Business Process Modeling

Definition: Business Process Modelling (BPM) is a modern term and methodology which has evolved through different stages and names, beginning during the division of labour of the late 1700s, when manufacturing first moved into factories from cottage industry. Broadly the term 'business' in Business Process Model/Modeling/modelling is interchangeable with 'organisation'. Business Process Modelling is arguably more widely relevant than say Time and Motion Study or Total Quality Management (to name two earlier 'efficiency methodologies') were in times gone by. Put simply Business Process Modelling aims to improve business performance by optimising the efficiency of connecting activities in the provision of a product or service. The diagrammatical representation of Business Process Modelling is commonly called 'notation'. Business Process Modelling generally needs support from people to work in practice. While Business Process Modelling relates to many aspects of management (business, organisation, profit, change, projects, etc) its detailed technical nature and process-emphasis link it closely with quality management and the analytical approaches and responsibilities arising in the improvement of quality. Business Process Modelling is a quality management tool, like for example Six Sigma, and is useful especially in change management. SWOT Analysis, Balanced Scorecard and Project Management methods provide further examples of change management tools, and Business Process Modelling can be regarded as working alongside these methods.

Business process modelling definition

A Business Process Model (BPM) is commonly a diagram representing a sequence of activities. It typically shows events, actions and links or connection points, in the sequence from end to end. Business Process Modelling is cross-functional, usually combining the work and documentation of more than one department in the organisation. The aim of modelling is to illustrate a complete process, enabling managers, consultants and staff to improve the flow and streamline the process. The outcomes of a business process modelling project are essentially: value for the customer, and reduced costs for the company,

leading to increased profits. Business Process Modelling is a powerful methodology when directed towards operations which can benefit from improvement, and when people involved are on-board and supportive.

Adding value for the customer

Adding value for customers, whether internal or external customers, is at the centre of a Business Process Model. It starts with a customer need and ends with the satisfaction of that need. Unlike a workflow diagram, which is generally focused on departmental activities, a BPM spans departments and the whole organisation. This point about customers being internal as well as external is crucial: Staff are among the internal customers of modern right-minded organisations. If you approach Business Process Modelling purely from a systems and 'things' viewpoint with a fixation on costs and profitability, and squeezing every activity to its theoretical optimum, then people (notably staff) tend to get squeezed too. Organisations work well when people enjoy and support the processes that they are required to perform, and you will only add sustainable value for your customers, when you also add value for your staff too.

Successful BPM added value for customers is self-sustaining because for staff it contains the magical WIIFM element - (What's In It For Me).

Example - BPM added value

An example could be the actions involved in processing a customer order from an internet-based mail order company.

Starting with a customer placing an order (the customer need) send IT-based information to the warehouse stock picking packing and recording sending the appropriate IT-based information to the distribution hub sending IT-based information to the accounts department generation of an invoice allocation and organisation of shipment for the vehicle drivers delivery of the item and invoicing (the customer need fulfilled).

This is a simple 'high-level' example. In practice each part or sub-process (for example, stockpicking) may require a 'low-level' BPM of its own. Business Process Modelling has enormous potential to address many of the critical demotivators among staff (e.g., poor working relationships, confused structure, failure, etc) and also many strong motivators (e.g., the quality of work itself, recognition, advancement, new responsibilities, etc). But it needs thinking about or it won't happen. Think beyond merely adding value for external customers, and optimising efficiency and profit make a special effort to look for added value for staff too, and then the BPM methodology will work on a much more effective level.

Modelling a business process - an overview

A Business Process Model is central to a host of other related activities, briefly outlined below. Redesigning a process and implementing it is not a speedy enterprise. It can take months and occasionally years, depending on the extent of the process and sub-processes, how many people and systems are involved and how much of it needs to be redesigned. As the project develops, the business will change and new requirements will surface, so the approach must be flexible and frequently reviewed and re-prioritised. It is advisable to stage the process in a succession of 'builds', each one completed within a business quarter, so that it can be reviewed and measured for return on investment. It is essential that the people involved in the process, at all levels, are engaged, all the way through. Not only because their input is vital, but also because they need to be fully 'on board.' Senior management buy-in is important to ensure that the resources are available to involve managers and

staff members and overcome any resistance to the change. Without this, the redesign cannot work. Focus groups, formal and informal discussions and workshops are useful at each stage and 'build'.

Stages in the development of the modelling project

Developing the models in practice follows the sequence: Identify the process and produce an 'as is' or baseline model. Review, analyse and update the 'as is' process model. Design the 'to be' model. Test and implement the 'to be'. Continuously update and improve the new model.

Creating a business process model

This section provides a guide to creating an initial, 'as is' or baseline model, in other words - the current situation.

component parts of a BPM

An 'as is' or baseline model gives an overall picture of how the process works, now. Any structural, organisational and technological weak points and bottlenecks can then be identified, along with possible improvements at the next stage. You will need the following information before you start to construct your model: The desired outcome of the process. The start and end points (customer need and customer need fulfilment). The activities that are performed. The order of activities. The people who perform the activities. The documents and forms used and exchanged between functions and from customers and suppliers.