Result

From our calculations we see that the process has a cost of 89.414, reliability of 0.923 and a business cost of 104.356.

Cost = 89.414 (8.1)

Business cost = 104.356 (8.2)

Reliability = 0.923 (8.3)

8.3

Conclusion

In this chapter we have considered two processes to calculate the financial parameters using the pattern based methodology. The first example, the payment process, is simple and is made up of 4 patterns. A practical implementation would probably have many more steps and details to process the payment.

The second example, the automobile order management process, is close to a real life implementation in the industry. The steps and in turn the patterns are many and their interactions with each other have a considerable impact on the resulting financial parameters. In both case the methodology to calculate business cost by identifying patterns and their interactions has been successful.

The results of these examples have also a business interpretation. We consider the order management process as this is more industry relevant. In practice an order management process such as this is expected to execute with 100% reliability i.e. a reliability of 1.0. This is especially true for the automobile industry. A reliability of 0.923 can also be interpreted as a failure rate of 0.077. This means that when this process is used 1000 times an order is placed only 923 times leading to a loss of 77 orders. Hence the reliability of this process needs to be increased enormously so as to achieve a higher order rate. An increase in the reliability will also reduce the business cost of this process.

9

Best practice evaluation

Over the past years, with the evolution of many frameworks, there are many practices which are recommended as best practices. These are practices which have shown by implementation that they lead to a positive effect on or more parameters of the busi- ness process. The practices are many and deal with all aspects of an organization. For example, there are best practices which also deal with the softer aspects such as motivating the employees etc. A vast collection of best practices and their qualitative analysis has been done by Reijers et al.[23]; this work [23] forms a very reliable source for different other studies, including this chapter. This chapter covers the most com- monly recommended best practices for reducing costs in a business process.

In this chapter we

(a) Adapt the devils quadrangle to produce a graphical representation of the impact of the best practice on a process.

(b) Look into the commonly recommended best practices which deal with cost parameter of the business processes.

(c) Analyze these practices by evaluating it as patterns to see its impact on the business cost of the process.

(d) Analyze business processes on different parameters in the “as is” condition and after implementing the recommended best practice.

9.1. DEVILS QUADRANGLE

Quality

Cost Time

Flexibility

Figure 9.1: Devils quadrangle

9.1

Devils quadrangle

Devils quadrangle is a framework to evaluate the performance of a business process and was proposed by Brand and Van der Kolk [13]. Industry practitioners and re- searchers believe that the devils quadrangle is best suited to evaluate the performance of a workflow as it has all the performance measures needed. The devils quadrangle is represented as a quadrangle as shown in the Figure 9.1. It defines four dimensions i.e. time, cost, quality, and flexibility. Every business process needs to create a bal- ance on these dimensions. When used, these dimensions are interpreted differently or at different maturity levels as the situation demands. Any change that is done to a business process leads to an impact on these dimensions. It is not necessary that the betterment on the value of one of the dimensions leads to an automatic betterment of the other one as well. One example which is seen almost always is the effort to decrease the cost dimension. This dimension usually shows that the Quality dimension starts coming down or in other words the quality of the business process starts decreasing. Our study revolves around three major parameters of a business process i.e. cost, re- liability and business cost. The devils quadrangle provides for a strong foundation to evaluate our study. The impact of reliability on the cost and in turn on the business cost of a business process can be well represented through this framework. So as to make this possible we will have to adapt the parameters from the devils quadrangle. We define the devils quadrangle with the following four parameters:

9.1. DEVILS QUADRANGLE

Time

Reliability Cost

Business Cost

Figure 9.2: Adapted devils quadrangle

(a) Cost: Here we do not differ from the devils quadrangle. We take cost as the sum of all expenses so as to keep a business process running.

(b) Reliability: We replace the original parameter quality with the parameter reliability.

(c) Business cost: We replace the original parameter flexibility with the pa- rameter business cost.

(d) Time: We have not considered time as a parameter in our study. We use this parameter so as to complete the quadrangle. As we do not take this into consideration we always make the assumption that it is constant.