Designing business processes

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MBA503 OperationsManagement andDecision-making ModelsWorkshop 4Designing business processesCopyright Notice
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This course-pack contains material copied by Kaplan Business School inreliance of section 113P of the Copyright Act 1968 (Act).The material in this communication may be subject to copyright under the Act.Any further reproduction or communication of this material by you may be thesubject of copyright protection under the Act.Do not remove this notice.For use only by the students of Kaplan Business School enrolled in thesubject: MBA503 Operations Management and Decision-making Models
“All we are doing islooking at the timelinefrom the moment acustomer gives us anorder to the point wecollect the cash. And weare reducing thattimeline in the valuestream by removing nonvalue-added wastes.”– Taiichi OhnoTaiichi Ohno’s workplace management, digital image, retrieved 8 April 2021,taiichi-ohnos-workplace-management.jpg (201×298) (adlibris.com)Ohno, T., 2012, Workplace Management, McGraw-HillThis Topic’s Big IdeaLearning Outcomes1. Appreciate the historical influences on thedevelopment of contemporary business processes.2. Understand the Business Process (BP) conceptand associated BP Trend Methodologies.3. Develop an appreciation for BP methodologies andrelated terminologies.4. Become familiar and conversant with BusinessProcess Modelling Notation (BPMN) and its role inrelation to business process, mapping, redesignand improvement.Historical Perspective:The development of business processesIndustrial Revolution 1903 Henry Ford andFord automobiles1911 – FrederickWinslow Taylor’s book.“Principles of ScientificManagement”1911 → WW11 –trains, planes,automobiles, radios,telephones, television1960s – Introduction of“The SystemsPerspective”A Business Entity as a SystemWorkshop Activity 4.1• Explain to each other the meaning of the diagramfrom the previous slide.• What are inputs? In Hospitality? In Education? Inthe industry you are from?• What are outputs? In TelecommunicationsIndustry? In motor vehicle manufacturing?• What is feedback?• How does feedback change the inputs?What is a Business Process?A business process is a collection of linked taskswhich find their end in the delivery of a service orproduct to a client.• Can also been defined as a set of activities andtasks that, once completed, will accomplish anorganisational goal.The process must involve clearly defined inputs and asingle output.• These inputs are made up of all of the factors whichcontribute (either directly or indirectly) to the addedvalue of a service or product. These factors can becategorised into management processes,operational processes and supporting businessprocesses.Appian, 2021, Business Process Definition, Appian, retrieved 8 April 2021, https://appian.com/bpm/business-process-definition.htmlWhat is a Business Process? Cont.• A business process is an activity or set ofactivities that will accomplish a specificorganisational goal. Business processmanagement (BPM) is a systematic approach toimproving those processes.• A series of actions or operations conducing to anend; […] a continuous operation or treatmentespecially in manufacture.Techtarget, 2018, Business Process, Techtarget, retrieved 8 April 2021, http://searchcio.techtarget.com/definition/business-processIGI Global, 2021, What is a Business Process, IGI Global, retrieved 8 April 2021, https://www.igi-global.com/dictionary/business-rules-managementbusiness-processes/3071Workshop Activity 4.2In a roundtable discussion, identify variouschanges in business processes that have occurredover the last 20 years in personal and businessbanking.Have those changes delivered better customeroutcomes or just acted to reduce the banks’ costsand improve profits?Business Processes Cont.Harmon, P, 2014, Business Process Change: A Business Process Management Guide for Managers and Process Professionals, 3rd Edition, ElsevierBusiness executives and those using BPMneed a common set of toolsBusiness Processes Cont.Harmon, P, 2014, Business Process Change: A Business Process Management Guide for Managers and Process Professionals, 3rd Edition, ElsevierProcesses that provide products and services forvalue chain stakeholders of a tyre (tire)manufacturerWorkshop Activity 4.3Working individually, write an answer to thesequestions:• What do we mean by the statement “understandbusiness context”?• If we “establish process governance” what are weactually doing?• How does an organisation “align enterprisecapabilities”?Share your thoughts with the rest of the class.Important MeasurementTerminologyTarget: A result, level, or situation that anorganisation or group wants or plans to achieve –an object for success.Timeframe: A set period of time which coverscertain events, or in which certain things areexpected to occur.Goal: An observable and measurable end resulthaving one or more objectives to be achievedwithin a more or less fixed timeframe.Important MeasurementTerminology Cont.Key Performance Indicator (KPI): A business metricused to evaluate factors that are crucial to the successof an organisation or another way of viewing goals.Objective: A specific result that a person or systemaims to achieve within a timeframe and with availableresources – generally more specific and easier tomeasure than goals.Data: Information in raw or unorganised form thatrefers to, or represents, conditions, ideas or objectives– a description of results.External MeasuresExternal Measures (outside measures):Provide information on the results achievedby a process or value chain – they are thereal measures of organisational or processsuccess.Examples are:• Income measures (profits or EBIT)• Customer satisfaction measures• Market growth measuresInternal MeasuresInternal Measures (measures from the inside):a measurement or even description of whethera process is working, but not a measure ofwhether the process is satisfying thestakeholders (e.g. customers or shareholders).Examples are:• Efficiency or effectiveness measures of a subprocess or function• Costs of producing a product or service• Quality of internal outputsWorkshop Activity 4.4Using both external and internal measures as thebasis, in groups of four (4), identify 10 ways thatKaplan Business School can measure the successor otherwise of its business processes.• How do you think Kaplan Business School isperforming?• Would the CEO share your views?Share your thoughts with the rest of the class.External and Internal Measures ofProcess PerformanceExternal and internal performance measures, digital image, retrieved 8 April 2021,http://image.slidesharecdn.com/20090901londonenterprisesessionv3colour-090912141051-phpapp01/95/20090901-london-enterprisesession-v3-colour-53-728.jpg?cb=1252764733Internal “Customers” are external tothe processes that supply themHarmon, P, 2014, Business Process Change: A Business Process Management Guide for Managers and Process Professionals, 3rd Edition, ElsevierLeading and Lagging IndicatorsLeading Indicators: Are measures that reporton situations that are causally related tooutcomes that are desired – these types ofindicators signal future events.Lagging Indicators: Describe situations thatcannot be changed – a lagging indicator is onethat follows an event.Note: The leading indicator is obviously moreuseful to a process manager trying to measurethe achievement of goals.A simple sales cycle with threeleading and one lagging measureHarmon, P, 2014, Business Process Change: A Business Process Management Guide for Managers and Process Professionals, 3rd Edition, ElsevierWorkshop Activity 4.5Using the previous slide as a template, try toidentify possible leading and laggingindicators for:1. A soft drink manufacturer2. A fine dining restaurant3. An educational institution (Kaplan?Harvard?)4. An international airline (Qantas?Emirates?)Who or What is a ProcessManager?A process manager is responsible for the design,review, administration and performance of a specificprocess. The work of a process manager can bedivided into three primary sectors:1. Documentation2. Measurement3. Operational improvement• Process management often includes reengineering or redesigning a project.• The process manager is typically responsible for anentire production process or workflow includingemployee supervision, equipment managementand human resources tasks.Functional Managers who are alsoProcess ManagersHarmon, P, 2014, Business Process Change: A Business Process Management Guide for Managers and Process Professionals, 3rd Edition, ElsevierPrinciples for Re-DesigningProcesses• Remove waste, simplify andconsolidate similar activities.• Link processes to createvalue.• Let the swiftest and mostcapable enterprise executethe process.• Flex process for any time,any place, any way.• Capture information digitallyat the source and propagateit through the process.• Provide visibility throughfresher and richerinformation about processstatus.• Fit process with sensors andfeedback loops that canprompt action.• Add analytic capabilities tothe process.• Connect, collect, and createknowledge around theprocess through all whotouch it.• Personalise the process withpreferences and habits of theparticipants.What is BPMN?Business Process Model Notation(BPMN) is a graphical representation forspecifying business processes in a businessprocess model.• is a method of illustrating businessprocesses in the form of a diagram similarto a flowchart.• was originally developed by the BusinessProcess Management Initiative (BPMI).Simple Business Process Modelling Notation(BPMN) Manufacturing Process DiagramHarmon, P, 2014, Business Process Change: A Business Process Management Guide for Managers and Process Professionals, 3rd Edition, ElsevierBPMN in its Simplest Form6 BPMN symbolsExample – SimpleOrderHarmon, P, 2014, Business Process Change: A Business Process Management Guide for Managers and Process Professionals, 3rd Edition, ElsevierBPMN Information ArtefactsData objects are a mechanism to showhow data is required or produced byactivities.• Depicted by a rectangle that has its upper-rightcorner folded over• Represent input and output of a process activityData stores are containers of dataobjects that need be persisted beyondthe duration of a process instance.Associations are used to link artefactssuch as data objects and data storeswith flow objects (e.g., activities).GatewaysExclusive Decision/Merge:• Indicates locations within a businessprocess where the sequence flow can taketwo or more alternative paths• Only one of the paths can be taken• Depicted by a diamond shape that maycontain a marker that is shaped like an XParallel Fork/Join:• Provides a mechanism to synchroniseparallel flow and to create parallel flow• Depicted by a diamond shape that mustcontain a marker that is shaped like a plussignRevised Sales OrderManagement ProcessRevised sales order management process, digital image, retrieved 8 April 2021, https://image3.slideserve.com/5584092/revisedorder-management-process-l.jpgPools and Lanes in BPMN• Pools – independentorganisational entities,e.g., customer, supplier.• Lanes – resource classesin the same organisationalspace and sharingcommon systems e.g.sales department,marketing department,clerk, manager orengineer.In BPMN, resource classes are capturedusing:Order Management with PoolsHarmon, P, 2014, Business Process Change: A Business Process Management Guide for Managers and Process Professionals, 3rd Edition, ElsevierOrder Management Processwith LanesHarmon, P, 2014, Business Process Change: A Business Process Management Guide for Managers and Process Professionals, 3rd Edition, ElsevierWorkshop Activity 4.6Now it’s your turn!• Individually, using just the 6 BPMN symbols,create a process flow chart to capture yourprocess of getting out of bed in the morning afterthe alarm rings.But: You want to have just a little bit more sleepso you hit the snooze button one, two or eventhree times.Remember you start and end with a ‘Beginning’ or‘End’ symbol.Exit ActivityWhat was the muddiest point in today’s workshope.g., the concept, term or approach, you leastunderstood from today’s workshop?Next WeekFacilities management – the importance offorecasting

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