Sunday, April 27, 2008

Business process management - Intro

Business process management (BPM) is a process-centric approach to managing business operations. BPM is not new. Predecessor categories included business process re-engineering, workflow management, and document management. However, the advent of sophisticated process engines and EAI infrastructure has made enterprise-wide BPM viable; the entire life cycle of a business process can now be managed through technology. BPM is now a rapidly growing market category of different technology-based products and services to help implement this process-centric approach. These include products for business process modeling, BPR, business process automation, process integration, process analysis, process monitoring, workflow management systems, and process-driven development.
Never before have business and information technology converged to such a far-reaching extent. Properly implemented, BPM technology becomes part of the fabric of the corporation, the beating electronic heart of its operations. We believe that over the next few years BPM will be recognized as a genuine source of sustainable competitive advantage for almost every medium to large enterprise. We also believe that how an organization implements BPM will determine the scale and nature of the potential advantage. Understanding BPM is therefore crucial to both business managers and IT managers.
It is the role of to provide news and in-depth articles about both the business and technology perspectives of business process management.
BPM System (BPMS) is sometimes seen as the whole of BPM. Some see that information moves between enterprise software packages and immediately think of Service Oriented Architecture(SOA); while others believe that modeling is the only way to create the ‘perfect’ process, so they think of modeling as BPM.Both of these concepts go into the definition of Business Process Management. For instance, the size and complexity of daily tasks often requires the use of technology to model efficiently. Bringing the power of technology to staff is part of the BPM credo. Many tout BPM as the bridge between Information Technology (IT) and Business.BPMS could be industrial specific and can be driven by a software such as Agilent OpenLAB BPM. Some other products may focus on Enterprise Resource Planning and warehouse management. Validation of BPMS is another technical issue which vendors and users need to be aware of, if regulatory compliances are mandatory The task could be performed either by an authenticated third party or by user themselves. In either way, validation documentation need to be generated. The validation document usually can either be published officially or well retained by users.Business process management life-cycle The activities which constitute business process management can be grouped into five categories: design, modeling, execution, monitoring, and optimization.DesignProcess Design encompasses both the identifying of existing processes and designing the "to-be" process. Areas of focus include: representation of the process flow, the actors within it, alerts & notifications, escalations, Standard Operating Procedures, Service Level Agreements, and task hand-over mechanisms.Good design reduces the number of problems over the lifetime of the process; a real world analogy can be having an architect design a house. Whether or not existing processes are considered, the aim of this step is to ensure that a correct and efficient theoretical design is prepared.The proposed improvement could be in human to human, human to system, and system to system workflows, and might target regulatory, market, or competitive challenges faced by the businesses.There are several common techniques and notations for business process mapping (or Business process modeling), including IDEF, BPWIN, Event-driven Process Chains, and BPMN.ModelingModeling takes the theoretical design and introduces combinations of variables, for instance, changes in the cost of materials or increased rent, that determine how the process might operate under different circumstances.It also involves running "what-if analysis" on the processes: What if I have 75% of resources to do the same task? What if I want to do the same job for 80% of the current cost?A real world analogy can be "wind-tunnel" test of an aeroplane or test flights to determine how much fuel it will consume and how many passengers it can carry.ExecutionOne way to automate processes is to develop or purchase an application that executes the required steps of the process; however, in practice, these applications rarely execute all the steps of the process accurately or completely. Another approach is to use a combination of software and human intervention; however this approach is more complex, making documenting a process difficult.As a response to these problems, software has been developed that enables the full business process (as developed in the process design activity) to be defined in a computer language which can be directly executed by the computer. The system will either use services in connected applications to perform business operations (e.g. calculating a repayment plan for a loan) or, when a step is too complex to automate, will message a human requesting input. Compared to either of the previous approaches, directly executing a process definition can be more straightforward and therefore easier to improve. However, automating a process definition requires flexible and comprehensive infrastructure which typically rules out implementing these systems in a legacy IT environment.The commercial BPM software market has focused on graphical process model development, rather than text-language based process models, as a means to reduce the complexity of model development. Visual programming using graphical metaphors has increased productivity in a number of areas of computing and is well accepted by users.Business rules have been used by systems to provide definitions for governing behavior, and a business rule engine can be used to drive process execution and resolution.MonitoringMonitoring encompasses the tracking of individual processes so that information on their state can be easily seen and statistics on the performance of one or more processes provided. An example of the tracking is being able to determine the state of a customer order (e.g. ordered arrived, awaiting delivery, invoice paid) so that problems in its operation can be identified and corrected.In addition, this information can be used to work with customers and suppliers to improve their connected processes. Examples of the statistics are the generation of measures on how quickly a customer order is processed or how many orders were processed in the last month. These measures tend to fit into three categories: cycle time, defect rate and productivity.The degree of monitoring depends on what information the business wants to evaluate and analyze and how business wants it to be monitored, in real-time or ad-hoc. Here, business activity monitoring (BAM) extends and expands the monitoring tools in generally provided by BPMS.Process mining is a collection of methods and tools related to process monitoring. The aim of process mining is to analyze event logs extracted through process monitoring and to compare them with an 'a priori' process model. Process mining allows process analysts to detect discrepancies between the actual process execution and the a priori model as well as to analyze bottlenecks.OptimizationProcess optimization includes retrieving process performance information from modeling or monitoring phase and identifying the potential or actual bottlenecks and potential rooms for cost savings or other improvements and then applying those enhancements in the design of the process thus continuing the value cycle of business process management.

No comments: