CHAPTER 2: PROCESS

IDENTIFICATION
Process
identification

Process architecture

Conformance and Process As-is process

performance discovery model
insights

Process Process
monitoring analysis

Executable Insights on
process weaknesses and
model their impact

Process Process
implementation To-be process redesign
model
 OVERVIEW
 Process identification refers to systematically defining business processes of
organization and establishing criteria to select processes for improvement.
 Output is process architecture, which represents processes and interrelations.
 Process architecture serves as framework for defining priorities and scope of
projects.
 First, we discuss the context of process identification.
 We present a method based on process architecture definition and process
selection.
 Definition is concerned with listing initial set of processes and their
architecture.
 Selection considers criteria for defining priorities of processes using a portfolio.

SLIDE 2
 DEFINITION OF BUSINESS
STRATEGY

Business strategy is an organizational perspective

on setting and meeting business goals. (Mintzberg)

SLIDE 3
 BALANCED SCORECARD
(KAPLAN & NORTON)
Financial
Perspective
Customer
Perspective
Internal
Perspective
Learning and
Growth
Perspective
Product/Service Operations Management
Attributes Processes
Improve Cost
Culture
Structure Price Supply Distribution
Production Risk Mgmt.
Quality

Increase Asset Availability Customer Management

Utilization Processes
Selection Leadership
Selection Retention
Functionality Acquisition Growth
Long-Term
Shareholder
Value Innovation
Relationship Processes
Alignment
Service Opportunity Design
Expand Revenue Research Launch
Opportunities Partnership

Regulatory and Social

Processes
Enhance Image Teamwork
Customer Value Environment Employment
Brand Safety/Health Community

SLIDE 4
 ENTERPRISE ARCHITECTURE
ACCORDING TO TOGAF
 Organizational perspective:
actors, roles, and organizational structure.
 Product perspective:
products and services along with their relationships.
 Business process perspective:
process architecture.
 Data perspective:
informational entities and their relationships.
 Application perspective:
different pieces of software with their dependencies.
 Technical infrastructure:
computer hardware and communication networks.

SLIDE 5
 CHANGES OF STRATEGIC
RELEVANCE: MANNESMANN

19th century 20th century 1990

Sources: stahlseite.de, Copyright Uwe Niggemeier,
SLIDE 6
deutsches-telefon-museum.eu, ebay-kleinanzeigen.de,
wanne-eickel-historie.de
 THE PROCESS CHECKLIST
It may not be easy to decide on what to consider as a business process. A chunk of work
that is frequently repeated might not be a business process on its own. To prevent poor
scoping decisions, it is useful to consider the following process checklist:
 Is it a process at all?  Is the process important enough to
 It must be possible to identify main manage?
action, which is applied to a category of  There is customer who is willing to pay for
cases. outcomes,
 Name is of form verb + noun.  Organization that carries out the process
would be willing to pay another party for
 Can the process be controlled? taking over, or
 Repetitive series of events and activities  Legal, mandatory framework compels an
to execute individually observable cases. organization to execute it.
 Without a clear case notion, process
 Is the scope of the process not too big?
management is not feasible.
  1:1 relation between initial event and
Also, without any sense of repetition, a
group of business activities may better activities.
qualify as a project than as a business  Is the scope of the process not too small?
process.
 Rule of thumb: there should be at least
three different actors – excluding the
customer – involved.
 If there are no handoffs between multiple
actors or systems, there is little that can be
SLIDE 7 improved using BPM methods.
 PROCESS CATEGORIES
Management Processes

Define Vision Develop Strategy Implement Manage Risk

Strategy

Core Processes

Manage
Procure Procure Market Deliver
Customer
Materials Products Products Products
Service

Support Processes

Manage
Manage Personnel Information Manage Assets

SLIDE 8
 RELATIONSHIPS BETWEEN
PROCESSES
Sequence

Manage
Procure Procure Market Deliver
Customer
Materials Products Products Products
Service

Decomposition Specialization

Procure Handle Job

Products Application

Handle Job Handle Job

Process Assemble
Application Application
Parts Parts
(Austria) (Germany)

SLIDE 9
 PROCESS ARCHITECTURE
Generic Process Architecture British Telecom

Model structure, methodology and

Meta modelling standards
Level 1 Level
Defines business activities

Operations Levels Process Levels Business Levels

Level A Distinguishes operational customer
Process Business Activities
oriented processes from management
and strategic process

Landscape Shows groups of related business

Level B Logical
(incl. Value Chains)
functions and standard end-to-end
processes (e.g. Service Streams)
Process Groupings Levels
Level C Core processes that combine together to
Level 2 Core Processes
deliver Service Streams and other end-
to-end processes

Business Processes Level D Decomposition of core processes into

(e.g. BPMN)
detailed ‘success model’ business
Business Process Flows process flows

Detailed operational process flows

Level E Physical
Level 3+
with error conditions and product and
Operational Process Flows geographical variants (where
Levels required).

Sub-processes and Tasks Level F Further decomposition of detailed

(e.g. BPMN) Detailed Process Flows operational where required

© British Telecommunications (2005)

SLIDE 10
 PROCESS LANDSCAPE MODEL:
EXAMPLE OF WIENERLINIEN
(VIENNA PUBLIC TRANSPORT)
Management Processes

Manage Communicate Manage Manage Manage Risks and Manage

Enterprise in and out Processes Quality Opportunities Innovation

Core Processes
Manage
Contact Manage Foster
Customer
Customer Sales Relationship
Relationship

Operate Plan and Buy Maintain Check

Vehicles Vehicles Vehicles Vehicles

Transport Plan Customer Transport Evaluate

Customer Transport Customer Transport

Provide Plan Build Maintain Evaluate

Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure

Support Processes

Manage Manage Manage Manage Manage Provide Winter

Personnel Financials Information Materials Disruptions Service

SLIDE 11
 HOW TO DEFINE PROCESS
1.
 LANDSCAPE MODEL
Clarify terminology:
Define key terms.
 Use organizational glossary.
 Use reference models.
 Ensure that stakeholders have a consistent understanding of process landscape model.
2. Identify end-to-end processes:
 Those processes interface with customers and suppliers.
 Goods and services that organization provides are good starting point.
 Properties help to distinguish processes, including: Product type, Service type, Channel,
Customer type.
3. For each end-to-end process, identify its sequential processes:
 Identify the internal, intermediate outcomes of end-to-end process.
 Perspectives help set boundaries: Product lifecycle, Customer relationship, Supply chain,
Transaction stages, Change of business objects, Separation.
4. For each business process, identify its major management and support processes:
 What is required to execute the previously identified processes.
 Typical support processes are management of personnel, financials, information, and
materials.
 However, these can be core processes if they are integral part of business model.
SLIDE12 Management processes are usually generic.
 HOW TO DEFINE PROCESS
5.

LANDSCAPE MODEL
Decompose and specialize business processes:
Processes of process landscape should be further subdivided into abstract process on Level
2.
 Further subdivision until processes can be managed autonomously by single process owner.
 Considerations when this subdivision should stop: Manageability and Impact.
6. Compile process profile:
 Each of the identified processes should be described using process profile.
 Process profile supports definition of boundaries, vision performance indicators, resources,
etc.
7. Check completeness and consistency:
 Reference models can be used to check whether all major processes are included.
 Reference models can help to check consistency of terminology.
 Check whether all processes can be associated with functional units of organization chart
and vice versa.

SLIDE 13
 PROCESS
PROFILE OF Name of Process: Procure-to-Pay
Vision: The objective of the procurement process is to secure that the

PROCURE- entire range of external products and services becomes available on time
and is at the required level of quality.
Process Owner: Chief Financial Officer (CFO)

TO-PAY Customer of process:

 Requesting unit
Expectation of customer:
 Timely, economic and complete
provision

PROCESS Outcome: Delivered products or provided services for the requested unit

Trigger: Need is identified

First activity: Submit Request
͙..
Last activity: Create Purchase Order
Interfaces inbound: Plan-to-Procure
Interfaces outbound: Construct-to-Complete

Required resources:
 Human resources:
Site Engineer, Clerk, Works Engineer
 Information, documents, know-how:
procurement guidelines, supplier rating, framework contract
 Work environment, materials, infrastructure:
Procurement information system

Process Performance Measures:

 Cycle Time
 Operational Costs
 Error Rate
SLIDE 14
 PROCESS SELECTION

SEITE 15
 SELECTION CRITERIA
 Strategic Importance:
 Find out which processes have the greatest impact on the strategic goals.
 Consider profitability, uniqueness, or contribution to competitive
advantages.
 Select those processes for process management that relate to strategy.

 Health:
 Determine which processes are in deepest trouble.
 These processes may profit the most from BPM initiatives.

 Feasibility:
 Determine how susceptible process is to BPM initiatives, incidentally or
continuously.
 Culture and politics may be obstacles.
 BPM should focus on those processes where it is reasonable to achieve
benefits.

SLIDE 16
 PROCESS PERFORMANCE
MEASURES
Performance Measures Performance Objectives
 Time  Formulate performance objectives of the
process at a high level, in the form of a
 Cost desirable state that the process should
ideally reach, e.g., customers should be
 Quality served in less than 30 minutes.
 Flexibility  For each performance objective, identify
the relevant performance dimension(s)
and aggregation function(s), and from
there, define one or more performance
measures for the objective in question,
e.g., the percentage of customers
served in less than 30 minutes. Let us
call this measure ST(30).
 Define a more refined objective based
on this performance measure, such as
ST(30) >99%.

SLIDE 17
 IMPORTANCE / HEALTH
DIAGRAM
High Selection Focus Feasibility
Rating
Loan Contract
Controlling Prepatation Low
Loan
Decision
Loan Market
Medium
Evaluation
Importance

Handling
High
Payments

Loan
Loan Planning
Application
Low

Poor Health Good

SLIDE 18