A graphical notation technique for understanding each task that makes up the business process and the relationship between them, including order of implementation. Q-BPM is used to evaluate internal controls based on the SOX Act and for process management by computer recognition.
Business Process Diagram (BPD). Business Flow Diagram (BFD).
Summary of Business Flow Diagram
Multiple tasks, multiple organizations and persons (actors) and multiple resources (including information) often connect to make up one "task." The Business Flow Diagram uses simple diagrams to represent these relationships (order of tasks and responsible actors, input, timing etc.) in graphic form. There are numerous graphical notation techniques (for example, rules regarding what diagram signifies what). In Japan, textbooks for diagnosing small and medium size corporations have introduced the followings:
- JIS flowcharts (JISX0121) (Programming language education)
|The SOX Act|
|Federal legislation in the United States, which imposes stricter guarantees of the accuracy and transparency of corporate accounting processes and financial reporting.|
- Sannodai flowcharts (Operational process manual)
- NOMA flowcharts
- Japan Management Association flowcharts
However, recently there has emerged a growing need for the Business Flow Diagram as an in-house visualization tool for understanding internal controls in the internal control reporting systems based on the SOX Act, and for a ready-to-use document format for information systems development (particularly, BPMS), and a range of notation techniques have been weeded out while others are evolving in the midst of worldwide standardization. Listed below are the main notation techniques.
|Internal Control Reporting Systems|
|A system whereby management evaluates internal controls for financial statements, and the results of the evaluation are audited by a chartered accountant, to try to secure trust in financial statements that are publicly released.|
- IDEF 0 (IDEF ZERO) (Since the 1970s, at the time of introducing the ISO9000 etc.)
- EPC (Event-driven Process Chain) (standard for the ERP package SAP etc.)
- UML Activity Diagram (systems design)
The Business Flow Diagram is also referred to as "a flowchart," "a business process diagram," "a process model diagram," as well as simply "a process diagram." There is no particular fixed expression. In official J-SOX documentation from the Financial Services Agency, it is referred to as a "Business Flow Diagram." In the specification documents for BPMN it is defined as a Business Process Diagram (BPD).
International Standards Bodies
OMG and WfMC are the main bodies involved with the standardization of graphical notation for business flow diagrams. The diagram below illustrates developments in the main standards bodies.
- OMG (Object Management Group): BPMN
- WfMC (Workflow Management Coalition): XPDL
- OASIS (Organization for the Advancement of Structured Information Standards): BPEL
- W3C (World Wide Web Consortium): HTML, XML
The Relationship between Business Flow Diagrams and BPM
One of the goals of introducing BPM is to strengthen internal controls. The SOX Act and corresponding legislation in many countries require that business content data and risk evaluation data be submitted in the form of documentation. The J-SOX legislation recommends that corporations submit three sets of data: a business flow diagram, a business description document and responses to risk and control. The Business Flow Diagram can be used to create a visual understanding of the flow of business processes. Consequently, the Business Flow Diagram has an important role in strengthening internal controls and it is also extremely important for the implementation of BPM.
- Business Process Definition
- Internal Control
- Internal Control Reporting System
- SOX Act
- Three-piece Set
- Process Owner
- Business Accounting Council "Evaluation of Internal Controls for Financial Statements and Auditing Standards as well as Evaluation of Internal Controls for Financial Statements and Establishing Implementation Standards for Audits (Statement of Opinion)" (Financial Services Agency, February 2007, PDF: 935 KB, 129 pages)
- Essential entries in securities reports for a listing application (part 2) (Osaka Securities Exchange)
- Questetra BPM Suite - Case Study
- BPM Story Episode 1: How to draw a Business Process Diagram ?(06/01/2009)