White Paper on Business Process Lifecycle

Business Process Lifecycle ManagementDr Michael Rosemann White Paper March 2004

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Learning outcomes After studying this paper, you will be able to: explain the entire process lifecycle identify the most important processes of an enterprise discuss the advantages and disadvantages of 'as-is' modelling identify weaknesses in processes apply outcome, activity and resource oriented suggestions for process improvement gain an appreciation of reference models explain the theory of constraints and explain the advantages of the pull principle

Course contents The Process Lifecycle - Introduction Process Identification As-is Modelling Process Analysis Process Improvement Process Implementation Process Execution Process Monitoring and Controlling Process Change Management

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I like to thank IthinQ.com, South Africa, for the permission to use this document for further distribution at the Queensland Unversity of Technology, Brisbane. I also like to thank Roy Chan for his input in a previous version of this White Paper.

White Paper "Business Process Lifecycle Management"

THE PROCESS LIFECYCLE - INTRODUCTION A process has a lifecycle; we will discuss the single steps of this lifecycle. First of all a process has to be identified. The selected processes should be depicted in process maps, which may also be termed process models. An 'as-is' model describes a current business process with all involved activities, people, data, and further resources such as software, hardware or printer. These as-is models must be analyzed thoroughly in order to identify existing shortcomings and constraints. 'To-be' models may be developed based on these as-is models. They should refer to the objectives of the process and consider existing organizational and technical limitations. These process models describe alternative future scenarios for the business processes. One of these to-be models will be selected and implemented. The new processes will then 'go live', i.e. be executed. At the same time, they are continuously monitored and controlled. Differences between the plan and the actual data can motivate a new 'Process Engineering' project. Figure 1 gives an overview about this process lifecycle, which consists of seven steps. Process identification Process modelling (as-is) Process analysis Process improvement (to-be) Process implementation Process execution Process monitoring/controlling

Figure 1: The Process Lifecycle The two main activities in the process lifecycle are: developing an understanding for the current (as-is) situation, and creating a possible new way of organizing the business processes (to-be).Descriprive modeling of the real world (as-is) Prescriptive modeling of the real world (to-be)

Figure 2: Objectives of Process Modelling Process Engineering describes a holistic approach for managing the entire process lifecycle. As you have learnt in the previous module, Michael Hammer and James Champy also introduced the more popular term Business Process Reengineering (BPR). They have been very successful in their best-selling book Reengineering the Corporation. A Manifesto for Reengineering (HarperCollins Publisher, Inc. 1994). Dr Michael Rosemann, QUT Brisbane 2 /29


Unfortunately, they are not very specific when it comes to how to make BPR actually happen. We seek to be more specific in this module by attempting to provide some hands-on recommendations. The approach we will take is also motivated by the fact that apparently more than 50 % of all BPR have failed. PROCESS IDENTIFICATION Most of the examples we discussed in Module 1 were dealing with selected processes. You drew a map for one process and analyzed one process. These examples gave you an initial understanding for the characteristics of a process. However, these examples oversimplify the reality. Fact is that most companies have hundreds, if not thousands of processes. The car producer Volkswagen, for example, has more than 1,200 process models documenting the production processes. AMP UK, a worldwide financial solutions provider, have designed more than 1,800 process models depicting the current situation within 15 months. Since a Process Engineering project obviously can become very complex, it is necessary to identify the most important processes. Guidelines are required on how priorities can be given to processes. Where should a Process Engineering project then start? To help you understand 'process identification', a number of questions and scenarios will follow that and guide you step by step along the business process lifecycle. Question 1 Think about the company you are currently working for, a company you have worked for, or a company you know about. What processes would be a good starting point for a Process Engineering project? What criteria would you apply? Answer 1 Three criteria determine the processes with the highest priority. The overall objective for most companies is to maximize the profit, that is, the difference between revenues and costs. Consequently, its only logical to apply this central objective also to the selection of the important processes. Following this guideline, important processes contribute significantly to a companys revenue. The marketing manager would describe them as cash cows. In addition or alternatively, important processes are cost intensive. While it is not always easy to quantify the monetary results of a process exactly, it is usually possible to identify these value-/cost-driving processes based on knowledge about the companies focus and priorities. The assumption is that each successful reorganization of these processes pays back in increased revenues and/or reduced costs. Besides pure monetary results, the degree of customer involvement in a process can be an important selection criterion, if customer relationship management is a relevant concept. The more interfaces a process has with customers, the more important it would be to start with this process. However, $-values or customer orientation are not the only criteria. A Process Engineering project aims to analyze and reorganize processes. A process might be the cash cow, but at the same very well organized. There is no reason to investigate into further analysis, if the process is already streamlined. Therefore, a further criteria is required that captures the need for reorganization. In other

Dr Michael Rosemann, QUT Brisbane

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words, a process is likely to be a candidate for the Process Engineering project if it currently has weaknesses and the perception is that its performance could be improved. Again, this does not require an in-depth analysis. Managers are typically able to list immediately the processes with the biggest problems. This analysis could be based on the processing time, the number of involved IT applications, an increasing number of customer complaints or unsatisfied employees. These two criteria can be summarized in a matrix that shows the required focus.Need to reorganize

high

II

I

small

IIIlow

IVhighProcess value

Figure 3: Focus of the process selection After trying to quantify the revenue and costs related to one process and estimating the need for reorganization, there may still be more than one process remaining. The final selection criterion is the likelihood of a successful reorganization of the process. A process might have weaknesses, not because nobody ever looked into this but because it is difficult to come up with feasible suggestions for improvement. If a Process Engineering project starts with an important but challenging process, it will be confronted with an enormous risk. If the project is not successful, the members of the project team and the organization will loose faith in Process Engineering. In short, especially at the beginning of the project, processes should be selected which can be reorganized successfully.

These three criteria are also mentioned by Michael Hammer and James Champy in their book Reengineering the Corporation. A Manifesto for Reengineering (HarperCollins Publisher, Inc. 1994). These criteria are known as: dysfunction ("Which processes are in the deepest trouble?"), importance ("Which processes have the greatest impact on the company's customer?") and feasibility ("Which process is the most susceptible to successful redesign?"). All three criteria come together for the selection of the processes that should be part of the Process Engineering project. Thomas H. Davenport lists in his book Process Innovation: Reengineering Work through Information Technology. HBS 1993 the following criteria: enumerate major processes determine process boundaries assess strategic relevance of each process Dr Michael Rosemann, QUT Brisbane 4 /29


render high-level judgements of the 'health' of each process qualify the culture and politics of each process.

The first two criteria from Davenport help to separate processes from the complex network of business activities within an enterprise. The last three criteria again are very close to the proposed criteria above. The selection of important processes can also be based on a comprehensive list that names all existing processes, and includes scores regarding the contribution of the process to the company's profit, its current performance and likelihood of a successful redesign project. A weighting can be given to each of the three criteria with the overall scores ranked in order, to identify the most important processes. This approach is known as the 'Scoring Model' but it is often regarded as too complex for the purposes of Process Engineering. A more cost-effective approach is it to talk to managers with comprehensive experiences and select the most relevant processes collaboratively. This selection should also include factors such as the attitude towards change of the involved members of the organization, or the existence of other projects that influence the processes. These are definitely not minor issues. The fact that line managers are reluctant to innovate is one of the most critical factors affecting the success for business reengineering projects. Once the processes for the first phase of the Process Engineering project are selected, it becomes important to communicate the idea of process orientation within the company. All project members must understand the advantages of process orientation, but also be aware of its constraints. Once the organization is 'process aware', the project work can start with a current description of the selected processes. AS-IS MODELLING Once the processes are selected, it is necessary to develop a common understanding of these processes. What is really meant by 'Procurement process'? Where does it start and where does it end? Does it cover all purchased materials and goods, including all assets? The main purpose of this phase is to focus precisely upon the project work. This is indispensable for the identification of the project team and can usually commence with an analysis of already existing process documentations. However, companies often have various and (unfortunately) creative ways of documenting processes. They use word processors, spreadsheet solutions, presentation software like PowerPoint or a graphic tool like ABC Flowcharter or Visio. Moreover, the different departments of one company usually have different approaches, the descriptions being made at different times within different projects. They are typically not maintained, do not include any information if they are still valid and are hard to find. They might even end up in the draw of a manager, who forgot about them. All identified process documentations help promote a preliminary understanding of the processes. Thus, the involved IT applications and organizational units may become clearer. Nevertheless, usually it is recommended to design a 'new' process map. (These process maps are also called flowcharts or process models.) Before the process modelling activities can start, it must be defined how the processes should be modelled. The past experiences regarding process documentation must be considered. The following decisions should be made at this stage:


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Who will design the process models? Are these people experts in modelling or will they do it for the first time? This is a very critical issue. Studies in Australia have shown that finding business reengineering team members who have the required skills and knowledge is the most critical success factor for such projects (Murphy and Staples: Reengineering in Australia: Factors affecting Success, Proceedings of the Australasian Conference on Information Systems - ACIS 2000, Sydney). Who will read these models? Will it be a small project team of experienced business analysts or is the idea to communicate the process models on the intranet to as many employees as possible? In the latter case, the models must be selfexplanatory. This means that certain conventions have to be defined for the names of the activities or for the entire layout of the process model. The following figure will give you an idea of how comprehensive process models can become. This process model was designed for a facility management company and is one of more than 250 models.D TI-Pote ntiale a bgleich en Beratu ng d urchfh ren A ng ebot e rstellen und Vertrag ab schlie en Kundenbedarf kann /soll m it DTI-R essou rcen gedeckt w erden Weitere, alternative Lsungsm glichkeiten sind zu erarb eiten Zu fakt urieren des Gro bkonzept ist zu erstellen

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Interne n Auf trag fo rmulie ren Vertriebsfachkraft Interner Auftrag wur de erteilt K onzep tverantw ortliche r

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A lternati ve Lsungen IQm-S trung smana gement liege n vor A lterna tive Lsung IQm -Admin istratio nsman ageme nt A lterna tive Lsung IQm-Flchen manag ement A lterna tive Lsung IQm -Strungsma nagem ent A lterna tive Lsung IQm-Ko mmun ikation smana gement A lterna tive Lsung IQm-C orporate Faci lity Network A lterna tive Lsung IQm -Personal-S ervices-Mangement A lterna tive Lsung IQm-Energi e- und Verb rauchs manag ement A lterna tive Lsung IQm-S icherheitsman agement A lterna tive Lsung IQm-Ba umanag ement

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Figure 4: An example for a process model Based on the answers to these questions, a decision must be made regarding the way the models should be designed. A modelling technique specifies what symbols and connectors are to be used in the process model. The resulting flowcharts may describe a sequence of activities in a very simple way. They also can include many symbols depicting various events, status, objectives, data, software, organizational units such as specific persons, positions, project teams, organizational departments, and business partners, etc. For example, the next figure includes activities (green desk), events (purple stars), data, organizational units (sales) and involved application (Excel).


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Customer order received

Excel

Sales database

Confirming order

Sales

Order confirmed

Handling order

Planning production

Figure 5: An example for symbols in a process model What tool should be used for the modelling activities: a simple drawing tool or a sophisticated business modelling tool? Is it necessary for many modellers to access the models at the same time? Is it necessary to store attributes like time and costs per activity?

After these decisions have been made, their appropriateness should be tested in a pilot project. This pilot can be differentiated in the three main phases unfreezing moving and freezing. In order to 'unfreeze' the organization and increase its process awareness, it is recommended that a process is depicted with its respective organizational and IT interfaces. The organizational interfaces indicate how the responsibility for an activity is handed over from one organizational unit to another. IT interfaces describe a point in the process, where two activities that follow each other are supported by two different software solutions. These first process models should demonstrate that they offer a new way of understanding the business, especially through identifying weaknesses related to interfaces. In successful Process Engineering projects, the project team already values process models that describe the current business processes. Although not including ideas for improvement in such a model, many organizations come to greatly appreciate the 'modelling' process. The following questions will help you to apply what you have learnt to processes interfacing in an organization. Question 2 What are examples for processes that typically have many interfaces in an organization? Select also potential processes from your individual workplace. Answer 2 Examples include customer complaints handling, purchase order process, sales order process, product development, and invoice verification. Once the organization appreciates the usefulness of process modelling, the 'as-is' modelling activities can start. A critical point regarding the as-is modelling is always its scope. How comprehensive should the as-is models be? On what level of detail should they depict the companies' activities? What information about a process should be included in the models - organizational units, people, objectives, weaknesses, data,


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resources, knowledge, or customers, etc.? All of these questions can only be answered if the modelling purposes are clearly defined. The purposes of process modelling can be very different. It could the simple situation that two organizations have merged and many people have left the company. In this case it may be difficult to maintain the overview about the business processes. In this case, process modelling increases the transparency about the process organization, in a manner similar to the way an organizational chart describes the structure of an organization. In the case that process modelling takes place as a part of a process reorganization, it is more important to highlight weaknesses and identify possible improvements. If the process models are used in order to select a new software solution, it will be useful to see how alternative software solutions support the particular process. Process models can also provide input for software engineers, who develop new software based on this specification of requirements. Furthermore, process models can highlight the interfaces to customers and be of benefit for a Customer Relationship Management project. This list of purposes can be easily extended. All of these applications have different requirements regarding the process models. However, it is not before the precise definition of these purposes that the contents of the models can be specified. Questions and Answers 3 and 4 encourage you to carefully consider the ramifications of designing 'as-is' process models. Question 3 What are the main advantages, but also disadvantages, of designing as-is process models? Answer 3 The following table gives an overview about the advantages and disadvantages of asis process modeling. The final conclusion of this chapter is that the as-is process model depends upon the individual project objectives. Advantages the same problem of understanding a defined project scope the same terminology it supports acceptance for the project (unfreezing) the base for a migration strategy towards the redesigned processes the completeness of to-be processes can be evaluated the results of as-is analysis can be used as to-be, if there are no or only minor changes it shows weaknesses and restrictions Disadvantages the results are obsolete as soon as tobe processes are designed and/or implemented the danger of narrow focused process design (thinking in constraints) time- and cost-consuming

Table 1: Advantages and Disadvantages of As-Is Modelling


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After the formal kick-off of the project and before the more comprehensive documentation of the current processes takes place, careful consideration of the advantages and disadvantages of as-is modelling is required. Advantages The main benefit of as-is modelling is that all involved project members can develop the necessary communication skills during the modelling process, along with the same understanding of problems and terminology. The collaborative design of models requires an agreement on which terms to be used. The scope of the project is clearly documented in the process model. During the development of possible improvements, the as-is model serves as a kind of a benchmark and completeness check. Parts or complete as-is models can often be used as 'to-be' models, if no major process changes are required or possible. Finally, existing process descriptions highlight weaknesses, thus providing the potential for improvements, but also identify existing constraints. Disadvantages The main disadvantage of intensive as-is modelling is the danger that the project team loses the ability of 'out-of-the-box' thinking. This occurs when the team of business analysts who are in charge of the process modelling consist of rather inexperienced people who interview experienced colleagues from various business areas. The respondents (team) will often try to convince the business analysts that the existing way of doing business is the only possibility in relation to existing constraints due to a number of reasons. At the end of these interviews the arguments might appear sound, for it may be difficult to step back and analyse the process objectively. This problem is the reason why Michael Hammer recommends skipping the as-is analysis altogether. He suggests a new way of looking at the enterprise, a way that has no knowledge of any constraints and starts from scratch. The as-is model can only document history as soon as new models are valid, and can become a very time and cost-consuming effort because a certain level of agreement is required between all participants. Participants may argue about what term has to be used or why a certain case is not depicted in the model. However, such discussions can be avoided by focusing upon the 80/20 rule. Following this rule of thumb, only the 80 % case is of concern, i.e. the typical scenarios. It is not necessary to describe each and every exceptional case. Furthermore, the process model reflects only the most popular terms. It cannot consider the individual requirements of specialist participants such as engineers, business representatives and IT-staff, who each may use different terminology. Business Process Frameworks As-is process modelling can quickly become a very complex task as the number of designed models grows. It is necessary to find adequate mechanisms in order to reduce and manage this complexity. One efficient way is to develop high-level 'business process frameworks', which describe the core business and support processes of a particular company. Figures 6 and 7 show two examples for such business process frameworks.


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Strategic Management Marketing Management Programming and Scheduling Sales Sales Process Management

Content Content

Packaging and Delivery Facilities People Technology Finance

Figure 6: A Business Process Framework for Television New Zealand Figure 6 describes the structure of Television New Zealand with the two core processes: sales (of airtime) and content delivery. The sales process is the cash cow, where companies can place their advertisements. It has interrelations with content delivery, the actual transmission of the program. The more interesting the program is (in New Zealand and South Africa this means especially 'rugby'), the higher are the prices per minute advertisement. The two processes sales and content are based on two infrastructure processes: the programming and scheduling, and the packaging and delivery of the program. The two triangles indicate that, over time, the programming and scheduling activities become less important as the program must be finalised a couple of weeks before transmission. On the other side, packaging and delivery (which includes the production process) gains more importance. In this case, the strategic processes include strategic management, marketing management and process management. You can see how process management is positioned as one of the few strategic activities. Such business process frameworks, together with a high positioning of process management, always provide one opportunity to emphasise the strategic role of process management. Finally, facilities, people, technology and finance form the base of the framework as supporting processes.


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Business ManagementMarket Development Process Management Knowledge Management Enviromental Management

Clean WaterLand Development Management

Billing

Manage Assets Waste and Surplus WaterCustomer Services

Finance

HR Management

Information Management

Support Services

Figure 7: A Business Process Framework for Western Australia's Water Corporation A similar example can be found in Figure 7. This framework was developed for Western Australias Water Corporation in Perth and has a comparable structure. The part in the middle describes the core processes, the roof indicates the strategic processes, and the basement covers the support processes. Minor differences are the terms used: 'Business Management' for 'Strategic Management', 'Knowledge Management for 'Business Function', and 'Explicit Functions' for the 'Customer Interfaces'). It should be emphasized that these business process frameworks depict processes, not organizational units. The objective is to structure the business independently from organizational and IT resources in a transparent way. Consequently, it is recommended to use terms for processes that do not correspond with already existing organizational units. As the first level of a process modelling project, business frameworks serve as the entrance point to all underlying models. This could be realised in an Intranet-based environment with hyperlinks to the actual process models. In this case, a 'double-click' on the arrow representing the sales processes in the Television New Zealand framework, would allow to see the underlying business process models. These frameworks are quite stable and do not change significantly with the change of perspectives from the as-is analysis to the to-be perspective. They can be used as an icon for the project and help to position every single project activity in the context of the entire company. Question 4 What are application areas for these business process frameworks? Answer 4 Business process frameworks also can be used to characterize different business processes of an enterprise on a high level. Different colors, for example, could indicate different priorities regarding the need for process redesign and may express a different degree of IT support. Business process frameworks serve as the central point of access to all process models. They can be found on the Intranet, where a doubleclick on one business process can lead to more detailed process models.


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PROCESS ANALYSIS In Module 1 we introduced the term 'pain points'. Process analysis is exactly about identifying these pain points. Based on the design process models of the existing situation, a team of business analysts, IT people, involved business representatives and, usually, external consultants analyze the processes in detail. They identify the objectives of the process and list current shortcomings. At this stage, the project team asks the following questions: Which aim does the process have? Why is the process executed as it is? Which organizational units and application systems are involved - and where are the interfaces between them? What are the current problems? Which changes independent from the Process Engineering project will take place soon (internal/environment)? What technology is (will be) available? What are the current benchmarks?

Questions and Answers 5, 6, 7 and 8 that follow assist you to carefully consider the questions above, and to stimulate appropriate responses for your own organization. Question 5 What information should be captured with every identified pain point? Design a table, which could be used as a general pattern for the classification of weaknesses. This table should capture all information relevant for the further description of weaknesses. Compare your table to the answer given. Answer 5weakness ID Name priority short term (ST) / long term (LT)LT ST

organizational or IT issue

related project

possible solution

responsible

deadline

1 2

A C

Organ/IT IT

nil software upgrade

John Smith Peter Frankins

15-01-01 30-09-01

Once the main weaknesses of the existing processes are identified and described, it may be useful to collect information about the best practice in these processes.


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Question 6 Benchmarking describes the comparison of internal performance data (such as processing time) with other internal or external data from the same or a different industry. What is the role of benchmarking in the process analysis phase? Answer 6 Benchmarking data usually is referred to as 'best practice'. Comparable internal data can come from subsidiaries with the same objectives and the same organizational structure in different locations (for example, different subsidiaries of a bank). External data can come directly from other companies or be purchased benchmarking studies that are conducted by consulting companies. Benchmarking can help to identify at least current shortcomings, that is, processes in which the performance is below the competitors' values. However, the core challenge is to find out why this is the case. In general, data about the process structure will not be available. 'Reference models' are one way to capture information about best practice. They refer to process models that do not describe one enterprise but an entire industry. A reference model can serve as a recommendation for the design of new processes. For example, more and more consulting companies are documenting their project experiences in the form of reference models. Thus it becomes possible for them to easily reuse their project results. A new consultant would study the available reference models for a certain industry and use them as a starting point for the analysis of the particular client's processes. The Figures 8 and 9 depict the idea of a reference model. Imagine that each matrix in Figure 8 represents one company. The different symbols can stand for departments, processes, or whatever. You see some similarities and some differences. A reference model attempts to keep the similarities, so that the fourth company could be immediately be characterized based on this reference model.

Figure 8: Three Individual Models

Figure.9: Possible Reference Model Reference models do not only describe on a generic level possible solutions for certain industries, but they also depict software functionality. Especially comprehensive business application software (ERP-software) is often documented in form of reference models. The market ERP solution SAP R/3 for example is described in more than 800 business process models and more than 120 scenarios for collaborative business processes required for E-Commerce. Dr Michael Rosemann, QUT Brisbane 13 /29


Question 7 Benchmarking and reference models are ways to capture information about the best ways of performing certain business processes. Discuss critically the term 'best practice'. Is it always recommended to refer to best practice? Can best practice always be identified? Please read Strassmann's article (1995) 'In Search of Best Practice'. You can find this article at: http://www.strassmann.com/pubs/cw/best-practice.shtml Answer 7 Best practice is a popular term for solutions that claim to be 'state of the art'. However, best practice is usually not defined. What does best practice really mean? Arthur Andersen defines best practice as "a method which has been judged to be superior to other methods. Many times it is the most efficient way to perform a task. In other words, it is the straightest line between raw material, through processing, to finished product." (http://isds.bus.lsu.edu/cvoc/learn/bpr/mprojects/bp/bpbasics.html) Usually best practice is defined as the state of the art in a certain industry. From a theoretical viewpoint, it is nearly impossible to define 'the' best practice as it would require complete enumeration of all current practices. There is no real evidence for best practice. It is only a claim from marketing people that, for example, an ERP solution provides best practice. As you can read in the Strassmann paper, large consulting firms declare that "our professionals will start by sharing [...] what works best for others". More appropriate would be 'most often' expressions, such as 'better' practice or 'common' practice. From a critical viewpoint, best practice could be interpreted as an excuse to constantly reuse the same approaches. Question 8 Critical voices have stressed that the extended use of ERP reference models and the application of best practices may lead to companies using the same business processes. Thus, the companies are not able to achieve a competitive advantage. What is your opinion? Will companies start to look the same, if they all refer to the same idea of best practice? Answer 8 Even if two companies use the same reference model (such as a reference purchasing process) for the design of their organizations, there will be significant differences in the way they finally conduct their businesses. Different employees with different skills, motivation, and creativity are involved in these processes. Although companies may use the same software, they will typically have many activities outside the scope of the software. This could be phone calls with the suppliers, or meetings between purchase people and staff working in accounts payable. Furthermore, the involved business partners (suppliers) are different. Competitive advantages are generally derived from the way the business is conducted and not how the ERP software is used. Using the same ERP reference models does not mean losing opportunities for competitive advantage. Rather, it is an available opportunity which can be used. By way of contrast, competitive disadvantages can result from not using ERP software.


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PROCESS IMPROVEMENT The process improvement stage is the most creative phase of a Process Engineering project. The as-is modelling stage aimed to increase the process awareness of the organization and thus unfreezed it. The process improvement phase now evaluates alternative ideas and moves the organization. All available information about the current processes and their pain points, the existing constraints and available resources, and the available best practice data and reference models, need to be consolidated. Improving processes requires comprehensive business and project experiences. Each process looks different and there is no general answer to how a process can be improved. Nevertheless, it is possible to at least list some general guidelines for improving processes. This guideline helps project managers to identify opportunities within their project. The following ideas are structured into three areas: improvements related to the specific outcome of a process improvements related to the flow of activities of a process improvements related to resources involved in a process Outcome-related Improvements In the following example, 'outcomes' does not only mean the finished product at the end of a process but all types of objects that are a part of the activities in the process. For example, outcome can include raw material, a pallet, a purchase order, an application or an invoice. O1. Elimination of an Outcome The most radical form of process redesign is to eliminate the entire process. A process does not have to exist any longer, if the outcome of this process is no longer required. For example, an efficient process engineer will not only question the need for copies of documents but also the need for reports. A popular approach, regarding the design of processes with reports as an outcome, is a zero-based start. Every report is eliminated and the people interested in the report must demonstrate the benefits of producing and distributing the report. All processes with outcomes such as reports can disappear, 'if' the report is no longer required. In situation, in which the report is necessary, it should be evaluated, if it is more cost-effective to give the receivers of the model online access to an IT system that stores the report. This turns the 'push' system (distribution of reports), into a pull system (accessing available reports). We will get back to the general advantages of a pull system later. Similar to reports, copies often can be eliminated by sending emails instead of paper-based documents. Commonly, copies of purchase orders or invoices are sent out for historical reasons only. In times of scanning paper documents and IT-based document management systems, the need for these copies often no longer exists. One common example for the elimination of process outcomes is pre-billing. Prebilling can be found in distribution channels, where the products are sent directly to the final customer (such as books and CDs). In these cases, the delivery note and invoice are often represented by one single document. As an invoice is just an evaluated delivery note, a specific delivery note is not required in these simple forms of distribution. This is the reason, why the process of creating the delivery note could be eliminated. Dr Michael Rosemann, QUT Brisbane 15 /29


O2. Substitution of an Outcome Of course, it may not always be possible, appropriate or desired to eliminate the process outcome. However, it may be feasible to choose between two or more alternative forms of process outcomes. An example for this is the process of Evaluated Receipt Settlement (ERS). Future Three (www.futurethree.com) defines ERS as: "A payment method that eliminates the need for the supplier to furnish the customer with an invoice detailing the charges applicable to the sale of goods by the supplier to the customer. The underlying principle of this payment method is the use of the received quantity extended by the customer at the Purchase Order price." What does this mean in simple words? The company that ordered and received goods does not wait for an incoming invoice from its supplier, but pays on the basis of the received delivery note and the underlying contract. In this case, the complex driver invoice is substituted with the easier-to-handle process outcome credit voucher. Hammer and Champy discuss in their book Reengineering the Corporation. A Manifesto for Reengineering (HarperCollins Publisher, Inc. 1994) the introduction of ERS at Ford, who used Mazda as a benchmark. Apparently, Ford had 500 people involved in the invoice verification process. After introducing ERS, only 125 people were required for this process. ERS is especially popular in the automotive industry, but also can be found in other industries. A key prerequisite for ERS is a relative powerful position of the goods receiver, as the main advantages are on this side. The time-consuming verification process then moves to the vendors. Further prerequisites for ERS are: The purchase order or the long-term contract must be accurate, as it specifies the data relevant for payment. It should include the price, payment terms, unit of measure, part number, and quantities. Packing slips must refer to a confirmed purchase order number or a long-term contract. Received purchase orders should be acknowledged by the vendor and any discrepancy should be recorded immediately.

Even with ERS, some invoices for special charge items (such as drum charges or customs) and purchase orders (not referring to ERS) are required. Invoices for ERS purchase orders typically will not be processed. At the end of the invoice verification process, the correct invoices are posted and are ready to be paid. In accounting terms this means an open item is created in accounts payable. This is also the main interface between logistics (material management) and accounting (accounts payable). A more detailed example for ERS can be found on the web pages of Micron Technology: http://www.micron.com/edi/supplierguide/ers.pdf Please look at their information for suppliers, especially the Micron Supplier's Guide.


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O3. Digitalization of an Outcome Managing bits and bytes instead of paper is a main objective in nearly all Process Engineering projects. It is far more expensive to copy, distribute and store paper than to utilize digital data. All paper-based outcomes should be analyzed regarding opportunities to digitalize them. This is the main purpose of the Document Management Systems (DMS), which converts paper into digital information through scanning technology. Digitalization should be done right from the beginning of a process in the department that is responsible for receiving, sorting and distributing mail. Each scanned document should be classified (for example, as an invoice) and then sent electronically to the person in charge. In sophisticated solutions, the receiver opens the document on the screen, at the same time opening the corresponding transaction in the required business application (for example, entering an invoice in accounts payable). Digitalization should not only be an internal project, but also start at the various interfaces to the business partners. For example, some companies only accept invoices from their suppliers, if they enter the invoice details through their web-based interface. These data go directly into their accounts payable system. O4) Harmonization of an Outcome The outcome of one process is usually the input for another process. This is valid for paper-based outcomes as well as for physical outcomes such as products. A typical paper-based sequence of outcomes is inquiry quote customer order production order delivery note invoice (customer complaints) payment. If you look at all these forms in details, it will become obvious that they all have same or similar data. The only distinction is that they describe different status along the overall valuechain. A main advantage of ERP solutions is that these documents have references to each other. For example, a purchase order can be derived from an inquiry or a quote. These standardizations along the process are called 'horizontal harmonization'. They do not only exist in document flows, but also in logistical processes. The term 'unitization' is used to describe a process in which the products (such as car seats on a standardized pallet) are transported is the same as in the production of the suppliers, during the transport to the car manufacturer, and until the assembly finally takes place. Unitization reduces the need for handling and sorting products and accelerates processes by eliminating non-value activities. While horizontal harmonization means standardizing the documents or products along the process, 'vertical harmonization' means standardizing and integrating processes that take place in parallel. The purpose of vertical harmonization is to reduce overcomplexity and to consolidate parallel processes. It leads to the centralization of activities. The idea is to consolidate those processes with similarities that, currently, are independent from each other. This may be because of mergers in the past, different IT platforms, or simply missing knowledge about the fact that similar activities take place somewhere else. For example, a vertical harmonization process was necessary when the two companies of the case study Tembe Toys, Joburg Toys and AfricaToys, merged. They had to integrate independent procurement processes, or individual recruitment processes, for different departments.


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O5. Separation of Outcomes To assist you to apply these processes to an organisation with which you are familiar, Questions and Answers 9, 10 and 11 follow. Question 9 Is it always useful to harmonize outcomes? Is it also possible that, separating outcomes (the opposite) can be useful? Give some examples? Answer 9 Retail companies can be characterized by the high volume of business transactions. It is not unusual for retailers to receive 10,000 invoices per month. Lets assume that a retailer has only one sequential process model for the invoice verification process. This model depicts the sequence of activities for an invoice without further differentiation. However, it might also be obvious that not all of the 10,000 invoices are identical. Further investigations into this process might show how different invoices can be, regarding the time their processing can consume. Invoices from longterm suppliers might be correct, in most cases, and can be paid immediately. Other invoices may be different to read, refer only to a part of a delivery, or just include the wrong price, quantity or even product. These invoices require a detailed verification and consume much more time. Such a process may be regarded as too harmonized. Though the relevant sequence of activities is the same for all invoices, the processes may look very different. The overall idea of separating process objects such as documents is to be able to assign appropriate resources to different process paths. Examples for such a separation could be foreign and domestic invoices (because of the currency involved or language issues), or sales orders from important A-customers and from (less important) C-customers. Once the processes are separated, it is possible to design specific software solutions or assign expensive experts only to those process paths that really require specialist knowledge. Harmonization and separation also can be consolidated. Vertical harmonization of objects is important because of economies of scale. The more objects are flowing through one process, the lower are the costs per outcome. Thus, it is desirable for the internal process organization to minimize the number of processes. This design principle changes the closer a process is to the customer. Customers normally appreciate individual products. They don't want to perceive the product or service they are buying as a standard outcome of a business process. Thus, it is important to split a process at the end into variants. This will become clear in the following example. Example Let's apply the first lessons we've learnt on possible process improvements to a simple process. In this case, we are dealing with customer interfaces and customer-specific processes and will discuss, on a generic level, the advantages of process standardization.


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Figure 10 shows three existing customer interfaces with individual activities highlighted in different colors. The vertical dotted line indicates the 'line of visibility'. That means, the customers can see as far as this line into the companies processes. The gray circles represent production activities that do not differentiate per customer group. Of course, every company wants to maximize these activities so they can concentrate only on economies of scale in these activities.Customer Interfaces

Figure 10: Standardization of processes (1/4) A first step towards an increased standardization, that is, an opportunity to focus only on internal activities, is to question the line of visibility. Can the customers really see that far into the company? Must different products have different parts in areas that the customer cannot see? Cars and televisions, for example, have many technical parts in common, independent of whether they are the low cost or the premium model. Standardizing these parts, which are not visible for the customer, means standardizing the corresponding processes and literally 'moving the line of visibility, as shown in Figure 11. The advantage is that external factors are eliminated from a larger part of the process. However, it is important to ensure that the customers are not negatively influenced by this.Customer Interfaces

Figure 11: Standardization of processes (2/4) In the next step, it could be questioned whether it is necessary to offer so many parallel customer interfaces. Is it essential to have the opportunity for receiving sales orders via fax? This might sound radical but, in general, it is possible to force customers in certain channels. They do not have to be treated with gloves all the time. Reducing such interfaces means reducing the number of processes and eliminating related complexity. Minimise process variants, as shown in Figure 12.


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Customer Interfaces

Figure 12: Standardization of processes (3/4) Finally, it is worthwhile to analyze what activities actually can be performed by the customers themselves. Quite often, it is not unusual for customers to be responsible for entering their contact details, completing an inquiry form or completing a purchase order. They also can check the status of their orders (monitoring) or pay with their credit card. This outsourcing of activities to the customer is also called 'customer selfservices'. The advantage of customer self-services is that many customers will appreciate doing these activities, that do not require interaction with any person in a time-consuming way. The main advantage to the organization, however, is that the customers do not charge for performing this activity. So, while the product stays the same, the costs for offering this product can be reduced by introducing customer selfservices. Figure 13 shows that, after these reorganizations, very few different costdriving activities remain.Customer Interfaces

Fig. 13: Standardization of processes (4/4) O6. Process-oriented Optimization an Outcome Improving a process does not always mean that the structure of the process has to be changed. In fact, an as-is and a to-be process model can even be identical. Nevertheless, the processing time may be significantly different between the processes based on the as-is model and those based on the to-be model. This is possible when the objects that are transformed in the process can be optimized in relation to the requirements of the process. Product developers call this 'Design for Manufacturing' or 'Design for Assembly'. In these cases, the product design not only takes aspects like the optical design or the required material into account, but also considers the way the product is handled and distributed in the production process. A product which is designed under


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consideration of the measures of machines and tools, or which can easily be handled by robots, accelerates the process. Some car producers could speed up their processes by 30 %, just by optimizing the automobiles process requirements. Optimization of the process objects also can be found in administrative processes. An example is the redesign of forms such as a leave form or a purchase requisition form. The sequence of activities (data entry, verification, etc.) and the involved organizational units should be considered when designing such a form. Activity-related Improvements The second type of potential process improvements is focused on the activities performed within a process. Activity-oriented approaches for process improvement are the most obvious starting points for Process Engineering projects, as they directly influence the process structure. A1. Elimination of Activities The elimination of activities is as radical as the elimination of outcomes. Identifying activities that do not create any or sufficient value is the main focus of the Lean Management concept. This is not a theoretical concept, but results from a worldwide empirical study that compared the performance and strategies of the automotive industry in Japan, USA and Europe. The main outcome was that Japanese car producers were far more efficient and performed better in nearly all key performance indicators. Further analysis showed that a main reason for this significant better performance was the different attitude towards non-value activities. In an attempt to adapt the Japanese strategy, many companies set up their individual Lean x project, where x included not only management but production, procurement, sales, education, and banking, etc. As a consequence of Lean Management, entire middle management levels were eliminated. The identification of non-value activities as the main idea of Lean Management can be applied less dramatically for operational processes as well. Activities such as printing, copying or distributing, indicate activities which do not create sufficient value to the organization. They can either be performed in a different way or are not necessary at all. We discussed this already above when we highlighted that reports and copies should be questioned in general. A2. Change the Flow of Activities: Pull Instead of Push Many ideas for process improvement can be adapted from production management. The management of production processes is quite an old discipline, which has dealt with process improvement for decades. One simple idea for the redesign of production processes is called 'Kanban', which is based on introducing a pull principle into manufacturing. In a Kanban-based production, all machines are ordered corresponding to the flow of materials, i.e. the transportation between the machines is well organized and simple. The production line is responsible for one standardized product. Stock is located between two machines, the boxes containing required parts for the next activity. Each box has a card attached that specifies the content and the number of parts in the box. (The Japanese name for card is Kanban.) Dr Michael Rosemann, QUT Brisbane 21 /29


The innovation of Kanban is that the production is triggered at the end, when a box full of end-products is taking away for distribution. The attached card is given to the people in charge for the last activity of the process; this triggers the production of the same number of parts. If the production of the end-products requires further parts, a box with the necessary parts is taken from the stock in front of the machine. Again, the attached card is given from the material source to the previous team (material target). Thus, in Kanban information flows in a direction opposite to the material. Material is 'pulled' through the process rather than pushed. Figure 14 shows this pull principle. Question and Answer 10 examine this process.

Material Target

Stock

Material Source Information flow

Container empty = demand

Empty container = productionMaterial flowFigure 14: The pull principle

Question 10 What are the advantages of a pull principle in comparison with a push principle? Answer 10 Processes that follow a pull principle should never have a bottleneck, i.e. a machine which limits the throughput of the process. An analogy for this is getting a scarf through a tube. It will be much easier to pull the scarf than to push it. This is the same with production processes. Production takes place only for specified demand. Overall, the pull principle also can be characterized as being oriented towards the customer. It is based on an initiation of a customer, which triggers the entire process. Thus, it has an external perspective. The push principle is more focused on keeping all machines busy and has an internal perspective. The pull principle is also a core element of Supply Chain Management concepts, in which the orders of the manufacturers trigger the final production processes. Please read the article: Kanban an Integrated JIT System now, which you can find at http://www.geocities.com:0080/TimesSquare/1848/japan21.html, and examine Questions and Answers 11. Question 11 What are the advantages of Kanban?


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Answer 11 A simple and understandable process Provides quick and precise information Low costs associated with the transfer of information Provides quick response to changes Limit of over-capacity in processes Avoids overproduction Is minimizing waste Control can be maintained Delegates responsibility to line workers

Finally, please view the following Powerpoint show that links Lean Production and Kanban on: http://hyperserver.engga.uwo.ca/es492b/Lectures/lect15/tsld001.htm A3. Focus on Bottleneck Activities One other lesson that can be learned from production management is the importance of bottlenecks for the entire throughput of a process. The 'Optimized Production Technology' (OPT) approach starts with the identification of the bottlenecks in the production. Once they are defined, all waiting production orders first are assigned to these bottlenecks. From there all activities that are predecessors or successors are scheduled on the relevant machines. Thus, it ensures that at least the bottleneck is busy all the time. This is important as every hour that is lost at a bottleneck immediately influences the overall throughput. OPT is based on the following nine principles: 1. Balance flow not capacity. 2. The level of utilization of a non-bottleneck resource is not determined by its own potential, but by some other constraint in the system. 3. Utilization and Activation of a resource are not the same. 4. An hour lost at a bottleneck is an hour lost for the entire system. 5. An hour saved at a non-bottleneck is a mirage. 6. Bottlenecks govern both throughput and inventory. 7. The transfer batch may not, and many times should not be, equal to the process batch. 8. A process batch should be variable not fixed. 9. Schedules should be established by looking at all of the constraints simultaneously. Lead times are the result of a schedule and cannot be predetermined. For more details, please view: www.stg.co.uk/shockwave/optsolution/education/challenge/chalfs.htm


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At a more general level, OPT is based on 'The Theory of Constraints' (TOC). You can find an introduction to TOC and further references at: http://www.stud.uni-wuppertal.de/~ua0273/toc.html and http://www.sytsma.com/htm/theorypages.htm Please read the article The Theory of Constraints - Fad or Future? by Robert E. Fox at http://www.tocc.com/staff.htm One of the first publications about the 'Theory of Constraints' was the book The Goal written by Fox and Goldratt. Although this book describes the problems of a production manager and how the focus on the bottleneck in his factory finally helped him to overcome these problems, it must be stressed that both authors see their theory as applicable for all areas of life. Thus, if you are interested in even more information, dont hesitate to have a look at 'Crazy about constraints' at: http://www.rogo.com/cac/ A4. Automation of Activities Similar to the idea of converting the process outcome from paper into bits is the idea of automating a process. This has two perspectives, the automation of the embedded activities and the automation of the process flow itself (also known as control flow). Activities can be automated, if appropriate IT applications can be found or developed which support these activities. The most comprehensive support can be offered by 'Enterprise Resource Planning' (ERP) systems, which cover the basic business functions. The fact that ERP solutions can support most of the business applications of one process is also the main reason why ERP and process management can be regarded as interrelated management approaches. Having only one application along an entire process reduces the number of interfaces between the activities. The graphical user interface is the same, i.e. the design of screens is identical in accounting, logistics and human resource management. Using one ERP system along one process for each activity of the process does not necessarily mean that the process is completely automated. It will still be required to identify manually the next task which has to be performed, to select the relevant ERP transaction and, especially, to assign this activity to someone. All these tasks can be automated by using a Workflow Management System (WFMS). Workflow management systems are characterized as middleware software, which means that they are placed between the applications (for example, financial accounting) and the database. A workflow management system requires a process model as input data. Based on this process map, a WFMS is able to: identify events that trigger the process (for example, the customer order is received) identify and initiate the relevant activities


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identify for each activity the relevant data and application identify staff members with sufficient qualification for this activity.

The identified people receive a notification in the form of a work item, which comes in the form of an email. As soon as one staff member opens and accepts the work item, the activity is assigned to her or him. At the same time, the work item disappears from the 'work to do' lists of the others. The person gets all required application and data and performs the activity. As soon as the task is finished, the workflow management system will identify the next activity and so on. It should become obvious by now, that process automation requires both the automation of the embedded activities and the automation of the process flow. A5. Parallel Routing of Activities In many companies with their own product development, a typical process for designing and rolling out a new product can look like this: It is based on a more or less detailed input from sales and marketing; a product designer creates a new product. This idea is discussed with representatives from sales regarding its fitness for the markets and its distribution quality. Representatives from marketing will then evaluate how the new product fits into the existing range of products and services. It then will be discussed with production: if and how the product can be produced. Then it is necessary to talk to the procurement department in order to find out whether the existing or new suppliers can provide the parts. Because of economic or technical reasons these cannot be produced in-house. Quality managers will contribute requirements regarding quality checks. In collaboration with management and cost accounting, the actual costs of this new product will be calculated.

Each of these steps will lead to modifications of the product. Consequently, the related process map will be one (long) sequential list of activities with many loops. It is not surprising that such a process is very time-consuming. Product development processes for cars based upon this model can take up to ten years. Again, it was an outcome of Lean Management that product development processes also could be organized in a very different way. Instead of having stepby-step discussions with the relevant departments, all these activities can be consolidated and the process delinerarized. This is called 'Simultaneous Engineering' which means that representatives from all involved areas come together and discuss together their ideas and interdependencies. This accelerates


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the process significantly so that time-consuming loops are getting replaced with direct dialogue. If the activities of a process have to be in the order, on a more general level it is recommended always to analyze which is documented in the as-is model. Michael Hammer calls the reorganization of activities into logical sequences with many parallel process paths the 'natural order of activities'. Questions and Answers 12 examine these concepts. Question 12 Should one aim of a process engineer be to maximize the number and length of parallel process paths? Answer 12 Activities that take place in parallel obviously can be finished faster than the same activities ordered in one sequence. On the other hand, this also means that the resources must be available in the same time period. If the same person is involved in two parallel processes, conflicts will occur, for the person can work on only one activity in time. Furthermore, parallel processes require coordination at the joining points. The question is, 'Do the results of the incoming processes fit together?' Thus, it may not be desirable to have a maximum number of parallel process paths in a process map. Resource-related Improvements The last of in total three types of process improvements is focused on the resources involved in the processes. We will discuss two approaches targeting the resources. First, the advantages of integrating activities will be explained. The underlying idea is to increase the number of activities per person. Second, the optimal assignment of resources to activities will be discussed. R1. Integration of activities If the radical approach of eliminating activities reaches its limit, it's time to think about reducing the number of activities, and thus the number of interfaces, by integrating activities. This is a quite old organizational approach termed 'job enlargement' and 'job enrichment'. Question and Answer 13 address these concepts. Question 13 Have you heard the terms job enlargement and job enrichment before? What does or could they mean? Give some examples, please. Answer 13 'Job enlargement' means the integration of two activities on the same level of difficulty. Thus, it is not expected that the person performing the task necessarily needs a higher qualification than that required for each of the two tasks. An example would be the integration of sorting and distributing internal mail. Job enlargement


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focuses first of all on the reduction of interfaces. Furthermore, it reduces the monotony of repetitive tasks. 'Job enrichment' aims to create more challenging activities for the involved employees. It combines activities on different levels of qualification. A main assumption of job enrichment is that people become motivated by more challenging tasks. One example is the integration of production and quality assurance activities. Instead of having two independent activities and two employees in charge, modern approaches to quality management suggest one person produces, at the same time checking the quality of her or his own work. Both job enlargement and job enrichment aim to extend the area of responsibility for involved organizational units, in order to reduce the number of interfaces, but also to increase the motivation of the involved people. In the extreme, only one person or a team is responsible for one entire process. This person is called a process owner, process manager or case worker (case team). R2. Assignment of Resources The separation of process outcomes has been presented as one way of improving processes. One objective for the separation of outcomes is to have individual process paths provided with the opportunity to assign different and adequate resources. Specialists should work on the more complicated cases, while standard cases should be the responsibility of line managers. The optimal assignment of people to processes not only is of importance after a further differentiation of processes, but also in general. Each and every activity should be evaluated, if the person in charge has an appropriate qualification. It is not only under-qualification, but over-qualification that must be detected. All these suggestions can provide only some guidance for the very creative stage of process improvement. They are like a reference checklist that can be used for an as-is model. Each approach should be evaluated regarding feasibility and relevance. Some approaches may lead to conflicting ideas, so that any one of the possible scenarios will be preferred. This should be documented in the final to-be process model. On the other hand, some ideas may be easy and quick to implement, while others require long-term projects. In these cases, it is recommended to describe a short-term to-be model as well as a long-term 'ideal' model. This ideal model can include ideas such as the policy of all incoming sales orders have to come via the Internet (email, web pages) or that payments with a cheque are no longer accepted. It will serve as the next objective once the suggestions depicted in the to-be model are implemented. PROCESS IMPLEMENTATION The previous discussion covered comprehensively possible ways of process improvement. These suggestions can be regarded as a checklist, which can not be complete. Each situation requires an individual analysis and will offer further opportunities. It is up to the project team to evaluate all alternatives. Once the project team has agreed on a to-be process, the documented improvements can be implemented. The task of bringing a concept 'alive' is called implementation. Typically, the implementation phase starts with a project kick-off meeting, in which Dr Michael Rosemann, QUT Brisbane 27 /29


all external and internal project members involved come together. They are given a briefing about the objectives, the timeframe and the entire management of the implementation project. The implementation of process improvements has both organizational and IT sites. From an organizational point of view, the involved staff members must be trained in the new procedures. This can include explanation of new objectives, new interfaces, and new policies, etc., to increase the overall awareness for process orientation. In addition to becoming familiar with the hierarchical organizational chart, everyone needs to understand how her or his work is embedded in the cross-functional processes. From an IT point-of-view, process implementation includes the development of new software or the configuration of standard packages like ERP software. High-level process models can be used as descriptors of the requirements. They require transformation into more detailed descriptions to become useful for software engineers. Process implementation is also a stage in which the ideas, documented in the to-be process models, often have to be modified again. Some ideas may become too expensive or too time-consuming to realize. In some cases involved employees can be very reluctant to change. It is also possible that constraints and objectives have already changed since the to-be process models were designed. Thus, process implementation means taking the most current situation into consideration in the process of bringing the to-be process models to life. PROCESS EXECUTION Typically, a Process Engineering project is regarded as finished when the new processes are implemented. At this time, the external consultants have submitted their final report, given their final presentation and disappeared. Until this point, the project only consumed money. The stage of process execution is supposed to be the project phase that leads to the expected benefits but it is often the phase that gets the lowest attention. The process models that were designed in the previous phases can now be used as a document for the employees involved in the new processes. The first experiences must be consolidated and can lead to modifications of the processes. This stage after the going live phase covers the stabilization stage. The organization tries to get used to its new processes but minor initial problems have to be solved immediately. After this, it is important to freeze the new situation. Freezing does not necessarily mean the processes cannot be changed anymore, for a more flexible process organization is one of the main objectives of Process Engineering projects. However, the project must be declared as finished, so that attention can be shifted to other projects. We will discuss the three steps unfreezing moving and freezing more intensively in the next module Change Management.


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PROCESS MONITORING AND CONTROLLING Process monitoring and controlling is the base for process change management. The ongoing delivery of current performance data is a prerequisite for the fast adoption of business process to new requirements. 'Process Monitoring' means to collect data about current activities. Such data could be the number of customer complaints currently in the pipeline or the status of a customer order. 'Process Controlling' goes beyond pure data collection and includes the aggregation and evaluation of data. This could include evaluating time data with costs, conducting statistical analysis in order to group documents with similar characteristics, or forecasting the future development. 'Process Controlling' has three main perspectives: process outcomes, activities and resources, as is shown in Figure 15.Resource Perspective

Collect

Examine

Archive

Process / Function Perspective

W itsc h tsinfor m tik r af a

. Greve n r S t a e 91 e r

. D 48 1 9 M ste r 5 n

W IR T S C H A F T S IN F O R M A TIK

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Unterlagen zur Rechnungsprfung

im Rahmen d er Beratungsaktivit t fr die DeTeImm obi lien sind mir im Zeit raum 1. Januar 31. Mai 1997 Reisekosten in H he von 1.021,7 2 DM ent standen, die ich mir erlaube Ihnen hiermit i n Rechnung zu stellen. a) b) c) d) e) Berlin (15.01.1997) : Parkgebhren Bonn (18.04.1997) : 378 km 0,52 DM Frankfurt (28.04.1997) : 590 km 0,52 DM Frankfurt (29.04.1997) : 590 km 0,52 DM Bonn (30.04.1997) : 378 km 0,52 DM 15,00 DM 196,56 DM 306,80 DM 306,80 DM 196 ,56 DM 1.021 ,72 DM

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Object Perspective

Mi t freundlic hen Gren

Mit freundlichen Gren

Figure 15: The three perspectives of process controlling Process Change Management Change management is based on a continuous identification and evaluation of new events (new competitors, changing demands from customers, leaving employees, etc.) that may lead to changes of the organization and/or IT systems. If changes are required, more or less comprehensive projects must be defined in order to implement the necessary changes. This can be organized like an ordinary project or as a change management project. A change management project involves a Change Manager, who is responsible for the alignment of the project with the overall objectives.


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