Process architecture - Part II

CRICOS No. 00213J

a university for the worldrealR 1

A/Prof. Marcello La RosaBPM Discipline

Queensland University of Technology

IAB203 – Business Process ModellingWeek 10, 5 May 2015

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

Process architecture: hierarchical viewP

rocess h

ierarchy

Level 1

Process

Landscape

Level 2

MainProcesses

(e.g. BPMN)

Level 3+

Subprocesses, Tasks

(e.g. BPMN)

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

How many levels in the process architecture?

6

Level 1

Example: process hierarchyGovernment Agency

Level 2

Level 3


Level 4


Logical

Levels

Physical

Levels

Bu

sin

ess

Leve

lsO

pe

ratio

ns L

eve

lsP

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ss

Leve

ls

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 hierarchyBritish Telecom

Service Streams

Process Service Lines

Resources

Detailed Resources

Value Domains

Business FunctionsProcess Groupings

Business Activities

Core Processes



Level A

Level B

Level C

Level D

Level E

Level F


Business

Activities

Processes

Sub-processes

Detailed Processes

Enabling Streams

Tasks

Steps

Operations

Busin

ess L

aye

rP

roce

ss L

aye

r

End-to-End

Processes

Core

processes

Imp

lem

enta

tio

n

Process View


Busin

ess L

aye

rP

roce

ss L

aye

r

Business

Value Streams

Business

Balanced Scorecard

Business

KPIs

Business Unit

ScorecardUnit KPIs

Business Process

Value Streams

Business

Objectives

Business Unit

Objectives

Operational Unit

Objectives

Imp

lem

enta

tio

n

Process Groupings

Business Activities

Core Processes



Level A

Level B

Level C

Level D

Level E

Level F


Strategic View


Busin

ess L

aye

rIm

ple

me

nta

tion

Pro

ce

ss L

aye

r

Operational Teams

Business

Operational Roles

Operational Units

Business UnitsProcess Groupings

Business Activities

Core Processes



Level A

Level B

Level C

Level D

Level E

Level F


Organization View


Busin

ess L

aye

rP

roce

ss L

aye

r

Business

Information

Custcontact

CustomerInquiry

Customercreditlimit

CustomerAccount

Customerbudget Cust

1

cn

1

n

1

n

1

1

1

11

1

1

1

1 1 1 n

CustomerOffer

Corporate Data Model

Process

Information

Function

Data

Function

Entities

department

Title

Phone #

Function

Attributes

System

Entities

department

Title

Phone #

System

Attributes Imp

lem

en

tation

Process Groupings

Business Activities

Core Processes



Level A

Level B

Level C

Level D

Level E

Level F

Operational Process FlowsProcedural

Information

Data View


System

Types

System IT FunctionsScreens

(System Specific)

Systems and

Modules

System Types and

Modules Types

System

DomainsProcess Groupings

Business Activities

Core Processes



Level A

Level B

Level C

Level D

Level E

Level F


Busin

ess L

aye

rP

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ss L

aye

rIm

ple

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nta

tion

Systems View


Process architecture vs Enterprise architecture

Process architecture is a slice of an overarching enterprise architecture (e.g. TOGAF)

• 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

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

• Industry-neutral enterprise model

• Open standard for benchmarking

• Four levels• Categories

• Process group

• Process

• Activity

Example: APQC Process Classification Framework (PCF)

APQC PCF Overview

Category

APQC Classification Framework

Group

Process

Activity

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

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)

Financial institution

Example: prioritized process portfolio

Health

High

Low

GoodPoor

Short-term action

Rating

Contractpreparation

Loan marketevaluation

Handling ofpayments

Loanapplication

Loanplanning

Loancontrolling

Loandecision

Feasibility

Low

High

Medium

Possible Strategic fit?

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

Does an assessment of the importance, health and feasibility always point to the same processes to manage?

Should all processes that are important, healthy and feasible to manage be subjected to BPM?

• Processes are identified with every request froma 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

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

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.

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)