Literature Review

Business Process Management

Literature Review

Amin Lalani

Submitted byAmin S. Lalani

Business Process Management | Literature Review

1. Introduction

1.1 About Business Process Management

Business Process Management is vital for productivity and efficiency in an

organization, whether it’s a manufacturing concern, a defense organization, a

trading company or a small business. Since Frederick Taylor revolutionized the

workplace with his ideas on work organization, task decomposition and job

measurement. Taylor's basic aim was to increase organizational productivity by

applying to human labor the same engineering principles that had proven so

successful in solving the technical problems in the work environment. Thomas and

James (1990)

BPM provides a framework that enables enhanced control and management of

core business processes across an organization. An enterprise can integrate the

business functions they've built over the decades by using BPM tools, techniques,

technologies, best practices, and business processes as the fundamental construct.

The enterprise will be much more flexible, dynamic, and capable of integrating

into the value chain of products, suppliers, and consumers. The enterprise can be

in the middle of the chain as a value-addition node to the overall value delivery

network. (Developer Works, IBM, 2008)

1.2 Why is BPM required?

There are many reasons for managing business processes. Four core reasons as

per New Industrial Engineering - Information Technology and Business Process

Redesign Thomas and James (1990) are:

1.2.1 Cost Reduction: Having optimized process in place can save cost in

many ways. Firstly, by leaning the processes can save process time,

resource required and satisfies customers.

1.2.2 Time Reduction: Having optimized process saves time in every

phrase of production and so in the final deliver, which saves cost and

speedy delivery of product/service to market/customers.

1.2.3 Output Quality: Having lean processes with standard QA/QC may

enhance the overall output of product and services.

Submitted by Amin S. Lalani Assignment # 03


1.2.4 Quality of Work life : Having structured Business Process

Management in place can bring enhance quality at work because

everyone have clear role and goal to work on.

Although Business Process Management is part of management sciences but,

without ICT it is difficult to bring about efficient and effective change in an

organization in short period of time.

1.3 BPM Lifecycle (Developer Works, IBM, 2008)

1.3.1 Envision

The business goals of the company are documented and well understood.

The KPIs of the business goals are analyzed and, with the combined

knowledge of goals and performance

requirements, a vision for the BPM solution

is developed. A change to the management

strategy may also be needed.

The vision caters to the technology vision,

and to how the strategy (regarding

organization capability and readiness) may

need to be developed to support a BPM-

enabled business transformation.

1.3.2 Assess

The "as-is," or current state of the enterprise as applicable to process design

and development, is analyzed. Organizational structure, application

ownership model, governance around process design, development and

deployment, and application portfolio analysis (at a high level) are some of

the activities assessed for gaps between what exists and what's required in

the future steady state.

Current organizational capabilities are assessed to determine if they can

adopt the new business processes, which might straddle organizational

boundaries and require a flattening of the organizational structure and

hierarchy.



Existing business measures and metrics are identified, and are assessed

against the capabilities of the new business processes that are envisioned in

the transformation. The current IT architecture is documented and assessed

for its maturity to support the IT transformations. The current technology

stack is also assessed and documented.

Based on the thorough assessment of the current architecture, technology,

business processes, measurement metrics, and governance framework, the

vision is reevaluated to make it realistic. Assessment may also incorporate

the definition of the IT strategy and roadmap to realize the business

transformation.

1.3.3 Define

Where the "to-be," or future steady state, enterprise business processes are

developed (design, implementation, deployment, and management). They

are simulated to identify potential bottlenecks. Solutions are incorporated

into the process models to reduce real-time performance inhibitors. The

future state of the business architecture is developed around the people,

processes, and information models. Business components are defined as

fundamental structural components of the business architecture. Business

processes that integrate functions from potentially multiple business

components are also defined.

The business architecture is defined through both a structural and dynamic

view of the business. Gaps in the IT architecture, as identified in the

previous phase, are used as input, along with the business architecture, to

define the future IT architecture for the enterprise. The future architecture

could support the design, development, implementation, and monitoring of

the business processes and their supporting applications. The technology

stack that would support the lifecycle of the business processes (their

modeling, design, assembling, deployment and monitoring) is also defined

during this phase.

The governance process and framework is modified and refined to support

the scoping, prioritization, and funding. Modifications also establish the



gating criteria to certify processes and their implementation, in the client

environment, vis-a-vis the performance objectives.

1.3.4 Execute

The high-level definition of the business, and IT architecture and its

components, are actually modeled, built, integrated, assembled, deployed,

and monitored in their respective run times. In general, the:

Business processes are either redesigned or designed from scratch.

Decomposed process models are used as one of the mechanism to

identify services.

Process is assembled and wired using the service and other IT

components.

Process is deployed on a process run time engine, and the running

processes are monitored for performance and other Service Level

Agreements (SLA) and KPIs.

The technology stack supporting each phase of process development is

installed and configured for whenever the current phase requires the tools

and products for its successful execution.

The business processes are monitored based on the KPIs and their metrics.

The IT infrastructure that monitors the executable business processes sends

out events and alerts that may be represented through various dashboards

that cater to specific roles within an organization. For example, the CEO

would like to know about business events and exceptions, so she may

summon a team for immediate reconciliation. The CIO may be interested in

a dashboard view that provides high-level information about whether the

services conform to the service SLAs.



The required organization changes, as defined in the previous phase, are

also initiated. Implementation of the process governance framework is

initiated and deployed during this phase.

1.3.5 Optimize

The various aspects of the enterprise architecture are monitored, managed,

and optimized for better performance, and to meet the business and IT

metrics used to define the success of the enterprise operations. Results from

the executable processes are typically gathered and analyzed. Analysis

usually reveals information that feeds back into the Envision phase, where

the business goals and priorities may be reworked based on the real-time

operational environment for the enterprise.

Some visions may be easily met, allowing the stakeholders to start thinking

about the next level of enterprise maturity. Some visions might be too far-

fetched to be realized within the maturity limits of the enterprise. Results

from the execution phase help in such optimizations.

Business processes are not the only facets of an enterprise that are capable

of optimization. The organizational structure, the governance framework

itself, the technology architecture, and the metrics, KPIs, and SLAs may

require optimization before the next iteration of business and IT

transformation is envisioned and defined.

BPM is best practiced through a phased and lifecycle approach, which lets you

iteratively build and execute a business process management framework based on

successive iterations of scope.



2. Business Process Modeling

2.1 Petri-nets (A. Tiwari et al)

Petri-nets is a formal graphical process

modeling language. According to Havey M

(2005), Petri-nets help describe the semantics

of process control flow, including basic

branch and join rules, as well as more

complicated synchronization scenarios. Petri-

nets are an established tool for modeling and

analyzing processes that has been widely

recognized. They can be used as a design

language for the specification of complex workflows and also Petrinet theory

provides powerful analysis techniques that can be used to verify the correctness of

workflow procedures – they can be used for both qualitative and quantitative

analysis of workflows and workflow systems. van der Aalst WMP (1998). A Petri-net is a

directed graph that uses as main constructs places, transitions, tokens and arcs

Places: drawn as a circle, a place is a stopping point in a process, the

attainment of a milestone.

Transitions: a transition is a rectangle that represents an event or action.



Tokens: A token is a black dot residing in a place representing the

current state of the process. During the execution of the process, tokens

move from place to place.

Arcs: An arc is a link from a transition to a place or a place to a

transition.

2.2 Business Process AI-based Language (A. Tiwari et al)

The second approach to formal business process modeling comes from Koubarakis M,

Plexousakis D (2001). The proposed business process modeling methodology is

constructed with an Artificial Intelligence (AI) programming language thus

ensuring the formality of the proposed process model. The methodology begins

with the definition of business process objectives. The output is a detailed formal

specification of a business process that achieves those objectives. This perspective

is established and confirmed by the logical assumption that a process model cannot

be represented by a single model but as a set of various sub-models that capture

the business process from different viewpoints. There are five interconnected sub-

models specified to formally describe different aspects of the business process are:

organizational sub-model, describing the actors that participate in the

process, their roles, their responsibilities and their capabilities,

objectives and goals sub-model, describing what the process and its

actors try to achieve,

Process sub-model, describing how the process will achieve those goals,

concepts sub-model, describing non-intentional entities, and

constraints sub-model, describing factors limiting what the enterprise

and its components can do.

2.3 Scheduling-based Mathematical Formulation of Business Processes (A. Tiwari et al)

The third approach to formal business process modeling comes from Hofacker I,

Vetschera R (2001) and it is related to mathematical definition of business processes.

This modeling approach is linked with three different optimization approaches,

they are PESA, SPEA2 and NSGA. A business process is described using a

mathematical model with an objective function which can portray any business



process objective e.g. cost. The objective function is minimized or maximized by

the optimization algorithm.

The main concepts used in the process design are activities and resources. A

business process is perceived as a sequence of activities. These activities use some

resources and produce others to be used by the following activities until the goal

resources are produced. Resources are the physical or information objects which

flow through the system. Activities are transformation steps which use resources

as inputs and produce new ones as outputs. Both activities and resources are

represented as sets. Each process begins with some input resources and produces

a desired set of output resources. Each activity has two parameters: one for its

starting time and another for its execution duration. The input resources of this

activity must be available before the activity starts and the output resources must

be produced after the activity has been executed. The time that a resource

becomes available is another parameter critical to process feasibility.



3. Next Generation Business Process Management

2.1 KNOVA TOOL (Knowledge Value

Added)

KNOVA is A TOOL that allows managers to

improve their understanding of the factors

influencing the performance and direction of

a working group or team. This improved

understanding increases confidence in decision making and overall group

operations. Specifically, KNOVA is particularly useful in identifying performance

measures and areas for investment (such as training, technology, or resources) to

improve weak points or change the style of work. However, organizations are

traditionally viewed and assessed within a quantitative, structural framework, with

poor integration of the "soft" people and cultural issues. There is no recognized

practical management framework that integrates the interrelationships between

people, performance, costs/investment, culture, structure, and soft resources such

as knowledge. As a result, there is no decision procedure to identify investment



options for performance improvement that considers the overall context. The

KNOVA framework described here addresses this need by developing a model of

the factors influencing team performance, along with a decision procedure for

applying this model to identify investment options for improved performance. The

performance model is based on the interactions among people, knowledge, and

organizational culture. An important aspect is explicit identification of the

knowledge resources of the team, in both active and latent form. This provides a

conceptual basis for an integrated model. Critical managers might say, "But I

already understand my team's situation." KNOVA does not negate existing skills

but allows them to be applied more quickly and with less mental effort. This is

useful when operating pressures allow insufficient time to give full consideration to

all factors. KNOVA is complementary to and can be used alongside conventional

business process reengineering approaches. It is an unfortunate fact that a high

proportion of BPR projects fail. Often this is because the projects take a view of the

organizational situation that does not include the softer and more pervasive issues

that govern performance and risk. It this latter dimension that KNOVA is designed

to address. The elements of a KNOVA review are expressed in the condensed

influence diagram shown in Figure 1. The arrows show influencing relationships

between the factors with which KNOVA is concerned that affect team performance.

By progressively expanding this model using the techniques to be described, a

detailed representation of the situation under examination is produced. In essence,

KNOVA explicitly identifies and integrates: • Knowledge possessed by the team. •

People factors such as staff turnover and motivators. • Culture of the organization

in terms of the informal microculture and the formal macroculture. • Investment in

the team and its environment for improved performance. • Performance of the

team, such as the quality of decisions or actions. • Benefits of the investment and

improved performance, for example, operational cost savings. • Time over which

the investment takes place, and performance is tracked. Time is treated as an

implicit factor, while the environment of the team, or the team context, is

accommodated within the culture factors. Microcultural factors reflect the way

things are done in the immediate team, the local environment of the team, and the

overall organizational environment. Macroculture reflects wider organizational

issues such as monetary reward.



4. Summary

In the light of literature review, it has been discovered that process

management has taken a scientific form and various algorithm are being

used at industry and administration to get accurate results to identify

optimize and cost effective businesses processes.

Having such level of mature system in place, various small and large

organization in various industry can set algorithm to achieve competitive

advantage over other by implemented optimize business process.

Further, having structured BPM in place can help in QA, BPR (Business

Process Re-engineering) which in other case could be very difficult.

5. References



Thomas H. Davenport and James E.Short. 1990. Sloan Management Review. New Industrial Engineering: Information Technology and Business Process Redesign. (p11-27)

Tony Holden and Paul Wilhelmij. (Winter, 1995/1996). Process Factors in a Hospital Situation. Journal of Management Information Systems, Vol. 12, No. 3, Information Technology and Its Organizational Impact pp. 21-41. Havey M (2005) Essential Business Process Modeling. O Reilly, U.S.A van der Aalst WMP (1998) The Application of Petri-Nets to Workflow Management. Journal of Circuits, Systems and Computers 8: 21-66 Koubarakis M, Plexousakis D (2001) A formal framework for business process modeling and design. Information Systems 27: 299-319 Hofacker I, Vetschera R (2001) Algorithmical approaches to business process design. Computers & Operations Research 28: 1253-1275 A. Tiwari et al.: Evolutionary Optimization of Business Process Designs, Studies in Computational Intelligence (SCI) 49, 513–541 (2007)


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