BP Intro
SYSTEM: A term misused by IT professionals: Set of components working together towards a purpose and forming a whole.
The processes and IT that people and organizations use to collect, filter, process, create, and distribute data/information.
DEFINING “BUSINESS PROCESS”
1. A collection of activities that takes one or more inputs and creates an output for a business outcome
2. Crosses organizational boundaries
o The business process view is the customer’s perspective:
* Customer – internal or external * Does not care about functions
• It’s also the automation perspective
MODELLING THE VALUE CHAIN:
INBOUND OPERATIONS OUTBOUND MARKETING & SALES SERVICE
LOGISTICS LOGISTSICS
Example for UCT:
Student admissions>>Teaching>>Progression + graduation>>In schools and invoice>>continuous education and alumni.
4 PROCESS TYPES
1. Strategic 2. Management 3. Support 4. Core/Primary Processes:
PROBLEMS AND BENEFITS OF THE BP APPROACH:
• More difficult to classify or describe than organisational structures. Often invisible.
• More natural than a hierarchy and is of use to the customer
• Organisational structures vary, but all Business Processes are similar
• You can measure the costs, outputs, efficiency, quality, and customer satisfaction
WHY CHANGE PROCESSES?
* Cut costs, Productivity, Customer satisfaction * Agility, Growth, Manage IT Change Resistance, Risk/Compliance Mergers
BP waves:
BP CHANGE 1ST WAVE: PROCESS IMPROVEMENT INITIATIVES: (eg TQM (Total Quality Management) or six sigma)
2ND WAVE: BUSINESS PROCESS RE-ENGINEERING. (Don’t automate, obliterate, EG BPR)
FIRST 3 PROCESS WAVES: Technology
BPM is “concerned with how to manage processes: 1 - on an ongoing basis as process improvement, and 2 - with the one-off
changes associated with BP Redesign and 3 - with technology.
4TH WAVE. OUTSIDE - IN /CUSTOMER EXPERIENCE
5TH WAVE: TRANSFORMATIVE & EXPLORATIVE PROCESS CHANGE - *Transform = Business Model Change *Managers face
paradoxical tensions as they try to simultaneously host an exploitative, efficiency-oriented process management approach while
still maintaining exploration and innovation in opposition to the requirements of process management. *The ability to both
explore and exploit is positively associated with organization outcomes.
WORK SYSTEM:
An information system or work system has 4 elements (participants, information, technology and the processes and activities).
VALUE CHAIN! Add value = primary activities. Add cost = support activities.
Why change BP? – Cut costs, productivity, customer satisfaction, agility, growth, manage IT, change resistance, risk/compliance,
mergers.
Exam Questions:
• Model the Primary Value Chain for the case organisation, loosely based on Porter but using their terminology
• There are 4 types of business processes, identify one of each type in the case
• Consider the Case organisation as a work system. The work systems framework has 6 central elements. Describe the core
characteristics and hence the impact of each element on the operation of the organisation
• Explain the 5 BPM waves and based on the case requirements suggest which of the waves case X should focus one –
justify your answer with quotes from the case.
,BP Modelling
BPMN = Business Process Model and Notation. Guidelines: 1 - Correct minimal symbol set and correct shapes are used
throughout, connectors have arrows showing direction, and the model is sufficiently readable. 2 - All sequential tasks (without
further inputs) performed by one role are grouped into one task. 3 - All tasks are named using Verb-Object format. 4 - Have pools
for each organisation and lanes for each human role. 5 - Each pool has one start and one end event. 6 - Connected sequence flow
within a pool. (Intermediate events & tasks need at least one incoming and only one outgoing sequence flow). 7 - There are no
crossing sequence flows or sequence flows between pools. 8 - Each gateway has type shown and at least 3 sequence flows; XOR
gateways have condition expressions. (“Yes or no”).
BP Redesign
Steps to successfully undertake a BP redesign project (BPTrends):
Initiate: Corporate process management (Value Chain)
1. Understand project (BC, Scope Diagram, Project Plan)
2. Analyse BP (AS-IS)
3. Redesign BP (TO-BE)
4. Implement redesigned BP (TO-BE workflow model)
5. Roll out redesigned BP
6. Execute Process
Process Stakeholders:
Organisations, groups, or individuals that could impact or be impacted by the BP. Categorise them with level of influence/Power
(on the process) and Interest (in the process) – High/Medium/Low.
Scope Diagram:
Examples: 1. Inputs: material requirements 2. Guides/Controls: exchange rates, legislation 3. Outputs: receipted raw materials,
payments 4. Enablers: email, port, finance manager, cell phone, credit card 5. Process 6. Management: finance reconciles
Don’t do this:
• Being too generic
• Laws
• Policies
• Staff members
• Not commenting on management or showing management steps
• Confusing actors with guides
• A customer is not normally an output
• A CEO is not the control – the process performed by the CEO maybe is
,Process Scope Diagram Problems Has 6 categories:
1. Process Flow: Completeness; decision-making; sequencing and duplication; measures.
2. Management: Plan/resource allocation; accountability; Monitor/feedback control; goals and incentives.
3. Inputs: Quality; quantity; timeliness.
4. Guides/Controls: strategy alignment; External management; policies & rules; documentation.
5. Outputs: Quality; quantity; timeliness.
6. Enablers: Problems with HR; Facilities; Accounting; IT.
Root-Cause Analysis:
E.g. 1) Problem: Production process delayed. Why? > Necessary materials not in warehouse. Why? > Delivery of materials
delayed. Why? > Zambikes did not settle the entire invoice. Why? > Payment was delayed. Why? > Transfer was blocked.
E.g. 2) Problem: Late for work. Why? > Caught speeding. Why? > Woke up late. Why? > Alarm on phone didn’t work. Why? >
Phone wasn’t charged. Why? > Cat chewed the charger cable. Therefore – Get a wireless charger (or get rid of cat).
Exam Questions:
• Do a project plan for Process redesign at Case X, following the recommended BPTrends Redesign method steps
• For Case X identify the Process stakeholders
• For Case X draw a scoping diagram
• Do a root-cause analysis of 5 problems mentioned in case X
BP Redesign Best Practices (BP Reader):
The four main dimensions in the effects of redesign measures: TIME, COST, QUALITY, and FLEXIBILITY. Ideally: decrease T
required to handle an order, decrease required C of executing the business process, improves Q of the service delivered and
improves the ability of the BP to react to variation (F). Use model (Devil’s quadrangle) to signify the difficult trade-offs.
1. Customers 2. Business process (operation view and behavioural view) 3. Information 4. Technology 5. External environment.
The business process element has two views; the participants in the business process considering: the organization structure
(elements: roles, users, groups, departments, etc.); and the organization population (individuals: agents which can have tasks
assigned for execution and relationships between them).
Business process operation
• Task elimination: ‘eliminate unnecessary tasks from a business process’
• Order-based work: ‘consider removing batch-processing and periodic activities from a business process’
• Triage: ‘consider the division of a general task into two or more alternative tasks’ or ‘consider the integration of two or
more alternative tasks into one general task’
• Task composition: ‘combine small tasks into composite tasks and divide large tasks into workable smaller tasks’
, Business process behaviour
• Resequencing: ‘move tasks to more appropriate places’
• Knock-out: ‘order knock-outs in a decreasing order of effort and in an increasing order of termination probability’
• Parallelism: ‘consider whether tasks may be executed in parallel’
• Exception: ‘design business processes for typical orders and isolate exceptional orders from normal flow’
Customer
• Control relocation: ‘move controls towards the customer’
• Contact reduction: ‘reduce the number of contacts with customers and third parties’
• Integration: ‘consider the integration with a business process of the customer or a supplier’
BP Types:
- ERP-based process automation
- Software automation projects
- Outsourcing projects
- Six sigma-based process improvement
- Major redesign projects
Exam Questions:
• Do a business case for changing process X. Use the BPTrends Redesign Template
• You have been asked to change the process described in the case. Consider the process as a work system. Suggest and
describe 6 redesign best practices which would each impact a different element of the work system. Name the work
system element in your description of the redesign.
• Describe and apply 4 best practices that Case X could use to redesign their production and sales business processes. For
each best practice name the work system element impacted.
ES Intro
ERP (Enterprise Resource Planning) is an integrated enterprise-wide business software application and a type of enterprise
system (ES). It represents software for managing business.
ERP system is a type of ES, is a comprehensive software package and incorporates all modules needed to run the operations of a
business. Modules include: Manufacturing/Operations management, Accounting and Finance, Human Resources, Sales,
Purchasing.
ERP Evolutions uses these:
Conversational user interfaces (UIs) - Chatbots can be used to help customers with sales enquiries.
Embedded artificial intelligence (AI) - Graphing bestselling items for specific areas.
Robotic process automation (RPA) - Shipping notifications for orders. This can be fully automated without any human
intervention.
Five phases of ES evolution:
1. MRP = Materials requirement planning
- Plans production and raw materials for future periods
- Forms the base of most ERP systems
- So, from the sales forecast create a production schedule. Then, given current stock levels, supplier lead times and finished
product recipes (BOMs), schedule raw material purchases.
- This is impossible to calculate without a computer.
2. MRP 2 = Manufacturing resource planning
3. ERP = Enterprise resource planning
- Need all the modules to run the operations of a business, some S/4HANA system SAP modules are (with their letter
codes):
- In Accounting = CO (Controlling), FI (Financial Accounting)
- In Logistics = SD (Sales and Distribution), MM (Materials Management)
- Yet, some ERP is often referred to as back-office.
