Business Process Library Q Business Process Management

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BPM is a business management concept involving the continuous implementation of changes and improvements in business processes, the management of these business processes, and efforts to bring these processes closer to ideal forms. Business Process Management.

Contents

Outline of BPM

Business process management (BPM) refers to business management activities that continuously change and improve a business process, manage it, and move it closer to the way it should operate.

Specifically, BPM includes defining and designing tasks in each process (process modeling), controlling the execution of the tasks in line with the definitions (process operation), and monitoring the performance of the tasks (process monitoring).

By repeating the activities cyclically, BPM continues to search for a process suited to the business environment. In other words, BPM can be said to be a PDS/PDCA cycle relating to an internal business process. BPM activities manage not only results but also process definitions, including the order of tasks, the input and output of tasks, and the people and computer systems in charge. BPM also manages execution status (processes in progress/processes completed; process instances).

Cyclical management of BPM
Cyclical management of BPM

Business processes first came under focus when business process re-engineering (BPR) was announced in 1993. However, BPR was not necessarily implemented successfully. BPR, like BPM, is a business management concept involving changing an internal business process to the way it should operate, but it was regarded as a sweeping reform that took place only once, and the related return on investment tended to come under question. Around 2002, BPM was conceptualized as a continuous BPR.

BPM is considered to stand for business process modeling on rare occasions, and means creating process models.

Features of BPM

  • Cycle: The improvement of a business process is not a single project. It is repeated in accordance with an improvement cycle (PDS/PDCA cycle).
  • Modeling: Since the focus is on the management of different internal business processes, models (business process diagrams) are often used for bird's-eye views and definitions of new processes.
  • Privilege management: Not only definitions of procedures, which are described in workflows, but also people performing tasks and performer privileges are managed and optimized.
  • IT support: The management of process models and the identification of process instances often assumes the use of information systems. Computer systems with effective support functions are called BPM systems (BPMS), BPM suites (BPMS), or BPM software (BPMS).The actual functions supported by BPMS are here.

BPM Cycle

  • Model (Plan): A process model is defined. The necessary environment is prepared, including the procurement of information systems.
  • Operate (Do): The business is carried out in the environment in accordance with the definitions.
  • Monitor (Check): The status of operation processing is identified. The operation processing results are calculated. The achievement of goals is checked. Issues and improvement plans are listed following analyses.
  • Optimize (Act): Improvements to issues, including the placement of resources (people, apparatus, and materials) and time changes, are carried out as far as possible. (Designing a process model is not included.)

(*)There are different types of understanding about the individual steps in the BPM cycle. For example, the introduction of support systems is considered by some to be the core of the Do step and is called Automate or Implement. Listing improvement plans and creating new process models are sometimes included in the Act step and are called Improve. The primary element of the Plan step is sometimes considered as a simulation for testing hypotheses. The Check step can be called Analyze. The variations are caused by the fact that BPM involves not only process models but also the identification of process instances.

Purpose of BPM

The primary purpose of BPM is to expose potential problems and risks in the company through process improvement activities.

In fact, BPM involves not only improving weaknesses but also bolstering strengths. With regard to improving weaknesses, if there is a dispersion of processing costs, a processing standstill, or unauthorized processing, for example, changes are made to the business process to prevent the problems recurring, such as the addition of an independent verification task. The business process can be modified after risks are assumed in advance based on the business process chart.

In terms of bolstering strengths, improvements to make a short delivery time shorter, for example, are considered to enhance the company's competitiveness, even if this is already an area of strength for the company.

Companies have very different purposes for BPM. The purpose may be just to ensure that adequate documents and other information are provided in relation to financial calculations.

From a long-term perspective, the purpose of BPM can be said to continue adapting the company to the business environment.

Collateral Effects of BPM

  • Real-time monitoring: The occurrence of aberrations and failures can be identified promptly, in addition to discrepancies with targets.
  • Recording audit trails: Who made what decisions and when can be recorded, and responsibility for performance can therefore be clarified.
  • Obtaining stakeholders' trust: Internal processes are clarified, and the likelihood of incidents falls, including unauthorized processing.
  • High organizational motivation: Improvements and changes are made continuously, and many people play a part. The organization is essentially different from one that refuses to depart from the status quo.

Types of BPM

If tasks in the business process are carried out by people in preparation for evaluation reports and decision-making, they are sometimes called human tasks. If tasks are automated in a computer system such as aggregate calculation and sorting goods in a distribution center, they are called system tasks.

simple sample of a business process
EAI
EAI stands for Enterprise Application Integration and means integrating multiple enterprise information systems so that they will collaborate organically. Middleware from BEA Systems, Sun Microsystems, and IBM is often used as software for implementing EAI.


BPM which primarily considers optimizing human tasks is called Human-Centric BPM (HC BPM). BPM which primarily considers optimizing system tasks is called Integration-Centric BPM (IC BPM) or System-Centric BPM. Many IT tools supporting Human-Centric BPM have evolved from workflow systems, and many IT tools supporting Integration-Centric BPM have evolved from EAI tools.

BPM Methodology

  • Top-down approach: In this approach, the business process is modified from the perspective of management or senior executives. A to-be process can be designed based on the business strategy and business plan without being limited by the as-is process. This approach is suitable for full optimization.
  • Bottom-up approach: In this approach, the business process is modified from the perspective of employees or operators. Changes are made to business processes at organization terminals. The focus tends to be on small improvements to the as-is process, and the business process can be improved on a day-to-day basis. The approach is suitable for local optimization.

(*)Of course, both the top-down approach and the bottom-up approach are necessary. If only the top-down approach takes place, it is likely to cause the functional failure of a centralized organization. On the other hand, if only the bottom-up approach takes place, full optimization will be difficult, with each department disconnected. Although the choice of methodology depends on the business category, size, and culture of the company, a realistic solution is as follows:

  1. Sharing business strategies and management policy
  2. Practicing bottom-up approach BPM cycles
  3. Making corrections through the top-down approach

Process Definition Methodology

  • Flow model: Definition of a business process flow. A business process flows from person to person, from person to computer, or from computer to computer. A flow may branch off and join back together.
  • Data model: Definitions of information formats for business process deliverables. A business process ultimately generates deliverables and by-products. In other words, the status of deliverable data transitions through a business process. In the case of a request for a managerial decision, data such as the text of the request, application date, and approval flag will be entered.
  • Authority model: Definition of the authority of people engaging in a business process. In many business processes, different people (people in charge) are engaged.

History(World)

Business framework Workflow design
  • 1987: J.A. Zachman (IBM) advocates EA (PDF: 17 pages)
  • 1992: J.A. Zachman (IBM) expands EA (PDF: 27 pages)
  • 1992: COSO announces COSO Control Framework
  • 1993: M. Hammer (MIT) and others announces BPR
  • 1994: ITGI releases COBIT1.0, an internal control framework
  • 1994: COSO adds to COSO Control Framework
  • 2000: Buss term: Web service
  • 2002: U.S. SOX Act enacted
  • 2004: Buss term: SOA
  • 2005: ITGI releases COBIT4.0, an internal control framework
  • 1970s: Modeling using entities
  • 1980s: Modeling of business requirements
  • 1997: OMG releases UML1.0
  • 2002: WfMC releases XPDL1.0
  • 2004: BPMI releases BPMN1.0 (May)
  • 2004: OMG releases UML2.0
  • 2005: OMG and BPMI merge (June)
  • 2005: WfMC releases XPDL2.0, which corresponds to BPMN (October)
  • 2007: OASIS releases WS-BPEL2.0
  • 2008: OMG releases BPMN1.1 (January)

History(Japan)

  • Sep. 2005: First subcommittee meeting of the Information Systems Society of Japan on the visualization of business processes
  • Jan. 2006: BPM-Japan Association established
  • Jun. 2006: J-SOX put into force
  • Dec. 2007: Japan Internal Control Association established

BPM in practice

  • Setting up a pilot process: Manage BPMS productive processes where quality control operations are carried out.
  • White collar process: Introduce BPMN to business processes, many of which are not controlled, and obtain approval trails.
  • Appointment of process owner: Appoint a process owner for each business process and make him/her responsible for an improvement cycle in the business process.
  • Use of frameworks: Incorporate frameworks in a BPM cycle, including COSO, COBIT, ITIL, CMMI, and ISOs.
  • Use of infrastructure: Start a BPM cycle, taking advantage of XBRL and compliance with the SOX Act.
  • Processes dependent on individual skills: Develop business processes that have been heavily dependent on individual skills, including performance management, customer relationship management (CRM), and business plan development.

improvement through Modeling (Planning)

  • Sharing: Many departments use the same processes and share common business processing knowledge.
  • Automation: Processing that does not need to be carried out by people is carried out by a computing system, including determining who documents are referred to and calculating cumulative amounts.
  • Elimination of redundancy (centralization): Enclose processes within each department's cross-functional processes. Eliminate redundant tasks and process operations without stoppage through the central control of data.

Improvement through Monitoring (Checking)

  • Personnel allocation: Widely distribute skilled workers and newcomers who require a longer processing time.
  • Alert: If the time taken for a process exceeds a certain period, the person in charge and the supervisor will be alerted.

BPM Failures

  • Implementation failures: The systematization (system implementation) of operations in accordance with a modeled business process is attempted. However, it requires time and a 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 a detailed description.
  • Dependence on consultants: All modeling and analyses are contracted to consultants. As a result, company managers and employees become indifferent to the BPM cycle.
  • Obscure policy: There is no business strategy or management policy as a base for discussing a to-be business process.
  • Insufficient knowledge of IT: The concept of SOA is applied to a company-wide system although there are not sufficient engineers for promoting IC BPM.

Japanese Translation of BPM

In the translations of standard BPMN specifications and workflow pattern documents carried out by J-SYS Software Co., Ltd., the Japanese translation of business process management is business process kanri, and the translation of business process is business process. (Other translations include business process zu (diagram).)

On the other hand, in reports, Q&A documents, etc. issued by the Financial Services Agency, there are no equivalents to business process management. Phrases closer in meaning include "internal control relating to business processes" and "the assessment of business processes." The Japanese translation of business process is gyomu process. The translation of business process diagram is gyomu-no nagarezu or flowchart tou (etc.).

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