Chapter 2: Process Identification

• Chapter 2 examines process identification and architecture

BPM Recap

• Any process is better than no process
• A good process is better than a bad process
• A good process can always be improved

BPM Lifecycle

• Process identification is the focus, along with discovery, analysis, design, implementation, and monitoring of business processes

Identification Phase Key Activities

• Enumerate major processes by counting or detailing them
• Determine process boundaries
• Assess strategic relevance of each process
• Make high-level judgments of the "health" of each process
• Qualify the culture and politics of each process
• Define a manageable scope for process innovation

Business Process Defined

• A business process consists of a set of logically related tasks to achieve a defined business outcome, as per Davenport (1990)
• Key characteristics include having customers, internal or external, and crossing organizational boundaries

Business Process Examples

• Ordering goods from a supplier with the user as the customer and the purchasing, receiving, accounts payable, and supplier organizations involved
• Developing a new product
• Creating a marketing plan
• Processing an insurance claim

Process Enumeration

• Involves identifying and counting processes in an organization
• The typical number of processes is not clear
• Balance ensuring a manageable process scope with the potential impact
• Rule of thumb is to have 10-20 main processes

Process Boundaries

• Processes are interdependent, requiring insight into their relations, including main processes, subprocesses, upstream, and downstream processes
• Processes change over time, so identification should be exploratory and iterative, and improvement opportunities are time-constrained

Process Selection Criteria

• Assess strategic relevance of each process
• Render high-level judgments of the "health" of each process
• Qualify the culture and politics of each process
• Define manageable process innovation scope

Process Selection Considerations

• Concurrent process initiatives face limited resources and coordination complexity
• There is a limited number of "active" process management projects

Key Points

• Identification is a necessary first step
• Few strict rules, and many issues exist
• Process modeling is required for all further phases of the BPM life-cycle

Designing Process Architecture

• Process architecture shows how value chains and business processes relate to each other and to the strategic goals
• Some refer to this as process model or process diagram
• Adding "business" or "enterprise" to indicates a high-level architecture of all processes in the organization

Value Chain

• Value chain is a set of activities a firm performs to deliver a valuable product or service
• Porter's value chains categorize Inbound Logistics, Operations, Outbound Logistics, Marketing and Sales, and Service as primary activities

Inbound Logistics

• Encompasses activities related to receiving, storing, and managing raw materials necessary for production
• A manufacturing company receives components for assembly, verifies quality, and stores them efficiently

Operations

• Activities convert raw materials into finished products or services
• Car parts are assembled, painted, tested, and quality ensured

Outbound Logistics

• Distribute finished products to customers or intermediaries quickly, efficiently, and cost-effectively
• E-commerce involves packing orders, organizing shipment with couriers, and ensuing timely delivery

Marketing and Sales

• Activities promote a product or service and drive sales
• Retail involves discounts and campaigns

Service

• Activities maintain or enhance the product's value
• Software includes post-purchase technical support and updates

Categories of Processes Based on Porter

• CORE PROCESS: Primary activities covering essential value chain such as producing goods and services customers pay for, including inbound logistic, operations, marketing and sales
• SUPPORT PROCESS: Enable execution of core, like HR, IT
• MANAGEMENT PROCESS: Assess competitor strength and strategic assessment of orgnanization performance

Other Categories of Processes

• Manage Processes are Business Direction related
• Operate Processes are product cycle related
• Support Processes are finance, HR, and tech related

Process Scoping Techniques

• Stakeholder-Objectives Matrix to identify stakeholders and objectives
• SIPOC Diagram (Suppliers, Inputs, Process, Output, Customers) to identify context
• Case/Function Matrix to identify process boundarie
• IGEO Diagram (Input/Guides/Enablers/Outputs) to identify guides and enablers

Process Stakeholders

• Process owner is responsible for effective and efficient operation
• Primary process participants directly involved in execution
• Secondary process participants are involved in preceding or succeeding processes

Process Objectives

• Primary objectives: time, cost, quality (minimise, maximise)
• Satisfaction, compliance, flexibility, predictability
• Secondary objectives: purchase or hire
• Include metrics and stakeholder definitions

Chapter 2 covers process identification and architecture. The BPM lifecycle includes identification, discovery, analysis, design, implementation, and monitoring. Key activities involve enumerating major processes, determining boundaries, assessing strategic relevance, and defining scope.