Business Process

Yves Pigneur
Yves PigneurProfessor at the University of Lausanne em University of Lausanne
rvicse
e-se e s
busin ess proc


ac ourse prepared
               r
by yves pigneu
e-business
se rvice design
scenario &    storytelling
 ta sk analysis
 p rototyping
   ervice qualit  y & usability
 s
  busi ness process ation
  bluepr int & visualiz
    business pr  ocess model
  !                          compliance
  service p  roductivity &
   bu siness model
   value cha  in & network l innovation
    service & b  usiness mode
business
process
          ^
 mo del
f ront
s tage

         back
         s tage
diving to the business processes ...
Customer
actions               online        borrow        ask for       return
                      pre-          document      deadline      document
                      reservation                 extension
line of interaction

Onstage
actions                             check &                     tack back
                                    authorize                   document
                                    access
line of visibility

Backstage
actions                             pick-up       answer        record return
                                    document      telephone &
                                                  confirm       store document

line of internal interaction

Support
                                    maintain                    maintain
processes                           reservation                 book
                                    system                      inventory
Customer
actions               online        borrow        ask for       return
                      pre-          document      deadline      document
                      reservation                 extension
line of interaction

Onstage
actions                             check &                     tack back
                                    authorize                   document
                                    access
line of visibility

Backstage
actions                             pick-up       answer        record return
                                    document      telephone &
                                                  confirm       store document

line of internal interaction

Support
                                    maintain                    maintain
processes                           reservation                 book
                                    system                      inventory
?
                 iness process
    What’s a bus


a workflow ?




                                     illustrations.fr
“ A business process is a collection of
  activities that takes one or more
  kinds of input and creates an output that
  is of value to the customer.
                                                         ”
    Hammer & Champy
    Reengineering the Corporation: A Manifesto for Business Revolution
“ Workflow is a term used to describe
  the tasks, procedural steps, organizations
  or people involved, required input and
  output information, and tools needed
  for each step in a business process.
                                      ”
    SearchCIO.com
    definitions
dream ...
ask for vacations ...   case




@ WorkflowGen
case
case

@ WorkflowGen
BP MODEL
cording to BPMN
ac
“ BPMN defines a diagram [...] tailored for
  creating graphical models of
  business process operations [...] a
  network of graphical objects, which are
  activities and the flow controls
  that define their order of performance. ”
    Stephen White, IBM
    Introduction to BPMN
leave management

employee
                                            not approved                             accepted
                         complete                                     refused
                         complete
     dream of leave


                                                           no
manager      demande
             leave                  validate           approved?
             de congé                validate
           application                                 yes


                                                                           no
director
                                                            décider             accepted?
                                                            décider                 yes
what are the
                                 main compon
                   of this mode             ents
                                l?
rf.snoitartsulli




                                                   > see document
activity




http://earth.leeds.ac.uk/esc_wg/
ACTIVITY

                ^ in BPMN




quot; a generic term for work that company performs
quot; can be atomic or compound
quot; produce output or results from input
leave management               case
 complete   complete a leave application


            examine the application, approve or
 validate   refuse, and forward to the final
            decision-maker

            make the final decision by approving or
  decide
            refusing
criteria for decomposition



!no change in space and
 in resources during the
 execution
!no interruption in time
actor
ACTOR
             ^  in BPMN




quot; (role of)
quot; participant in charge or responsible of activities
leave management                   case
employee
             complete




manager                 validate




director                           decide
event
EVENT

         ^  in BPMN




quot; something that “happens” during the course of a process
quot; which affects the flow of the process and
quot; usually has a cause (trigger) or an impact (result)
leave management                              case
employee
                                    not approved            refused   accepted

                  complete
 dream of leave


manager
                             validate




director
                                                   decide
flow
FLOW

          ^  in BPMN




quot; control used to show the order (the sequence)
   that activities will be performed in a process
quot; can show the messages between activities
  (or business entities) that send and receive them
leave management                                     case
employee
                                           not approved            refused   accepted

                         complete
     dream of leave



manager
              leave                 validate
           application



director
                                                          decide
gateway
GATEWAY

                  ^  in BPMN




quot; used to control the divergence and convergence of flow
quot; determines traditional decisions, as well as
   the forking, merging, and joining of paths
leave management                                     case
employee
                                           not approved                 refused        accepted

                         complete
     dream of leave


                                                          no
manager       leave
                                    validate          approved?
           application                                yes


                                                                             no
director                                                                          accepted?
                                                               decide
                                                                                      yes
leave management
employee
                                                         case

             COMPLETE                           not approved         refused   accepted


           leave application

                               no
manager




              VALIDATE              approved?

                               yes



                                                                no
                                                                      yes
director




                                           DECIDE
                                                               accepted?
partners
PARTNERS

                  ^   in BPMN




quot; external business entities or people which cooperate in
   inter-organizational processes
loan management   case
BP DESIGN
uses of proce
                                   ss models ??
                                               ?
rf.snoitartsulli




                                                   > see document
business
  process
           &
reengine ering
reengineering   BPR
“ a management approach aiming at
  Business process reengineering (BPR) is

  improvements by means of elevating
  efficiency and effectiveness of
  the processes that exist within and
  across organizations. ”
    Hammer & Champy
    Reengineering the Corporation: A Manifesto for Business Revolution
^
BPR
       according to
                    Hammer & C
                              hampy



 deploy transversal processes
 remove steps
 use information technology
 reduce number of actors
 increase parallelism
 limit controls
oticon
who is Otico
                               n?


                                              ?
                            in which business


                                     which rev
                                               olution
                                    in the 90
                                              ’s ?
rf.snoitartsulli




                                                         > see document
spaghetti organization
Business Process
outsourcing   BPO
“ BPO is the process of hiring another
  company to handle a business
  process for you... Now it
  encompasses a number of functions that
  are considered quot;non-corequot; to the
  primary business strategy.
                            ”

     SourcingMag
“ The expected turnover of the BPO
  sector by March 2008 will be around US
  $ 10.9 billion, with the industry
  employing slightly over 700,000
  employees. ”
    NASSCOM BPO Newsline
business
  process
             &
manu factu ring
just in time   JIT




© DetroitDiesel
“   Just-in-time is an inventory strategy
    implemented to improve the return on
    investment of a business by reducing in-
    process inventory and its associated carrying
    costs. In order to achieve JIT the process
    must have signals of what is going on
    elsewhere within the process. ”
      wikipedia
do you know
                               the
                   Kanban conce
                                pt ?
rf.snoitartsulli
do you know
                               the
                   Kanban conce
                                pt ?




                                       drawn by
                                       Michel B
                                                alme
rf.snoitartsulli
su
                                                                  concept
                                                                     permarke
                                                                              t




© http://www.toyota.co.jp/en/vision/production_system/just.html
Business Process
“   Lean production is an assembly-line manufacturing
    methodology developed originally for Toyota [...] The   goal
    of lean production is described as to get
    the right things to the right place
    at the right time, while minimizing
    waste and being open to change. ”
       SearchCIO.com
       definitions
“   Six Sigma is a business strategy that seeks to
    identify and eliminate causes of
    errors or defects or failures in business
    processes by focusing on outputs that are
    critical to customers. It is also a measure of
    quality that strives for near elimination of
    defects using statistical methods. ”

      Jiju Antony
© McKinsey lean six sigma
© Dilbert
business
process
           &
quality
quality management   TQM
“ Certification to an ISO 9000 standard
  does not guarantee any quality of end
  products and services; rather, it certifies
  that formalized business
  processes are being applied. ”

    international organization for standardization (ISO)
Is ISO 9000
                                 similar to ser
                                                vqual ?


                                  different ?


                                   why ?
rf.snoitartsulli
SERVQUAL
              ^ according to
                Parasuraman
                            , Zeithaml, a
                                          nd Berry




 for assessing quality of service
 based on measured gap between consumer
 expectations and perceptions

  is not ISO 9001 ...
© Dilbert
business
process
           &
  IT
maturity model                                       CMM




http://www.clipartreview.com/_gallery/_pages/r_865.html
“ Capability Maturity Model® Integration
  (CMMI) is a process improvement
  approach that provides organizations
  with the essential elements of effective
  processes. ”


    Software Engineering Institute, CMU
capability maturity model
                                                 optimized


                                       managed


                              defined


                 repeatable


        ad hoc

© SEI
ERP
 enterprise resource planning
                                                              From an order
                                                              to a bill, a delivery, …


                          sale
                 production        buy
                          salary


                       Enterprise        function-oriented
                                          Function-oriented
                                                                         process-oriented
                                                                            Process-oriented

                       Resource
                       Planning
                        (ERP)

                                                                                         ERP




                                                                                         DB
                                              DB          DB      DB




[Estier, 2001]
SOA
service-oriented architecture




© microsoft
IT infrastructure libraryITIL




© aspediens, 2008
business
  process
         &
e-comm erce
customer relationship   CRM




[Kalakota, 2001]
“ Customer relationship management
  (CRM) is a term applied to processes
  implemented by a company to handle its
  contact with its customers. ”


    Gartner
customer relationship
             Sales force automation
             Prevision, contacts, estimate, proposition, follow up …
             Convert a visitor to a customer and keep the customer

                                    SALES




                            Customer Base
          SERVICE                                     MARKETING


Call center, messaging, web …               Initiative, campaign
Self-service                                from telemarketing to messaging
Pro-active, quality of service, …           one-to-one marketing
build to order
     acc ording to
     Dell
                                             Prevision

                                            Planing of
                                              stock
                                                                  Process
                                            Planing of            Replenishment
                                             capacity
 Process
                                               MRP
 Order planning                           choice supplier

   Order       Order       Planing of    Availability stock
 processing confirmation   realization     Scheduling
                                                                  Process
                                         Stock allocation
                                         order of priorities      Production & assembly
                                           Scheduling
                                          manufacturing

                                            Scheduling         De-stocking   Planing    Customer   Process
                                            distribution         loading     delivery    service   Distribution




[Kalakota, 2001]
build to order
acc ording to
Dell
SCM
   supply chain management

                                         information
  product




               supplier   manufacturer   distributor   seller   buyer



                                          payment




[Kalakota, 2001]
“bull whip effect”

                                    information
product




          supplier   manufacturer   distributor   seller   buyer



                                     payment
simulation
EDI
electronic data interchange


Company A                                     Company B

   BUY           selection, comparison, ...      SALE      before sale

                         order
   Order                                         Supply    sale

                        delivery
Reception                                      Delivery    production & distribution


 Payment                invoice                Invoicing   after-sale

       payment                         confirmation
  Bank A               Clearing                 Bank A
ECR
 efficient customer response
                                       retailer

      Manufacturer         VMI - DC    retailer

                           VMI - DC    retailer

                           VMI - DC               retailer

                                       3d - DC    retailer

                         Manuf. - DC   retailer   retailer

                                       retailer

    DC = distribution center

[Maller, 2001]
procurement
dutch flowers




http://www.pbase.com/srijith/image/88605858




http://www.pbase.com/srijith/image/88605858
how does it w
                                   ork ???


                            market place ?



                                     dutch auction ?
rf.snoitartsulli




                                                       > see document
http://www.pbase.com/srijith/image/88605858




http://www.pbase.com/srijith/image/88605858
http://www.pbase.com/srijith/image/88605858




http://www.pbase.com/srijith/image/88605858
http://www.pbase.com/srijith/image/88605858
Business Process
business process
employee




             COMPLETE                            not approved         refused   accepted


           leave application




                                                                                           model
                                no
manager




              VALIDATE               approved?

                                yes



                                                                 no
                                                                       yes
director




                                            DECIDE
                                                                accepted?




                               rev iew quot; activity
                                                                                           quot; actor
                                                                                           quot; event
                                                                                           quot; flow
                                                                                           quot; gateway
1 de 95

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Business Process

  • 1. rvicse e-se e s busin ess proc ac ourse prepared r by yves pigneu
  • 2. e-business se rvice design scenario & storytelling ta sk analysis p rototyping ervice qualit y & usability s busi ness process ation bluepr int & visualiz business pr ocess model ! compliance service p roductivity & bu siness model value cha in & network l innovation service & b usiness mode
  • 3. business process ^ mo del
  • 4. f ront s tage back s tage
  • 5. diving to the business processes ...
  • 6. Customer actions online borrow ask for return pre- document deadline document reservation extension line of interaction Onstage actions check & tack back authorize document access line of visibility Backstage actions pick-up answer record return document telephone & confirm store document line of internal interaction Support maintain maintain processes reservation book system inventory
  • 7. Customer actions online borrow ask for return pre- document deadline document reservation extension line of interaction Onstage actions check & tack back authorize document access line of visibility Backstage actions pick-up answer record return document telephone & confirm store document line of internal interaction Support maintain maintain processes reservation book system inventory
  • 8. ? iness process What’s a bus a workflow ? illustrations.fr
  • 9. “ A business process is a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer. ” Hammer & Champy Reengineering the Corporation: A Manifesto for Business Revolution
  • 10. “ Workflow is a term used to describe the tasks, procedural steps, organizations or people involved, required input and output information, and tools needed for each step in a business process. ” SearchCIO.com definitions
  • 12. ask for vacations ... case @ WorkflowGen
  • 13. case
  • 17. “ BPMN defines a diagram [...] tailored for creating graphical models of business process operations [...] a network of graphical objects, which are activities and the flow controls that define their order of performance. ” Stephen White, IBM Introduction to BPMN
  • 18. leave management employee not approved accepted complete refused complete dream of leave no manager demande leave validate approved? de congé validate application yes no director décider accepted? décider yes
  • 19. what are the main compon of this mode ents l? rf.snoitartsulli > see document
  • 21. ACTIVITY ^ in BPMN quot; a generic term for work that company performs quot; can be atomic or compound quot; produce output or results from input
  • 22. leave management case complete complete a leave application examine the application, approve or validate refuse, and forward to the final decision-maker make the final decision by approving or decide refusing
  • 23. criteria for decomposition !no change in space and in resources during the execution !no interruption in time
  • 24. actor
  • 25. ACTOR ^ in BPMN quot; (role of) quot; participant in charge or responsible of activities
  • 26. leave management case employee complete manager validate director decide
  • 27. event
  • 28. EVENT ^ in BPMN quot; something that “happens” during the course of a process quot; which affects the flow of the process and quot; usually has a cause (trigger) or an impact (result)
  • 29. leave management case employee not approved refused accepted complete dream of leave manager validate director decide
  • 30. flow
  • 31. FLOW ^ in BPMN quot; control used to show the order (the sequence) that activities will be performed in a process quot; can show the messages between activities (or business entities) that send and receive them
  • 32. leave management case employee not approved refused accepted complete dream of leave manager leave validate application director decide
  • 34. GATEWAY ^ in BPMN quot; used to control the divergence and convergence of flow quot; determines traditional decisions, as well as the forking, merging, and joining of paths
  • 35. leave management case employee not approved refused accepted complete dream of leave no manager leave validate approved? application yes no director accepted? decide yes
  • 36. leave management employee case COMPLETE not approved refused accepted leave application no manager VALIDATE approved? yes no yes director DECIDE accepted?
  • 38. PARTNERS ^ in BPMN quot; external business entities or people which cooperate in inter-organizational processes
  • 41. uses of proce ss models ?? ? rf.snoitartsulli > see document
  • 42. business process & reengine ering
  • 44. “ a management approach aiming at Business process reengineering (BPR) is improvements by means of elevating efficiency and effectiveness of the processes that exist within and across organizations. ” Hammer & Champy Reengineering the Corporation: A Manifesto for Business Revolution
  • 45. ^ BPR according to Hammer & C hampy deploy transversal processes remove steps use information technology reduce number of actors increase parallelism limit controls
  • 47. who is Otico n? ? in which business which rev olution in the 90 ’s ? rf.snoitartsulli > see document
  • 50. outsourcing BPO
  • 51. “ BPO is the process of hiring another company to handle a business process for you... Now it encompasses a number of functions that are considered quot;non-corequot; to the primary business strategy. ” SourcingMag
  • 52. “ The expected turnover of the BPO sector by March 2008 will be around US $ 10.9 billion, with the industry employing slightly over 700,000 employees. ” NASSCOM BPO Newsline
  • 53. business process & manu factu ring
  • 54. just in time JIT © DetroitDiesel
  • 55. Just-in-time is an inventory strategy implemented to improve the return on investment of a business by reducing in- process inventory and its associated carrying costs. In order to achieve JIT the process must have signals of what is going on elsewhere within the process. ” wikipedia
  • 56. do you know the Kanban conce pt ? rf.snoitartsulli
  • 57. do you know the Kanban conce pt ? drawn by Michel B alme rf.snoitartsulli
  • 58. su concept permarke t © http://www.toyota.co.jp/en/vision/production_system/just.html
  • 60. Lean production is an assembly-line manufacturing methodology developed originally for Toyota [...] The goal of lean production is described as to get the right things to the right place at the right time, while minimizing waste and being open to change. ” SearchCIO.com definitions
  • 61. Six Sigma is a business strategy that seeks to identify and eliminate causes of errors or defects or failures in business processes by focusing on outputs that are critical to customers. It is also a measure of quality that strives for near elimination of defects using statistical methods. ” Jiju Antony
  • 62. © McKinsey lean six sigma
  • 64. business process & quality
  • 66. “ Certification to an ISO 9000 standard does not guarantee any quality of end products and services; rather, it certifies that formalized business processes are being applied. ” international organization for standardization (ISO)
  • 67. Is ISO 9000 similar to ser vqual ? different ? why ? rf.snoitartsulli
  • 68. SERVQUAL ^ according to Parasuraman , Zeithaml, a nd Berry for assessing quality of service based on measured gap between consumer expectations and perceptions is not ISO 9001 ...
  • 71. maturity model CMM http://www.clipartreview.com/_gallery/_pages/r_865.html
  • 72. “ Capability Maturity Model® Integration (CMMI) is a process improvement approach that provides organizations with the essential elements of effective processes. ” Software Engineering Institute, CMU
  • 73. capability maturity model optimized managed defined repeatable ad hoc © SEI
  • 74. ERP enterprise resource planning From an order to a bill, a delivery, … sale production buy salary Enterprise function-oriented Function-oriented process-oriented Process-oriented Resource Planning (ERP) ERP DB DB DB DB [Estier, 2001]
  • 77. business process & e-comm erce
  • 78. customer relationship CRM [Kalakota, 2001]
  • 79. “ Customer relationship management (CRM) is a term applied to processes implemented by a company to handle its contact with its customers. ” Gartner
  • 80. customer relationship Sales force automation Prevision, contacts, estimate, proposition, follow up … Convert a visitor to a customer and keep the customer SALES Customer Base SERVICE MARKETING Call center, messaging, web … Initiative, campaign Self-service from telemarketing to messaging Pro-active, quality of service, … one-to-one marketing
  • 81. build to order acc ording to Dell Prevision Planing of stock Process Planing of Replenishment capacity Process MRP Order planning choice supplier Order Order Planing of Availability stock processing confirmation realization Scheduling Process Stock allocation order of priorities Production & assembly Scheduling manufacturing Scheduling De-stocking Planing Customer Process distribution loading delivery service Distribution [Kalakota, 2001]
  • 82. build to order acc ording to Dell
  • 83. SCM supply chain management information product supplier manufacturer distributor seller buyer payment [Kalakota, 2001]
  • 84. “bull whip effect” information product supplier manufacturer distributor seller buyer payment
  • 86. EDI electronic data interchange Company A Company B BUY selection, comparison, ... SALE before sale order Order Supply sale delivery Reception Delivery production & distribution Payment invoice Invoicing after-sale payment confirmation Bank A Clearing Bank A
  • 87. ECR efficient customer response retailer Manufacturer VMI - DC retailer VMI - DC retailer VMI - DC retailer 3d - DC retailer Manuf. - DC retailer retailer retailer DC = distribution center [Maller, 2001]
  • 90. how does it w ork ??? market place ? dutch auction ? rf.snoitartsulli > see document
  • 95. business process employee COMPLETE not approved refused accepted leave application model no manager VALIDATE approved? yes no yes director DECIDE accepted? rev iew quot; activity quot; actor quot; event quot; flow quot; gateway