1

Process Identification
By

Amit Kumar Agrawal

2

Process Life Cycle

Gover-n
Strategy ance

Culture
Process identification

What?
1. Identify an organization’s business processes
2. Prioritize their management based on certain criteria

Why?
3. Understand the organization
4. Maximize value of BPM projects
Process identification steps

1. Designation step
Process
• Enumerate main processes Architecture
• Determine process scope

2. Prioritization step (aka Process selection)

Prioritize processes based on: Prioritized
Process
• Importance Portfolio
• Health
• Feasibility

After Davenport (1993)

 Process Enumeration

“Most businesses have just three core processes:

1. Sell stuff
2. Deliver stuff
3. Making sure you have stuff to sell and deliver”

Geary Rummler
Porter: Types of processes

Management
Processes

Customers / Stakeholders
Suppliers / Partners

Core Processes

Support Processes

After Michael Porter (1985)

Example: core, support and management processes
Grocery Wholesaler
Core processes

• Sales (lead-to-quote, quote-to-order, order-to-cash)

• Purchase-to-Pay (direct procurement, e.g. supplies replenishment)

• …

Support processes

• Purchase-to-pay (indirect procurement, e.g. parts replenishment, operational resources replenishment…)

• HR (policies update, recruitment, induction, probation…)

• …

Management processes

• Suppliers management (suppliers planning, suppliers acquisition…)

• Logistics management (logistics planning, logistics controlling…)

• …
8
Relations between core, support, mgt processes
Example: process architecture
Wholesale
r
Strategic
Manageme
nt
Logistics Suppliers
Management Management
Warehouse Demand
Management Management
Process
Management processes group

Direct Distributi
Sales
procurement on

Marketing Service
Core
processes
Indirect
Finance IT HR
procurement
Support
processes
Example: process architecture
Insurance
company Management processes
Strategic
Management
Corporate Market Investor
Development Development Relations

Risk Assessment & Management

Marketing & Sales

Underwriting Policy Claims
Management Servicing Management
Payments Collection and Disbursement
Assets Management
Core processes

Finance/ Legal/
Reinsurance IT HR
Treasury Audit
Support processes
Exercise: classify by process type
These groups of processes are typically performed at a university. Categorize each
process group as core, support or management

Indirect
Sport
HR procurement
services

Strategic Teaching
Management degree courses

IP
Management Marketing

Curriculum Additional
Management services mgt

Language Admission IT
training

Teaching
Market
professional
management
courses
Solution: identify process types
Process scoping

Processes are interdependent insights into interrelations required

• Specialization: general – special product/service
• Horizontal: upstream – downstream processes and their value chains
• Vertical: main processes – sub-processes

Process architecture
Value chain modeling

• Chain of processes an organization performs to deliver value to customers and

stakeholders
• More generally, a mechanism to group high-level business processes according to an
order relation (can be applied to core, support and management processes)
business
process
Procure-to-service

order
relation
Guidelines to identify horizontal boundaries in value chains

1. Change of key business object in the process

2. Change of granularity of main business object
3. Change in frequency/time
4. Change in intermediate outcome/resolution/objective
Example: value chain
Wholesaler
Core processes
Typical value chains for core processes

Think around three main steps:

• Imagine it (design new product/service)
• Build it (source, assemble, deliver product/service)
• Sell it (market, sell, service product/service)

Example: Producer
Stocked
products:

Specializations
MTO
products:

ETO
products:
Example: value chains for service provider
IT service
provider
Example: value chain of non-core processes
Support processes

HR:

Accounting:

Management processes

Suppliers
management:

Risk
management:
Example: process architecture & value chains
Wholesale
r
Strategic
Manageme
nt
Warehouse Logistics
Management Management
Suppliers Demand
Management Management
Management processes
Chevron: Direct Distributi Box:
Sales
collapsed procurement on
groups
Procure-to-Service
value chain processes/
Marketing Service
Core value chains
processes
Indirect
Finance IT HR
procurement
Support
processes
Alternative: process architecture – groups
Consultancy Firm

Expanded
process
group
Typical artifacts for vertical scoping
Typical focus of Process enumeration
Value chains
Chains of processes. Stay at a high level. Rule of thumb: 3-7 processes
• Procure-to-service, Risk management
(Root/Main) Processes
Build up value chains and affect each other. They are abstract
• Lead-to-quote, Quote-to-order, Order-to-cash
Subprocesses
These are detailed, involve multiple activities and can be layered on different levels.
• Order shipment, invoicing
Tasks
These are atomic and performed by human resources, IT systems or equipment
• E.g. Approve invoice
Process architecture: hierarchical view

Level 1
Process
Landscape

Process hierarchy
Level 2
Main
Processes
(e.g. BPMN)

Level 3+
Subprocesses, Tasks
(e.g. BPMN)
25

How many levels in the process architecture?

Example: hierarchical process architecture
Insurance
company
Strategic
Level Management

1 Corporate Market Investor

Development Development Relations

Management processes

Risk Assessment & Management

Marketing & Sales

Underwriting Policy Claims

Management Servicing Management

Payments Collection and Disbursement

Assets Management
Core processes

Finance/ Legal/
Reinsurance IT HR
Treasury Audit

Support processes
Example: hierarchical process architecture
Insurance
company
Level
2
Strategic Corporate Marketing Investor
Management development development relations
Process
group
Define
Define offering Plan
business concept Design & manage
and customer investor
& corporate policies
value proposition relations
long-term vision
Develop
Define pricing
Build Process
Manage
business investor subgroup
knowledge strategy
strategy relations

Manage Manage Define and Manage

strategic change & manage investor
initiatives improvement channel strategy relations

Manage Communicate
partners with stakeholders

Manage
investments &
divestments

Management processes
Example: Develop Define offering
process architecture business
strategy
and customer
value proposition
Process
subgroup
Insurance Develop overall
Define
offering and
company mission statement
positioning

Main
Evaluate strategic Develop value
options proposition process
Level
3 Select
long-term business
Validate value
proposition
strategy
Coordinate
functional and Develop
operational new branding
strategies
Align
functional and
operational
strategies
Create
organisational
design

Develop
organisational
goals

Formulate
business unit
strategies

Management processes
Example: hierarchical process architecture
Insurance
company
Level
4
Develop overall Main
mission statement process

Define
current business

Formulate Subprocess
mission

Communicate
mission

Management processes
Designation via reference models

A reference model is used as a template to design the process architecture

Examples:
• Information Technology Infrastructure Library (ITIL)
• Supply Chain Operations Reference Model (SCOR)
• Process Classification Framework (PCF)
• Control Objectives for Information Technology (COBIT)
• Value Reference Model (VRM)
• Voluntary Interindustry Commerce Solutions (VICS)
• eTOM Business Process Framework
Example: APQC Process Classification Framework (PCF)

• Industry-neutral enterprise model

• Open standard for benchmarking
• Four levels
• Categories
• Process group
• Process
• Activity
APQC PCF Overview

Category
APQC Classification Framework

Group

Activity

Process
Prioritization (aka Process Selection)

1. Importance
Which processes have greatest impact on the organization‘s strategic objectives?

2. Health (or Dysfunction)

Which processes are in deepest trouble?

3. Feasibility
Which processes are most susceptible to successful process management?

Prioritized process portfolio

Hammer, Champy (1993)

Example: prioritized process portfolio

Financial institution

Hig
Short-term action Feasibilit
h Ratin y
Loan Lo
controlling Contract g w
preparation Medium
Loan
decision Hig
Loan market
Importanc

h
evaluation
e

Handling
of Loan
payments planning
Loan
Lo application
w Healt
Poor Good
Possible h Strategic fit?
Prioritization

1. Importance
Which processes have greatest impact on the organization‘s strategic objectives?

2. Health (or Dysfunction)

Which processes are in deepest trouble?

3. Feasibility
Which processes are most susceptible to successful process management?

Prioritized process portfolio

Hammer, Champy (1993)

Example: prioritized process PICK chart

Financial institution

Hig
Short-term action Feasibilit
h Ratin y
Loan Lo
controlling Contract g w
preparation Medium
Loan
decision Hig
Loan market
Importanc

h
evaluation
e

Handling
of Loan
payments planning
Loan
Lo application
w Healt
Poor Good
Possible h Strategic fit?
38

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Process Modeling