Tag: business modeling methodology

An organization performs several business processes, route tasks of business processes to employees, systems, within an organization and across the organization (Business to Business transactions – B2B) to achieve it’s goals or objectives and most of the processes are handled manually in many cases.

Manually maintained business processes very often result in errors, higher cost for resources and it is difficult to manage these processes in an efficient and effective manner. These problems can easily be overcome by using workflow software to automate these business processes.

Workflow software uses a set of instructions known as Workflows to schedule and run the business processes.  As per specific conditions, these business processes are executed in a sequential way to accomplish the goals of an organization. Workflows can be started manually, or as soon as the server is initialized, or at particular day or at a particular time, or at a particular week or at a particular month according to the needs. These workflow tools have the capability to suspend a workflow if there is a problem in a particular process and as soon as the problem is fixed, then workflow can be started once again to run the processes.

Workflow software records business process run or execution information to a repository. When the repository is queried using workflow monitor tools, information like start and finishing time of the business processes, status of the   processes (started, stopped, succeeded), errors and exceptions of the processes can be easily retrieved for further analysis. Workflows can be used to notify the process status through email to the topmost executives of the company or whoever in need of it.

Advantages of Workflow:

• Workflow software enables the tasks to be completed in no time when compared to manual process by coordinating the tasks done by people and systems.
• Workflow helps the topmost executives to take decisions immediately.
• Workflow is very important for continuous process improvements.
• Workflow reduces errors and exceptions.
• Workflow reports provide plenty of information about tasks that have been completed, stopped or suspended.
• Workflow is the core of B2B transactions and it provides partners, vendors, and suppliers to quickly receive, send, and analyze data that helps to take decisions, settlement of business transaction amounts.
• Workflow reduces the number of human resources to complete tasks, which increases the enterprise’s profit.
• Workflow can be very useful to implement Sarbanes-Oxley rules and other rules imposed by government.

 

Business Process Modeling Tools are used to create business process models, process flow models, and data flow models.

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• Business Process Modeling is explained under the topics Business Process Modeling and Business Process Modeling Example.
• Process Flow Modeling is explained under the section Process Flow Modeling.
• Data Flow Modeling is explained under the section Data Flow Modeling.

 

What Is Business Process Re-engineering?

Quite often it is necessary for an organization to revise and re-examine it’s decisions, goals, targets etc., in order to improve the performance in many ways and this activity of re-engineering is called as Business Process Re-engineering which is also known as Business Process Re-design or Business Process Improvement.

Analyzing present business process diagrams, process flow diagrams (work flow diagrams) and data flow diagrams may lead to success in business process re-engineering since these diagrams are very powerful in visualizing the activities, processes and data flow of an organization.

Business Process Re-engineering Examples:

The entire organization’s business processes or an individual department’s business processes can be re-engineered according to the needs of an organization.

For example, a bank may have many activities associated with it like investing, credit cards, loans, etc.,  and they may be involved in cross selling (e.g. insurance) with other preferred vendors in the market. If the credit card department is not functioning in an efficient manner as the way the bank expected, it might re-engineer the “credit card” business process.

In this situation, bank may think about decreasing the interest rate, offering promotion, redemption, balance transfers etc., to the customers in order to facilitate the performance. This would lead to re-engineer or re-design the current bank’s credit card process. The net effect is the improvement in performance of credit card division and conversely, if anything goes wrong, major losses are also expected.

Computer system’s infrastructure, competition, financial strength, expenses reduction, customer satisfaction, product quality, better management, employees involvement are some of the areas that an organization is interested to do business process re-engineering and change the existing processes.

Project Infrastructure:

An organization may migrate from X database to Y database for better performance, storage capabilities and reliability.

Competition:

An organization may buy a new and sophisticated application in order to overcome the competitive pressure.

Financial strength:

Many small and big companies need money to expand their business and in this situation, they may get loans, or issue shares etc.

Product Quality:

A calling card distributor may buy good calling cards from the vendors that are good in quality, time and easy connection.

 

Business Process Management (BPM):

Business Process Management has been implemented in many organizations in order to leverage the automation of existing and future business processes. BPM is a key to maximize an organization’s ROI(Return On Investment), Quality and service provided to the customers. Growing popularity of BPM tools and the need for automation of business process in today’s business world turns many companies to go for BPM.

Advantages of Business Process Management (BPM):

• BPM’s activities like Modeling, Automating, Monitoring, Analyzing, and improving the business processes helps an organization to get good profits in less time.
• BPM’s business process models visualize the activities within the organization and business-to-business transactions.
• BPM’s process flow models visualize the process flows within the organization and business-to-business transactions and the relationships between process flow.
• BPM’s data flow models visualize the data flow within the organization and business-to-business transactions.
• BPM’s decomposition diagrams for business process modeling, process flow diagrams and data flow diagrams visualize the processes and activities in a detailed manner.

Workflow:

BPM&’s workflow helps to define, create, execute, automate and manage processes within the organization and business-to-business-transactions to get more productivity.

Documentation:

The entire business process procedures can be documented in a shared multi-user repository. This provides technical and non-technical persons to understand the different processes that occur in each departments of the organization, its performance and the outcome of each business processes.

Quality:

BPM increases quality and quantity of a product or a service provided by the organization.

Reports:

BPM reports can be very useful to the topmost executives of an organization and whoever needs it.

Resources:

BPM reduces the working hours of the employees.

Exceptions:

BPM reduces the errors and exceptions when compared to a manual process.

Regulations:

BPM helps an organization to abide by the regulations of the government.

Business-to-Business Transactions (B2B):

BPM is the core of B2B transactions to gain leverage with vendors, customers, consumers, and suppliers.

Competition:

Provides significant competitive advantage over competitors.

Simulation:

Simulation techniques with different scenarios can be used on business processes to explore the effect of change.

 

BPM Tools:

Business Process Management (BPM) Tools are used to create an application that is helpful in designing business process models, process flow models, data flow models, rules and also helpful in simulating, optimizing, monitoring and maintaining various processes that occur within an organization.

Many tasks are involved in achieving a goal and these tasks are done either manually or with the help of software systems. For example, if an organization needs to buy a software application that costs 6 million dollars, then a request has to be approved by several authorities and managers. Here the request approval may be done manually or with the help of change management software(e.g. – Serena, Test Director); whereas when a person applies for a loan of three hundred thousand dollars, several internal and external human-centric or enterprise application-centric business processes are to be triggered in order to find out the details of that person before approving the loan. For these activities, BPM tool creates an application that co-ordinates the manual and automated tasks.

Apart from coordinating the processes, BPM tools also facilitate the capturing of the rules defined for processes, simulation of business processes, executing the processes in a sequential manner by workflow component, monitoring the business processes by Business Activity Monitoring component,  creating score cards for key performance indicators and balancing score cards to help the executives in taking better decisions.

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Business processes are a set of activities involved within or outside an organization that work together to produce a business outcome for a customer or to an organization.

An organization may have specific goals, aims and targets to be achieved. For products to be manufactured or sold or serviced, there are several activities involved with this organization like employees recruitment, machinery installation, purchasing goods, manufacturing of products, selling and servicing the product to consumers/vendors, collecting the payments and implementing governments rules etc., and these activities collectively are called as business processes.

Different kinds of Business Processes:

• Business Processes that are within an organization. (e.g. product manufacturing)
• Business Processes that are between organizations e.g Mortgage sales by a mortgage company and escrow (payment of insurance and taxes) servicing for that mortgage done by some other company. These are called business to business transactions and are done through application interfaces.
• Business Processes that are managerial.(HR and Recruitment process)
• Business Processes that are operational.(service calls attended in call centers, information stored by bank tellers regarding opening an account etc.)
• Business Processes that are activity oriented: The transformations that takes place in a data warehouse.

Process Flow Modeling is used to graphically describe the various processes that happen in an organization and the relationships between them.

IDEF3:

IDEF3 is a process description capture method used in Process Flow Modeling, designed to model and document the processes. This method helps to capture and understand the different processes or activities and their relationships in a system. IDEF3 workflow models explain the activity inter-dependency and timing, branching and merging of process flow, choice, looping and parallelism in much greater detail.

Process Flow Model is a collection of several activities captured with the help of IDEF3 structural analysis method. In IDEF3, each activity is represented by a box with a verb describing an activity or verb phrase describing transformation need to be done by a process and an identification number. For example, Check Credit History, Process an Order, Ship an Order are some of the examples for these. In general, activities take inputs and transform them into outputs or outcomes and the relationship between these activities is represented by arrows. These activities are often referred to as UOW (Unit of Work) within a model.

The main objects or components in IDEF3 are activities or processes, one or more junctions and arrows. Junctions are nothing but a small box that enable branching or joining of processes. The practical implementation of these junctions are represented in detail below.

Fan Out Junctions:

Fan Out junction branches a single process or activity upon entering a junction into several activities (i.e) single arrow enter these Fan In junctions and multiple arrows come out of these junctions.

Fan In Junctions:

These junctions consolidate various processes or activities upon entering these junctions and outputs a single activity (i.e) multiple arrows enter these Fan In junctions and only one arrow comes out of these junctions.

Fan In and Fan Out junctions are often accompanied with several options like AND, OR, XOR, Asynchronous and Synchronous. These AND, OR and XOR are represented visually inside the junction boxes as &, O and X respectively. Asynchronous and Synchronous are represented as lines inside the boxes. Table shown below represents the meaning of these in case of Fan In and Fan Out Junctions.

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Business process modeling is a collection or group of related activities or business processes that produce a specific service or product. Business processes are visually represented as diagrams of simple box with arrow graphics and text labels, better known as Business Process Models.

Business Process Modeling Overview:

Business Process Modeling (IDEF0) is the first step in Business Modeling and it is followed by Process Flow Modeling (IDEF3) and Data Flow Diagrams (DFD). In Business Process Modeling, an organization’s functions are represented by using boxes and arrows. Here boxes represent activities and arrows represent the information associated with an activity. Input arrow, Output arrow, Mechanism arrow and Control arrow are the different types of arrows that are used in business process modeling.

The business process modeling is started with a context diagram and it provides a brief overview about the organization’s activity. In order to understand the activities of an organization in a detailed manner, the context diagram is then decomposed into many sub activities diagrams.

Business Process Modeling Diagram:

Similarly decomposition of context diagram is done in process flow modeling and data flow diagrams. Context diagram is similar to a conceptual data model in data modeling. The following example gives the layout of the context diagram.