Introduction to

Business Process
Engineering
 What Is a Business?

 The term business refers to an organization

or enterprising entity engaged in
commercial, industrial, or professional
activities. The purpose of a business is to
organize some sort of economic production
(of goods or services).
 Business also refers to the efforts and
activities undertaken by individuals to
produce and sell goods and services for
profit.
 The word business is derived from the term
“busyness”.
Business Types

 Sole proprietorships:
Continue
Business Sizes

 Microenterprises: 1 to 9 employees
 Small enterprises: 10 to 49 employees
 Medium-sized enterprises: 50 to 249 employees
 Large enterprises: 250 employees or more
Characteristics of Business
Component of business

 Industry
 Commerce
Industry

 The term ”industry” refers to that part of business activity which

is concerned with the extraction production or fabrication of
products
 Conversion of raw material to finished good.
 This is a form of utility.
Types of industries
 Primary industry
 Primary industry is engaged in the production or extraction of raw
materials, which are used in secondary industry. Primary industry can be
divided into two parts:
 (a) Extractive industry
 In this industry, hidden resources below or beneath the surface of the
earth are extracted. All kinds of mining are the examples of such industry.
E.G extraction of oils, gas, coal, etc.
 (b) Genetic industry
 Genetic industries are the industries engaged in the reproduction or
multiplication of certain species of plants and animals. Plant nurseries,
poultry farms and cattle breeding farms (animal husbandry) are the main
examples of genetic industries.
Types of industries
 Secondary industry
 These industries use raw material to make useful goods. This industry also
contributes by making goods more profitable and useful by completing same
finished and incomplete goods or by changing their former design. Raw
material for these industries id obtained from primary industry.
It can be divided into two parts:
 (a) Manufacturing industry:
 This industry is concerned worth the processing or transformation of raw
materials and semi-finished products into finished products. Such industry
changes the shape and form of materials produced by genetics and extractive
industries.
 Manufacturing industry is of the following types:
 (1) Analytical :
 An oil refinery where crude oil is refined and several petroleum
products are obtained.
 (2) Synthetically:
 Factories where cosmetics, soap, cement, fertilizer and paint, etc
are prepared.
 (3) Processing:
 Cotton textile industry where cotton passes through the spinning,
weaving, dyeing bleaching and printing processes
 (4) Assembling:
 Manufacturing of radios, TV sets watches and automobiles.
 (b) Constructive industry
 This industry is engaged in the construction of building, bridges,
roads, dams, etc. It utilizes the products of manufacturing
industries such as bricks, steel, cement etc, the distinctive
feature of this industry is that its products remain fixed at one
place and cannot be taken physically to the market for sale.
 (c) Services industry:
 Business provides not only goods but also services. A services
industry does not produce tangible goods. It is engaged in
providing services to the public, hotel, railways shipping
companies, transport companies, insurance companies etc are
some example of service industry.
 COMMERCE
 Commerce is the very
important part of business.
It is concerned with the
buying and selling of goods.
It includes all those
activities which are related
to the transfers of goods
from the place of
production to ultimate
consumers.
Well-Known Businesses
Process definition

 to treat or prepare by some particular series of actions, as in

manufacturing.
 a series of actions that produce a change or development the
process of digestion
 A process is a cross-functional interrelated series of activities that
convert business inputs into business outputs
What is Business Process

 A group of logically related tasks that use the firm's resources to

provide customer-oriented results in support of the organization's
objectives.
 A business process is a set of activities that need to be
completed to achieve an organizational goal.
Examples of processes in
business
  Quote-to-order
Order-to-cash:
 Procure-to-pay  Issue-to-resolution
 Application-to-approval
Ingredients of a Business
Process
A typical process involves decision points,
A process also involves a number of components such as:
 human actors, organizations, or software systems acting on behalf of human actors
or organizations
 physical objects such as equipment, materials, products, paper documents
 immaterial objects electronic documents and electronic records
 physical objects such as the rented equipment),
 electronic documents such as equipment rental requests, POs, invoices
 electronic records (equipment engagement records maintained in a spreadsheet)
 The one who consumes the output of the process plays a special role, namely the
role of the customer
Ingredients of a business
process
Types of Business Processes

 Core Processes
 These processes are critically aligned with the fundamental
values, objectives, and vision of the business.
 Support Processes
 These processes enable and support the core processes to be
performed seamlessly. Human resources, finance management,
administration, and operations fall under supporting processes as
they help expand a business.
 Management Processes
 These processes are responsible for planning, monitoring,
managing, and controlling the core and supporting processes
from start to end.
Business Process Technology

 Business process technology refers to the use of technology,

such as software and systems, to automate, streamline, and
optimize business processes.
 It helps organizations improve efficiency, reduce errors, and
save time and resources on manual task completion.
 Examples:
 Workflow management software
 Customer Relationship Management (CRM) systems
 Customer Relationship Management (CRM) systems
The Importance of Business
Processes
 A process forms the lifeline for
any business and helps it
streamline individual activities,
making sure that resources are
put to optimal use.
Characteristics of Business
Process
 Scope: Starting and end point for the series of steps.
 Purpose: Overall objective or reason why the process is
performed.
 Steps: Specific actions performed by team members.
 Sequence: Order in which steps are performed.
 Team members: Individuals that perform the steps.
 Outcome: The specific product, service or result that comes
from executing the process.
 Customer: Next process, requestor, or end-user of the outcome
Management
 Management is the coordination and administration of tasks to
achieve a goal. Such administration activities include setting the
organization’s strategy and coordinating the efforts of staff to
accomplish these objectives through the application of available
resources.
Business process
management
 Business process management (BPM) streamlines and optimizes
business processes, or repeatable tasks, to foster a more
effective and efficient organization.
What BPM is Not

 BPM is not a software product.

 BPM is not Task Management.
Origins and History of BPM

 The Functional Organization

 A functional organizational structure is a structure used to organize
workers.
 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.
Purchasing process at Ford at the
initial stage
The Birth of Process Thinking

purchasing process at Ford after redesign

The Rise and Fall of BPR

 The management concept that was referred to as Business

Process Redesign or Business Process Re-engineering, often
conveniently abbreviated to BPR.
 The interest for BPR faded down in 1990s due to some reasons:

Concept misappropriation
Over- radicalism
Support immaturity
 Two key events revived some of the ideas behind BPR and laid
the foundation for the emergence of BPM
First of all, 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.
 A second important development was technological in nature.
Different types of IT system emerged, most notably Enterprise
Resource Planning (ERP) systems and Workflow Management
Systems (WfMSs)
Enterprise Resource Planning
(ERP) systems
 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. This idea of a single shared and centralized
database enables the optimization of information usage and
information exchanges, which is a key enabler of process
improvement
Workflow Management Systems
(WfMSs)
 WfMSs on the other hand are systems that distribute work to various
actors in a company on the basis of process models. By doing so,
a WfMS make it easier to implement changes to business processes
(e.g. to change
the order in which steps are performed) because the changes made
in the process
model can be put into execution with relative ease, compared to the
situation where
the rules for executing the process are hard-coded inside complex
software systems
and buried inside tens of thousands of lines of code. Also, a WfMS
very closely
supports the idea of working in a process-centered manner.
 The above historical view suggests that BPM is a revival of BPR,
as indeed BPM adopts the process-centered view on
organizations. Some caution is due though when BPR and BPM
are being equated.
Job functions of a manager responsible for a process (a.k.a.
process owner)
BPM Lifecycle

 Step 1: Design
 Step 2: Model
 Step 3: Execute
 Step 4: Monitor
 Step 5: Optimize
Approaches to BPM

 Human-centric
 Human-centric BPM addresses the processes performed
by people in the organization.
 Document-centric
 Document-centric BPM is about getting important documents to
the finish line and making them accessible to the rest of your
organization—think tracking, verification, and organization.
 Integration-centric
 Integration-centric BPM is about improving cross-platform
processes.
What are the Benefits of
Implementing Business Process
Management?
 Improved Business Agility
 Reduced Costs and Higher Revenues
 Higher Efficiency
When should Organizations
Implement Business Process
Management?

Here are some examples of business processes where implementing BPM
will result in a high return on investment.
 1. Dynamic processes that require regulatory compliance changes, such
as a change in customer information management following changes in
finance or privacy laws.
 2. Complex business processes that require orchestration and
coordination across multiple business units, divisions, functional
departments, or workgroups.
 3. Measurable mission-critical processes that directly improve a crucial
performance metric.
 4. Business processes that require one or more legacy applications for
their completion.
 5. Business processes with exceptions that are handled manually and/or
require quick turnarounds.
Business process
management vs. workflow
management vs. project
management

Workflow management means supervising a sequence of tasks.
 Project management refers to the supervision of entire projects (or
groups of tasks together).
 Business process management deals with all of a company's
processes across different projects, teams, and departments.
Charactiristics of BPM
Business Process
Management Software
 Business Process Management (BPM) software is a type of
software designed to support the design, execution, monitoring,
and optimization of business processes.
 BPM software enables organizations to automate manual tasks,
track process performance, and make real-time improvements to
processes.
https://
www.predictiveanalyticstoday.com
/open-source-free-bpm-tools/
What is Software engineering?
 Software engineering is the process of designing, developing, testing, and
maintaining software. It is a systematic and disciplined approach to
software development that aims to create high-quality, reliable, and
maintainable software. Software engineering includes a variety of
techniques, tools, and methodologies, including requirements analysis,
design, testing, and maintenance.

 The basic objective of software engineering is to develop methods and

procedures for software development that can scale up for large systems
and that can be used consistently to produce high-quality software at low
cost and with a small cycle of time.
Business process engineering

 Business process engineering is a way in which organizations

study their current business processes and develop new methods
to improve productivity, efficiency, and operational costs.
5 steps to a BPE approach
 The following lists the steps for performing process engineering
for a business:
 Analyse the current mode of operation (CMO)
 This process seeks to understand a business's current practices,
techniques, strategies and technologies to achieve results.
 Identify and analyse opportunities for improvement
 Determine the points or areas within a CMO that require some
improvement.
 Define the future mode of operation (FMO)
 he FMO aims to solve any issues the current operational methods
possess and provides adjustments in lacking or outdated areas.
These changes could involve introducing new technologies,
operations or products.
 Develop a gap analysis and transition plan
 Gap analysis allows you to fully understand the new strategy,
methodology, timeline and all the expected changes. The
transition plan defines the practical steps to adopt the FMO as
the new practice. It's important to design a good transition plan
to ensure the process goes smoothly and produces the optimum
results.
 Implement the new strategy
 Once there's an official plan, you can introduce the new strategy.
Implementation is the stage where you test the FMO to observe if
it produces the intended results.
Why is BPE important?

 A company's goals and performance might influence its decision

to undertake a BPE process.
 The existing business practices may seem efficient and effective,
but improvements are always possible.
 Allowing a business process engineer to analyze and propose
changes means companies are willing to review their operations
and adopt new techniques despite the cost.
 Example: Technology industry
Factors that affect BPE

 Human resources
 Customer satisfaction
 Leadership
 Resistance to change
 Timeframe
 Organizational culture
 Financial investment