Business Process Modeling, Management and Mining
Business Process Improvement
Prof. Cesare Pautasso
http://www.pautasso.info
[email protected]
@pautasso
Tradeoff
Hard to optimize all qualities
Time
- Execution Time - the duration of the actual task execution
- Waiting Time - delay due to resource unavailability or contention
- Setup Time - preparations may be amortized over multiple executions
- Communication Time - to gather all information necessary for the execution (message exchanges, input/output from files/databases)
External Quality
Customer Satisfaction:
- Product (Process Outcome) meets expectations/specifications
- Customer receives correct informations in a timely manner
- Contracts are not violated
- Data privacy is guaranteed
Internal Quality
Working Conditions:
- Find the Best Person for each Task
- Fair Workload Allocation
- Motivation
- Experience, Learning effects
- Ensure Correct Decisions are made
Costs
- Fixed vs. Variable (over time, per use)
- Human vs. IT Systems
- Internal (we pay) vs. External (customer pays)
- Operations vs. Management vs. Support
- Finite resource depletion vs. Renewable resource consumption
Flexibility
Ability to react to changes
- Flexible resources can execute different tasks, (quickly) learn how to execute new tasks
- Flexible processes handle various cases and variable workloads
- Flexible management can reallocate resources, adapt rules and policies
- Flexible organizations can restructure themselves to respond to market conditions or business partners demands
Focused Improvement
Scope:
- Individual Activities
- Sub Processes
- Entire Processes
Statistics:
- Average
- Variance
- Threshold Violations
Improvement
How to redesign?
- Evolutionary
salvage AS-IS, lower risk, smaller changes - Revolutionary
ignore AS-IS, high-risk high-reward
Starting point?
- Clean slate
- AS-IS (existing processes)
- Reference process models
Task Elimination
Remove unnecessary activities:
- redundant activities (lean)
- inefficient activities (cost > benefit)
- useless activities (value = 0)
Better: Cost, Time - Worse: Quality
Task Elimination Example
Trade the cost of checking against the risk of not checking
Skip some check point activities: cheaper but also could lower product quality
Resequencing
Order tasks using their costs/benefits ratio
Anticipate decisions that may lead to quick dismissals
Postpone expensive tasks
Better: Time, Cost - Worse: Flexibility
Triage
Use an early up-front decision to pick the appropriate process path and avoid unnecessary work
Example: emergency room admission, quick settlement for cheap claims, VIP treatment for returning customers
Better: Time - Worse: Flexibility
Handover reduction
Keep the same person working on the same case as long as possible
Example: personalized service by dedicated customer account manager
Better: Time, Quality - Worse: Flexibility
Handover reduction example
Task Composition
Combine multiple small tasks into complex large ones (simpler processes, more complex tasks)
Reduce setup time and fragmentation
Ensure uniform quality
Employ generalists that enjoy doing rich and eventful jobs
Better: Time - Worse: Flexibility
Task Decomposition
Decompose large tasks into workable units
Less work per task, more handovers
Employ specialists, let the experts focus on critical tasks
Better: Quality, Cost, Flexibility - Worse: Time
Potential for Parallelization and Self-Service
Task Parallelization
Parallelize Independent Tasks
(assuming enough concurrent execution resources are available)
Better: Time - Worse: Cost
Parallelization example
Optimize Communication
Reduce the number of messages to be exchanged (simplify business protocols)
Automate message handling
Never employ a human being to copy data between two systems by hand
Prefer asynchronous non-blocking interactions
Better: Time, Cost - Worse: Flexibility
Information Access
Provide direct, unfiltered, timely access to the right and necessary information
What information is needed to carry out a task or to make a decision?
Who owns and controls information, databases, websites (authoritative sources)?
Better: Time, Cost - Worse: Quality
The Complete Kit
Work should not begin until all necessary pieces are available (front-loading)
Requires to give feedback upstream about incomplete/defective input
Prevents failures due to missing/incorrect information
Wasted preparation effort if the work fails later
Michael zur Muehlen
Outsourcing
Let inefficient and non-critical parts of the process be executed elsewhere by a different organization
Requires: provider selection, contract bidding and negotiations, trust establishment, systems interoperability and integration, quality monitoring
Better: Cost - Worse: Flexibility
What to outsource?
internal (private) business functions (e.g., payroll, billing, accounting, legal, IT)
customer-facing (public) processes (e.g., marketing, sales, support)
What to outsource?
Clearly defined, repeatable tasks
Labor intensive tasks done without needing the core competencies or intellectual property of the company
Seldomly executed processes that will need large capital investments
Processes that operate on information allowed to cross national borders
What NOT to outsource?
Core processes that add the most value to the company's products or services
Critical operational processes that need to be closely monitored and controlled
Highly visible processes that impact the company's image
Tasks for which liability cannot be shifted to the external service provider
Where to outsource?
- Offshoring
- Nearshoring
- Onshoring
- Inshoring
- Multishoring
Increasing the distance may reduce labor costs but increase communication, synchronization, travel overhead
Self Service
Push work back to the customer
Examples: data entry, quality assurance, support
More challenging but as important: make sure customers can revise/cancel/suspend their work by themselves
Better: Cost - Worse: Quality
Crowdsourcing
Leverage open community participation
Open Call for "volunteers" which collaborate/compete to carry out a specific task for a small financial reward or social recognition
Examples: content production and curation, distributed human intelligence tasks, fund raising
Better: Cost - Worse: Quality, Time
Process Standardization
Same treatment for all cases of all customers
Use a larger, homogeneous resource pool
Leverage economies of scale
Better: Cost - Worse: Quality, Flexibility
Process Specialization
Differentiate processes based on case types, geography, season, customer profile
Opportunity to include customized activities
Use a smaller, heterogeneous resource pool
Better: Quality, Flexibility - Worse: Cost
Improvement Heuristics
- Task Elimination
- Resequencing
- Triage
- Handover Reduction
- Task Composition/Decomposition
- Task Parallelization
- Optimize Communications
- Outsourcing/Insourcing
- Self Service/Crowdsourcing
- Standardization/Specialization
Improvement Fail Factors
- Spend too much time analyzing the AS-IS state
- Target non-critical paths
- Ignore concerns/suggestions from involved people
- Proceed without management support
- Consider parts of the process/organization off-limits
- Introduce automation for technology's sake
- Pick the wrong benchmarks
BPM Lifecycle
Process Simulation
References
- Marlon Dumas, Marcello La Rosa, Jan Mendling, Hajo Reijers, Fundamentals of Business Process Management, Chapters 7-8, Springer, 2013, ISBN 978-3-642-33142-8
- Thomas N. Duening, Rick L. Click, Essentials of Business Process Outsourcing, Wiley, May 2005, ISBN 978-0-471-70987-9