Process architecture - Part II
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This document discusses process architecture and how to identify and scope processes. It defines different levels in a process hierarchy from high-level value chains to detailed tasks. Guidelines are provided for vertical decomposition based on business objects, resources, or modeling readability. Reference models can be used as templates to design process architectures. Processes should be prioritized based on importance, health, and feasibility for improvement. Pitfalls of identification include unclear purpose, too narrow or broad scope, and poor stakeholder involvement.
Process architecture - Part II
- 1. CRICOS No. 00213J a university for the worldreal R 1 A/Prof. Marcello La Rosa BPM Discipline Queensland University ofTechnology IAB203 – Business Process Modelling Week 10, 5 May 2015
- 2. 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 Build up processes. They are detailed, involve multiple activities and can be layered on different levels of abstraction (i.e. sub-subprocesses) • Order shipment, invoicing Process tasks Build up processes and sub-processes. They are atomic and performed by human beings, IT systems or equipment • Approve invoice Typical artifacts for vertical scoping Typical focus of Process enumeration
- 3. Process architecture: hierarchical view Processhierarchy Level 1 Process Landscape Level 2 Main Processes (e.g. BPMN) Level 3+ Subprocesses, Tasks (e.g. BPMN)
- 4. 4. Decomposition based on logical constraints, e.g. • Predominant business object (e.g. order vs invoice) • Predominant resource class (e.g. sales vs financial department) 5. Consider process modeling guidelines for readability purposes (e.g. no more than 30 flow objects) Guidelines to identify vertical boundaries
- 5. How many levels in the process architecture? 6
- 6. Level 1 Example: process hierarchy Government Agency
- 7. Level 2 Level 3 Example: process hierarchy Government Agency
- 8. Level 4 Example: process hierarchy Government Agency
- 9. Logical Levels Physical Levels BusinessLevelsOperationsLevelsProcessLevels Model structure, methodology and modelling standards Shows groups of related business functions and standard end-to-end processes (e.g. Service Streams) Decomposition of core processes into detailed ‘success model’ business process flows Detailed operational process flows with error conditions and product and geographical variants (where required). Further decomposition of detailed operational where required Process Groupings Business Activities Core Processes Business Process Flows Detailed Process Flows Level A Level B Level C Level D Level E Level F Operational Process Flows Defines business activities Distinguishes operational customer oriented processes from management and strategic process Core processes that combine together to deliver Service Streams and other end- to-end processes Meta Level © British Telecommunications (2005) Example: process hierarchy British Telecom
- 10. Service Streams Process Service Lines Resources Detailed Resources Value Domains Business FunctionsProcess Groupings Business Activities Core Processes Business Process Flows Detailed Process Flows Level A Level B Level C Level D Level E Level F Operational Process Flows Business Activities Processes Sub-processes Detailed Processes Enabling Streams Tasks Steps Operations BusinessLayerProcessLayer End-to-End Processes Core processes Implementation Process View © British Telecommunications (2005)
- 11. BusinessLayerProcessLayer Business Value Streams Business Balanced Scorecard Business KPIs Business Unit Scorecard Unit KPIs Business Process Value Streams Business Objectives Business Unit Objectives Operational Unit Objectives Implementation Process Groupings Business Activities Core Processes Business Process Flows Detailed Process Flows Level A Level B Level C Level D Level E Level F Operational Process Flows Strategic View © British Telecommunications (2005)
- 12. BusinessLayerImplementationProcessLayer Operational Teams Business Operational Roles Operational Units Business UnitsProcess Groupings Business Activities Core Processes Business Process Flows Detailed Process Flows Level A Level B Level C Level D Level E Level F Operational Process Flows Organization View © British Telecommunications (2005)
- 13. BusinessLayerProcessLayer Business Information Cust contact Customer Inquiry Customer credit limit Customer Account Customer budget Cust 1 cn 1 n 1 n 1 1 1 11 1 1 1 1 1 1 n Customer Offer Corporate Data Model Process Information Function Data Function Entities department Title Phone # Function Attributes System Entities department Title Phone # System Attributes Implementation Process Groupings Business Activities Core Processes Business Process Flows Detailed Process Flows Level A Level B Level C Level D Level E Level F Operational Process Flows Procedural Information Data View © British Telecommunications (2005)
- 14. System Types System IT Functions Screens (System Specific) Systems and Modules System Types and Modules Types System DomainsProcess Groupings Business Activities Core Processes Business Process Flows Detailed Process Flows Level A Level B Level C Level D Level E Level F Operational Process Flows BusinessLayerProcessLayerImplementation Systems View © British Telecommunications (2005)
- 15. Process architecture vs Enterprise architecture Process architecture is a slice of an overarching enterprise architecture (e.g. TOGAF)
- 16. • If Process Architecture already in place: where does the process fit into the Process Architecture? • On what level is the unit of analysis, i.e. end-to-end process, procedure or operation? • What are the previous/subsequent processes and what are the interfaces to them? • What variants does this process have? • What underlying processes describe elements of this process in more detail? Locating a process in an existing architecture
- 17. 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) • Value Reference Model (VRM) • Voluntary Interindustry Commerce Solutions (VICS) • eTOM Business Process Framework • Performance Framework Designation via reference models
- 18. • Industry-neutral enterprise model • Open standard for benchmarking • Four levels • Categories • Process group • Process • Activity Example: APQC Process Classification Framework (PCF)
- 21. APQC Classification Framework Available industry sectors: • Aerospace & Defense • Automotive • Banking • Broadcasting • Consumer Electronics Just released • Consumer Products • Education • Electric Utilities • Petroleum Downstream • Petroleum Upstream • Pharmaceutical • Retail • Telecommunications
- 22. 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)
- 23. Financial institution Example: prioritized process portfolio Health High Low GoodPoor Short-term action Rating Contract preparation Loan market evaluation Handling of payments Loan application Loan planning Loan controlling Loan decision Feasibility Low High Medium Possible Strategic fit?
- 24. Cost per execution Resource utilization Waste Cost Cycle time Waiting time Non-value- adding time Time Error rates SLA violations Customer feedback Quality Back up health judgments with performance measures
- 25. Does an assessment of the importance, health and feasibility always point to the same processes to manage?
- 26. Should all processes that are important, healthy and feasible to manage be subjected to BPM?
- 27. • Processes are identified with every request from a line of business • Ensures high relevance for involved business unit • Reactive approach (-) • Often restricted to discrete improvement (-) • No conscious process selection approach (-) Alternative: project-by-project identification
- 28. Pitfalls of Process Identification (1/2) • The purpose of the project is not clear enough leading to inappropriate scoping of the process. • The scope of the process is too narrow leading to the fact that later the identified root-causes are located outside the boundaries of the process under analysis • The scope of the process is too wide leading to a process improvement project that has to be compromised in its lack of detail
- 29. Pitfalls of Process Identification (2/2) • The process is identified in isolation to other projects due to poor portfolio management leading to redundancies and inconsistencies between these projects • Involved project members and stakeholders have not been sufficiently informed about the benefits of the project leading to limited participation • The involved project members and stakeholders have not been carefully selected leading to a very limited source of knowledge • The business process architect has poor facilitation skills and cannot resolve emerging conflicts between the project members and stakeholders.
- 30. References Required • M. Dumas, M. La Rosa, J. Mendling, H.A. Reijers, “Fundamentals of Business Process Management”, Springer, 2013, Chapter 2 Recommended • T.H. Davenport, “Process Innovation: Reengineering Work Through Information Technology”, Harvard Business School Press, 1993 • M. Hammer, J. Champy, “Reengineering the Corporation: A Manifesto for Business Revolution”, HarperCollins, 1993 • M.E. Porter, “Competitive Advantage: Creating and Sustaining Superior Performance”, Free Press, 1985 • P. Harmon, Business Process Change, Morgan Kaufmann, 2014 (3rd edition) • M. Rosemann, “Process Portfolio Management”, BPTrends, April 2006 • R. Dijkman, I. Vanderfeesten, H.A. Reijers, “The road to a business process architecture: an overview of approaches and their use”. BETA Working Paper Series, WP 350. Eindhoven University of Technology, Eindhoven (2011) Web-sites • http://www.value-chain.org (Value Reference Model) • http://www.mindtools.com/pages/article/newSTR_66.htm (more on value chains) • http://www.apqc.org/process-classification-framework (APQC PCF website)