Chapter 1

Introduction to Business Process

Management
• Business Process Management (BPM) is the art and
science of overseeing how work is performed in an
organization to ensure consistent outcomes and to
take advantage of improvement opportunities.

• BPM is not about improving the way individual

activities are performed. Rather, it is about managing
entire chains of events, activities and decisions that
ultimately add value to the organization and its
customers. These “chains of events, activities and
decisions” are called processes.
1.1 Processes Everywhere
Every organization—be it a governmental body, a non-profit
organization, or an enterprise—has to manage a number of
processes.
• Order-to-cash
• Quote-to-order
• Procure-to-pay
• Issue-to-resolution
• Application-to-approval
• Business processes are what companies do whenever
they deliver a service or a product to customers.

• The way processes are designed and performed

affects both the “quality of service” that customers
perceive and the efficiency with which services are
delivered.
Example 1.1 Procure-to-pay process at BuildIT.
1.2 Ingredients of a Business Process
• A business process encompasses a number of events and activities. Events
correspond to things that happen atomically, meaning that they have no
duration. An activity takes time, when an activity is rather simple and can
be seen as one single unit of work, we call it a task, an activity has many
tasks.
• A typical process involves decision points, that is, points in time when a
decision is made that affects the way the process is executed.
• A process also involves a number of actors (human actors, organizations, or
software systems acting on behalf of human actors or organizations),
physical objects (equipment, materials, products, paper documents) and
immaterial objects (electronic documents and electronic records).
• Finally, the execution of a process leads to one or several
outcomes. Ideally, an outcome should deliver value to the
actors involved in the process. In some cases, this value is
not achieved or is only partially achieved, this corresponds to
a negative outcome, as opposed to a positive outcome that
delivers value to the actors involved.
• Among the actors involved in a process, the one who
consumes the output of the process plays a special role,
namely the role of the customer. Sometimes, there are
multiple customers in a process.
Exercise 1.1 Consider the process for the admission of graduate
students at a university.
• Business Process
We define a business process as a collection of inter-related events,
activities and decision points that involve a number of actors and
objects, and that collectively lead to an outcome that is of value to at
least one customer.

• BPM
We define BPM as a body of methods, techniques and tools to discover,
analyze, redesign, execute and monitor business processes. This
definition reflects the fact that business processes are the focal point of
BPM, and also the fact that BPM involves different phases and activities
in the lifecycle of business processes.
RELATED DISCIPLINES
• Total Quality Management
• Operations Management
• Lean
• Six Sigma

BPM inherits from the continuous improvement philosophy of TQM,

embraces the principles and techniques of operations management,
Lean and Six Sigma, and combines them with the capabilities offered by
modern information technology, in order to optimally align business
processes with the performance objectives of an organization.
1.3 Origins and History of BPM
To better understand why organizations engage in BPM and
what benefits it brings to them, it is worth looking at the
reasons why BPM has emerged and evolved over time.
• The Functional Organization
• The Birth of Process Thinking
• The Rise and Fall of BPR
1.3.1 The Functional Organization
• The functional organization that emerged from the mindset
of the Second Industrial Revolution, dominated the
corporate landscape for the greatest part of the 19th and
20th centuries.
• Towards the end of the 1980s, however, major American
companies such as IBM, Ford, and Bell Atlantic (now Verizon)
came to realize that their emphasis on functional
optimization was creating inefficiencies in their operations
that were affecting their competitiveness.
• Costly projects that introduced new IT systems or
reorganized work within a functional department with the
aim of improving its efficiency, were not notably helping
these companies to become more competitive.
1.3.2 The Birth of Process Thinking

at Mazda only five people worked

at this department (Michael Hammer)
Exercise 1.2 Consider the purchasing process at Ford.

1. Who are the actors in this process?

2. Which actors can be considered to be the customer (or
customers) in this process?
3. What value does the process deliver to its customer(s)?
4. What are the possible outcomes of this process?
• A key element in this case study is that a problematic
performance issue (i.e. an excessive amount of time and
resources spent on checking documents in accounts payable)
is approached by considering an entire process.
• T.H. Davenport, J.E. Short, The new industrial engineering:
information technology and business process redesign. Sloan
Manag. Rev. 31(4), 11–27 (1990).
1.3.3 The Rise and Fall of BPR
The work by Davenport and Short, as well as that of others, triggered
the emergence and widespread adoption of a management concept
that was referred to as Business Process Redesign or Business Process
Re-engineering.
• Concept misuse
• Over-radicalism
• Support immaturity
Two key events revived some of the ideas behind BPR and laid
the foundation for the emergence of BPM.
• Empirical studies appeared showing that organizations that were
process-oriented—that is, organizations that sought to improve
processes as a basis for gaining efficiency and satisfying their
customers—factually did better than non-process-oriented
organizations.
• Different types of IT system emerged:
• ERP systems are essentially systems that store all data related to the business
operations of a company in a consistent manner, so that all stakeholders who
need access to these data can gain such access.
• WfMSs on the other hand are systems that distribute work to various actors
in a company on the basis of process models. As WfMSs became more
sophisticated and better integrated with other enterprise systems, they
became known as Business Process Management Systems (BPMSs).
1.4 The BPM Lifecycle
1. Process identification
• In this phase, a business problem is posed, processes
relevant to the problem being addressed are identified,
delimited and related to each other.
• The outcome of process identification is a new or updated
process architecture that provides an overall view of the
processes in an organization and their relationships.
• In some cases, process identification is done in parallel with
performance measure identification.
Exercise 1.3
Consider the student admission process described in
Exercise1.1.
Taking the perspective of the customer, identify at least two
performance measures that can be attached to this process.
2. Process discovery
• Also called as-is process modeling. Here, the current state of
each of the relevant processes is documented, typically in
the form of one or several as-is process models.
3. Process analysis
• In this phase, issues associated to the as-is process are
identified, documented and whenever possible quantified
using performance measures.
• The output of this phase is a structured collection of issues.
These issues are typically prioritized in terms of their impact,
and sometimes also in terms of the estimated effort required
to resolve them.
Exercise 1.4
Consider again the student admission process described in Exercise 1.1.
Taking the perspective of the customer, think of at least two issues that
this process might have.

Exercise 1.5
Given the issues in the admissions process identified in Exercise 1.4.
What possible changes do you think could be made to this process in
order to address these issues?
4. Process redesign
• Also called process improvement. The goal of this phase is to identify
changes to the process that would help to address the issues
identified in the previous phase and allow the organization to meet its
performance objectives.
• To this end, multiple change options are analyzed and compared in
terms of the chosen performance measures. This entails that process
redesign and process analysis go hand-in-hand: As new change
options are proposed, they are analyzed using process analysis
techniques. Eventually, the most promising change options are
combined, leading to a redesigned process.
• The output of this phase is typically a to-be process model, which
serves as a basis for the next phase.
5. Process implementation
• In this phase, the changes required to move from the as-is
process to the to-be process are prepared and performed.
Process implementation covers two aspects: organizational
change management and process automation.
• Organizational change management refers to the set of
activities required to change the way of working of all
participants involved in the process.
• Process automation on the other hand refers to the
development and deployment of IT systems (or enhanced
versions of existing IT systems) that support the to-be
process.
6. Process monitoring and controlling
• Once the redesigned process is running, relevant data are
collected and analyzed to determine how well is the process
performing with respect to its performance measures and
performance objectives.
• Bottlenecks, recurrent errors or deviations with respect to
the intended behavior are identified and corrective actions
are undertaken.
• New issues may then arise, in the same or in other
processes, requiring the cycle to be repeated on a
continuous basis.
The role of technology in BPM
• Technology in general, and especially Information Technology (IT), is a
key instrument to improve business processes.
• To achieve maximum efficacy, system engineers need to be aware
that technology is just one instrument for managing and executing
processes.
• System engineers need to work together with process analysts in
order to understand what the main issues affecting a given process,
and how to best address these issues, be it by means of automation
or by other means.
“The first rule in any technology used in a business is
that automation applied to an efficient operation will
magnify the efficiency. The second is that automation
applied to an inefficient operation will magnify the
inefficiency”

Bill Gates
Stakeholders in the BPM lifecycle
• Management Team. responsible for overseeing all
processes, initiating process redesign initiatives, and
providing resources and strategic guidance to stakeholders
involved in all phases of the business process lifecycle.
• Process Owners. A process owner is responsible for the
efficient and effective operation of a given process. The
process owner is involved in process modeling, analysis,
redesign, implementation and monitoring.
• Process Participants. Process participants are human actors
who perform the activities of a business process on a day-to-
day basis. They are also involved as domain experts during
process discovery and process analysis. They support
redesign activities and implementation efforts.
• Process Analysts. Process analysts conduct process
identification, discovery (in particular modeling), analysis
and redesign activities. They have one of two backgrounds.
Process analysts concerned with organizational
requirements, performance, and change management have
a business background. Meanwhile, process analysts
concerned with process automation have an IT background.
• System Engineers. System engineers are involved in process
redesign and implementation. They interact with process
analysts to capture system requirements. Oftentimes, system
implementation, testing and deployment are outsourced to
external providers, in which case the system engineering
team will at least partially consist of contractors.
• The BPM Group (also called BPM Centre of Excellence). The
BPM group is responsible for maintaining the process
architecture, prioritizing process redesign projects, giving
support to the process owners and process analysts, and
ensuring that the process documentation is maintained in a
consistent manner and that the process monitoring systems
are working effectively.