L1 – Chapter 1&2; Business Process Management Introduction &
identification
• Processes flow through organisations. Processes are steps from initiation to completion
• BPM goal: identify processes that are worthwhile and feasible to manage (=identification)
o Key activities
▪ Assess importance of each process: go through list of processes and identify which are
the most important
▪ Determine feasibility of process initiative (importance, performance)
• Process identification checklist, business process passes all criteria
o 1) Is it a process at all?
▪ Distinction between processes and functions, e.g. Marketing or sales are functions
▪ Must be possible to identify the main action, which is applied to a category of cases.
▫ Form verb + noun, e.g. approve-leave requests
▫ Test appropriateness of cases: is output in the form noun + past participle? E.g.
completed cases are leave requests that have been approved
o 2) Can the process be controlled?
▪ Individual process instances can be identified
▪ Instances need to occur on a regular basis
▫ Without repetition, a group of business activities may better qualify as a project.
When a project happens frequently, it can turn into a process
▫ Processes can evolve over time
▪ HRM is not a process: not possible to identify a single instance of a managed human
resource
o 3) Is the process important enough to manage? Must meet one or more criteria:
▪ Customers are willing to pay for the process result (loan application process, customer is
willing to pay the bank for the outcomes of the process)
▪ If the process would be outsourced, the organization would be willing to pay for the
process result (Spar at uni instead of doing it themselves)
▪ The organization is (legally) obliged to perform the process (banks performing checks
for money laundering)
o 4) Is the scope of the process not too big?
▪ Too big if its trigger, steps, and result are not in a one-to-one relation with each other
▪ E.g. for a car manufacturer there is no one-to-one relation between the design of a new
model and the sale of an individual car of this model, so they should not be part of the
same process
o 5) Is the scope of the process not too small?
▪ A business process crosses organizational boundaries, this occurs between
organisational sub-units
▪ Rule of thumb: at least three different actors excluding the customer involved
▪ E.g. just one mechanic performing the repair of a bicycle is too small
Book Chapter 1 Introduction to BPM
• BPMN is about managing entire chains of events, activities and decisions that add value to the organisation
• BPM: body of principles, methods, and tools to discover, analyse, redesign, implement, and monitor business
processes.
• Processes: chains of events, activities and decisions
o Typical examples of processes: Order-to-cash, Quote-to-order, Procure-to-pay, Issue-to-resolution,
Application-to-approval
• The way processes are designed and performed affects the quality of service of customers & efficiency with
which services are delivered → can outperform other organization if similar kinds of services have better
processes
1
,• Business process exists of
o Events: things that happen automatically and have no duration. It may trigger the execution of a
series of activities. E.g. arrival of a piece of equipment at a construction site. (activity could be an
inspection by engineer)
o Task: an activity that is simple and can be seen as one single unit of work, fine grained unit of work
o Activity: fine grained or coarse-grained units of work
o Decision points: points in time when a decision is made that affects the way the process is
executed.
o A process also involves actors, physical objects and informational objects
o The execution of a process leads to one or several outcomes
• BPM lifecycle
o First question on a BPM initiative: which processes do we aim to improve? The process has to be
delimited in more precise terms by asking questions like when does the process start/end, when
does it continue? → delimit scope + identifying relations between processes. May be easy or hard
to answer depending on how much process thinking has taken place in the organisation
beforehand
o Process identification: initial phase of BPM, a business problem is posed. Processes relevant to the
problem being addressed are identified, delimited, and interrelated. Outcome: new or updated
process architecture which provides an overall picture of the processes in an organisation and
their relationships. This serves as a framework for defining the priorities and the scope of process
modelling and redesign projects.
▪ Typically, process identification is done in parallel with performance measure
identification
o Purpose of BPM: ensure business processes covered by the BPM initiative lead to consistently
positive outcomes and deliver maximum value to the organization in servicing its clients
o Before starting to analyse a process in detail, define process performance measures/metrics to
determine whether a process is in good or bad shape.
o Process discovery: understand the business process in detail. Typically, outcome of this phase is
one or several as-is process models: they reflect the understanding that people in the organisation
have about how work is done.
o Process analysis: identification and assessment of issues with the as-is processes and
opportunities for process improvement. Output: structured collection of issues which are
prioritized based on their potential impact and the estimated effort required to resolve them. E.g.
find out how often negative outcomes occur and why they are happening
▪ Assessing issues of a process often goes hand in hand with measuring the current state of
the process with respect to certain performance measures
▪ Next phase: identify and analyse potential remedies for these issues
o Process redesign/process improvement: propose redesigned version of the process, to-be process,
based on the issues and a set of potential remedies. Analysis and redesign go hand-in-hand, each of
the options needs to be analysed in order to make an informed decision. As new change options
are proposed, they are analysed using process analysis techniques. The change options are
analysed and compared in terms of the chosen performance measures.
o Process implementation: after redesign, changes in the way of working and IT systems of the
organisation should be implemented so that the to-be process can be executed. Involves two
complementary facets:
▪ Organizational change management: set of activities required to change the way of
working of all participants involved in the process. This includes
▫ Explaining the changes to the process participants: what changes are
introduced and why they are beneficial
▫ Management plan for stakeholders: when changes come into effect
▫ Training users to the new way of working
▪ Process automation: configuration or implementation of an IT system to support the to-
be process.
2
, o Process monitoring: monitoring the process in order to identify needed adjustments. Lack of
continuous monitoring leads to degradation.
o BPM lifecycle should be seen as circular: output of the monitoring phase feeds back into the
discovery, analysis and redesign phases.
o Helps understand the role of technology in BPM
o BPM activities
o The success of BPM in an organization depends on many other factors beyond their scope
▪ BPM initiatives should be aligned with the strategic goals of the organization (strategic
alignment)
▪ Clearly defined roles and responsibilities in BPM initiatives and the associated decision-
making processes
▪ Measurement systems, guidelines, and conventions are in place to ensure that BPM
initiatives are conducted in a consistent manner (governance)
▪ Process participants are engaged in in the initiatives and managers and analysts have the
necessary skills
▪ Organizational culture that is responsive to process change and embraces process
thinking. People and cultures role should not be underestimated.
Book Chapter 2 Process Identification
• Balanced scorecard emphasizes the causal relationship between different goals of an organisation.
• EA describes the structural dependencies between different perspectives of the organisation.
• Why conduct process identification?
o Organization should focus either on processes that create value of strategic relevance or that have
substantial problems (or both) → keeps it an ongoing task because processes inside an
organisation are subject to the dynamics of time and change (shift focus on other processes).
o Dynamics outside in the environment of organisations: market demands, regulations or new
products
o → organisation in BPM initiative needs to maintain a map of its processes + clear criteria for
determining which processes have the highest priority: Process Checklist
• Process identification concerned with two steps
o Definition of the process architecture, with goal to gain understanding of the processes an
organisation and their interrelationships
o Selection of processes aims to develop prioritization of processes for the BPM activities
o Neither steps are concerned with the development of process models. It always takes into account
the overall set of processes, it is also called multi-process management.
• Process selection
o Aim: to define criteria for assessing the performance of the identified business processes:
▪ Strategic importance: which have the greatest impact on the strategic goals?
▪ Health: which processes are in deepest trouble? (so most profit from BPM)
▪ Feasibility: focus on processes where it is reasonable to achieve benefits
o These criteria do not always point to the same processes
o Most of the times, it’s not doable to subject all processes that are unhealthy, of strategic
importance and feasible to manage to BPM because of resources
• Process performance dimensions: time, cost, quality and flexibility
o Flexibility is the performance of a process in other (more important in comparison to normal)
circumstances.
▪ Within different settings, with changing workloads etc
3
, ▪ Runtime flexibility: the opportunities to handle changes and variations while executing a
specific business process.
▪ Build-time flexibility: the possibility to change the business process structure.
o Can be refined into Process Performance Measures/KPIs: quantity that can be unambiguously
determined for a given business process. E.g. several types of cost like production, cost of delivery
or cost of human resources
o Time
▪ Cycle time/throughput time: time it takes to handle one case from start to end.
• Processing time/service time: the time that resources, such as process
participants or software applications invoked by the process, spend on actually
handling the case.
• Waiting time: the time that a case spends in idle mode. Waiting time includes
queueing time
o Cost
▪ Fixed and variable costs
▪ Operational cost: costs directly related to the outputs of a business process. Large part is
labour cost.
o Quality
▪ External quality: the client’s satisfaction with either the product or the process. Service
level agreements (SLAs) specify what is expected. Specific measures to capture this:
• Churn rate: how many interactions are not completed / all interactions
• Net promotor score: how far customers would be willing to recommend a
product or service
▪ Internal quality: relate to process participants’ viewpoint
• Level of control in the work performed, level of variation experienced, how
challenging working with the business process is.
o Based on KPIS, define performance objectives: e.g. percentage of customers served in less than 30
min ≥ 99%.
o Performance target: performance objective with a timeframe associated to it. E.g. in 12 months
o All performance measures can be aggregated to obtain single measure of process health: to what
extent these objectives have been achieved. For example in a balanced scoreboard:
▪ Provides a hierarchy of process performance measures over four layers of granularity:
from detailed process performance measures (Layers 3 and 4) up to key process
performance areas (Layer 1).
▪ By populating the measures at the lowest level with concrete measurements and
aggregating the results, one can obtain a single health measure for each business process
• Process portfolio: the set of all processes in general, and more specifically to their visualization by the help
of different criteria
o Builds on: importance, health, and feasibility
o Should prioritise prioritize processes in the left upper quadrant, but also take feasibility into
account.
▪ Don’t select too many processes! Limited temporal and financial resources & more
projects leads to complexity of coordination (due to interrelation of processes)
▪ Don’t tackle first the process that is the most strategically important and the least healthy
→ high changes of failure
▪ Do: start with a small number of projects and learn from these.
4
identification
• Processes flow through organisations. Processes are steps from initiation to completion
• BPM goal: identify processes that are worthwhile and feasible to manage (=identification)
o Key activities
▪ Assess importance of each process: go through list of processes and identify which are
the most important
▪ Determine feasibility of process initiative (importance, performance)
• Process identification checklist, business process passes all criteria
o 1) Is it a process at all?
▪ Distinction between processes and functions, e.g. Marketing or sales are functions
▪ Must be possible to identify the main action, which is applied to a category of cases.
▫ Form verb + noun, e.g. approve-leave requests
▫ Test appropriateness of cases: is output in the form noun + past participle? E.g.
completed cases are leave requests that have been approved
o 2) Can the process be controlled?
▪ Individual process instances can be identified
▪ Instances need to occur on a regular basis
▫ Without repetition, a group of business activities may better qualify as a project.
When a project happens frequently, it can turn into a process
▫ Processes can evolve over time
▪ HRM is not a process: not possible to identify a single instance of a managed human
resource
o 3) Is the process important enough to manage? Must meet one or more criteria:
▪ Customers are willing to pay for the process result (loan application process, customer is
willing to pay the bank for the outcomes of the process)
▪ If the process would be outsourced, the organization would be willing to pay for the
process result (Spar at uni instead of doing it themselves)
▪ The organization is (legally) obliged to perform the process (banks performing checks
for money laundering)
o 4) Is the scope of the process not too big?
▪ Too big if its trigger, steps, and result are not in a one-to-one relation with each other
▪ E.g. for a car manufacturer there is no one-to-one relation between the design of a new
model and the sale of an individual car of this model, so they should not be part of the
same process
o 5) Is the scope of the process not too small?
▪ A business process crosses organizational boundaries, this occurs between
organisational sub-units
▪ Rule of thumb: at least three different actors excluding the customer involved
▪ E.g. just one mechanic performing the repair of a bicycle is too small
Book Chapter 1 Introduction to BPM
• BPMN is about managing entire chains of events, activities and decisions that add value to the organisation
• BPM: body of principles, methods, and tools to discover, analyse, redesign, implement, and monitor business
processes.
• Processes: chains of events, activities and decisions
o Typical examples of processes: Order-to-cash, Quote-to-order, Procure-to-pay, Issue-to-resolution,
Application-to-approval
• The way processes are designed and performed affects the quality of service of customers & efficiency with
which services are delivered → can outperform other organization if similar kinds of services have better
processes
1
,• Business process exists of
o Events: things that happen automatically and have no duration. It may trigger the execution of a
series of activities. E.g. arrival of a piece of equipment at a construction site. (activity could be an
inspection by engineer)
o Task: an activity that is simple and can be seen as one single unit of work, fine grained unit of work
o Activity: fine grained or coarse-grained units of work
o Decision points: points in time when a decision is made that affects the way the process is
executed.
o A process also involves actors, physical objects and informational objects
o The execution of a process leads to one or several outcomes
• BPM lifecycle
o First question on a BPM initiative: which processes do we aim to improve? The process has to be
delimited in more precise terms by asking questions like when does the process start/end, when
does it continue? → delimit scope + identifying relations between processes. May be easy or hard
to answer depending on how much process thinking has taken place in the organisation
beforehand
o Process identification: initial phase of BPM, a business problem is posed. Processes relevant to the
problem being addressed are identified, delimited, and interrelated. Outcome: new or updated
process architecture which provides an overall picture of the processes in an organisation and
their relationships. This serves as a framework for defining the priorities and the scope of process
modelling and redesign projects.
▪ Typically, process identification is done in parallel with performance measure
identification
o Purpose of BPM: ensure business processes covered by the BPM initiative lead to consistently
positive outcomes and deliver maximum value to the organization in servicing its clients
o Before starting to analyse a process in detail, define process performance measures/metrics to
determine whether a process is in good or bad shape.
o Process discovery: understand the business process in detail. Typically, outcome of this phase is
one or several as-is process models: they reflect the understanding that people in the organisation
have about how work is done.
o Process analysis: identification and assessment of issues with the as-is processes and
opportunities for process improvement. Output: structured collection of issues which are
prioritized based on their potential impact and the estimated effort required to resolve them. E.g.
find out how often negative outcomes occur and why they are happening
▪ Assessing issues of a process often goes hand in hand with measuring the current state of
the process with respect to certain performance measures
▪ Next phase: identify and analyse potential remedies for these issues
o Process redesign/process improvement: propose redesigned version of the process, to-be process,
based on the issues and a set of potential remedies. Analysis and redesign go hand-in-hand, each of
the options needs to be analysed in order to make an informed decision. As new change options
are proposed, they are analysed using process analysis techniques. The change options are
analysed and compared in terms of the chosen performance measures.
o Process implementation: after redesign, changes in the way of working and IT systems of the
organisation should be implemented so that the to-be process can be executed. Involves two
complementary facets:
▪ Organizational change management: set of activities required to change the way of
working of all participants involved in the process. This includes
▫ Explaining the changes to the process participants: what changes are
introduced and why they are beneficial
▫ Management plan for stakeholders: when changes come into effect
▫ Training users to the new way of working
▪ Process automation: configuration or implementation of an IT system to support the to-
be process.
2
, o Process monitoring: monitoring the process in order to identify needed adjustments. Lack of
continuous monitoring leads to degradation.
o BPM lifecycle should be seen as circular: output of the monitoring phase feeds back into the
discovery, analysis and redesign phases.
o Helps understand the role of technology in BPM
o BPM activities
o The success of BPM in an organization depends on many other factors beyond their scope
▪ BPM initiatives should be aligned with the strategic goals of the organization (strategic
alignment)
▪ Clearly defined roles and responsibilities in BPM initiatives and the associated decision-
making processes
▪ Measurement systems, guidelines, and conventions are in place to ensure that BPM
initiatives are conducted in a consistent manner (governance)
▪ Process participants are engaged in in the initiatives and managers and analysts have the
necessary skills
▪ Organizational culture that is responsive to process change and embraces process
thinking. People and cultures role should not be underestimated.
Book Chapter 2 Process Identification
• Balanced scorecard emphasizes the causal relationship between different goals of an organisation.
• EA describes the structural dependencies between different perspectives of the organisation.
• Why conduct process identification?
o Organization should focus either on processes that create value of strategic relevance or that have
substantial problems (or both) → keeps it an ongoing task because processes inside an
organisation are subject to the dynamics of time and change (shift focus on other processes).
o Dynamics outside in the environment of organisations: market demands, regulations or new
products
o → organisation in BPM initiative needs to maintain a map of its processes + clear criteria for
determining which processes have the highest priority: Process Checklist
• Process identification concerned with two steps
o Definition of the process architecture, with goal to gain understanding of the processes an
organisation and their interrelationships
o Selection of processes aims to develop prioritization of processes for the BPM activities
o Neither steps are concerned with the development of process models. It always takes into account
the overall set of processes, it is also called multi-process management.
• Process selection
o Aim: to define criteria for assessing the performance of the identified business processes:
▪ Strategic importance: which have the greatest impact on the strategic goals?
▪ Health: which processes are in deepest trouble? (so most profit from BPM)
▪ Feasibility: focus on processes where it is reasonable to achieve benefits
o These criteria do not always point to the same processes
o Most of the times, it’s not doable to subject all processes that are unhealthy, of strategic
importance and feasible to manage to BPM because of resources
• Process performance dimensions: time, cost, quality and flexibility
o Flexibility is the performance of a process in other (more important in comparison to normal)
circumstances.
▪ Within different settings, with changing workloads etc
3
, ▪ Runtime flexibility: the opportunities to handle changes and variations while executing a
specific business process.
▪ Build-time flexibility: the possibility to change the business process structure.
o Can be refined into Process Performance Measures/KPIs: quantity that can be unambiguously
determined for a given business process. E.g. several types of cost like production, cost of delivery
or cost of human resources
o Time
▪ Cycle time/throughput time: time it takes to handle one case from start to end.
• Processing time/service time: the time that resources, such as process
participants or software applications invoked by the process, spend on actually
handling the case.
• Waiting time: the time that a case spends in idle mode. Waiting time includes
queueing time
o Cost
▪ Fixed and variable costs
▪ Operational cost: costs directly related to the outputs of a business process. Large part is
labour cost.
o Quality
▪ External quality: the client’s satisfaction with either the product or the process. Service
level agreements (SLAs) specify what is expected. Specific measures to capture this:
• Churn rate: how many interactions are not completed / all interactions
• Net promotor score: how far customers would be willing to recommend a
product or service
▪ Internal quality: relate to process participants’ viewpoint
• Level of control in the work performed, level of variation experienced, how
challenging working with the business process is.
o Based on KPIS, define performance objectives: e.g. percentage of customers served in less than 30
min ≥ 99%.
o Performance target: performance objective with a timeframe associated to it. E.g. in 12 months
o All performance measures can be aggregated to obtain single measure of process health: to what
extent these objectives have been achieved. For example in a balanced scoreboard:
▪ Provides a hierarchy of process performance measures over four layers of granularity:
from detailed process performance measures (Layers 3 and 4) up to key process
performance areas (Layer 1).
▪ By populating the measures at the lowest level with concrete measurements and
aggregating the results, one can obtain a single health measure for each business process
• Process portfolio: the set of all processes in general, and more specifically to their visualization by the help
of different criteria
o Builds on: importance, health, and feasibility
o Should prioritise prioritize processes in the left upper quadrant, but also take feasibility into
account.
▪ Don’t select too many processes! Limited temporal and financial resources & more
projects leads to complexity of coordination (due to interrelation of processes)
▪ Don’t tackle first the process that is the most strategically important and the least healthy
→ high changes of failure
▪ Do: start with a small number of projects and learn from these.
4
