Business

Process
Manageme
nt
Literature Review

Amin Lalani

Submitted by
Amin S. Lalani
Business Process Management | Literature Review

1. Introduction

 
1.1 About Business Process Management
Business Process Management is vital for productivity and efficiency in an organization, whether
it’s a manufacturing concern, a defense organization, a trading company or a small business.
Since Frederick Taylor revolutionized the workplace with his ideas on work organization, task
decomposition and job measurement. Taylor's basic aim was to increase organizational
productivity by applying to human labor the same engineering principles that had proven so
successful in solving the technical problems in the work environment. Thomas and James (1990)

BPM provides a framework that enables enhanced control and management of core business
processes across an organization. An enterprise can integrate the business functions they've built
over the decades by using BPM tools, techniques, technologies, best practices, and business
processes as the fundamental construct. The enterprise will be much more flexible, dynamic, and
capable of integrating into the value chain of products, suppliers, and consumers. The enterprise
can be in the middle of the chain as a value-addition node to the overall value delivery network.
(Developer Works, IBM, 2008)
 
1.2 Why is BPM required?
There are many reasons for managing business processes. Four core reasons as per New Industrial
Engineering - Information Technology and Business Process Redesign Thomas and James (1990)
are:
1.2.1 Cost Reduction: Having optimized process in place can save cost in many ways.
Firstly, by leaning the processes can save process time, resource required and
satisfies customers.
1.2.2 Time Reduction: Having optimized process saves time in every phrase of
production and so in the final deliver, which saves cost and speedy delivery of
product/service to market/customers.
1.2.3 Output Quality: Having lean processes with standard QA/QC may enhance the
overall output of product and services.

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Business Process Management | Literature Review

1.2.4 Quality of Work life : Having structured Business Process Management in place
can bring enhance quality at work because everyone have clear role and goal to
work on.
 Although Business Process Management is part of management sciences but, without ICT it is
difficult to bring about efficient and effective change in an organization in short period of time.
 
1.3 BPM Lifecycle (Developer Works, IBM, 2008)
1.3.1 Envision
The business goals of the company are documented and well understood. The KPIs of the
business goals are analyzed and, with the combined knowledge of goals and performance
requirements, a vision for the BPM solution is
developed. A change to the management strategy
may also be needed.

The vision caters to the technology vision, and to

how the strategy (regarding organization capability
and readiness) may need to be developed to support
a BPM-enabled business transformation.

1.3.2 Assess
The "as-is," or current state of the enterprise as
applicable to process design and development, is analyzed. Organizational structure,
application ownership model, governance around process design, development and
deployment, and application portfolio analysis (at a high level) are some of the activities
assessed for gaps between what exists and what's required in the future steady state.

Current organizational capabilities are assessed to determine if they can adopt the new
business processes, which might straddle organizational boundaries and require a
flattening of the organizational structure and hierarchy.

Existing business measures and metrics are identified, and are assessed against the
capabilities of the new business processes that are envisioned in the transformation. The

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Business Process Management | Literature Review

current IT architecture is documented and assessed for its maturity to support the IT
transformations. The current technology stack is also assessed and documented.

Based on the thorough assessment of the current architecture, technology, business

processes, measurement metrics, and governance framework, the vision is reevaluated to
make it realistic. Assessment may also incorporate the definition of the IT strategy and
roadmap to realize the business transformation.

1.3.3 Define
Where the "to-be," or future steady state, enterprise business processes are developed
(design, implementation, deployment, and management). They are simulated to identify
potential bottlenecks. Solutions are incorporated into the process models to reduce real-
time performance inhibitors. The future state of the business architecture is developed
around the people, processes, and information models. Business components are defined
as fundamental structural components of the business architecture. Business processes
that integrate functions from potentially multiple business components are also defined.

The business architecture is defined through both a structural and dynamic view of the
business. Gaps in the IT architecture, as identified in the previous phase, are used as input,
along with the business architecture, to define the future IT architecture for the
enterprise. The future architecture could support the design, development,
implementation, and monitoring of the business processes and their supporting
applications. The technology stack that would support the lifecycle of the business
processes (their modeling, design, assembling, deployment and monitoring) is also
defined during this phase.

The governance process and framework is modified and refined to support the scoping,
prioritization, and funding. Modifications also establish the gating criteria to certify
processes and their implementation, in the client environment, vis-a-vis the performance
objectives.

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Business Process Management | Literature Review

1.3.4 Execute
The high-level definition of the business, and IT architecture and its components, are
actually modeled, built, integrated, assembled, deployed, and monitored in their
respective run times. In general, the:

 Business processes are either redesigned or designed from scratch.

 Decomposed process models are used as one of the mechanism to identify
services.
 Process is assembled and wired using the service and other IT components.
 Process is deployed on a process run time engine, and the running processes are
monitored for performance and other Service Level Agreements (SLA) and KPIs.

The technology stack supporting each phase of process development is installed and
configured for whenever the current phase requires the tools and products for its
successful execution.

The business processes are monitored based on the KPIs and their metrics. The IT
infrastructure that monitors the executable business processes sends out events and alerts
that may be represented through various dashboards that cater to specific roles within an
organization. For example, the CEO would like to know about business events and
exceptions, so she may summon a team for immediate reconciliation. The CIO may be
interested in a dashboard view that provides high-level information about whether the
services conform to the service SLAs.

The required organization changes, as defined in the previous phase, are also initiated.
Implementation of the process governance framework is initiated and deployed during
this phase.

1.3.5 Optimize
The various aspects of the enterprise architecture are monitored, managed, and optimized
for better performance, and to meet the business and IT metrics used to define the success
of the enterprise operations. Results from the executable processes are typically gathered
and analyzed. Analysis usually reveals information that feeds back into the Envision

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Business Process Management | Literature Review

phase, where the business goals and priorities may be reworked based on the real-time
operational environment for the enterprise.

Some visions may be easily met, allowing the stakeholders to start thinking about the next
level of enterprise maturity. Some visions might be too far-fetched to be realized within
the maturity limits of the enterprise. Results from the execution phase help in such
optimizations.

Business processes are not the only facets of an enterprise that are capable of
optimization. The organizational structure, the governance framework itself, the
technology architecture, and the metrics, KPIs, and SLAs may require optimization before
the next iteration of business and IT transformation is envisioned and defined.

BPM is best practiced through a phased and lifecycle approach, which lets you iteratively build
and execute a business process management framework based on successive iterations of scope.

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Business Process Management | Literature Review

2. Business Process Modeling

2.1 Petri-nets (A. Tiwari et al)

Petri-nets is a formal graphical process modeling
language. According to Havey M (2005), Petri-nets help
describe the semantics of process control flow,
including basic branch and join rules, as well as more
complicated synchronization scenarios. Petri-nets are
an established tool for modeling and analyzing
processes that has been widely recognized. They can
be used as a design language for the specification of
complex workflows and also Petrinet theory provides
powerful analysis techniques that can be used to verify the correctness of workflow procedures –
they can be used for both qualitative and quantitative analysis of workflows and workflow
systems. van der Aalst WMP (1998). A Petri-net is a directed graph that uses as main constructs places,
transitions, tokens and arcs

 Places: drawn as a circle, a place is a stopping point in a process, the attainment of a

milestone.
 Transitions: a transition is a rectangle that represents an event or action.
 Tokens: A token is a black dot residing in a place representing the current state of the
process. During the execution of the process, tokens move from place to place.
 Arcs: An arc is a link from a transition to a place or a place to a transition.

2.2 Business Process AI-based Language (A. Tiwari et al)

The second approach to formal business process modeling comes from Koubarakis M, Plexousakis D
(2001). The proposed business process modeling methodology is constructed with an Artificial

Intelligence (AI) programming language thus ensuring the formality of the proposed process
model. The methodology begins with the definition of business process objectives. The output is a
detailed formal specification of a business process that achieves those objectives. This perspective
is established and confirmed by the logical assumption that a process model cannot be

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Business Process Management | Literature Review

represented by a single model but as a set of various sub-models that capture the business process
from different viewpoints. There are five interconnected sub-models specified to formally describe
different aspects of the business process are:

 organizational sub-model, describing the actors that participate in the process, their
roles, their responsibilities and their capabilities,
 objectives and goals sub-model, describing what the process and its actors try to
achieve,
 Process sub-model, describing how the process will achieve those goals,
 concepts sub-model, describing non-intentional entities, and
 constraints sub-model, describing factors limiting what the enterprise and its
components can do.

2.3 Scheduling-based Mathematical Formulation of Business Processes (A. Tiwari et al)

The third approach to formal business process modeling comes from Hofacker I, Vetschera R (2001)
and it is related to mathematical definition of business processes. This modeling approach is
linked with three different optimization approaches, they are PESA, SPEA2 and NSGA. A
business process is described using a mathematical model with an objective function which can
portray any business process objective e.g. cost. The objective function is minimized or
maximized by the optimization algorithm.

The main concepts used in the process design are activities and resources. A business process is
perceived as a sequence of activities. These activities use some resources and produce others to be
used by the following activities until the goal resources are produced. Resources are the physical
or information objects which flow through the system. Activities are transformation steps which
use resources as inputs and produce new ones as outputs. Both activities and resources are
represented as sets. Each process begins with some input resources and produces a desired set of
output resources. Each activity has two parameters: one for its starting time and another for its
execution duration. The input resources of this activity must be available before the activity starts
and the output resources must be produced after the activity has been executed. The time that a
resource becomes available is another parameter critical to process feasibility.

Submitted by Amin S. Lalani Assignment # 03

Business Process Management | Literature Review

Submitted by Amin S. Lalani Assignment # 03

Business Process Management | Literature Review

3. Next Generation Business Process Management

 
2.1 KNOVA TOOL (Knowledge Value Added)

KNOVA is A TOOL that allows managers to improve

their understanding of the factors influencing the
performance and direction of a working group or
team. This improved understanding increases
confidence in decision making and overall group
operations. Specifically, KNOVA is particularly useful in identifying performance measures and
areas for investment (such as training, technology, or resources) to improve weak points or
change the style of work. However, organizations are traditionally viewed and assessed within a
quantitative, structural framework, with poor integration of the "soft" people and cultural issues.
There is no recognized practical management framework that integrates the interrelationships
between people, performance, costs/investment, culture, structure, and soft resources such as
knowledge. As a result, there is no decision procedure to identify investment options for
performance improvement that considers the overall context. The KNOVA framework described
here addresses this need by developing a model of the factors influencing team performance,
along with a decision procedure for applying this model to identify investment options for
improved performance. The performance model is based on the interactions among people,
knowledge, and organizational culture. An important aspect is explicit identification of the
knowledge resources of the team, in both active and latent form. This provides a conceptual basis
for an integrated model. Critical managers might say, "But I already understand my team's
situation." KNOVA does not negate existing skills but allows them to be applied more quickly and
with less mental effort. This is useful when operating pressures allow insufficient time to give full
consideration to all factors. KNOVA is complementary to and can be used alongside conventional
business process reengineering approaches. It is an unfortunate fact that a high proportion of BPR
projects fail. Often this is because the projects take a view of the organizational situation that
does not include the softer and more pervasive issues that govern performance and risk. It this
latter dimension that KNOVA is designed to address. The elements of a KNOVA review are
expressed in the condensed influence diagram shown in Figure 1. The arrows show influencing

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Business Process Management | Literature Review

relationships between the factors with which KNOVA is concerned that affect team performance.
By progressively expanding this model using the techniques to be described, a detailed
representation of the situation under examination is produced. In essence, KNOVA explicitly
identifies and integrates: • Knowledge possessed by the team. • People factors such as staff
turnover and motivators. • Culture of the organization in terms of the informal microculture and
the formal macroculture. • Investment in the team and its environment for improved
performance. • Performance of the team, such as the quality of decisions or actions. • Benefits of
the investment and improved performance, for example, operational cost savings. • Time over
which the investment takes place, and performance is tracked. Time is treated as an implicit
factor, while the environment of the team, or the team context, is accommodated within the
culture factors. Microcultural factors reflect the way things are done in the immediate team, the
local environment of the team, and the overall organizational environment. Macroculture reflects
wider organizational issues such as monetary reward.

Submitted by Amin S. Lalani Assignment # 03

Business Process Management | Literature Review

Submitted by Amin S. Lalani Assignment # 03

Business Process Management | Literature Review

4. Summary

 
In the light of literature review, it has been discovered that process management has
taken a scientific form and various algorithm are being used at industry and
administration to get accurate results to identify optimize and cost effective businesses
processes.

Having such level of mature system in place, various small and large organization in
various industry can set algorithm to achieve competitive advantage over other by
implemented optimize business process.

Further, having structured BPM in place can help in QA, BPR (Business Process Re-
engineering) which in other case could be very difficult.

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Business Process Management | Literature Review

5. References

 
Thomas H. Davenport and James E.Short. 1990. Sloan Management Review. New Industrial
Engineering: Information Technology and Business Process Redesign. (p11-27)

Tony Holden and Paul Wilhelmij. (Winter, 1995/1996). Process Factors in a Hospital Situation.
Journal of Management Information Systems, Vol. 12, No. 3, Information Technology and Its
Organizational Impact pp. 21-41.
 
Havey M (2005) Essential Business Process Modeling. O Reilly, U.S.A
 
van der Aalst WMP (1998) The Application of Petri-Nets to Workflow Management. Journal of
Circuits, Systems and Computers 8: 21-66 
 
Koubarakis M, Plexousakis D (2001) A formal framework for business process modeling and
design. Information Systems 27: 299-319
 
Hofacker I, Vetschera R (2001) Algorithmical approaches to business process design. Computers &
Operations Research 28: 1253-1275
 
 A. Tiwari et al.: Evolutionary Optimization of Business Process Designs, Studies in
Computational Intelligence (SCI) 49, 513–541 (2007) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Submitted by Amin S. Lalani Assignment # 03