Business Process: The Model and The Reality

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Business Process: The Model and TheReality

P. Szmodics

Abstract— This paper gives an overview about the business process management’s main perspectives. First it defines the

differentiation between public and private value drivers then it assesses the difficulties in the process modeling. It shows the

process compliance as the key of the practical success and gives some idea about its management. It also reveals the BPM as

source of possible holistic risk in the society. In this paper the key elements of the future research of the author are introduced.

Index Terms— Business process, Compliance, Problem complexity, Readiness, User/Machine systems, Value of information

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1 INTRODUCTION

HE business process management (BPM) is the mainpillar of the information management. The deeperunderstanding of the processes helps the actors with

the performance managing, business risk handling andidentifying new opportunities.

Since the processes compose a holistic system, they areconnected at least indirectly; therefore it is useful to thinkout of the box and to have a strategic view as well, inorder to be able to grasp the value addition phenomena inthe business processes. The ability to recognize the valuegives the possibility to render the business processes tothe real business demands earlier than the competitors.The visionary leadership and the corporate path finding[1] are the part of the key success factors in order to createvalue. Next to the strategic process approach it is alsorequired to have the sufficient level of resources as thebase of the coming changes, in one hand it might comefrom outer sources or in the other hand it might be basedon slack resources [2].

The BPM gives more than simple performance as-sessing in practice, it provides the intelligence for thebusiness. The BPM can be used with efficiency in thosesystems where the processes are unified, can be parame-terized, and at the end there is a structure. The structurehelps with the documentation process what builds the

grounds for the continuity.The documentation facilitates the exploration of the in-

consistencies, with the help of the documentation thedifferent actors can have about the same process a com-mon accepted interpretation. The common sense and thecommon language reduce the variation of the processes, itsupports the determination of the priorities and the iden-tification of the developments. The delimitation of theresponsibilities generates transparency. The performancemanagement becomes univoque, the maximization of theprofit simpler. The process management can be used e.g.by managing critical pure information, analogue, finan-

cial systems, roles, event-management (especially trig-

gers). It is also necessary for the identification of riskydecisions, processes, nodes. The main elements of theevent-based process management are the events, func-tions, roles, documents, systems, the trig-gers/predecessors, the follow-up activities and the logicaloperators which describe relations amongst the processesand the directions in flow [3].

2 THE VALUE DRIVERS OF THE PROCESSES

In assessing the systems there is always a problem how todetermine the value. What is value at all and for whom?The dominant values are usually the financial perspec-

tives: reduced costs, maximized value, higher profit; ordynamics: shorter response time/reaction time. The mainproblem with the value is how to find the common valuefor the stakeholders and for a specific time horizon.

In the most cases it is difficult to determine the attrib-utes of the common value, which might mean similarpreferences for everybody/everything (or at least for themajority). In the practice there are more negative common‘values’ which are rejected (e.g. anti-tolerance).

The value problem’s business process management as-pect is even more interesting: what is the market value(historical cost + brand value), the real value (historical

value) and the value of utilization of the goods (the real-ized value from the usage), these are usually significantlydifferent. In the future it might be really interesting whichvalues might be the common value, will be a rapproche-ment or not. Anyway the business process managementwill deliver the inputs for the assessing the reality deeperand deeper.

The drivers of the value (Fig. 1.) might be distin-guished from the public and the private aspect. In orderto secure the long term business activities it is importantto maximize the private value (e.g. profit, market share,collaboration etc.), but it cannot harm significantly the

public value (e.g. tolerance, knowledge, security, preven-tion). ————————————————

P.Sz. Author is with Corvinus University of Budapest, Budapest, Hungary

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JOURNAL OF COMPUTING, VOLUME 5, ISSUE 4, APRIL 2013, ISSN (Online) 2151-9617

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On Fig. 1. the horizontal axis marks the private values

which are usually strictly connected to the business pro-cesses, the vertical axis represents the public values whichare mainly connected to the society and the human ele-ments and processes. The different type of values cannotexist without each other, a successful business entity hasto provide a mixture from the different type of values.

The business processes might cover the private valuescompletely but the real business cycles require inherentpublic values built in the business processes. The bestexample for this dichotomy is the reputation itself, oncethe business cannot comply with the factors of the reputa-tion, it has an immediate loss. The adequate identification

of the public and the private value gives a mixture whichcontains all of the relevant elements with the specificweights. For the realistic projection it is crucial to recog-nize the existence of the public values.

3 THE BUSINESS PROCESS MODEL AND THE

REALITY

3.1 Realistic projection

The surrounding environment is subjective for the mostof the human entities, that is the why it is important howthe given process catches it. There is also the problem of

the gaps of the visualization and the imagination aboutthe reality which can derive an unrealistic approach. Thecommon interpretation must be always the ground of thecooperation. It is important that the roles in the specificenvironment (with specific limitations) have the commondefinitive directory: the same activity should carry thesame meaning for everybody. Using the business pro-cesses there is the interesting fact that the business pro-cesses alter the environment continuously, the impact ofthe constitutive and implementer actors might be alsosignificant in the process lifecycle and for the environ-ment.

Once the constitutive worked out the framework of theprocesses, it is critical whether it is implemented/used ornot, the process compliance factors are able to run theprocess or not.

3.2 Process compliance factors

The process has to have a trigger and a target, betweenthese points happens the modeled reality. How the pro-cess reaches the target, depends mainly on human andtechnical factors, once the business process is set ade-

quate. The human factors are the motivation and thecapability, the technical factor is represented with thesystem (Fig. 2.).

The motivation represents the cooperation willingnessof the human entity (mental state, physical state, motiva-tion set etc.), the capability shows whether the humanentity is able to comply with the process physically (bodyskills, technical skills, competency set, licenses etc.). [3.2.2

Readiness indicators]The system shows whether the physical environmentfits the current requirements (hardware, software, net-work etc.). [3.2.1 Systems]

The precondition for this ‘Compliance factors’ model is that: there is an interaction between at least one humanrole and one system and there is a business process. If oneof these elements has a failure the process cannot reachthe target. There are different levels set which symbolizethe minimum requirement, in this example the levelsshould separately reach the minimum of 80% level inorder accomplish the target. Once one fails, the wholeprocess fails.

The following two points describe the system and thehuman factor deeper relating to Fig. 2.

3.2.1 Systems

If the actors cannot isolate themselves somehow and pro-vide the resources for sustaining themselves on the longterm, they have to cooperate with someone or somethingby necessity. The cooperation means usually at least onelegal dependency, but this connection might be material,technological or financial etc. If the actor is a human enti-ty, the dependency can be expanded with addictionwhich is commonly a material, consumption or behavior-

al practice simultaneously (e.g. regular time spending).The trade secrets and the patents have a very specialdependency (lock-in) which means usually a technologi-cal binding [4]. The current business can more or less

Fig. 1. Value drivers

Fig. 2. Compliance factors






handle the dependent systems, but the households arenot any more able to recognize the dependencies, thehidden mechanism of the relations cannot be usuallyrevealed for them since the knowledge is accumulated bythe private business sector. The process management’sdevelopment path might be in one hand the knowledgerestructuring at the households (change from the status:clever business vs. silly households).

At first it might be strange to involve the householdsbut the deeply connected networks, the networking getmore importance, the critical mass and the mass effectsdevelop the social dynamics in such a way which cannotbe left out of consideration. The customers are motivatedto follow the mainstreams what implies the commonmovements and acts which can lead to high risk, especial-ly in loss of trust (e.g. run on the bank).

The systems mean not just the environment but alsothe fact of the dependency.

3.2.2 Readiness indicators The technical and human factors are always parallel inthe process since they often, almost always, cooperatewith each other.

The different knowledge-intensive systems require al-ready a wide competency set in order operate. Each hu-man entity has an own competency map which describeshis/hers knowledge, but these maps are usually relativestatic and not completely objective. The process manage-ment can deliver the framework to make these maps dy-namic. For this it is important to measure the processesand the real compliance of the roles, how they are pre-

pared and if they are ready to fit the compliance in prac-tice.The E-readiness indicator is a widely accepted solution

for this problem, it covers the connectivity, infrastructure,the social environment, the legal environment and thebusiness elements. From the perspective of the BPM asimilar but more distinguished model should be devel-oped. This ad hoc example shows just some of the basicelements of the human readiness:

• e/d – electronic/digital• l – legal• f – finances/money• m – mobility• t – time usage• a – alphabetization• c – creativity• h - health• residualThis example is relative simple, not complete and till

now it has not got any specific content (and there arecause and effect relations which are not described) but asan illustration it shows well what kind of potentials are inthe business process management. Logging every rele-vant steps and piece of knowledge might be useful for thebusiness units. The characteristics of the logs can draw

the real profile of the business and the given human enti-ty, which will be more and more useful in performanceassessing. Since the logs describe the reality, there is alsoa moral hazard element in the whole theory.

The human and artificial systems work with each otherusually smoothly in a pre-determined environment, if it isnot so well-determined the exploration of the complexityof the problems or business cases might be the valuedriver itself.

3.3 Human/Automatic systems vs. Complexity

The formalization of the processes determines in whichsystem the process can be run. The less it can be struc-tured, the more difficult it is to be reconstructed and besimulated or implemented in another environment. Theprocesses, which can be structured well, are a type of aparameter system which can be realized by semi-automatism and automatism. The more explicit theknowledge, the better the process can be structured andthe more simple the copying and programming of it.

Since the pure processes get more transparency, thebusiness processes are also clearer. The tacit knowledgewill be soon the key element of the competency [5] next to

the networking.

In order to visualize the problem scope the interactionsand the complexity is marked. The ratio amongst thehuman and automatic systems shows the type of interac-tions. The both ends represent pure human or pure auto-matic interactions, in the practice the interactions happensomewhere in the mixed zone. The other visualized ele-ment is the complexity of the problem. The simple prob-lem is the completely structured problem which has analgorithm e.g. an event based process, the non-structured,complex problem has got no structure at all, these are alsotwo endpoints.Interactions:

1. Human2. Mixed3. Automatic

Problem:1. Non-structured (Complex)2. Structured3. Completely structured (Simple)

The schematic illustration is simple, but it shows the basicdifficulties for the business process structuring.

Human

Automatic

Complex

Simple

1.

2.

3.

Fig. 3. Human/Automatic systems vs. Complexity






3.3.1 The documentation

The structure of the processes gives an opportunity to getthe process documented. Once the given process is ade-quate documented, it can be measured as well. The lackof documentation makes difficult to interpret the process,in this case just the affected roles might know it. During

the cooperation it is necessary to have the parameters,otherwise the connections amongst the processes cannotbe set. The complete lack of documentation is a source ofproblem, in the other hand if the process is too deeplydocumented, the too detailed process might swallow thevalue of the process, the unimportant elements can havemore focus, the real value cannot be driven. It is im-portant to put emphasis on reliability and expedience inaddition. The common goal of the business process man-agement is to create the adequate guarantee system aboutthe documentation not just in every business unit, butalso in the public administration.

The documentation creates competitive advantage: fast

adaption ability, copying ability, information andknowledge sharing. But how to do this? The answer issimple: every relevant step should be logged.

3.3.2 Tracing/Logging

The tracing and the logging creates the environment forthe process evolution [6], but it seems to be sometimes tootransparent. The information systems get more integrat-ed, the possibility of isolation is a kind of privilege. Thebetter realistic process projection reaches the boundary ofthe business domain, it is in the doorstep of the publicdomain via integration. The information systems are

open, the data privacy control is far behind the technolo-gy. The tracing and the logging solutions can be set inevery information system. The main phenomena: who isfollowing who and why?

4 RUPTURES

4.1 Privacy

The process management makes the processes transpar-ent; the personal private domain, the companies and thestate exchange information more and more. Currently thehouseholds are in the center of the privacy intrusions. TheBPM is already affected via the integrated processes. The

transparency and the isolation from the integrated infor-mation system are both privilege. With the transparencythe set of action can be easily characterized of the givenentity.

4.2 Society tensions

The determination of the value (in the reality) is not sim-ple, there should be therefore more such scenarios wherethere are more coexisting values which can form rupture.The networking can reduce the cultural differences whichcan attenuate the identity of the subgroups. The toocommon preferences may cause common acts which

means a high risk, the mass serving systems are notenough flexible to deliver the services for concentrateddemand.

There is also a rupture amongst the non-automatized

(e.g. creative) and automatized processes, there is alreadyan isolation mechanism. The questions whether thesenon-automatized processes should be integrated or not;anyway once they are not the inherent part of the processmass, the risk of the full system might be lower.

The BPM gives the opportunity to assess the perfor-mance and the risks easier and more punctually. Since itgives the business directly competitive advantage and theprofit realization, it is worthy to use it, but there areboundaries strongly connected with the public and pri-vate values which should be taken into consideration.

5 CONCLUSION

The structure and documentation of the business process-

es gives the parameters to the communication channels.

The processes become the part of the business network

and get integrated, so the complex reality can be modeled

always better. The tracing of the logs makes the former

static approaches dynamically which has several benefitsbut also risks which is accumulated mainly in the acts of

the critical mass and the privacy.

ACKNOWLEDGMENT

The author wish to thank the Department of InformationSystems at Corvinus University of Budapest for theirsupport.

REFERENCES

[1] H.J. Leavitt, Corporate Pathfinder . Homewood, Ill.: Dow Jones-Irwin,

1986.

[2] J.V. Singh, “Performance, slack and risk taking in organization-

al decision making,” Academy of Management Journal, vol. 29, pp.

562-585, 1986.

[3] A.W. Scheer, ARIS – business process modeling. Saarland Univer-

sity, 1998.

[4] H.L. Varian, J. Farrel, and C. Shapiro, The Economics of Infor-

mation Technology. Cambridge: University Press, pp. 54-72, 2004.

[5] M. Polányi, The Tacit Dimension. London: Routledge, 1966.

[6] H.L. Van de Ven, “Suggestions for studying strategy process: A

research note,” Strategic Management Journal, vol. 13, pp. 169-

188, 1992.

P. Szmodics holds MSC: in Business Information Systems (2007),and in Economics (2011), he is currently a PhD student at CorvinusUniversity of Budapest; he is the employee of Tata ConsultancyServices; his current research interest covers business processmanagement and related document management; is member of theJohn von Neumann Computer Society.




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Business Process: The Model and The Reality