Business Process Management

Business Process Management is a business management concept involving the continuous improvement in Business Processes, the management of these Business Processes, and the efforts to bring these processes closer to its ideal.

 

1. Overview

Business Process Management activities (BPM activity) are the activities in which there is a continuous seeking for a Business Process that fits its business environment by improving the Business Process through the improvement cycle (PDCA Cycle).

In the first place, “Business Process” refers to “How to proceed the business” or “Business rules”. In general, a BPM activity is defined by utilizing a variety of documents, such as Business regulations, Business manuals, Business Flow Diagrams. Whereas in BPM activities supported by IT, it often refers to definition files called “Business Process Definition” (Process Models) which consists of schematics and abstraction.

pdca-cycle-business-process

1-1. How to Define Business Process

There is an infinite variety of “granularity and depth of description” about the procedure on the business or the Business rule, depending on the contents of the business or business scale. However, you must “simplify” (model) to some extent to manage the changes in the Business Process itself.

The following aspects are often simplified (modeled): 1)Flow of the Business, 2)Participant, 3)Business data.

1-2. How to Improve Business Process Definition

Considering and discussing based on simplified Business Process Definitions, to create a new (improved) one.

Regarding BPM activities, it is desirable to improve continuously through the PDCA Cycle. That is, the repetition of

  • Plan: Defining / Redefining a Business Process (Model)
  • Do: Carrying out day to day operations according to the Business Process Definition (Implement)
  • Check: Monitoring the performance status of the daily operations and analyze it (Analyze)
  • Act: While overseeing the performance, optimize aspects such as personnel allocation, etc. (Improve)

Note that, the action of defining or redefining the Business Process is called “Process Modeling” or simply “Modeling”. Also, Business Process Definition is referred to as “(Business) Process Model” or simply “Model”.

1-3. Range of Business Process Management Activities

Primarily, what is required is the continuous management of the “Modeled Business Process Definition”.

However, it could be possible to redefine (model) business processes only by aggregating and analyzing the “Issues that flowed on it” (Instances). Therefore, it is often managed together with the Issues (instances), not only the Business Process Definition (Model). (Especially in BPM Activities supported by IT.)

  • Model: Business Process Definition (Document that modeled the aspects of Flow/ Personnel/Data)
  • Instances: Issues (Each one of Issues that flows according to the Business Process Definition.)

Note that, the relation between Model and Instance sometimes causes confusion. If we simply mentioned “Process”, we can’t be sure if it means “Business Process Definition”(Model) or the “Issues” (Instances).

  • regarding Model: “Change the Process”, “Draw a Process Diagram”
  • regarding Instance: “Many Processes flow”, “Check the Process ID”
  • Ambiguous expression: “Manage a Process”, “Suspend a Process”

Other examples: Rail and Train, Mold and Cast, Class and Instance in Object-oriented, Metadata and data

workflow-railway

 


2. Purpose of BPM

The purposes of Business Process Management (activities to continuously improve Business Processes) are many.

  • Improving Weaknesses (overcoming challenges)
    • Discover potential problems and risks in the company
    • Reduce stagnation
    • Reduce discrepancies in deliverables
    • Prevent occurrence / recurrence of fraud
    • Clarify how to proceed business to Stakeholders / newcomers
    • Record the business processing as an audit trail
    • Quantify the performance and abilities of each individual
  • Bolstering Strengths (Enhancing Competitiveness)
    • Share the details of best practice Issues
    • Ensure the quality of deliverables
    • Promote the sharing of business know-how

 


3. History of BPM

  • 1987: J.A. Zachman (IBM) advocates EA
  • 1992: COSO announces COSO Control Framework
  • 1993: M. Hammer (MIT) and others announces BPR
  • 1994: ITGI releases COBIT1.0, an internal control framework
  • 2002: WfMC releases XPDL1.0
  • 2004: BPMI releases BPMN1.0
  • 2005: ITGI releases COBIT4.0, an internal control framework
  • 2005: OMG and BPMI merge
  • 2005: First subcommittee meeting of the Information Systems Society of Japan on the visualization of business processes
  • 2006: BPM-Japan Association established
  • 2006: J-SOX put into force
  • 2007: Japan Internal Control Association established
  • 2008: OMG releases BPMN1.1 (Business Process Modeling Notation)
  • 2009: OMG releases BPMN1.2
  • 2011: OMG releases BPMN2.2 (Business Process Model and Notation)

 


4. BPM Failures

  • Implementation failures: The systematization (system implementation) of operations in accordance with a modeled business process is attempted. However, it requires time and the BPM cycle ceases to function.
  • Insufficient level of detail: The company has focused on documenting all internal business processes. As a result, each business process lacks detailed description.
  • Dependence on consultants: All modeling and analyses are delegated to consultants. As a result, company managers and employees become unaware of the BPM cycle.
  • Obscure policy: There is no business strategy or management policy as a base for discussing how to achieve optimal business processes.

 


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