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Process Intelligence for Dummies:

Chapter 1&2

2/11/2011 Process Intelligence For Dummies 1

Submitted by

Anshul PachouriSachin Arora

Ankur Saxana

Priyanka Pandey

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Process

Intelligence

Process Intelligence (PI) is the ability to

understand business processes and knowinghow to use them effectively.

Process Intelligence helps to adjust andapply your processes to compelling business

advantage.


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With Process Intelligence, you can

Discover opportunities for savings by seeing precisely

where waste and loss is occurring in your business

Know immediately when a business process, activity, or

transaction encounters a delay or commits an error

Uncover weaknesses and areas of exposure in any part of

a process or activity Understand the connections between high-level strategy

and operational activities

See the how value streams between you, your customers,

and your suppliers are working


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Process Intelligence:

Revenue

Profit TurnoverProductivity

Error Rates Cycle Times

Customer Satisfaction

Capabilities Process CostsReliability Levels


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Process-Driven

Organization a Reality

Successful process-driven organizations share

a sense of purpose and priority.

Successful enterprises can synchronize theirlong-term strategic goals with the everyday

tactical execution of their related processes.

And they accomplish this by applying Process

Intelligence.


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Intelligence is power

With Process Intelligence, you can assess your

business processes in terms of speed, cost,

quality, quantity, and other key measures, and

turn your business into a higher-performing

enterprise.


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Result

Better performance: Improved processes lead to improvedbusiness performance; youre more competitive and make moremoney.

An efficient early-warning system: Get out from under reactiveresponses by seeing critical key indicators of performance (quantity,

time, cost, quality) in real time or even predict potentialoutcomes.

Faster and better decisions: Identify process deficiencies morequickly, and take immediate corrective action before things get outof hand.

More with less: Get more out of your people, time, and money byreducing waste and eliminating mistakes in how work gets done.

Informative benchmarks: Understand whats happening now.Benchmark your processes so you know where to applyimprovements and best practices.


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The Three Levels of Process

Intelligence Strategic: Stakeholders need to answer questions like:

Where are we now, relative to plan?

Whats working?What isnt working?

Will we achieve our goals?

Tactical: Process owners need end-to-end detailed information. Tacticalstakeholders want to know is:

Where do we need to intervene?

Are our interventions, changes, and improvementsworking?

What further changes do we need to make?

Operational: They need to know whats happening within their individual

work processes right now, in real-time, on an event-by-event basis. Theoperational stakeholders seek answers to questions like:

How well is everything working right now?

Whats going wrong?What action should I take to fix it?

Whats coming next?What do I need to be ready for?


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The Cycle of Business Process

Excellence(BPE)

You can¶t have one without the other


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Process Status

Through Process Intelligence, one can easily

understood that whats the current status for

the process.

When a process is behaving, you want the

comfort of knowing everything is all right.

When a process is misbehaving, you want to

know everything about whats gone wrong.


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Views of the Process

Internal View(White-Box): Reveals process

inner workings and enables you to detect

critical failures and make fast adjustments

down to a single instance.

External View(Black-Box): how the process is

interacting with the outside world and how it

is performing as a member of the valuestream


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Knowing about Process

Everyone must have constant up-to-date

information about performance in their area

of responsibility.

Q uantitative, based on the measurement of

objective end-to-end process indicators.

Q ualitative, based on graphical or

organizational representations of the process

structure


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The As-is state

Every day is the as-is state.

Its always tempting to dismiss current difficult

conditions as the old way of working and tofocus energy and attention on developing new

and better ways.

If you dont, know where the problems are

and what to fix. You may unwittingly throw

away perfectly good things.


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Knowing that you dont know

what you dont know

Insufficiently modeled processes miss criticalprocess conditions. In order processing andservicing, these include:

When orders are unexpectedly modified by thecustomer

How orders are split apart by a supplier (due todelivery bottlenecks)

The way customers complain about invoices andservice

When incoming payments are partial, or missing,and reminders are necessary


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Tackling with Process Intelligence

True Process Intelligence provides a view intoevery process instance capturing andvisualizing them automatically.

When and how often are orders modified? How often and in which scenarios are orders

split?

What were customers complaining about?

How many reminders were necessary until thecustomer accepted and paid invoices in full?


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Single Process Instances

Automated Process Discovery (APD) tools can

extract and characterize all process-relevant data

and events from IT systems (such as ERP, CRM,

middleware, workflow engines)

APD constructs a visualization of each executed

process instance.

For simple process executions, the reconstructionshows a sequence of activities and functions,

called an Event-driven Process Chain (EPC).


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Aggregated Process View

For high-volume processes, dont try to analyze each singleprocess instance separately. Instead, aggregate theindividual instances of processes into a collection.

Process Intelligence technologies will aggregate these

processes and search for conditions and will deliver agraphical representation of the aggregated processes plusthe KPIs for the selected request.

Compare and benchmark the behavior of differentvariables.

By drilling into details, such as a low-performing region, youget a detailed picture of the behavior of the organizationand can compare it to the behavior of high performers thus identifying the best practices in your organization


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Visualization Techniques for Process

To generate a graphical visualization of anaggregated process, objects and connections thatfulfill equivalence criteria are combined to formone object or connection.

The logical workflow sequence is retained byincorporating connectors (AND, OR, and XORbranches) in the process work flow sequence.

The visualization of the discovered model thenbecomes the basis for a structural analysis of theprocess because it shows the most importantpaths and activities in the process.


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Automated Organizational Discovery

Process Intelligence tools can discover organizationalrelationships.

To optimize business activities and analyze processes,a behind-the organizational-chart view is needed.

In many scenarios, analysis of the team structure andpaths for cooperation are more important thananalyzing the process structure in detail.

Organizational Discovery (OD) uses techniques derived

from statistics and sociology, including social networkanalysis. Using this approach, users can identify who isperforming a particular task, how often, and withwhom, as well as their response and throughput times.


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Automated Discovery- Organization


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Indicating Performances: KPIs

Key Performance Indicators (KPIs) are the metrics thathelp you truly characterize processes.

Theyre the measurement points that reveal the innerworkings of the processes that drive your business.

KPIs come in two flavors:

1. External: Customers and suppliers see you from the

outside. For them, KPIs include time, quality, price, and

service levels.

2. Internal: Inside your enterprise, the focus is on theeffectiveness of processes. Internal KPIs includevolume, cost, risk, and resources.


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Getting the Route Cause

Getting to the root cause of whats driving internal andexternal performance.

When analyzing root cause, follow the path fromperformance indicators to both process structures and

organizational structures. This combination is especiallyimportant in obtaining a meaningful analysis of bottlenecks.

Analysis techniques from approaches like Lean and SixSigma come in handy when looking for root causes because

they provide methods and tools for determining the causesof process outcomes. These include fishbone diagrams, CT(critical to) trees, cause and effect (C&E) matrices, Paretoanalysis etc.


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Rolling it All

What are the results? What are the KPIs the

outcomes of our processes?

How were the results produced?What were the

process steps taken that generated these

outcomes?

Who was involved?What was the organizational

structure and contribution to these processes? Why did this happen? What caused these

outcomes?


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Benchmarking

Process Intelligence to benchmark processperformance against goals, markets, andcompetitors.

Compare indicators relative to one another (suchas throughput time or process costs in Region Aversus Region B).

Compare performance of a process relative to itsstructure and how effective that structure is indelivering key outcomes (such as complexity andstructure of processes in Region A versus RegionB).


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Comparison: Benchmarking


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Intelligent Capabilities

Process Intelligence requires the fast and easyassimilation of large volumes of information.

With a performance dashboard, you combine the

enterprise process landscape with a visualizationof associated KPIs. This combination enablespeople to immediately identify deviations fromplanned values.

You can filter data by time, region, product group,

and so on, and can use indicators like traffic lightsand trend charts to show deviations fromplanned values & analyze business performance.


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Predicting the Future

Process Intelligence can collect enough historyand observe enough behavior to know whencertain events are likely to follow certain others.

Through a mathematical inference algorithmbased on Bayesian statistical processing, theevent of a past fail be recorded as well as theconditions of all causal factors.

As the pattern of those causal elements repeats,

algorithm can predict with a calculated statisticallevel the probability that the event will occuragain can be determined.


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