Lecture 01 - Business Processes PDF

©2021 COMM335 Teaching Team. This content is protected and may not be shared, uploaded, or distributed. Learning Objectives 2...

©2021 COMM335 Teaching Team. This content is protected and may not be shared, uploaded, or distributed. Learning Objectives 2  Understand business processes  Understand the foundations of process improvement  Understand the basics of process mapping and its benefits  Prepare and use flowcharts and cross-functional (swim lane) maps to understand, evaluate, and document information systems BUSINESS PROCESSES COMM 335 Information Systems Technology and Development Business Processes What is a Process? 3 4  Consider these activities at our university:  Add a class to the business curriculum A process is a sequence of activities for accomplishing a function  Add a new section to a class schedule  Assign a class to a classroom  Drop a class section  Record final grades  We are surrounded by business processes! Customer orders Employee picks the Products are delivered products products from Inventory to customer  Understanding business processes is critical to understanding how business operates start activities end COMM 335 1 ©2021 COMM335 Teaching Team. This content is protected and may not be shared, uploaded, or distributed. Definition of Process Process Components 5 6  A process is a sequence of linked tasks or activities which, at every stage,  Resources: things that a process must routinely have to be able to convert consume one or more resources (employee energy, time, infrastructure, inputs into outputs machines, money) to convert inputs (data, material, parts) into outputs  Inputs: things that are transformed by the process into an end product or (products, services or information) service required by the customer of the process  A process is a network of:  Activities: actions that move the inputs through the process to become  Resources outputs  Inputs  Outputs: can be products, services, or information  Activities  Outputs  Controls: activities involved in ensuring a process is predictable, stable, and  Controls consistently operating at the target level of performance with only normal variation  These interact to achieve business functions Processes and Value Chains Types of Processes 7 8  Value Chain can be made up of many processes Support Processes Management Processes  Value Chains describe how organizations create value (and margin) in products and services that the company delivers  Value Chain is a network of value-creating activities Customercentric Acquiring goods and  Primary activities: Create value of direct benefit to customers services from Primary activities directly add value to the product or service external sources  Support activities: Indirectly responsible for benefits to customers Support activities support the primary activities Contribute indirectly to production, sale, and service Essential to deliver the product to the customer Business Processes Business Processes Involve Primary Acitivities COMM 335 2 ©2021 COMM335 Teaching Team. 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Primary Activities Example of Business Processes 9 10  Inbound Logistics  receiving, storing, and disseminating inputs to products  Operations  transforming inputs into final products  Outbound Logistics  collecting, storing, and distributing products  Marketing and Sales  inducing buyers to purchase products  Service  assisting customers’ use of products Scope of Processes Examples: Primary Activities and Processes 11 12  Operational processes concern day-to-day activities ACTIVITY OPERATIONAL MANAGERIAL STRATEGIC  High frequency, routine procedures, utilize computer actors (automated) Evaluate potential  Supported by Transaction Processing Systems (TPS) Inbound Logistics Order supplies Manage inventory suppliers  Managerial processes concern the allocation and use of resources Schedule equipment Operations Assemble product Open new store maintenance  Medium frequency, mix of computer and human actors Determine payment  Supported by Management Information Systems (MIS) Outbound Logistics Ship product Award refund policy  Strategic processes concern broader-scope, organizational issues Evaluate promotional Marketing and Sales Mail promotion Launch new product discounts  Low frequency, long term affect, depend on human actors (manual) Evaluate complaint Evaluate outsourcing  Supported by Executive Support Systems (ESS) Service Track orders patterns options COMM 335 3 ©2021 COMM335 Teaching Team. This content is protected and may not be shared, uploaded, or distributed. Process Waste 14  Waste is any resource consumed by inefficient or nonessential activities, 13 Business Process Improvement any unwanted material left over from a production process, or any output that has no marketable value. Process improvement aims to help a process better  Process improvement is concerned with removing waste from processes to reduce costs, eliminate defects, and increase productivity. achieve its objectives based on its measures.  There are 8 types of waste: Short term: decrease costs and increase efficiency  Examples of waste in: Construction, Office, Higher Education Long term: create competitive advantage  Common mnemonics: Who is TIM WOODS Alternatively… DOWNTIME The 8 Wastes 15 16 aka DOWNTIME Defects Overproduction Waiting Non-utilized talent (Skills, Employees) Transportation Inventory Motion Extra processing (Overprocessing) Source: www.techsolve.org/8-wastes-of-lean-manufacturing/ COMM 335 4 ©2021 COMM335 Teaching Team. This content is protected and may not be shared, uploaded, or distributed. Standardization Business Process Improvement Steps 17 18  Standardization is the formulation and implementation of guidelines, rules, 1. Identify the process to be improved and scope the improvement and specifications for common and repeated use, aimed at achieving effort optimum efficiency or uniformity in a process, organization, or system. 2. Map and analyze the process  Standardization maximizes efficiency and minimizes waste  Taking Inventory: use process mapping to document current process 3. Redesign the process  Generate Instructions: write best-in-class work instructions 4. Test and implement the process  Formatting & Availability: define optimal layout for work instructions  Training: provide standardized training based on the work instructions 5. Continually improve the process  Control & Action: ensure compliance with rules and standards  Updating Content: encourage suggestions for improvements  Governance: define clear roles and control responsibilities Business Process Management 19 20  Business Process Management (BPM) focuses on improving corporate performance by managing business processes  It promotes business effectiveness and efficiency while striving for innovation, flexibility, and integration with technology  It attempts to improve processes continuously Source: InovaPrime COMM 335 5 ©2021 COMM335 Teaching Team. This content is protected and may not be shared, uploaded, or distributed. Process Maps 22  Display the various tasks and activities contained within the process 21 Business Process Mapping  Describe the flow of materials, information, and documents  Show that the tasks transform inputs into outputs Process Mapping is a pictorial, step-by-step description of  Indicate the decisions that need to be made throughout the process the actions taken by workers as they execute processes  Demonstrate the essential interrelationships and interdependencies between process steps  Enable thorough examination processes to develop improvements Business Process Maps 23 24  Are a visual way to represent the activities in a business process  Intent is that all business users can easily understand the process from a standard notation  Cross-Functional (Swim Lane) Maps show the organizational unit performing the activity by dividing the entire process into functions, or swim lanes  Each swim lane is representative of a person, team, department, or stakeholder, making it evident who is responsible for which stage in the process to help avoid confusion COMM 335 6 ©2021 COMM335 Teaching Team. This content is protected and may not be shared, uploaded, or distributed. Diagrams.net/Draw.io 26 Business Process Map Symbols Lucidchart.com Swim Lanes 27 28  Swim Lanes can be set up horizontally or vertically, or as grid-like diagram  Cross-Functional (Grid Style) Map example – Course Development Source: www.lucidchart.com/blog/business-process-modeling-methodologies Source: online.visual-paradigm.com COMM 335 7 ©2021 COMM335 Teaching Team. This content is protected and may not be shared, uploaded, or distributed. Consider the amount of actors to create the swim lanes. And then the activities performed Guidelines for Preparing Business Process Maps Example: Payroll Processing (1/3) 29 30  Identify and understand the business processes  Prepare Business Process Map based on the following narrative  Organize diagram using two columns (actors & activities) and as  Draft the map by hand first, then use any tool to draw the diagram many rows (swim lanes) as needed to explain the process activities  Enter each business process on the diagram showing where it  Payroll Processing: begins and ends  When employees are hired, they complete a new-employee form.  Use standard symbols to depict the process steps sequentially in  When a change to an employee’s payroll status occurs, such as a raise, the human resources department completes an employee change form. A copy their appropriate swim lanes of these forms is sent to payroll. These forms are used to update the records  Draw a rough sketch, refine, and finalize in the employee/payroll file. Example: Payroll Processing (2/3) Example: Payroll Processing (3/3) 31 32  At the end of each pay period, department managers send the employees’  The accounts payable clerk uses the tax report to prepare a tax check. The timecards to the payroll department. The payroll clerk uses the timecard data, accounts payable clerk uses the payroll register to prepare a check for the total data from the employee file, and the appropriate tax tables to prepare a paycheck amount of the employee payroll and a disbursements voucher. The original copy for each employee. The clerk also prepares a payroll register showing gross pay, of each document is forwarded to Susan. deductions, and net pay for each employee. The clerk updates the employee file  Susan reviews each packet of information she receives, approves it, and signs the to reflect each employee’s current earnings. The payroll register is forwarded to checks. She forwards the cash disbursements vouchers to Ashton, the tax reports the accounts payable clerk. Every pay period, the payroll clerk uses the data in the and payments to the appropriate governmental agency, the payroll check to the employee/payroll file to prepare a payroll summary report for Susan so that she bank, and the employee checks to the employees. can control and monitor labor expenses. This report is forwarded to Susan, with  Ashton uses the payroll tax and the payroll check cash disbursement vouchers to the original copies of the employee paychecks. Every month, the payroll clerk uses update the general ledger. Finally, he cancels the journal voucher. the data in the employee/payroll file to prepare a tax report and forward it to the accounts payable clerk. COMM 335 8 ©2021 COMM335 Teaching Team. This content is protected and may not be shared, uploaded, or distributed. Flow charts have more informaion Flowcharts 34  Describe an information system showing:  Inputs and outputs  Information activities (processing data)  Data storage  Data flows  Decision steps  Key strengths of flowcharts are that they can easily capture control via decision points and show manual versus automated processes Flowcharting Symbols Common Flowcharting Symbols 35 36 Flowcharting symbols are divided into four categories:  Input/output symbols show input to or output from a system.  Processing symbols show data processing, either electronically or by hand.  Storage symbols show where data is stored.  Flow and miscellaneous symbols indicate the flow of data, where flowcharts begin or end, where decisions are made, and how to add explanatory notes to flowcharts. COMM 335 9 ©2021 COMM335 Teaching Team. This content is protected and may not be shared, uploaded, or distributed. 37 Types of Flowcharts Guidelines for Preparing Flowcharts 39 40  Document: shows the flow of documents and information  Understand the system you are trying to represent between departments or areas of responsibility, useful in  Identify business processes, documents, data flows, and data evaluating internal controls processing procedures  System: shows the relationship among the input, processing, and  Organize the flowchart so that it reads from top to bottom and output in an information system left to right  Program: shows the sequence of logical operations a computer  Clearly label all symbols performs as it executes a program  Use page connectors (if it cannot fit on a single page)  Edit/review/refine to make it easy to read and understand COMM 335 10 ©2021 COMM335 Teaching Team. This content is protected and may not be shared, uploaded, or distributed. Document Flowchart System Flowchart Program Flowchart ©2021 COMM 335 Teaching Team 44 This content is protected and may not be shared, uploaded, or distributed. 43 Exit Poll This lecture presentation and the slides that accompany it are the Take a moment to reflect on… exclusive copyright of COMM 335 teaching team and may only be 3 things you have learned used by students enrolled in COMM 335 course at the University of British Columbia, Sauder School of Business. Unauthorized or 2 things you found interesting commercial use of these lectures, including uploading to sites off of 1 question you still have the University of British Columbia servers, is expressly prohibited! ! COMM 335 11