Business

Process
Engineering
Week # 1
MOMNA ZANEB
Today’s Agenda
• Introductory Session
• Course Objectives
• Learning Outcomes
• Administrative Items
• Fundamental Concepts
• Questions ?
Momna Zaneb
Lecturer
FSC – FAST , NUCES Lahore Campus

⚫ M.S(SPM) – FAST , NUCES LHR

⚫ BS (CS) PUCIT , Lahore

⚫ Worked in Academia and Industry ⚫ Research Interests:

⚫ Software Quality Assurance ⚫ Software Engineering
⚫ Software Testing ⚫ Software Process improvements
⚫ Professional Practices ⚫ Software Processes & Metrics.
⚫ Visual Programming
⚫ OOAD , ICT , LT

⚫4
 Course ◦ understand the fundamental concepts of business process
Objectives
engineering (how they can be improved and streamlined
for optimum efficiency in terms of performance.).

◦ learn the skills and knowledge required for:

◦ describing the lifecycle of a business process.

◦ modelling a business process

◦ Identifying business wastes

◦ mapping them into a business model.

◦ learn the methodologies of business process improvement

◦ understand how a business process could be re-engineered

Tentative Course Contents
• Business Process – Basics, Origin, History and Evolution (Hierarchy of Business, Processes and BPE,
The Difference between Functions and Processes)
• Components of a Business Process
• Business Process Management life cycle
• Business Process Modelling Techniques
• Business Process Improvement
• Business Outsourcing
• Business Process Re-engineering and improvement cases
Course Material
• Lecture Slides
• Handouts/Research Papers
Plagiarism Policy
• Any form of cheating in assignments, homework problems, quizzes, and exams will
result in strict action.
• Plagiarism detection tools
• All the parties involved will be awarded Zero in the first instance.
• Repeat of the same offense will result in (F) grade.
Tentative Grading Policy *
• Class Participation 5%
• Project (in phases) 20%
• Quiz 10%
• Mid Term 25%
• Final 40%
What is a Process?

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Process
Processes are a set/series of logical instructions/actions/steps to be
executed from start to end to achieve a particular goal.

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What is a Business Process?

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Business Process
According to Gartner:
“An event-driven, end-to-end processing path that starts with a
customer request and ends with a result for the customer. Business
processes often cross departmental and even organizational boundaries.”

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Business Process
A business process is an activity or set of activities that can accomplish a
specific organizational goal. Business processes should have purposeful
goals, be as specific as possible and have consistent outcomes.

Is "a collection of related, structured activities that produce a service or

product that meet the needs of a client.

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Introduction
The first ever business process

The earliest known definition of a business process comes from Scottish economist
Adam Smith. Breaking down his idea to the simplest elements, in 1776 he
described a business process in place at a theoretical pin factory, involving 18
separate people to make one pin
“ One man draws out the wire, another straights it, a third cuts it, a fourth
points it, a fifth grinds it at the top for receiving the head: to make the
head requires two or three distinct operations: to put it on is a particular
business, to whiten the pins is another and the important business of
making a pin is, in this manner, divided into about eighteen distinct
operations, which in some manufactories are all performed by distinct
hands, though in others the same man will sometime perform two or three
of them.”
Why should we care about how many people it takes to
make the pins, or how many steps are in the process?
Well, Smith found that by creating a process and
assigning the steps to individual specialists, the
productivity is increased .
Importance of Business Processes
Represent how processes are performed inside a company
Help to measure the performance of a business process
Help in hiring the right person for an efficient execution
Enhance coordination among various stakeholders
Improve a process by optimizing and/or automating using a software

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Essential Attributes of a Business Process
Repeatability
Everyday processes of a business
Totally part of an organization, whether they are visible to customers or not
Involve multiple defined inputs, which are affected by different factors, and contribute
to the final output value
Flexibility
Main processes are not changed or updated by businesses but still there is always room
for improvement
Every business process should be flexible without affecting its stakeholders

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Essential Attributes of a Business Process
Specific
Should be well-defined by describing the start point, end point and the series of
these steps.
Determine the individuals that perform in every step
Should decide the reason why a process is automated
Measurable
Should be measurable in every part to identify which part of the process works well
or not
Nothing can be better without measuring first
Helps in identifying which processes have more benefits due to business process
automation

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On a winter morning in 1907, Henry
Ford took Charles E. Sorensen to
Piquette Avenue Plant, an empty
building in Detroit that would go on to
become the birthplace of America’s first
mass-produced affordable car. “We’re
going to start a completely new job” he
told the head of production.
Ford idea for a new process
Ford explained his idea for a new process. Instead of one artisan creating a
product alone, everyone was taught to do one of 84 simple, repetitive jobs.
With this new approach to processes, Ford cut the manufacturing time of
the Model T down from 12.5 hours to 2.5 hours.
Not only was that a triumph for Ford’s bank account, it was one of the
most revolutionary moments ever to occur, not just in the history of cars or
manufacturing, but in the entire history of business.
Business Process Categorization
Every business is different with the types of business processes varying depending on
the business nature.
A specific type of task could be a support process in one business and a core process in
another.
The output of a process and its contribution towards the business determine the type of
business process.

Two major types : 1.Core 2.Support

Further categorizes includes
Management processes
Operational processes
Supporting processes
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Types of Business Processes
Core Processes: How you deliver a value
Directly serve external clients and generate income
Also known as Primary Processes
How does my business generate value and make its income?
What does my business primarily do?

Examples of Core Processes

Developing and creating a product or service
Marketing the product or service and conveying it to the buyer (for a marketing firm)
After–sales service and support also add value and are part of core processes (i.e. software maintenance team)

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Types of Business Processes
Supporting Processes
Support the management and operational processes. The company relies on these processes to
prop up the planning and doing parts of the business. It’s processes like tech support,
employee onboarding or hiring an intern.

While these aren’t what the company does to make money, they facilitate the main revenue
stream and make it so the management processes have something to manage, and that the
operational processes are as friction-free as possible.

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Types of Business Processes
Management Processes
Optimize income generation
Ensure the continued survival of the business as a whole
Involve planning, coordination, monitoring and control of core and
support processes
Deal with opportunities and threats that could help or harm the business
Ensure meeting:
Regulatory compliance needs
Financial targets and budgets
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Types of Business Processes
Support Processes: Making Value Delivery Possible
Serve internal clients and do not generate income in themselves
Make it possible to carry out core processes effectively
Example
HR activities have nothing to do with customers, and they don’t directly generate money, but
without them the business couldn’t function
IT department doesn’t directly generate money, but without the systems it oversees, the
value-generation part couldn’t function

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Types of Business Processes
Operational Processes
Operational processes concern your core business process. If your in a t-shirt company,
one of your core operational processes is taking orders over the phone. Another would
be getting manufactured t-shirts off to be shipped.

Whatever your business does at its core, there should be watertight processes in place to
make your business scalable and efficient.

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Types of Business Processes

An example of a management process might be a CEO planning out how

best to organize the marketing team’s time and energy for a PR launch
campaign. The process part would be allocating resources, defining
timeframes and checking that the systems are in place and optimized

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The Problems Solved By Processes
In The Checklist Manifesto — a book we can’t stop talking about — Atul Gawande
talks about how he implemented a safety process at Johns Hopkins hospital.
It seemed simple, and it wasn’t as cool as the other ideas they’d had, like robotic
surgery. But in reality it was the most effective tool that could have been implemented,
and it was just a sheet of paper.
Surveyed after the checklist’s implementation, 78% of medical staff at the hospital said
they noticed the checklist preventing an error. And, the ultimate proof: 93% of
surgeons would want the checklist to be used on them if they were in the operating
theatre undergoing surgery.
This is the process:

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LAHORE GARRISON UNIVERSITY
 This next example is a more tangible, disastrous one.
On the morning of the hottest day of the year — July
17, 1865 — two trains packed mostly with children
collided in Whitemarsh Township, Pennsylvania,
killing around 60 and injuring over 100.

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LAHORE GARRISON UNIVERSITY
 The cause? Wikipedia has it listed as ‘human error’.
The trains were pulling far more carriages than they could handle,
meaning the drivers had to stop periodically to regain the engine
pressure they needed to continue. With this erratic behavior, the train
wasn’t on schedule and didn’t communicate that to the surrounding
stations.
The driver thought he could make up for lost time and stay on
schedule, so he gunned the engine, taking an alternative track and
thinking that he’d be clear of the Aramingo, another train pulling out
of Wissahickon around the same time.

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 On a blind bend, the boilers of the two trains impacted and
caused an explosion heard up to 5 miles away. The three
carriages closest to the boilers were blown to splinters, and the
rest caught fire and derailed.
In response to this disaster, North Pennsylvania Railroad
adjusted their processes. They ruled that no two trains traveling
in two directions will share the same track, and telegram
communication with nearby stations was made mandatory.

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Examples of Business Processes
1. Order-to-cash

2. Quote-to-order

3. Procure-to-pay

4. Issue-to-resolution

5. Application-to-approval (document approval)

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 A business process is an activity or set of activities
that can accomplish a specific organizational goal.
Business processes should have purposeful goals,
be as specific as possible and have consistent
outcomes.
IS "A COLLECTION OF RELATED, STRUCTURED ACTIVITIES THAT
PRODUCE A SERVICE OR PRODUCT THAT MEET THE NEEDS OF A CLIENT.
Business Process Engineering
Why do we need Business Process Engineering?
The field of business engineering developed primarily to fill the gap
between the management and technical or administrative teams
within a company.
Management may have difficulty translating their plans to technical
teams, who may in turn find it challenging to develop products and
solutions to carry out these plans in the real world.
Business Process Engineering
Business engineering acts as a bridge between these two areas, and
is designed to help a company not only develop effective goals, but
also techniques for carrying out these goals as efficiently as possible.
This may require changes in every area of the company, from
marketing to administration, to computer systems
Unique aspect of BPE
Another unique aspect of the business engineering field is that it can be
applied to a company at any stage of development.
Individuals who wish to form a new business can use these principles to select
the best product or market, or to refine an existing idea.
It can also be used to improve an existing business. This may mean
increasing profit or cutting cost, but it can also refer to improving
employee satisfaction or retention rates.
This process may involve making small changing or incorporating new
technologies, or may require a complete redesign of the company and all its
processes.
 Business Process Engineering and
Software Engineering
In many software engineering methods approaches to requirements
engineering involve a detailed modeling of different aspects such as system
structure data or behavior these models are an essential means of
communication between system developers and expert users
 Business Process Engineering and
Software Engineering
Furthermore they are the basis from which system design and
implementation are derived in later stages of the development process
As the quality of requirements specifications is a decisive factor for
software quality and correction costs day by day much effort is usually
spent on system modeling in the early stages of the software development
process.
 Business Process Engineering and
Software Engineering
However, the models developed quite often only aim at providing the
system developer with a better understanding of the system to be
developed rather than producing a set of unambiguous consistent and
semantically integrated documents, which support an at least half
automated derivation of subsequent results in the development process
such as design or implementation documents thus the high effort spent on
modeling is often not used efficiently.
 Business Process Engineering and
Software Engineering
1. Process Automation:
1. BPE involves analyzing and optimizing business processes for efficiency and effectiveness.
2. Software Engineering plays a crucial role in automating and implementing these optimized processes
through the development of software solutions. Workflow automation, through the creation of custom
software applications, helps in streamlining and managing business processes.
2. System Integration:
1. BPE often requires integrating various systems and technologies to ensure seamless business
operations.
2. Software engineers design and implement integration solutions, connecting different software
applications and systems to work together harmoniously. This integration helps in achieving a cohesive
and efficient business environment.
3. Custom Software Development:
• BPE may identify the need for custom software solutions to address specific business process
requirements.
• Software engineers are responsible for designing, developing, and maintaining these custom
software applications tailored to meet the needs of the optimized business processes identified
in BPE.
 Business Process Engineering and
Software Engineering
4. Continuous Improvement:
• Both fields share a common goal of continuous improvement. BPE focuses on optimizing
business processes over time, while Software Engineering follows agile methodologies and
DevOps practices to iteratively improve and enhance software systems.
5. Data Analysis and Decision Support:
• BPE often involves data analysis to identify bottlenecks and areas for improvement in
business processes.
• Software engineering plays a role in developing data analytics tools and decision support
systems that facilitate informed decision-making based on the insights gained from the
analyzed data.
6. Change Management:
• BPE and Software Engineering both require effective change management strategies when
implementing new processes or software solutions.
• Professionals in both fields collaborate to ensure a smooth transition, addressing issues related
to user adoption, training, and communication.
Business Processes – Historical Perspective
Hundreds of years ago, work was the domain of each individual
◦They completed all parts of the end-to-end process
◦They researched, created, sold and distributed their products
Drawbacks
◦Variations in the quality of produced/manufactured product
◦Least productive
◦Expensive
◦Person dependent

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Division of Labour
In 1776, Adam Smith wrote a book “The Wealth of Nations” and introduced the
world to the Industrial Revolution
He defined the concept of “Division of Labour” similar to what is known as function
today
Smith explained the concept with an example of making metal pins:

“Each person making a 10th part of 48,000 pins might be

considered as making 48,000 pins in a day. But if they had
all wrought separately and independently, and without any
of them having been educated to this peculiar business,
they certainly could not each of them have made 20,
perhaps not 1 pin in a day.”

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Division of Labour & Business Process
Adam Smith’s definition of ‘Division of Labour’ formed the basis of modern day
working methodology
Functions are designed to complete specific tasks
As companies, products and marketplaces became more complex and segmented, there
is a need to have more complex and specialized functions within organizations
Organizations face challenges to manage the flow of work across functional specialties
Business Processes need to be defined properly to represent the functional specialties

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Industrial Revolution (1760-1840)
Era of transition from the traditional hand based manufacturing to machines
New chemical manufacturing and iron production processes were introduced
Increased usage of steam power and water power for industrial processes
Development of machine tools gave rise to mechanized factory system
Business Processes need to be defined properly to represent the manufacturing
and industrial processes

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Scientific Management
In 1911, Frederick Winslow Taylor published “The Principles of Scientific Management” for
the American Society of Mechanical Engineers
Taylor advocated “enforced standardization of methods, enforced adoption of the best
implements and working conditions, and enforced cooperation” in order to improve efficiency
Taylor’s focus was on scientific study of work, standardization of process, systematic training
and sound structure of employees and management.
The work was hugely unpopular with workers
Taylor’s work laid foundation for modern industrial engineering

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Assembly Belts and Statistical Process
Controls
An assembly line production was used to produce the first affordable automobile, Ford
Model T, by Ford Motor Company in 1908
In 1913, Henry Ford introduced moving assembly belts into plants producing Model T
cars to increase efficiency
By 1916, the car costed less than half than it was in 1908
In 1920, Walter A. Shewhart at Bell Laboratories pioneered the use of Statistical
Process Control to detect and prevent manufacturing issues before they could become
problems.

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Questions?