happening.
• Detective controls: recognize a risky action has taken place..
  • alert management to ensure follow-up

Information and Communication in ERM

• Information systems capture data.
• Useful to better understand a company’s risk profile.
• All aspects of a company should be continually monitored.
• Communications with employees increase buy-in for processes.
• Helps and offers protection over company assets

Risk monitoring in ERM

• Internal committee/ external auditor can review policies and practices.
• May also include getting feedback, analyzing data.
• Need to assess their ERM environment to pivot as needed.

Types of Risks Typically Addressed by ERM

• Strategic: Related to the business’s strategic objectives.
• Operational: Arising from the day-to-day operations.
• Financial: Related to the financial stability.
• Compliance: Related to non-compliance with laws, regulations.
• Reputational: Affect the organization’s reputation and brand.
• Environmental: Related to environmental factors.

ERM Benefits

• Identifies and understand key risks.
• Helps impacting achievement of strategies and objectives
• Invites broad participation and perspectives of senior leaders and governance
• Provides a common framework for discussing risks. -Management or "treatment" strategies
• Assists in establishing accountabilities for risk management activities -Integrates risk planning with strategic and tactical planning
• More effective cost-efficient management of risks Increases enterprise value