Business Process Management

IS205

Dr. Amjad Rehman

 The book and other material
• Jeston and Neils, (2008) Business Process Management, 2nd Edition:
Practical Guidelines to Successful Implementations.
– Shelly and Rosenblatt (2011) Systems Analysis and Design, 9th Edition.
• Other shared material
 CLO of IS 205 BPM
• CLO 1: Describe the concept of BPM through its lifecycle, maturity, and
issues in its implementation, and its effective implementation in organizations

• CLO 2: Recognize the importance of BPM, key success factors, drivers and triggers

• CLO 3: Design workflow and the role of business processes within

numerous applications in an organization

• CLO 4: Analyze business processes activities through modelling, architecture and

automation

• CLO 5: Examine best practices for modelling the business processes through case
studies

• CLO 6: Classify business process through teamwork and field research in

real organization and suggest ways for improvement
 Technology and change
• The first rule of any technology is that
automation applied to an efficient operation
will magnify the efficiency.
• The second is that automation applied to an
inefficient operation will magnify the
inefficiency.
Bill gates
 Business Process Management
The achievement of an organization’s objectives through
the improvement, management and control of essential
business processes.

• BPM is:
– More than just a software.
– More than just improving or reengineering your processes.
It deals with managerial issues.
– It is an integral part of management.
– More than just modelling – it is also about the
implementation and execution of these processes, which
requires analysis & creativity.
 Business Process
• A business process is a series of structured
activities or tasks performed in a sequence to
achieve a specific organizational goal. These
processes define how resources, such as people,
information, and materials, are used to produce a
desired outcome or deliver a product or service.
• In short, a sequence of logically related tasks
performed to achieve a defined business
outcome is known as BP.
 For Example
• Order Fulfilment Process
1. Receive customer order (input).
2. Check inventory for product availability.
3. Pack and ship the product.
4. Deliver the product to the customer (output).
5. Update inventory records and process payment.

• Can you indicate more examples of Business

Processes in daily life ??
 Key Characteristics of a Business
Process
• Purpose-Driven: Each process has a clear objective,
such as improving customer satisfaction, increasing
efficiency, or delivering a product or service.
• Defined Inputs and Outputs: Processes start with
inputs (e.g., raw materials, information) and transform
them into outputs (e.g., finished goods, reports).
• Structured Activities: A business process involves a
series of steps or activities that follow a logical order.
• Participants and Roles: It involves people, teams, or
automated systems with specific roles and
responsibilities.
• Repeatability: Business processes are typically
repeatable and can be performed consistently.
 Types of Business Processes:

[Link] Processes: Directly deliver value to

customers (e.g., product development, sales,
customer service).
[Link] Processes: Enable core processes to
function effectively (e.g., HR, IT, maintenance).
[Link] Processes: Oversee and control
core and support processes (e.g., strategic
planning, performance monitoring).
Components of a process architecture

Management
Processes

Customers / Stakeholders
Suppliers / Partners

Core Processes

Support Processes

After Michael Porter (1985)

Example: Process architecture for Wholesaler

Strategic
Management

Logistics Suppliers
Management Management
Warehouse Demand
Management Management
Management processes

Direct
Sales Distribution
procurement

Marketing Service
Core processes
Indirect
Finance IT HR
procurement
Support processes
 What is Process & why they fail
• A business process is a collection of linked tasks that find their
end in the delivery of a service or product to a client. A business
process has also been defined as a set of activities and tasks that,
once completed, will accomplish an organizational goal.

Causes of failure
• The need for provision of visibility of processes from an end-to-end perspective.
• Too many hand-offs or gaps in a process, or no clear process at all.
• Unclear roles and responsibilities from a process perspective.
• Quality is poor and the volume of rework is substantial.
• Processes change too often or not at all.
• Lack of process standardisation.
• Lack of clear process goals or objectives.
• Lack of communications and understanding of the end-to-end process by the
parties performing parts of the process.
 Business Process Management Life
Cycle
Body of principles, methods , tools to design,
analyze, execute and monitor business
processes, with the aim of improving their
performance.
IT systems
Customers Employees

Business
Processes
Data Trading
Partners

IT infrastructure Suppliers

13
 When BPM should be used?
• BPM automation should be used when:
– a high volume of similar and repetitive transactions exist.
– a clear flow of high-volume transactions that need to be
passed from one person to another, with each adding
some value along the way.
– a need for real-time monitoring of transactions (a need to
know a transaction status at all times)
– a critical issue with processing time – that is, time is of the
essence.
– a need to complete many calculations within the
transaction.
– transactions or ‘files’ need to be accessible by many
parties at the same time.
 Drivers and triggers of BPM usage
Drivers are long-term, strategic forces that influence the need for
change or improvement. These are often external or internal forces
that shape the organization's direction, goals, or priorities. Drivers
often operate over time and influence strategic decisions.
• Examples of Drivers:
1. Market Changes: Competitive pressures or shifts in consumer
preferences.
2. Technological Advancements: Innovations like Artificial Intelligence
(AI), Internet of Things (IoT), or automation.
3. Regulatory Requirements: New laws, standards, or compliance
obligations.
4. Economic Factors: Global economic conditions influencing costs
and profitability.
5. Customer Demands: Increased expectations for better service,
quality, or responsiveness.
Triggers
Triggers are specific events or immediate occurrences that
initiate a particular action, project, or change in the business
process. They are short-term catalysts for taking action.
Triggers are event-driven and require an immediate or urgent
response.
• Examples of Triggers:
1. Operational Failures: Sudden process breakdowns or
disruptions.
2. Regulatory Deadlines: Immediate compliance mandates
requiring quick action.
3. New Competitors: A competitor launches a superior
product or service.
4. Customer Complaints: Escalation of dissatisfaction or
declining service quality.
5. Performance Gaps: Measurable failures in achieving KPIs or
targets
Organisational Triggers and Drivers
• High growth – difficulty coping with high growth or proactively planning for high
growth
• Acquisitions – they cause the organization to ‘acquire’ additional complexity or
require rationalization of processes. The need to retire acquired legacy systems
could also contribute. BPM projects enable a process layer to be ‘placed’ across
these legacy systems, providing time to consider appropriate conversion strategies.
• Reorganisation – changing roles and responsibilities.
• Change in strategy – deciding to change direction to operational excellence,
product leadership or customer intimacy.
• Organization objectives or goals are not being met – introduction of process
management, linked to organizational strategy, performance measurement and
management of people.
• Compliance or regulation – for example, many organizations have initiated process
projects to meet the ISO requirements; this has then provided the platform to
launch process improvement or BPM projects.
• The need for business agility to enable the organization to respond to
opportunities as they arise.
• The need to provide the business with more control of its own destiny.
 Managerial Triggers and Drivers
• Lack of reliable or conflicting management
information – process management and performance
measurement and management will assist.
• The need to provide managers with more control over
their processes.
• The need for the introduction of a sustainable
performance environment.
• The need to create a culture of high performance.
• The need to gain the maximum return on investment
from the existing legacy systems.
• Budget cuts.
 Employee Triggers and Drivers
• High turnover of employees, perhaps due to the mundane
nature of the work or the degree of pressure and
expectations upon people without adequate support.
• Training issues with new employees.
• Low employee satisfaction.
• The expectation of a substantial increase in the number
• of employees.
• The wish to increase employee empowerment.
• Employees are having difficulty in keeping up with
continuous change and the growing complexity. (p.17 & 18)
 Consumer/Supplier/Partner Triggers
• Low satisfaction with service, which could be due to:
– high turnover rates of staff.
– staff unable to answer questions/queries adequately within the
required timeframes.
• An unexpected increase in the number of customers, suppliers or
partners.
• Long lead times to meet requests.
• An organizational desire to focus upon customer intimacy.
• Customer segmentation or segmented service requirements.
• The introduction and strict enforcement of service levels.
• Major customers, suppliers and/or partners requiring a unique
(different) process.
• The need for a true end-to-end perspective to provide visibility or
integration. (p.18)
 Product and Service Triggers
• An unacceptably long lead time to market (lack of
services business agility).
• Poor stakeholder service levels.
• Each product or service has its own processes,
with most of the processes being common or
similar.
• New products or services comprise existing
product/service elements.
• Products or services are complex.
 BPM & IT
• Introduction of a new IT architecture
• The introduction of new systems, for example CRM, ERP, billing
systems etc.
• The purchase of BPM automation tools (workflow, document
management, business intelligence), and the organization does not
know how to best utilize them in a synergistic (grouped) manner.
• Phasing out of old application systems.
• Existing application system overlaps and is not well understood.
• A view that IT is not delivering to business expectations is wrong
• A view that IT costs are out of control or too expensive is wrong.
• The introduction of web services/apps created new directions for
business & their management.
 Network Diagram
• It is a graphic representation of a project’s operations
and a composed of activities and events that must be
completed to reach the end objective of a project,
showing the planned sequence of time
accomplishment, their dependence and inter-
relationship. It has two basic components.
• Activity- An activity is a task, or item of work to be
done, that consume time, effort, money or other
resources. An activity is represented by an arrow with
its head indicating the sequence in which the events
are to occur.
• Event- An event is generally represented by a circle.
The activity can be further classified into the
following three categories
• Predecessor activity- An activity which must be
completed before one or more other acj’tivities
start is known as predecessor activity
• Successor activity- An activity which started
immediately after one or more of other activities
are completed is known as successor activity.
• Dummy activity- An activity which does not
consume either any resource or time is known as
dummy activity. A dummy activity is depicted by
dotted line in the network diagram.
Fulkerson’s rules for Network Diagram
Construction.
• (a) Every event is assigned a unique number.
• (b) Event numbering should be carried out on a
sequential basis from left to right
• (c) The initial event which has all outgoing arrows
with no incoming arrow is numbered 0 or 1
• (d) The head of an arrow should always bear a
number higher than the one assigned at the tail
of the arrow
• (e) Gaps should be left in the sequences of event
numbering to accommodate subsequent
inclusion of activities, if necessary.
 CPM
CPM is a network-based model designed to assist in the
planning, scheduling and control of projects .
 Gantt Chart
A Gantt chart is a type of bar chart that illustrates a project schedule, named after his
name Henry Gantt
 Time estimation
The project manager first makes three time
estimates for each task/overall project: an
optimistic, or best-case estimate (B), a probable-
case estimate (P), and a pessimistic, or worst-case
estimate (W). The manager then assigns a weight,
which is an importance value, to each estimate. The
weight can vary, but a common approach is to use a
ratio of B = 1, P = 4, and W = 1. The expected
task/project duration is calculated as follows:
(B+4P+W)/6

(Shelly and Rosenblatt, 2011, p. 107).

 Example of time estimation
For example, a project manager might estimate
that a file-conversion task could be completed in
as few as 20 days or could take as many as 34
days, but most likely will require 24 days. It is
calculated as follows:

(20+(4*24)+34)/ 6 = 25

(Shelly and Rosenblatt, 2011, p. 107).

• In PERT, we assume that activity times are deterministic, while in
CPM we assume that activity times are probabilistic.