Going Beyond Process Modeling

Why Do We Manage Processes?

Overview

Business process modeling — creating a graphical description of a business process — is a recognized practice in describing, analyzing and improving business operations. In many organizations, the model itself is the end product that communicates the business process amongst stakeholders; however, significant benefits can be realized by moving beyond process modeling to process automation.

This article provides an overview of the current state of process modeling and automation practices and technologies, and outlines the drivers and benefits of moving beyond simple process modeling to more comprehensive automation and management.

Why We Model Processes

Almost all organizations create descriptions of their key processes: how to manage a customer shipment, for example, or the procedure for month-end financial reporting. In many cases, these go beyond text descriptions to graphical process models, usually in a flowchart format that shows how activities are interrelated.

Process models can be created using ad hoc drawing tools, or more sophisticated modeling applications that enforce model integrity and provide analytical capabilities for process improvement. They may use an industry-standard modeling notation, such as the Business Process Model and Notation (BPMN), or a graphical notation specific to — and likely only understood by — the organization or even the individual analyst.

Once created, process models are valuable as operational documentation: they can guide workers through the steps in processes, ensure that processes are performed in a standardized fashion, and provide all stakeholders with a common understanding of the processes. Documenting processes makes it possible to apply analytical techniques, either manually or using modeling and analysis software, to detect inefficiencies and bottlenecks in processes, and simulate improved processes before they are put into practice.

In short, process modeling provides value to organizations as a documentation and operational improvement practice. But how much more value could be gained digitizing and managing processes?

BPM: The World Beyond Modeling

Business process management (BPM) includes a wide variety of methodologies and tools focused on improving how processes work. The terms used to describe BPM can vary, but in general include the following:

• Process modeling is the creation of a graphical description of a business process, usually in a flowchart-style notation.
• Process analysis (BPA) is a superset of process modeling, adding analytical techniques for detecting problems and improving processes, such as Lean Six Sigma and process simulation.
• Process automation is the digitization of a business process within software. It can include presenting human tasks to operators for completion as well as fully-automated activities including the integration and orchestration of other systems. This may be implemented with a BPM suite (BPMS) or encoded within other applications.
• Process management is a superset of process automation, using a BPMS for automation plus process monitoring, work management and process improvement. This may include functions such as work allocation and load balancing, manager dashboards, key performance indicator (KPI) measurement, real-time predictive analytics, and dynamic process definitions.

Going beyond process modeling, therefore, requires moving from “design-time” to “execution-time” activities. The design-time activities of modeling and analysis are used to document and suggest improvements to processes but do not actually run the process; executiontime automation and management control and monitor processes as they are happening.

Why We Manage Processes

Process modeling and analysis, as mentioned previously, occurs in most organizations. Process management happens much less frequently than business process analysis (BPA), due to the additional cost and complexity of implementing a BPMS.

What benefits can we expect from moving beyond process modeling?

First, we see a number of operational efficiency benefits of process automation and task routing:

• Capture information early in the process and route it electronically, reducing paper handling
• Automate decision-making using business rules
• Automate integration between systems to reduce manual data entry and errors
• Standardize processes and enforce regulatory compliance
• Route manual tasks to the right person at the right time

Process management provides additional benefits beyond automation, many focused on improving customer satisfaction:

• Provide full informational context to improve human decision-making and focus on the customer journey
• Allow model-driven, agile processes to be easily changed for continuous improvement and innovation
• Enable collaboration within processes for faster problem resolution
• Monitor and manage work-in-process, including reallocation and load balancing, to optimize workforce utilization
• Predict and proactively alert missed deadlines and KPIs

Although cost benefits are still important, these latter benefits show how BPM can improve competitive differentiation and revenue generation.

BPM Benefits: Use Cases

The decision in any organization to move beyond process modeling to BPM is usually motivated by a combination of some of the benefits listed in the previous section. The deciding factors can be quite different depending on the company’s age and corporate culture, as well as their industry and competition. The following use cases describe typical implementation scenarios and benefits of BPM.

Financial Institution Back Office:

A financial institution has a back office operation that processes transaction, and wants to improve efficiency and reduce costs rather than consider outsourcing. A BPMS is implemented to orchestrate and integrate multiple line-of-business systems, removing the need for workers to re-enter information from one system to another and thereby reducing error rates. The BPMS is also used to manage exceptions that require manual intervention, routing and enabling collaboration between workers while providing a rich information context. The BPMS tracks all work, both fully-automated and human tasks, and provides alerts when service level agreements that may incur regulatory penalties are in danger of being missed.

Although the primary benefits are improved efficiency and reduced operational risk, this also has the effect of improving customer satisfaction by decreasing transaction cycle time and raising the speed and quality of problem resolution through collaboration.

Manufacturing Supply Chain:

A consumer goods manufacturer has complex product development and supply chain processes in a rapidly-changing market. A BPMS is implemented to replace several spreadsheet-based planning and control systems, and integrate with an enterprise resource planning (ERP) system to provide a business-controlled supply chain process. The process model within the BPMS can be modified directly by analysts within the product development business units, allowing immediate changes in timing and order of operations, thereby reducing time to market for new products. The BPMS monitoring capabilities provide visibility and control over the operational processes, and feed back into the process modeling and analysis for continuous process improvement.

The primary benefit is improved time to market, with a secondary benefit of reduced reliance on IT resources and the associated costs.

Transportation Logistics:

A transportation logistics company provides freight shipping for one-off shipments and long-term contracts, in a market driven by competitive pricing. A BPMS is implemented to manage pricing quotes by routing requests and information between a salesperson, the pricing manager and (optionally) the customer. The BPMS integrates with a rules management system that provides recommendations based on comparative cost and pricing data from similar shipments and current market conditions, and captures the final price directly into the billing system.

The primary benefit is increased profits due to faster and better-informed pricing decisions, with a secondary benefit of reduced errors and manual processing time.

Consumer Lending:

A bank offers loans to individuals and small businesses, requiring the collection of a variety of documents and other supporting information before approving the loan. A BPMS is implemented to manage the loan initiation process, using case/folder management capabilities integrated with an enterprise content management (ECM) and document capture system. Documents are added by loan officers using scanners at the bank branches, or through capture directly by the customer using a mobile application. The BPMS uses business rules to determine the information required for the specific loan parameters, and sends alerts to the loan office and customer regarding missing information. Bank managers can monitor the status of loan initiation, determining which loan officers and/or customers may be delinquent in providing information prior to issuing the loan.

The primary benefits are improved regulatory compliance due to the rules-based documentation requirements, and improved loan issuance rates due to reminders about missing documentation.

Summary

Most organizations model processes, but many fewer go beyond process modeling to take full advantage of process automation and management, thereby improving customer satisfaction while increasing operational efficiencies.

In this article, we have focused on the reasons why you should consider going beyond process modeling to a more complete business process management program, including several use cases to illustrate the benefits.