Business Process

In its widest sense, a business is a system which exists in a society. It uses its resources to transform and produce consumable products and services.

This transformation is done by using processes, which yield profits to itself and value for the rest. A process is the composition of a number of co-ordinated activities which result in a specific outcome. Preparing a meal, constructing a building or passing an examination are examples of processes.

A process is said to be a successful process when:

 Resources are optimally consumed

 Activities are effectively conducted

 Outcomes are close to expectations

In the earlier parts of this section, we described how modelling helps us to make business process efficient. At every stage, decision making is critical for success. So to improve this ‘process’, we studied various methods.

Implementing them is called Business Process Management. We will see some of the important concepts for better understanding.

7.6.1 The ingredients

The ingredients that might be used in a business process can be briefly outlined as shown below.

 The data which accomplishes the desired business objective

 Acquisition, storage, distribution, and control of data which undertakes the process across tasks

 Persons, teams, and organisational units which helps to perform and achieve the tasks

 Decisions which enhances the value of data during the process

We also have some behavioural aspects of the business process, mainly the decision making process where humans are involved. Decision failures are common and research has shown that, the failure of decisions is because of:

 Biases in perception and fallacies in reasoning

 Tendency to act on assumptions, even when data are available easily for verification and/or confirmation

 Tendency to bring out of memory the facts that reinforce our assumptions and biased evaluation

 Tendency to accept evidence or fact as absolute which support our hypotheses

The above listed factors result in faulty decision making. Being aware and avoiding them consciously improves the processes of the business.

7.6.2 Business analyst

The responsibility of a business analyst is to:

 Collect in detail business problems and the requirements of the business people

 Format the requirements and problems of the business

 Facilitate best solutions satisfying the business need and the business people

To identify the best solutions for the business need of an organisation, he/she has to:

 Act as a go-between the business people to break down data

 See through the logical steps that need to be taken

 Fill the gaps to enable the experts in technology to provide solutions For better forecasting the business needs, he/she should have following skills, knowledge, and functions. (See figure 7.5 Skills, knowledge and functions required for a Business Analyst). He /She should:

 Lead the team members to a consensus

 Identify or gather the requirements of the business process that are critical. To do this, he/she needs to do the following tasks:

 Question concern people

 Verify the statements that are made

 Locate any gaps

 Arrange them in the logical process for creating uninterrupted dataflow

 Identify the core requirements

 Question business area experts and seek relevant information

 Make sure that the requirements can be subjected to tests and the results are verifiable. Analyst’s most important skill will be in his capacity to separate the grain from the chaff, that is, to know which are critical, vital and important bits of information from a huge mass of data he is confronted with

Fig. 7.5: Skills, knowledge and functions required for a business analyst

7.6.3 Workflow vs. Business Process Modelling (BPM)

Workflow contains a number of entities in a unidirectional path with nodes.

Each of these nodes may contain a number of elements – Material, Data, Attributes, and Value. They all come together for integration or even for division and will have transformation going on. The activities that make these transformations are the sub-processes. So, there will be changes taking place along the path and at the end, we have a completed process.

Every detail will be worked out, the outcomes verified and corrected and brought into the flow so that nothing untoward occurs.

The only thing lacking is the flexibility that business situations demand all the time. This is because, the enterprise has to perform and excel in conditions of uncertainty, improvement, and competition. Fortunately these are exceptions. While majority of the repeated tasks goes on smoothly, we need to manage these exceptions. Notably, exceptions create new processes, opportunities and help us get new insights into the processes. It has been found that 80% of process costs arise out of managing exceptions. These happen at many points in the value chain. Managing all these is Business Process Management.

Workflow does not offer options in, the way processes are conducted. They have fixed routes, activities, and schedules. Actually, there is not much

‘management’. BPM goes ahead not on a fixed track, but on bumpy roads, swerving sharply to avoid collisions and overtaking the vehicles that are ahead. It calls for all management skills.

7.6.4 Impact on process modelling

If BPM is not flexible in the path, then the activities or the way entities need to be aligned to make it more flexible. Therefore, it is not any more necessary to define the total process initially. The flow of the activities need not be fitted into a ‘model’ to be followed continuously, but can be adapted to suit the situations the process is in. The user has choices of subsequent activities and can take advantage of the flexibility the process is allowed to have.

Self Assessment Questions Fill in the blanks

7. Managing ____________ is Business Process Management.