Business Process Reengineering

1. 2. 3. 4.

Deterministic Machines Complex Dynamic Systems Interacting Feedback Loops Social Constructs

Deterministic Machines
Traced to the Taylors Scientific Management. Regards Business process as a fixed sequence of well defined activities or tasks performed by Human Machines that convert inputs into outputs in order to accomplish clear objectives. BP is unquestioned and its design is analogous to a technical engineering activity. Emphasizes structure (tasks, activities and areas of responsibility), procedures (constraints and rules of the work to be performed), and goals (nature of the OP to be obtained)of the business process being designed. Criterion of good process design is efficiency in the use of money, resources and time subject to the constraint of satisfying customers needs.

Business Process as Deterministic Machines

Deterministic Machines
IT plays an important role in this perspective- automating, coordinating and supporting the re-engineered process.
Ex: Stable Manufacturing-type environments( order fulfillment and fast-food processes) Bureaucratic, paper-based processes found in some service environments (credit application and back office processes). Davenport and Short support Mechanistic View. Hammer and Champy, Armistead and Rowland and Kock and McQueen highlighted customer orientation and cross-functional activity.
STATIC BPM:

Stress is on Mapping and documenting the flow of items , the activities, their logical dependency and the resources needed.

Deterministic Machines Techniques

Process flow charting and its extensions: The simplicity of its basic elements activities and decisions- make it easy to understand and communicate. Other techniques are: 1. Integration Definition for Function Modeling : IDEF0, IDEF3, IDEF4 AND IDEF 14 Their modeling reveal their mechanistic approach. 2. Event Process Chain 3. Riva Approach- RAD (Role Activity Diagrams) 4. Business Process Modeling Notation (BPMN) 5. Supply-Chain Operations Reference Model 6. The Rosetta Net Partner Interface Process.

IDEF HISTORY
During the 1970s, the U.S. Air Force Program for Integrated Computer Aided Manufacturing (ICAM) sought to increase manufacturing productivity through systematic application of computer technology. The ICAM program identified the need for better analysis and communication techniques for people involved in improving manufacturing productivity. As a result, in 1981 the ICAM program developed a series of techniques known as the IDEF (ICAM Definition) techniques which included the following: IDEF1, used to produce an "information model". An information model represents the structure and semantics of information within the modeled system or subject area. IDEF2, used to produce a "dynamics model". A dynamics model represents the time-varying behavioral characteristics of the modeled system or subject area.

Overview on IDEF Methods

Eventually the IDEF methods have been defined up to IDEF14: IDEF0 : Function modeling IDEF1 : Information Modeling IDEF1X : Data Modeling IDEF2 : Simulation Model Design IDEF3 : Process Description Capture IDEF4 : Object-Oriented Design IDEF5 : Ontology Description Capture IDEF6 : Design Rationale Capture IDEF7 : Information System Auditing IDEF8 : User Interface Modeling IDEF9 : Business Constraint Discovery IDEF10 : Implementation Architecture Modeling IDEF11 : Information Artifact Modeling IDEF12 : Organization Modeling IDEF13 : Three Schema Mapping Design IDEF14 : Network Design

Deterministic Machines Techniques

1. IDEF0: Descendents of dataflow diagrams with functional,
structures approach. IDEF0, used to produce a "function model". A function model is a structured representation of the functions, activities or processes within the modeled system or subject area. Their modeling constructs are inputs, activities, outputs, mechanisms and controls. Perhaps the main strength of IDEF0 is its simplicity, as it uses only one notational construct, called the ICOM (Input-Control-Outputmechanism). IDEF0 is mainly concerned with what activities the organization performs.

Deterministic Machines Techniques

2. IDEF3: Units of behavior, elaboration, referents,
junctions, links, objects states and state transition arcs. IDEF3 describes processes as ordered sequences of events or activities. As such, IDEF3 is a scenario-driven process flow modeling technique, based on the direct capture of precedence and causality relations between situations and events. The goal of an IDEF3 model is to provide a structured method for expressing the domain experts knowledge about how a particular system or organization works as opposed to IDEF0. Similar to IDEF0, the main strength of IDEF3 is the simplicity of its notation, which relies on only one basic construct, called the UOB (Unit of Behavior)

Deterministic Machines Techniques

3. IDEF14 or Integrated Definition for Network Design Method: Is a method that targets at modeling and designing computer and communication networks. It can be used to model existing ("as is") computer networks or envisioned ("to be") computer networks. It helps the network designer work with "what if" potential network designs and document design rationale. The fundamental goals of the IDEF14 method research project have developed from a perceived need for good network designs that can be implemented quickly and accurately.

Example of an IDEF0 diagram: A function model of the process of "Maintain Reparable Spares".

IDEF0

IDEF3

IDEF4 - An Behavior Diagram for methods Implementing Louder.

Dimensions of IDEF4 Design Objects.

Deterministic Machines Techniques

3. Event Driven Process Chain (EPC) : Has been developed within the
architecture of the integrated IS. It is made up of components such as function, events, units, information, flows, paths, connectors and assignments providing an integrated view of functions, data and organization. An Event-driven Process Chain (EPC) is a type of flowchart used for business process modeling. EPC's can be used for configuring an enterprise resource planning (ERP) implementation, and for business process improvement. EPC diagrams illustrate business process work flows, and are an important component of the SAP R/3 modeling concepts for business engineering. EPC diagrams use graphical symbols to show the control flow structure of a business process as a chain of events and functions.

EPC

EPC

RIVA APPROACH - RAD

Ould (1995) proposed Riva approach for the elicitation, modeling, analysis and design of organisational processes. RAD is one part of the Riva method; it is a technique for process modeling which embraces roles as main component. It shows roles, their activities and interactions. Riva Approach uses more process-oriented technique called Role Activity Diagrams (RAD). RAD allows a business process to be modeled diagrammatically through roles , goals, activities, interactions and business rules. Unlike flow charts, RAD, IDEF and EPC techniques are more appropriate for modeling business process that involve the cooperation of several entities and less appropriate for modeling complex routings.

RIVA APPROACH - RAD With its roots in business theory, rather than software development, the Riva method has gained a reputation for addressing the business aspects of processes in a way that is accessible by the everyday user, whilst giving the analyst powerful tools for understanding, change and design. Riva starts with a powerful and fast technique for preparing a process architecture of the organization, showing exactly what processes there are and how they interact.

RIVA APPROACH - RAD The architecture is derived from an understanding of what business the organization is in, rather than its current structure or culture. Once this architecture is understood, individual processes can be examined in their own process models and organizational and cultural issues can be addressed. Riva provides the analyst with the intellectual machinery necessary for working with processes much more than just a way of drawing pictures.

RIVA APPROACH - RAD

Riva has now been used in a variety of business areas amongst them
finance, utilities, civil engineering, computer manufacture, government, charities, pharmaceuticals, software product development, and information service provision for a variety of purposes, including
the re-structuring of a business along process lines rather than functional lines, re-engineering of a sales and marketing function, assessment of the effect on a business of changes in regulatory requirements, analysis of usability problems of an installed IT system, the preparation of requirements for a new information system, and the evaluation of the fit of a proposed package with a business

RAD

Business Process Modeling Notation-(BPMN)

BPMN (Business Process Modeling Notation) is intended to provide a common standard to enable Business Analysts to document business processes. BPMN attempts to bridge the gap between business processes that can be read and understood by business analysts, business stakeholders and technical teams. One of the challenges of using BPMN is that as a technique it often allows different styles to show the same thing. Another challenge facing groups of process modelers is achieving a common look and feel, and consistent level of detail on their diagrams.

Deterministic Machines Techniques

Business Process Modeling Notation (BPMN) is a graphical representation for specifying business processes in a workflow. BPMN was developed by Business Process Management Initiative (BPMI), and is currently maintained by the Object Management Group since the two organizations merged in 2005. The current version of BPMN is 1.1, and a major revision process for BPMN 2.0 is in progress. The Business Process Modeling Notation (BPMN) specification provides a graphical notation for specifying business processes in a Business Process Diagram (BPD). Business Process Modeling Notation (BPMN) is developed in an attempt to standardized the process diagramming techniques. Its modeling constructs are events, activities, gateways, sequence and message flows, associations, pools, lanes, data objects, groups and annotations.

Deterministic Machines Techniques

They are derived from flow charting. They support the intra and inter organizational process. They can be translated into a language for execution purposes. But it is largely dependent on the practitioner acceptance. The objective of BPMN is to support business process management for both technical users and business users by providing a notation that is intuitive to business users yet able to represent complex process semantics. The BPMN specification also provides a mapping between the graphics of the notation to the underlying constructs of execution languages, particularly BPEL4WS (Business Process Execution Language for Web Services).

FLOW OBJECTS AND CONNECTING OBJECTS

EVENT

ACTIVITY

GATEWAY

CONNECTIONS

Swim Lanes and Artifacts

SWIM LANES

ANNOTATION

GROUPS

DATA OBJECTS

BPMN

BPMN

BPMN

BPMN

Difficulties with the Deterministic Machines

1. Assumptions that the business processes can only be designed in rational and technical terms. Neglects the human and organizational issues. 2. Assumption that business processes are assumed static. Ignores the dynamic behavior due to resource competition, interactions or other sources of uncertainty.

Complex Dynamic Systems

A system comprised of a (usually large) number of (usually strongly) interacting entities, processes, or agents, the understanding of which requires the development, or the use of, new scientific tools, nonlinear models, out-of equilibrium descriptions and computer simulations. Advances in Complex Systems Journal

"A system that can be analyzed into many components having relatively many relations among them, so that the behavior of each component depends on the behavior of others. -Herbert Simon "A system that involves numerous interacting agents whose aggregate behaviors are to be understood. Such aggregate activity is nonlinear, hence it cannot simply be derived from summation of individual components behavior. -Jerome Singer

Complex Dynamic Systems

Rather than viewing a business process as an assembly of interchangeable components, this second viewpoint focuses on the complex, dynamic and interactive features of business processes. Basic idea is close to metaphors of organism and flux and transformation in which open system adapts to a changing environment in order to survive. Emphasizes interaction and dynamic behavior. In this view of open system, business process can have inputs, transformation, outputs and boundaries. A BP can be defined as a set of subsystems people, tasks, structure, technology and so on - that interact with each other (internal relationships) and with their environment (external relationships) in order to fulfill some objectives. Each subsystem is seen as a system which can be hierarchically decomposed into further levels of detail. Effectiveness (quality and service level) is likely to be a major criterion rather than solely

Business Process as Complex Dynamic Systems

Complex Dynamic Systems Models

Discrete Event Business Process Simulation Petri Nets More emerging approaches, such as Agent Based Simulation.

Classification of Simulation Models

Classification of simulation models
Static vs. dynamic Deterministic vs. stochastic Continuous vs. discrete

Most operational models are dynamic, stochastic (random), and discrete will be called discrete-event simulation models

Complex Dynamic Systems Models

DISCRETE EVENT BUSINESS PROCESS SIMULATION is a way to model the dynamic behavior in terms of entities (items and resources) and discrete events( begin task and end task). This simulation model can then be sued to conduct what-if experiments avoiding the need for building or disrupting the real-world business process.
A discrete event simulation model mimics the real world but in compressed time Focus only on events when the state of the system changes and skips the time between these events Discrete event simulation is a powerful and realistic tool to complement the more simplistic methods Allows exploration of the redesign effects without costly interruptions of current operations Helps reduce the risks inherent in any design/change project

Advantages with Discrete Event Simulation

Promotes creativity by enabling easy testing of ideas Captures system dynamics but avoids disturbances of current process Can capture interactions between sub-processes Mitigates the risk of sub-optimization Graphical reporting features promotes better process understanding and facilitates communication The quantitative nature brings a sense of objectivity into the picture.

STEPS IN A SIMULATION STUDY

Model conceptualization Setting of objectives and overall project plan No Yes Model Translation Experimental Design Yes Production runs and analysis

Problem Formulation

Verified?
No

Validated?

Data collection

Yes
No

Yes More runs?

No

Implementation

Documentation and reporting

PETRI NETS
Petri net is primarily used for studying the dynamic concurrent behavior of network-based systems where there is a discrete flow. Petri Net: An algebraic structure with two sets, one called places and the other called transitions, together with their associated relations and functions, and named after their inventor, Carl Adam Petri. Petri net consist two types of nodes: places and transitions. And arc exists only from a place to a transition or from a transition to a place. A place may have zero or more tokens. Graphically, places, transitions, arcs, and tokens are represented respectively by: circles, bars, arrows, and dots. Place/Transition Net: A Petri net comprising a net graph with positive integers associated with arcs and an initial marking function which associates a natural number of simple tokens (black dots) with places.

Basics of Petri Nets -continued Below is an example Petri net with two places and one transaction. Transition node is ready to fire if and only if there is at least one token at each of its input places. State transition of form (1, 0) (0, 1) p1 : input place p2: output place

p1

t1

p2

Example: In a Restaurant (A Petri Net)

Customer 1 Waiter free Customer 2

Take order

Take order

wait

Order taken

wait

eating Serve food

45

eating Tell kitchen Serve food

Complex Dynamic Systems Models

Discrete Event Systems Specification (DEVS Scheme, a generic simulation environment based on LISP. BP is decomposed into a set of relatively independent subsystems. Two generic Modeling abstractions: Atomic and Coupled Models BEST SUITED FOR COMPLEX AND HIGHLY TUNED SIMULATIONS Vreede Custom Arena template of process modeling abstractions supported by problem solving approach known as dynamic model ling which combines groupware, participative design and simulation modeling to analyze and improve business processes. BP is seen as a network of interacting objects that display dynamic behavior and this proposed the following modeling abstractions- message, product, person, actor, repository, link, tasks and decisions. BEST SUITED FOR HIGH-LEVEL AND POSSIBLY FAST, MODELING EXERCISE BECAUSE IT IS BASED ON A VISUAL INTERACTIVE MODELING SYSTEM.

Complex Dynamic Systems

Melao and Pidd proposed BPSim++ simulation approach. It is an extendable library of modeling components which is easy to use by business users and flexible so as to address new application areas or complex human behavior. It is a two layered component based architecture. The top layer provides a visual, user-friendly environment in which the user can build models by composition from a comparison of business and manufacturing processes. For model building purposes, a business process is a programming framework from which the skilled user can modify the behavior of existing components and develop new components from other existing components or entirely from the scratch.

Complex Dynamic Systems Models

AGENT BASED MODEL

An agent-based model (ABM) (also sometimes related to the term multi-agent system or multi-agent simulation) is a class of computational models for simulating the actions and interactions of autonomous agents (both individual or collective entities such as organizations or groups) with a view to assessing their effects on the system as a whole. It combines elements of game theory, complex systems, emergence, computational sociology, multi-agent systems, and evolutionary programming. Monte Carlo Methods are used to introduce randomness. ABMs are also called individual-based models.

Difficulties
Lead to neglect of social-political dimensions of a business process since there is an implied belief that a business process can only be approached in logical and rational terms. Human aspect is only regarded as relevant as a resource for executing tasks. The time and skills required to build dynamic computer models of simple systems may not add any value over simple flowcharts or spreadsheets. It involves huge costs. Ignores the feedback loops that may determine the behavior of many real-world-business processes. Nevertheless, this viewpoint reminds us that different subsystems of a business process interact to produce complex dynamic behavior.

Interacting Feedback Loops

Extends the complex dynamic system viewpoint by highlighting the information feedback structure of business processes The difference is the complex dynamic system viewpoint focuses on business processes with no intrinsic control (Open loop systems) where as the IFL perspective claims that business processes are closed loops with intrinsic control. An attempt is to understand the dynamic behavior of a business process not in terms of individual components but rather in terms of interactions between internal structure and policies.

Business Processes as Interacting Feedback Loops

System dynamics
System dynamics is a computer-aided approach to policy analysis and design. It applies to dynamic problems arising in complex social, managerial, economic, or ecological systems -- literally any dynamic systems characterized by interdependence, mutual interaction, information feedback, and circular causality. The field developed initially from the work of Jay W. Forrester. His seminal book Industrial Dynamics (Forrester 1961) is still a significant statement of philosophy and methodology in the field. Within ten years of its publication, the span of applications grew from corporate and industrial problems to include the management of research and development, urban stagnation and decay, commodity cycles, and the dynamics of growth in a finite world. It is now applied in economics, public policy, environmental studies, defense, theory-building in social science, and other areas, as well as its home field, management. The name industrial dynamics no longer does justice to the breadth of the field, so it has become generalized to system dynamics. The modern name suggests links to other systems methodologies, but the links are weak and misleading. System dynamics emerges out of servomechanisms engineering, not general systems theory or cybernetics (Richardson 1991).

System Dynamics
The system dynamics approach involves: Defining problems dynamically, in terms of graphs over time. Striving for an endogenous, behavioral view of the significant dynamics of a system, a focus inward on the characteristics of a system that themselves generate or exacerbate the perceived problem. Thinking of all concepts in the real system as continuous quantities interconnected in loops of information feedback and circular causality. Identifying independent stocks or accumulations (levels) in the system and their inflows and outflows (rates). Formulating a behavioral model capable of reproducing, by itself, the dynamic problem of concern. The model is usually a computer simulation model expressed in nonlinear equations, but is occasionally left unquantified as a diagram capturing the stock-and-flow/causal feedback structure of the system. Deriving understandings and applicable policy insights from the resulting model. Implementing changes resulting from model-based understandings and insights.

System dynamics

System dynamics

Difficulties
Lead risk of considering the human actor as only an instrument to be controlled or as an instrument exercising control. Easy to know but impossible to apply.

System dynamics
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Business Processes as Social Constructs

The focus here is on subjective and human aspects of the business process.
Emphasizes business processes as made and enacted by people with different values, expectations and possibly hidden agendas. Implies they are abstractions, meanings and judgments that people put on the real world which resulted from a process of subjective construction of the human minds. A business process can be dened in terms of different perceptions constructed by various individuals and groups as a result of different frames of interpretation. These frames, shaped by beliefs, values, expectations and previous experience, act as lters enabling people to perceive some things but ignore others.

Business Processes as Social Constructs

Business Processes as Social Constructs

For example, a production manager may regard an order fulllment process as a way to ensure that the orders are manufactured on time, while a marketing manager may regard it as a way to satisfy a customers needs.
The existence of multiple (and often conicting) views about what is going on and about how the process is being and should be carried out means that a different view of change is required.

The view of a business process as a social construct ts well with strategic, less tangible processes, in which human activity is the major driver, such as health, social and educational services.

Social Constructs - Difficulties

First, the stress on cultural feasibility may impede the attainment of more efcient and radical designs.
Secondly, this perspective alone is unable to provide an objective, quantitative assessment of business process changes. Finally, although it recognizes the political environment, it offers no way of dealing with it other than the need to conduct several analyses.

Advantages and Disadvantages of BPR

Advantages
Satisfaction Growth of Knowledge Solidarity to the Company Demanding Jobs Authority
Reduce Organizational Complexity Offers an Alternative Perspective Link Functional Areas

Disadvantages
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. Re-Engineering Too Many Processes at Initial Stages Inadequate Training of Process Owners and Team Members Unclear Knowledge of RE-engineering Improper Monitoring of a ReEngineered Process Wastage of Time in Detail Process Analysis Fear of Failure Unfavourable Organizational Environment Delay in Showing Results Improper Appraisal system Inability to Quantify Improvement Complacency of Management Non-availability of Adequate Resources Limited Awareness amongst Employees Discontinuance of Re-Engineering after Achieving Benchmark. Resistance to the change