2.1 Focusing on Key Processes

What to focus on?

  • It is not cost-effective to model/analyze/redesign/deploy/support/monitor (via BPM) all the processes organization. It has to pay off.
    • Focus on a subset of processes.
  • What processes are executed? AND Which ones should the organization focus on?
    • A map describing all the processes and keeping it up to date.
    • Clear criteria for determining process importance.
      • Processes need to receive priority based on:
        • Processes with strategic importance (to a organizations survival)
          • Processes were it is possible to create great value
        • Processes with striking problems
          • Processes were a significant problem is present
      • Processes may change priority if necessary
        • Problems may solve itself
        • New problems arise
        • Processes that are strategic important, become less/more important

The Designation Phase

  • When a organization is turning into a process-centered organization, there are things to consider:

    • Which chain of operations is a single business process.
    • Which chains are part of another process?
    • The idea of process management is to actively manage business processes in the pursuit of satisfying its specific customers.

  • Categorize business processes:

    • Existence of only 2 processes: Managing product line & Managing the order cycle
    • Categories of processes according to Porter:
      • Core processes (primary activities)
        • Essential value creation, production of goods/services for which customers pay.
        • Inbound logistics, operations, outbound logistics,marketing & sales and services
      • Support processes (support activities)
        • Enable execution of core processes
        • Infrastructure, human resources, technology development and procurement.
      • Management processes (some autors)
        • Periodic process to assess the strength of competiors.
    • Distinction of core, support and management processes is of strategic importance to a company.

  • Conclusion: The number of processes that are identified in the designation phase must represent a trade-off between impact and manageability.

    • Small number of processes == numerous operations per process.
      • Impact when changing a process is higher.
      • More difficult to manage.
      • Realistic models would take a long time to develop and would be extremely complex.
      • The involvement of a large number of staff will make effective communication among them problematic.
      • Keeping models up to dat would be very difficult.
      • Improvement projects that are related to large project are more complex.
    • Identify broad and narrow processes
      • Broad processes = Where an organisation feeld it is important to completely overhaul the existing operations. (ex. competitive forces)
      • Narrow processes = Not targeted for major overhauls. Actively monitored, continuously updated and fine-tuned. (ex. improvement suggestions of employees)

  • In addition to a detailed vieuw on what business processes exist, there also needs to be understanding of the relations between processes.

    • In organisations with both broad and narrow processes, it is important to map how these narrow proesses relate to broad processes.
    • Hierarchical relations between processes = Relationships about broad-narrow relationships of processes.
      • ex. management (broad) consists of: order booking, billing, shipment and delivery (all narrow).
    • Illustrates how processes can be sequentially related.
      • Upstream process = If a process occurs before another one but are from the same broad process.
        • ex. Billing and Shipping are in the same broad process. But Billing occurs before Shipping.)
      • Downstream process = If a process occurs after another one, but are from the same broad process.
        • ex. Billing and Shipping are in the same broad process. But Shipping occurs after Billing.)
    • Gain understanding about how importand the outcome of a process is as imput for another process.

  • Reference models:

    • While processes are subject to different design choises and preferences from a organization, some general guidance is available in the form of reference models.
    • Developed by a range of different organizations ranged from non-profits to goverment resachearch programs.
    • Best known examples:
      • ITIL, Information Technology Infrastructure Libary.
      • SCOR, Supply Chain Operatios Reference Model.
      • PCF, Process Classification Framework.
      • APQC, American Productivity and Quality Center.
      • VRM, Value Reference Model.
      • Performance Framework.
    • These models standardize:
      • What can be seen als different processes with unique charasteristics and delivering distinguishable products.
      • How the performance of a process can be measured.

  • Process Architecture

    • Organizes overview over the processes that exist within a organizational context.

The Evaluation Phase

  • Not al processes are equally important and do not receive the same amount of attention.
  • Process management involves: Commitment, ownership, investment in performance enhancement, optimization.
  • Processes that create loss or risk demand for: consolidation, decommissioning or elimination.

  • Criteria to evaluate a process evaluation:

    • Importance: Assessing strategic relevance of each process.
      • Greatest impact on a company`s strategic goals considering profitability, continuity or contribution
      • The criteria assume that there is certain information available.
        • Such as: the strategic course of the company..
    • Dysfunction: Render a high-level judgment of the "health" of each process.
      • Which processes are in the deepest trouble. These profit most.
      • Bad health: Organizations that do not work in process-centered ways do not have insight in process performance.
    • Feasibility: Is the process susceptible to process management initiatives?
      • Obstacles are most likely to be Culture and Politics.
      • Focus on processes where it is reasonable to expect benefits.
      • Political sensitivities within a organization may have effect on the success rate of process management efforts.

  • BPM Maturity Assessment

    • Body of techniques that define the level of systematic process thinking.
    • Aspects to asses:
      • To what extend does the organization cover the range of processes that are ideally expected from it.
      • To what degree are these processes documented and supported.
    • CMMI (Capability Maturity Model Integrated) Framework levels:
      • Level 1 (Initial)
        • Run processes in ad-hoc fashion. No clear definition of processes. No control.
      • Level 2 (Managed)
        • Project planning, monitoring and control, measurement, analysis and product quality assurance are implemented.
      • Level 3 (Defined)
        • Focus on processes. Organizational training for stakeholders to be engaged in process documentation and analysis.
      • Level 4 (Quantitatively Managed)
        • Organizational processes performance is tracked. Project management uses quantitative techniques.
      • Level 5 (Optimizing)
        • Established organizational performance management with casual analysis and resolution.

  • Important to have credibility in process management initiatives to ensure organization-wide change.

    • Can be achieved by focusing on processes with less strategic importance, but with need/desire to change.

The different levels of detail in a process architecture: