Business Process Management PDF

BUSINESS PROCESS MANAGEM ENT BUSINESS PROCESS AS A MANAGEMENT TOOL WHAT IS BUSINESS PROCESS? A process is a specific ordering of work activities across time and space, with a beginning, an end, and clearly identified inputs and outputs: a structure for action. A business process is def...

BUSINESS PROCESS MANAGEM ENT BUSINESS PROCESS AS A MANAGEMENT TOOL WHAT IS BUSINESS PROCESS? A process is a specific ordering of work activities across time and space, with a beginning, an end, and clearly identified inputs and outputs: a structure for action. A business process is defined as a set of activities that, taken together, produce a result of value to a customer, or add value to something else. business process as a collection of inter-related events, activities and decision points that involve a number of actors and objects, and that collectively lead to an outcome that is of value to at least one customer. WHAT IS BUSINESS PROCESS? ACTIVITIES PRIMARY INBOUND OUTBOUN MARKETI SERVICE OPERATIONS D NG AND LOGISTICS LOGISTIC SALES S VALUE FIRM INFRASTRUCTURE S HUMAN RESOURCE MANAGEMENT TECHNOLOGY DEVELOPMENT PROCUREMENT SUPPORT ACTIVITIES CLASSIFICATION OF BUSINESS PROCESSES PRIMARY Primary ACTIVITIES v s SUPPORT processes ACTIVITIES ….are the central and value-creating processes of the enterprise. …run straight through the company, from ACTIVITIES PRIMARY SERVICE receiving supplies from vendors to INBOUND OUTBOU M A RKETI OPERATIONS ND NG AND LOGISTICS LOGISTI SALES CS activities on the customer side FIRM INFRASTRUC TURE VALUE S HUM AN RESOURC E M ANAGEM ENT Support processes TEC HNOLOGY DEVELOPM ENT ….are not value-creating processes PROCUREMENT SUPPORT directly, but AC TIVITIES rather activities needed to support the primary processes. ….include activities like financial and personnel management  PRIMARY PROCESSES INBOUNDS MARKETING SERVICE the processes related to ľ h e píocesses you use to peísuade The activities related receiving, storing, and clients to puíchase fíom you instead to maintaining the distributing inputs of youí competitoís. ľ h e benefits value of your internally. you offeí, and how well you product or service to Your supplier relationships communicate them, aíe souíces of your customers, are a key factor in creating value heíe. once it's been value here. purchased. OPERATIONS OUTBOUNDS The transformation Activities deliver your product activities that change or service to your customer. inputs into outputs that These are things like are sold to customers. collection, storage, and Here, your operational distribution systems, and they systems create value. may be internal or external to your organization. GENERAL BUSINESS PROCESS V S OPERATIONAL PROCESSES OPERATIONAL PRO C ESSES GENERAL BUSINESS PROCESS V S OPERATIONAL PROCESSES OPERATIONAL PRO C ESSES  Example : PROCUREMENT PROCESS CONTRA CONTRACT PAYMENT CT DRAFT Draft FINALIZATI Contract Goods and contract ON draw services and up supply document for tender NEED SUPPLIER DELIVER ANALYSIS SELECTION Y Identify Evaluat Goods and needs for e services good and supplier supply services s Ingredients of a Business Process Objectives/Outcomes Events Activities Decision points Actors (Who and Where): ○ human actors, organizations, ○ software systems acting on behalf of human actors or organizations (CRM, ERP) ○ physical objects (equipment, materials, products, paper documents) ○ immaterial objects (electronic documents and electronic records) Drawing Process Flow Diagrams Process Step or Activity – Carried out by an actor/agent or resource in the system, adds value, is required for completion of the flow unit, may or may not have inventory, has a capacity (max number of flow units that can flow through the activity per unit of time). Depicted as a rectangle. Arrows – Indicates the flow of the flow unit; multiple flow unit types are possible. Inventory/Buffers – These have no (max or min) capacity. Multiple flow unit types are possible. Depicted as a Triangle Who does What, When Michael Herrera was a diabetic with a history of heart disease and several hernias. He died while waiting in the Emergency Department. Is there a way to redefine process boundaries? BUSINESS PROCESS REENGINEERING What is Business Process Reengineering? Business Process Reengineering is the radical redesign of business processes to achieve dramatic improvements in productivity, cycle times, quality, and employee and customer satisfaction. Companies start by assessing what work needs to be done to deliver customer value. (Davenport) What is Business Process Reengineering?... the analysis and design of workflows and processes within and between organizations. Business activities should be viewed as more than a collection of individual or even functional tasks; …they should be broken down into processes that can be designed for maximum effectiveness, in both manufactuíing and service environment. (Davenport) What is Business Process Reengineering? BPR is the fundamental thinking and radical redesign of business processes to achieve dramatic improvement in critical, contemporary measures of performance such as cost, quality, service and speed. (Hammer and Champy) How to redesign this Procurement Process with the support of digital CONTRA technology?CONTRACT PAYMENT CT DRAFT Draft FINALIZATI Contract Goods and contract ON draw services and up supply document for tender NEED SUPPLIER DELIVER ANALYSIS SELECTION Y Identify Evaluat Goods and needs for e services good and supplier supply seívices s Example of BPR GROUP DISCUSSION It is necessary for companies to reengineer their business operations? What impact will technology have on this process? DETERMINANTS OF BUSINESS PROCCESSES DESIGN Strategy & Expectations Business Model with regard to of the products or organization services - Nature delivered by the of organization competiti ve advantag e The - Nature of business value processes chain that produce Stakeholders these organizations, products or institutions, or services and people affected by support and or with a granted enable the interest in the delivery of them  SEVEN REASONS FOR UNDERTAKING BPR Customer- Speed focused Dramatic compression of the time it takes to complete a task for key Customer service oriented business processes. processes aiming to eliminate customer complaints. Productivi Compression ty Cutting major tasks of cost and Improve capital, throughout the value drastically chain effectiveness and efficiency Innovatio Flexibility n Adaptive processes and Leadership through structures to changing imaginative change conditions and competition providing to organization Quality competitive advantage. Obsession with the superior service and value to the customers. The level of quality is always the same controlled and monitored by the processes, and does not depend mainly on the person. Central Tenets of BPR Radical change and assumption challenge; Process and goal orientation; Organizational restructuring; T h e exploitation of enabling technologies, particularly information technology. A company’s journey to process-oriented improvement Strategic IMPROVEMENT (BPR) Tatical (JIT, TQM) TIME Types of BRP Type 1: Cost improvement ○ Díamatic cost reductions in non-core processes (cost-reduction- focus) Type 2: To achieve parity or “best in class” ○ Reengineer core processes to attain competitive parity (competitive focus) Type 3: To affect a Break Point ○ Rewriting the rules and create the new definition of best in class BUSINESS PROCESSS REENGINEERING STEPS Characteristics of Reengineered Processes Several jobs are combined into one Workers make decision T h e steps in the process are performed in a natural order Processes have multiple versions Work is performed where it makes the most sense Checks and controls are reduced Reconciliation is minimised Single point of contact Principles of BPR The Effectiveness of BPR The effectiveness of BPR depends on a few factors: The relevance or obsolescence of current business processes The ability and experience of those performing BPR The type of technological innovations available today Outsourcing? Can outsourcing be a solution to business process management? Possible problems? Reluctance to lose control and flexibility A given function is too critical to outsource Anticipated negative reaction by customers Employee resistance Group Discussion How does a company decide which business activities to focus on and which of those should be outsourced?