Process design & BPMS PV207 – Business Process Management Spring 2022 Jiří Kolář 1 Lecture overview ● About course ● BPM discipline ○ What is business process? ○ What is BPM? ○ What is BPM adoption? ○ Why BPM ? ○ Roles in BPM ○ Process life-cycle ○ Phases of process based development ● Business Process Management Systems (BPMS) ○ BPMS components ○ Architecture ○ Human Tasks ○ Business Rules ○ BAM ○ Existing BPMS 2 ● Introduce the BPM (motivation, use cases..) ● Explain BPM in context of services integration ● Deep dive in business process modeling ● Explain basics of Business Analysis ● Explain how to adopt BPM in organisation ● Introduce Process Monitoring & Measurement ● Hands-on-experience with BPM technologies ● Lead students to the elaboration of a simplified end-to-end BPM project in a TEAM Course goals 3 Course organization Fair and equal conditions to everybody Everything is in the course manual https://docs.google.com/document/d/1y0hIr1VrK7s2O4fMoHayqogJ_ur6YOwmiNyJf1aAW4Q/edit# Questions resolved by comments to the manual document (Highlight the topic, Ctrl-M;) 4 ● The course is mandatory, and complex ● Lectures are valuable from knowledge perspective ● Seminars are mandatory ● Build your team first week and work in teams ● Check schedule and instructions ● Do homeworks (or you are out ;) ● Avoid Cheating Important guidelines 5 And now on BPM 6 Is a Management discipline, focused on systematic definition, execution and measurement of processes in organizations Alternative defintion: An effort to describe processes in organisation, measure results and manage process changes towards higher efficiency Business Process Management 7 Typical motivation for BPM: ● Business Reengineering ○ Enterprise growth ○ Acquisitions ○ Organisational and cultural changes ● Quality Management & Measurement ● Legal compliance, certifications ● Technology for IS development ○ Integration ○ Agile system development 8 ● Large enterprises ○ Banking, ○ Insurance Business ○ Telco ○ Retail ○ ++ ● Health Care (developed countries) ● Public organisations (developed countries) ○ Courts, State administrative, Governmental organisations (ex. EU bureaucrats:) ● "Smart" SMEs ○ Smaller companies, where efficiency matters Where do we find BPM? 9 ● XX BC Division of labour ● Beginning of 20th century ○ Bata, Ford ● 80' – Total Quality Management ○ Toyota ● 80'/90' – Workflow management ● 90' – Business Process Reengineering ○ Davenport etc.. ● 2002 – Business Process Management ○ First BPM technologies Pioneers of BPM ● 2009 ++ AI in process mining, Social BPM ● 2015 Case Management, Low code apps History of BPM Picture downloaded from http://www.what-is-bpm.com/bpm_primer/bpm_primer.html 10 Business process definition Definition: Series of logically related activities or tasks (such as planning, production, sales) performed together to produce a defined set of results. -- Business Dictionary A repeatable sequence of logically related activities, which contributes to fulfilment of one or more business objectives -- PV207 / Jiří Kolář 11 1. Customer creates an Order 2. Order is reviewed by Sales 2.1. If price of the Order is lower than 40 000$, it is accepted 2.2. If price is over 40 000$ it have to be confirmed by Financial department 2.3. Order can be rejected by the department 3. Otherwise the order is processed Process Example: Order 12 Business Process Management Management discipline for systematic definition, execution and measurement of processes in organizations Picture downloaded from http://www.what-is-bpm.com/bpm_primer/bpm_primer.html 13 BPM adoption - definition A change in target organization towards the establishment of a process-driven management model. This can, but does not necessarily have to, lead to the automation of some processes in a process-oriented Information Systems. Such systems can be eventually based on a Business Process Management Suite 14 BPM adoption in practice ● Organisational and management changes towards a process-oriented approach ○ Rengineering ○ Efficiency & quality measurement ○ Certifications, standards & legal compliance ● Tailoring organisation's Information Systems towards process-oriented principles ○ Business integration (direct link business <-> IT) ○ High level technologies ○ Integration of legacy systems 15 ● Know-how codification ○ Value of processes as a know-how is increasing in today's knowledge economy ○ Less vulnerability caused by employee fluctuation ● Performance and costs measurement ● Better business-change management ○ Changes can be performed easier ○ Impact of change can be measured ○ Important to choose good level of process rigidity ● Increased transparency Why to adopt BPM? 16 ● Outsourcing and business services integration ○ Measurement of outsourced services quality ● Increase of quality ○ Better error detection and exception handling ○ Detection of bottlenecks & weak points of organisation ○ Compliance with ISO standards (2000X, 9001) ● Better organisation of work-flow /process ○ Higher efficiency = reduction of costs ○ Early detection of problems Why to adopt BPM? (cont.) 17 Why to adopt BPM? (cont.) ● Flattening organisation's hierarchy ○ Elimination of "silo effect" ○ Horizontal job character Picture downloaded from http://www.what-is-bpm.com/bpm_primer/bpm_primer.html 18 BPM adoption drawbacks :( ● High initial costs ○ Technologies & tools are expensive and not widely available ○ Change is always expensive ● Change in people's mindset is necessary (it hurts ;) ● Changes in organization structure ○ Fear of the change ○ Fear of job loss ● Agreement of all major decision-makers is crucial (not so easy) 19 Potential risks of BPM adoption ● Loss of business flexibility ○ Too high process rigidity ● Demotivated/Annoyed employees ● High investments in BPM solution ● Inefficient management changes ● Technological overkill ● Non-realistic process definitions 20 Questions? Break 10mins 21 Basic roles in BPM adoption ● Organisation's stakeholders (Owners, Management, Customers, Partners etc.) ● Business analyst ○ Identifies and define processes that fulfil goals ● Process specialist ○ Model and implement processes, design service integration ● System developer (Integration specialist) ○ Implements services and underlying system components ● Process participants (Business workers) 22 BPM lifecycle 23 Define Monitor Execute Implement Optimize Model Business Process analyst Process developer Process participant ● Roles identification ● Business Goals definition ● Objectives definition ● Identification of existing processes ● Process architecture (relationships) ● Reengineering of existing processes and definition of new ones ● Metrics/KPI/KRI definition (Key Performance/Result Indicators) for Goals/Objectives 0. phase: BUSINESS ANALYSIS 24 ● Goal: Identify/define valid and measurable processes ○ Which objective is being fulfilled by the process? ○ What is the value created by the process? ○ What are Inputs and Outputs of the process? ○ Which metrics should be on the process? ○ Who is Process owner? ○ Which roles participate on process? 1. phase: DEFINE 25 2. phase: MODEL ● Model logical structure of the process ○ Readable by all lifecycle participants ● (BPMN) Business Process Modeling Notation ○ Graphical notations ○ Portability (Standard) ○ Based on Petri-Nets formalism ● Modeling tools ○ Stand-alone modeler ○ Modeler BPMS component 26 3. phase: IMPLEMENT ● Implement human tasks ○ Forms, user interface ● Implement integrations ○ Connect integrated systems ○ Web services , ○ REST ○ other service tasks ● Implement data model, data structures ○ Connect to data sources (databases) 27 4. phase: MONITOR ● Reasons for process monitoring ○ Fault/Error detection ○ Performance measurement ○ Information for process improvement ● Business Activity Monitoring ○ Real-time process monitoring ○ Measurement of process metrics ● Key Performance/Result Indicators ○ Business performance ○ Derived from process metrics Tracking of business goals fulfillment 28 ● Reasons: ○ Measured gaps in performance ○ Changes of process in real world ● Continuous process improvement: ○ Detection of inefficient parts of process ○ Bottlenecks, cost inefficiency ○ Design and validation of change (simulation) ○ Process modification ○ Deployment of optimised version ○ Monitoring ○ <> repeat until dead; 5.phase : OPTIMIZE 29 BPM lifecycle 30 Define Monitor Execute Implement Optimize Model Business Process analyst Process developer Process participant Business Process Management System “A suite of tools and software components supporting the whole BPM lifecycle” Usual BPMS components: ○ Process modeller ○ Process simulator ○ Execution engine ○ Process console (admin interface) ○ Human tasks engine (process user interface) ○ Business Rule engine ○ Business activity monitoring interface 31 BPM lifecycle again Picture downloaded from: http://docs.oracle.com/cd/E23943_01/user.1111/e15175/bpmug_intro_bpm_suite.htm 32 BPMS Architecture example 33 33 Human tasks Process activities with necessary human interaction ● Filling a form with data ○ Notifications, escalations, timeouts, delegation .. ● Common implementations ○ Portal style interface, Web 2.0 form frameworks ○ Proprietary BPMS vendor interfaces ● Often embeddable in other interfaces 34 ● Rules stored aside from process ● Specific rule language for evaluation ● Evaluated by Business Rules Engine ● Rule + Input data => Output ● Typically IF – THEN ● Rules types ○ Validation rules ○ Transformation rules ● Business Rule Engine often exposed as an API REST/Web Service Business Rules 35 ● Rules decision in Order process: ○ Rule has parameter (40 000$) ○ ○ ○ ○ ○ ○ ○ We change parameter or replace rule ○ Rules can be changed dynamically Business Rules – Example 36 Business Rules Management system 37 http://openrules.com/docs/man_4.html ● Business object: Order ○ id – of an order ○ itemPrice – price of one item of order ○ quantity – quantity of item ● finDirDecisionNeeded – boolean identyfying if CFO's decesion is necessary ● Rule evaluation language: ○ order_price = Order(eval( quantity * itemPrice ) ) ● Rule itself ■ WHEN order_price > 40.000 THEN set finDirDecisionNeeded = true Business Rules example: 38 Business Activity Monitoring ● Monitoring is important part of BPM lifecycle ○ Monitoring data are inputs for process improvement ○ Early detection of problems ● Process metric examples ○ Order processing time, Order total price, Order state ● KPI examples: ○ Average time of order processing per day ○ Sum of prices of all Orders for this week ○ Number of cancelled Orders this week ○ Percentage of Orders with delayed payment 39 Business Activity Monitoring - Dashboards ● Monitoring of process data in real time ● Actions triggered when certain metric value is reached ○ On screen, Email, SMS Trigger action/process ● Custom set of figures on one page ● Configurable for every user 40 BAM Dashboard 41 Existing BPMS products ● Proprietary ○ IBM BPM ○ Bizagi ○ Appian ○ Opentext/Metastorm ○ Pegasystems ○ Savvion ○ Signavio ○ TIBCO iProcess Suite ○ Oracle BPM suite ○ ARIS enterprise BPMS ○ ++ 42 ● Open source ○ Red Hat Process Automation AKA jBPM ○ Activiti / Cammunda ○ PVM based ■ JBPM 3 ■ Bonita ■ Orchestra ○ ApacheODE based ■ Project Levi ○ ++ ○ BPMN method and style Bruce Silver, 20099780982368107 ○ Business Process Management: Practical Guidelines to Successful Implementations ○ Business Process Management: A Rigorous Approach ○ Business Process Management: Concepts, Languages, Architectures ○ Essential Business Process Modeling ○ Smith, H. and Fingar, P.: Business process management: the third wave ○ "Schedlbauer, M.: The Art of Business Process Modeling: The Business Analyst’s Guide to Process Modeling with UML and BPMN" Extended books (beyond course border) 43 FIN Questions? PV207 – Business Process Management Jiří Kolář 44