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- “Helping businesses make better use of their data and realize quicker
ROI and higher productivity by means of technology and business-process
analysis “
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- Business process management (BPM) is a fascinating technology that has
come to the forefront of business thinking because of its potential for
dramatically improving the productivity and agility of organizations.
BPM addresses the problems and challenges faced by every business person
in every organization. In this document we provide a brief introduction
to BPM and its two component technologies, workflow automation and
enterprise application integration (EAI). The goal is to enable the lay
reader to understand the significance of this powerful technology, and
the profound impact it has on the productivity and efficiency of an
organization.
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- Every organization has numerous business processes that involve humans.
These business processes define the tasks, the rules, the people and the
applications engaged in delivering goods, services or information to
internal and external customers of the organization. Some common
business processes that are readily recognizable include:
- Order Processing that dictates how customer orders will be received,
entered, manufactured, shipped and invoiced. Performance Reviews that
define how, when and by whom employee performance will be reviewed.
Customer Complaint Process that describes the mechanisms for handling
complaints issued by a customers. Loan Processing that defines how a
financial institution processes loan applications and the rules and
approvals that must be obtained. Purchase Order Processing that lays out
the rules and paperwork that must be processed in order to control the
acquisition of goods and services. Claims Processing that specifies how
an insurance company will receive, review and process claims.
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- Provide highly productive paperless environment by extending the value
of your existing systems and use the data you already have.
- Using user-friendly tools, to inspect and examine your data visually,
spotting trends and identify opportunities to improve your business.
- Online approvals and follow up for key business processes with automated
E-mail notifications.
- Key business reports provided in easy and flexible graphical format.
- Simplification of business processes with adequate compensating
controls.
- Use of web based systems to maximize efficiency and reliability.
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- 1. Convert paper-based business process into electronic processes that
eliminate paper forms, file folders, documents, and the inefficiencies
associated with these. 2. Incorporate control features that ensure
integrity of processes and compensate for human or system failure. 3.
Increase the speed of response and reduce the lag time. 4. Provide
real-time feedback about the status of processes. 5. Measure the time
and cost of processes so that they can be optimized.
- Workflow Automation (WFA) is a subset of BPM that deals with automating
business processes that primarily involve people and desktop
applications used by people, also known as human-centric business
processes.
- Enterprise Application Integration (EAI) is the other subset of BPM that
deals with automating business processes involving enterprise or
backoffice applications.
- Workflow Automation and EAI are parts of the BPM space as shown in the
figure. While on the surface they look similar, there are substantial
differences between EAI and workflow automation that are discussed in
separate sections of this white paper.
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- A simple definition of a business process is:
- “A sequence of structured or semi-structured tasks performed in series
or in parallel by two or more individuals or applications to reach a
common goal.”
- The highlighted words signify the five essential elements of a business
process:
- i. A business process is a “sequence” of tasks indicating the plurality
of things that must be accomplished. One task alone does not constitute
a business process. ii. The sequence of tasks is “structured or
semi-structured.” This signifies that there is some logic to a business
process. The tasks are not performed on a purely ad hoc basis. iii.
Tasks can be performed in “series or in parallel” based upon the logic
of the business process. iv. There must be at least “two or more”
individuals or applications involved as players performing different
tasks. v. The sequence of tasks must have a purpose of reaching a common
goal or outcome. Merely linking together unrelated tasks into a series
of steps does not make a process.
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- The diagram above is a sketch of a simple purchase requisition process.
Any employee can initiate a purchase requisition by filling out a form.
The employee’s supervisor must then approve the purchase requisition, as
represented by the second step in the process. If the supervisor
disapproves the purchase, an e-mail message is sent to the employee with
the reasons for the disapproval. If the supervisor approves the
purchase, and the amount is less than $1000, the purchase order is sent
to the buyer since the supervisor is allowed to approve items costing up
to $1000. If the amount is more than $1000, the purchase order is sent
to the company controller who checks for funds availability and makes a
recommendation. The request is then sent to the general manager of the
company who can approve or disapprove the purchase. Again, if the
general manger disapproves it, an e-mail is sent to the employee who
requested the purchase, and if the request is approved, it is routed to
the buyer. The buyer can either place an order via telephone and the
process ends, or the order may be printed and mailed to the supplier or
even faxed.
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- This example illustrates the essential characteristics of a business
process:
- i.The purchase requisition workflow is a “sequence” of tasks such as the
initial request, supervisor approval, e-mail notification, general
manager approval and purchasing. Each step in the process represents a
discrete task. ii.The sequence of tasks is “structured or
semi-structured.” The tasks are carried out in accordance with certain
logic or rules. For example:
- The initial request must always be approved by the initiator’s
supervisor
- If the amount is more than $1000, the general manager must approve it.
- If the request is denied, the requestor must be notified via e-mail.
- iii.The tasks can be performed in “series or in parallel” based upon the
logic of the business process. In this example, the e-mail notification
is sent in parallel, or at the same time the buyer is requested to place
the order. iv.There must be at least “two or more” participants
performing different tasks. There are several people involved in the
purchase requisition process, including the employee, supervisor, buyer,
general manager and controller. In this example we also have two
applications involved, namely e-mail and Microsoft Word. v.The sequence
of tasks must have a purpose of reaching a common goal or outcome. In
this example, the purpose of the process is to either approve and buy
the requested item, or deny it and inform the requestor of the reasons.
- Based on the definition and this simple example, one can think of
numerous other examples of business processes in every company or
organization. Some of them are listed in Table 1, but the number and
type of workflow processes vary from organization to organization.
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Notes
