The Main Challenges and Objectives Relating to the Development of Business rocess Management - Term Paper Example

Running head: Business Рrосеss Маnаgеmеnt (BРМ) [Name] [Professor Name] [Course] [Date] Contents Business Process Management 3 Objectives of integrating BPM Solutions 4 Challenges in developing BPM solutions 5 a)Issues at the strategic level 5 b)Issues at the tactical level 7 c)Challenges at the operational level 8 BPM standards 9 a)Business Process Model and Notation (BPMN) 9 b)XML Process Definition (XPDL) 9 c)Business Process Definition Metamodel (BPDM) 10 d)Business Process Execution Language (BPEL) 10 Ideal BPM Architecture 11 a)Components of a good BPM application 12 Six Sigma and Lean 13 Case Study: BPM in Logistics Processes 14 References 16 Appendix A 19 Abstract: Business Process Management is generally delineated as a closely controlled approach aimed at identifying, designing, executing, monitoring, controlling and measuring business operations, both computerized and non-computerized, to attain targeted results that are consistent with the strategic goals of an organization (Bandara, 2007). This paper discusses the main challenges and objectives relating to the development of BPM solutions with emphasis on managing, modeling, measuring and optimizing processes. It also explores major BPM standards. Others discussed include system architecture for model BPM architecture, the main components of a "good" BPM application, and Six Sigma and Lean. Finally, the paper presents a case study of a company that resorted to use BPM solution to improve value to customer delivery. Business Process Management Business Process Management (BPM) comprises a set of practices aimed at improving an organization’s effectiveness, flexibility or efficiency through computerization of the of the entire business processes. It can also be defined as a collection of functions in a particular sequence that at the end of its all, deliver value-added products or services to the organizations internal and external clients. BPM therefore entails an all-encompassing management approach that aligns an organization’s operation process with the needs of clients. As a sound management approach, it views business processes as an organization’s strategic resources that must be managed well to ensured better delivery to customers (Bandara, 2007). From the above definitions, it can be concluded that BPM is a management approach that is generally controlled, interactive and a technology-aided focused on improving management of back-to-back business processes, hence creating value and enabling the organization to meet its goals and objectives with more enhanced dexterity (Murphy and Staples, 1998). Objectives of integrating BPM Solutions Several objectives are closely associated with the development of BPM solutions. On average, they can be classified into for major areas, namely organization, financial, information technology and operational (Ericree.com, n.d.). The financial objectives are numerous and depend on the process that is being redesigned and managed, such as to lower cost of production, to increase cash flow and to create new revenue avenues. The organizational objectives include improving the reputation of the organization, increasing the customer base, gaining a competitive edge and increasing the organization’s market share. Thirdly, operational objectives entail reducing non-value-added services, enhanced communication processes between departments, improving workspace and motivating employees. Lastly, the information technology objectives include improving the performance of the system, facilitating service level agreements and improving the company’s productivity through computerization. Challenges in developing BPM solutions To develop a good BPM solution, the project’s environment must first be designed, the underlying challenges examined and the local and large-scale perspectives evaluated (Kemsley, n.d.). Afterwards, a design may be created and eventually, the solution tested. With regard to challenges, although studies have shown that business process management is ranked as a major priority for business organization, analysis suggest certain gaps in addressing the contemporary industry demands (Rudden, 2007). Along with the potential significance of BPM solutions to an organization, there are several challenges associated with its development and implementation to an organization. a) Issues at the strategic level Lack of proper understanding of the Business Management Solutions, such as failure to establish where to get started is a major challenge in developing BPM solution. The concern is that the business may be preoccupied with understanding what it entails causing failure to get started or move forward. This invokes the principle of “analysis of paralysis”. In addition, lack of visibility into the business operations as well as lack of information on the current processes causes uncertainty; this is likely to cause conflicts and confusions within the organization during the development of BPM solutions, as there are likely to be wide views and perceptions of the BMP in the organization (Raduescu et al, 2006). In the same breadth, lack of clear understanding of BPM has the potential of making it impossible to know where to start from. This is likely to have a negative impact on employee buy-in across the business organization. Besides, researchers have shown that the middle management has often resisted the need for BPM implementation, as they feel threatened by redundancy potentials as they feel they may lose control to the BPM solution. This demonstrates a clear indication of lack or employee buy-in due to lack of understanding of BPM (Apostolou et al 2010). Lack of consensus that a holistic approach facilitated by the BPM technologies can help as well as be applicable in solving certain organizational problems is also a major challenge generally faced in its implementation. A major factor for this is the lack of consensus on the capacity of the BPM. Generally, getting a consensus or an agreement from the varied stakeholders can be a major challenge, basing on the fact that BPM is such a broad term with varied definitions. An additional challenge includes linking the organizational strategy with the BPM solutions. Experts agree that the implementation and management of the BPM should take a holistic approach. In addition, there should be no gap between the strategy of the organization and the BPM efforts. Information systems analysts have expressed an underlying concern with service agreement, policy match making, and policy management. If it has to be effective, then it must fit into the general IT infrastructure (Larsen and Myers, 1998). b) Issues at the tactical level Lack of clear standards at the organizational level can cause a challenge to the development of the BPM solutions. Basically, standards should entail specifications stipulated by the organization’s governing body and that should be widely accepted within the organization. Overall, they should offer clear-cut basis upon which BPM solutions can be specified, and hence play an integral role in sustaining consistency across departments and other organizational domains. However, experts agree that standards can themselves be a challenge when it comes to developing BPM solutions within the organization. Basing on the content of the standards, they do often have specific domain, thus calling for experts in the area to jointly derive this, thus becoming a more political issue within the organization. As aforementioned, BPM denotes several different things, different experts and since different departments have their own standards and vested interest, it is difficult to perceive a scenario where embodying clear-cut standards cannot be an issue. Secondly, process specification can be essential in allowing elimination of information islands within the organization to enable employees to have a wider view at the organizational problems whose solution should be sought using the BPM. Process modeling can be crucial in achieving this. However, there is a trade-off between expressing it and stabilizing the business language. Experts argue that a discrepancy exists between what should and what could be significantly modeled and what modeling language can really support. With regard to using process modeling to ensure specification of the process, a company can encounter a challenge over specification of their business processes, and a result straying from the actual objective of the actual purpose of the modeling. According to some business experts, business people often look to view their processes in a simple and precise way, and when the processes are transformed to more technical view, they would still want to have the same simple and abstract view (Bandara, Gable and Rosemann, 2005). Lack of a clear methodology is another challenge facing BPM solutions development. Experts suggest that there should be a strong need for BPM methodology, as currently, they do not exist. Indeed, there are no set of methods of doing BPM, furthermore, a standardized approach does not exist. This has made many organizations to be obsessed with non-specific methodologies that vary from time to time. For instance, studies have shown that organizations are often confused on whether to use Six-sigma or Lean, and which should be the right methodology (Nave, 2002). In such situations, experts have recommended that there is the need to implement a comprehensive methodology that can deal with issues related to BPM projects scope management, proper selection of BPM solutions and ways to sustain performance metrics and the general flexibility of the project. c) Challenges at the operational level A major challenge at the operational level includes the limited margins of technical support that can be harnessed in developing BPM solutions. Several researches have indicated that even as a great number of user organizations have implemented BPM, it however does not imply that they are BPM-compliant -- by the mere fact that they have procured such technologies. Naturally, by merely owning the technology does not address any particular issues, but rather how it is used. A number of challenges here include lack of flexibility of the BPM tools, misconception on the capabilities of the tools, existing gaps between the process runtime and level as well as lack of tools that sustain process visualization. BPM standards a) Business Process Model and Notation (BPMN) Business Process Model and Notation (BPMN) refer to a graphical representation essential for identifying a business process model. Technically, it is a standard for modeling business process by providing a graphical notation that identifies or specifies a business process in a BPD (business process diagram). BPMN is aimed at supporting business process management for both the business and technical users (Silver, 2011). It ensures this by offering a notation that is perceptive to the business users while at the same time being capable of representing intricate process semantics. Thus its underlying goal is to offer a standard notation that can be easily understood by the entire stakeholders of the business organization. In this way, it serves as a universal language that bridges communication gap that may often exist between implementation and design of business process (Havey, 2005). b) XML Process Definition (XPDL) Another BPM standard is the XML Process Definition Language (XPDL) which some experts have claimed is among the most mature standards. This standard is essential for interchanging process models between various applications, specifically in business organizations that deal with human-facing or workflow-like components (Kaya, 2001). A major feature of BPMN is its capacity to support most functions of BPMN. In addition, it can retain graphical spatial information. Also, it can support extensions that are vendor-specific. c) Business Process Definition Metamodel (BPDM) Business Process Definition Metamodel (BPDM) is a BPM standard serves as a serialization format essential for BPMN diagrams. Even as it also supports major functions of BPMN, it has a larger scope compared to XPDL. Among other functions it supports include orchestration as well as choreography, meaning even as it does orchestrations of we systems, it covers choreography between two separate organizations. Further, it has distinct meta-models thus it represents a lot more than BPMN can, as it supports other views of processes or of business models (Rosen, 2008). d) Business Process Execution Language (BPEL) Business Process Execution Language (BPEL) is a BPM standard essential for identifying actions that characterize a certain business process with webs services. Typically, the processes in this standard imports and exports date by exclusively applying web service interfaces. BPEL provides a language for the identification of abstract and executable business processes. Abstract business processes involve partly specified processes that are not meant to be executed, while executable business processes are those processes that are actual behavior of those taking part in a specific business interaction. BPEL abstract process signifies a cluster of observable behaviors that are standardized. In this case, BPEL is aimed at modeling the behavior of the abstract and executable processes (Ryan, Stephen and Lee, 2009). Ideal BPM Architecture Ideal system architecture for a model BPM architecture should have the capacity to apply the strategy of divide-and –conquer to minimize the severity of an organizational problem into more manageable parts, as well as solve each part by reusing the existing approach, and not by innovating a new technology. In applying this strategy in a BPM architecture invites specific questions such as the problem that has to be solved, the parts of the problem and the standards for solving them (Peisl, 2012). Even as BPM is stuffed with competing standards, a good architectural approach separates the BPM solution into separate parts and assigns the proper standards for each. Thus the architecture this paper suggests as a reference model is the Workflow Reference Model (WfMC), which is designed for both services and product architects. This kind of system concentrates on the computerization of business operations where interaction of computer based activities and humans play an integral part. Within the process of workflow, tasks or information are passed between participants using a method that is controlled by set of rules. WfMC was designed to identify the functional areas in business processes as well as create proper specifications to be implemented in workflow. These systems are typically applied in areas such as insurance, banking and administration. They however have many manufacturing or industrial applications. Given their various areas or application, WfMC products have different architecture, areas of specification as well as techniques of implementation (Fang and Changqing, 2010). a) Components of a good BPM application Theoretically, the runtime engine is the heart of the system. The runtime engine performs processes that are written using a BPM standard – such as the BPEL. Later, the interaction between humans and computer-based applications drive the execution of the processes in the runtime engine. Participants (humans) in the process apply human workflow geographic application, which links the engine via a programmatic work-list interface. The interface enables the user to see as well as to execute the awaiting manual activities. Usually, there are two kinds of computer interactions, namely external and internal. The internal applications exist on the organization’s network although they are externally of the engine’s address space. They can be accessed using integration technologies such as COM, J2EE or web services, with XML used as the possible message format. Internal interactions on the other hand have the potential to also be more trivial aligned code snippets that are written in such programming languages as C# or Java. Basically external interactions entail web-based communication controlled by business-to-business interactions of choreographies. Another important component is the BPM administrator who used a graphical administrator and monitors console to sustain and track the engine process. The console makes use of the management language to communicate with the engine. The runtime engine stabilizes the persistence of the state of the process to a database. The console hits the database instead of using the management language to perform unplanned process queries. Applications that involve multifaceted interactions with external factors, such as the business-to-business processes, the WS-CDL choreography creates BPMN model for capturing the communications for use in the local process. Six Sigma and Lean “Six Sigma” and “Lean” are two popular performance improvement methodologies. Generally, Lean tools focus on process and data collections on labor, quality and time. In addition, they focus on determining the process variation as well as its reduction. They also tend to support smaller teams for longer periods of time. Further, they tend to leverage on the knowledge of participants. Conventional thinking perceives “Lean” as focused on the improvement in the process flow and identification of waste. Since it focuses on waste removal or anything that does not necessarily produce a service or product, its common feature is touch time, or the period of time the product is processed or touched during the processing. It is frequently emphasizes on workflow. It also involves five steps which are however different from those of Six Sigma, namely identification of features that create value, identification of the value stream activities, making the activities flow and finally, perfecting the process (Womack and Daniel, 1996). Six Sigma on the other hand is more date focused, and often collects data on inputs that are related to outputs. It also tends to support smaller teams for long periods while reaping the knowledge of the participants. Thus, Six Sigma appears to guarantee that by focusing on reduction of variations, the business processes will find the most proper solution while at the same time solving overall organizational issues. In addition, it assumes that by using a set of statistical tools to recognize the fluctuation of a process, it enables the management to forecast the expected outcome of the process. And if the outcome is not acceptable, the associated tools may still be applied to establish the factors influencing the process. In all, Six Sigma process involves five steps, namely definition, measurement, analysis, improvement and control (Nave, 2002). Case Study: BPM in Logistics Processes A giant mobile phone manufacturer suggested a process improvement opportunity for its logistics operation. Each quarter, distressed shipments, or products that could be delivered, cost the company several millions of dollars in lost revenue. Process analysis found that improvements were required in various areas of operation, and since external partners interoperated with the internal departments, a holistic view of the order was difficult to attain as it progressed through the process. In addition, the window opportunity to save a shipment was shy 24 hours, even as completion of tasks, work priorities and acceleration were critical for resolution. This is because date on the order notifications was repeatedly unreliable and behind the schedule. The giant mobile-phone maker therefore required real-time notifications if it has to save the shipments. The original process implementation tracked and notified the customer service team the moment an order was designated ‘distressed.’ In addition, deadlines of resolution were consigned automatically and tasks directed in order to allow for solving the shipment problems immediately. Further, the process implemented standard procedure that guide call centre agents on the best alternatives for the customers. The outcome of the proactive management of the existing process bore tremendous results. Each quarter, each of the new versions of the process shifted the key metric percentage save from 8 percent to 73 percent, representing a saving of nearly US$2 million. With persistent global expansion, the number continued to grow. The company further used analytical and simulation capabilities of its BPM solution to specify the next set of improvements. The BPM solution also recommended workarounds for the bottleneck in business processes as well as simulated the performance of each business process. This enabled the logistics team to identify the new ways to notify customers of deliveries as well as allow the customer service agents to validate delivery details before the deliveries are made. Anchored in the pilot results, the logistics team approximated that there is a potential to increase the shipment saved to over 90 percent. Conclusion In conclusion, Business Process Management concerns the organization and not software application, even as it is essential in facilitating the process. The objectives of the BPM are generally focused on ensuring improved performance, effectiveness of business processes, efficiency of business operations as well as the ensuring a smooth change management process (Dettmer, 1997). Even as development of BPM solutions encounter many challenges, they are greatly beneficial to an organization emphasizing while they should be implemented by organizations. In specifying the objectives of the BPM, a key point worth noting is that BPM has the potential to improve different perspectives of an organization if developed or implement appropriately. As earlier explained, one of the greatest benefits that BPM solution can offer, particularly for a profit-focused organization, is the capacity to improve shareholder value. References Apostolou, D., Mentzas, G., Stojanovic, L., Thoenssen, B., & Lobo, T. P. 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How To Compare Six Sigma, Lean and the Theory of Constraints. New York: American Society for Quality New York. Retrieved from http://www.lean.org/Admin/KM%5Cdocuments/76dc2bfb-33cd-4ef2-bcc8-792c5b4ef6a6-ASQStoryonQualitySigmaAndLean.pdf Peisl, R. (2012). The Process Architect: The Smart Role in Business Process Management. Retrieved http://www.redbooks.ibm.com/redpapers/pdfs/redp4567.pdf Murphy, F., & Staples, S. (1998) “Reengineering in Australia: Factors affecting success”. In proceedings of the Australasian Conference of Information systems, Sydney, Australia. Raduescu, C., Tan, H. Jayaganesh, M., Bandara, W., zur Muehlen, M. & Lippe, S. (2006) “A Framework of Issues in Large Process Modeling Projects” in proceedings of the 14th European Conference on Information Systems, Goetesburg, Sweden. Rosen, M. (2008). Orchestration or Choreography? Retrieved from http://www.bptrends.com/publicationfiles/04-08-COL-BPMandSOA-OrchestrationorChoreography-%200804-Rosen%20v01%20_MR_final.doc.pdf Rudden, J. (2007). Making the Case for BPM: A Benefits Checklist. Retrieved from http://www.bptrends.com/publicationfiles/01-07-ART-MakingtheCaseforBPM-BenefitsChecklist-Rudden.pdf Ryan K., Stephen S. & Lee, E. (2009) Business Process Management (BPM) Standards: A Survey. In: Business Process Management Journal, 15(5) Silver B. (2011). BPMN Method and Style, 2nd Edition, with Bpmn Implementer's Guide: A Structured Approach for Business Process Modeling and Implementation Using Bpmn 2. Cody-Cassidy Press. Womack, J &Daniel T. (1996). Lean Thinking: Banish Waste and Create Wealth in Your Corporation. New York: Simon & Schuster. Appendix A Table 1. Matrix of Responsibilities Read More