Business Process Management Systems Lecture 1 2 BPM

Business Process Management Systems [Συστήματα Διαχείρισης Επιχειρησιακών Διαδικασιών] Lecture 1, 2: BPM, Business Processes and Business Process Models Univ. of the Aegean Financial and Management Engineering Dpt Petros KAVASSALIS <pkavassalis@atlantis-group. gr> 1

What you will learn in this course n This course provides a set of fundamental concepts for understanding Business Process Management (BPM), business process modelling, process automation and use. n Course topics: > > > Business Process Analysis Business Process Design by using: o BPMN o XML o Web Services o E-Forms Best practices and techniques for modeling business processes: o Methods and examples o “Hands-on" experience: create business process models by using Intalio|BPMS (open source) l l l n n Download Intalio|BPMS Intalio Designer: Getting Started Tutorial (in Greek) Strategies for orchestrating enterprise IT systems and human activity through Business Process Management Systems Familiarization with practical use of BPM in: > > e-business e-government 2. 0 <pkavassalis@atlantis-group. gr> 2

Who am I? n Ph. D in Economics and Management (Univ. Paris Dauphine & Ecole polytechnique) n Research experience > > n Ecole polytechnique, Paris MIT Center of Technology Policy and Industrial Development, MIT CTPID (MIT Internet Telecommunications Convergence Consortium) Current positions > > Univ. of the Aegean (FME): Assoc. Professor RACTI: Director of ATLANTIS Group <pkavassalis@atlantis-group. gr> 3

Communication tools n n e-mail: pkavassalis@atlantis-group. gr Course web site: see FME web site <pkavassalis@atlantis-group. gr> 4

Students evaluation n Class Participation (20%) + n Assignments (20%) + n Final Exam (60%) <pkavassalis@atlantis-group. gr> 5

Starting Point: What is a value chain? Petros KAVASSALIS <petros@cfp. mit. edu> 6

Firms as a “budge” of business functions: M. Porter’s Value Chain <pkavassalis@atlantis-group. gr> 7

Firms as a “budge” of business functions: Value System <pkavassalis@atlantis-group. gr> 8

What is a process? [Anupindi et al, Managing Business Process Flows, Prentice Hall] Information structure Inputs Process Management Network of Activities and Buffers Outputs Goods Services Flow units (customers, data, material, cash, etc. ) Committed Resources

Examples n Process / Flow unit / Input-Output Transformation > > > > Order fulfillment / Orders / Receive order – Deliver product Production / Products / Receive components – Develop end product Outbound Logistics / Products / Store product – Move to the customer Supply Cycle / Supplies / Issue a purchase order – Receive the supplies Customer Service / Customers / Arrival of the customer in a store (Receive request) – Customer’s departure from a store (Satisfy request) New Product Development / Projects / Recognition of the need – Launch of the product Cash Cycle / Cash / Cover costs – Collect revenues Petros KAVASSALIS <petros@cfp. mit. edu> 10

Process Hierarchy [Harmon, Managing Business Processes, Business Process Trends] Petros KAVASSALIS <petros@cfp. mit. edu> 11

What is process management? (1) n Core concepts: > > Understand the process architecture of an organization (discover and model processes – process mapping) Assess process performance (extract, manipulate and calculate process information) Simulate processes (move from “as-is” to new process, and process orchestration, designs – “to-be” processes) Improve in reality process architecture and performance Petros KAVASSALIS <petros@cfp. mit. edu> 12

What is process management (2) n Business processes are the key instrument to decompose firms’ value chains into networks of activities (and buffers) > > n “Committed” resources are allocated to processes Processes assure the proper alignment of the firm’s strategic agenda with the three basic execution principles: Operational Effectiveness, Customer Targeting, and Innovation Business Process Management (BPM) makes it possible to align companies towards customer requirements and to organize an increasingly large number of activities effectively and efficiently (by measuring and evaluating firm’s performance and by constantly re-designing firm’s process architecture according to its strategic goals) <pkavassalis@atlantis-group. gr> 13

A business process is (in formal terms) n n A set of activities Performed in coordination to realize a business goal In an organizational and technical environment Each process is enacted by a single business or it may interact with processes performed by other enterprises. Petros KAVASSALIS <petros@cfp. mit. edu> 14

Source: M. Weske, Business Process Management: Concepts, Languages, Architectures, Springer, 2007 A business process example <pkavassalis@atlantis-group. gr> 15

Business Process Management (BPM) includes n Concepts Methods Techniques n To support the n n > > > n Design Administration Configuration Enactment Analysis … of business processes Petros KAVASSALIS <petros@cfp. mit. edu> 16

A Business Process Management System (BPMS) is n Software that > n To coordinate > n Is driven by explicit process representations The enactment of business processes BPMS contain graphical notations to express orderings between activities of a business process (BPMN) Petros KAVASSALIS <petros@cfp. mit. edu> 17

A business process view of the organization n Implies an horizontal view of organization Looks at processes as sets of independent activities designed and structured to produce a specific output for a customer or a market Uses the term activity > n To refer to a small scale process that consists of one or few closely related steps A process defines > > The results to be achieved (start-end) The context of the activities The relationships between activities The interaction with other process and resources Petros KAVASSALIS <petros@cfp. mit. edu> 18

Source: M. Weske, Business Process Management: Concepts, Languages, Architectures, Springer, 2007 Business Process Management and Information Systems <pkavassalis@atlantis-group. gr> 19

Source: M. Weske, Business Process Management: Concepts, Languages, Architectures, Springer, 2007 Enterprise Application Integration through Workflow: example <pkavassalis@atlantis-group. gr> 20

Enterprise Application Integration through Workflow: Workflow Management System (apps) Source: M. Weske, Business Process Management: Concepts, Languages, Architectures, Springer, 2007 <pkavassalis@atlantis-group. gr> 21

Enterprise Application Integration through Workflow: Workflow Management System (apps + humans) Source: M. Weske, Business Process Management: Concepts, Languages, Architectures, Springer, 2007 <pkavassalis@atlantis-group. gr> 22

Enterprise Application Integration through Workflow: Workflow Management System (humans + apps) <pkavassalis@atlantis-group. gr> 23

A business process model n Consists of > n Is used > n To configure the Business Process Management System accordingly Represents > n A set of activity models and execution constraints between them Activities and Relationships Graphical representations of business processes focus on the process structure and the interactions of participating parties (rather than on technical / software aspects) > Examples follow Petros KAVASSALIS <petros@cfp. mit. edu> 24

Example: A reseller’s process Source: M. Weske, 2007 Petros KAVASSALIS <petros@cfp. mit. edu> 25

Example: A buyer’s process Source: M. Weske, 2007 Petros KAVASSALIS <petros@cfp. mit. edu> 26

Example: Interacting business processes (case 1) Source: M. Weske, 2007 Petros KAVASSALIS <petros@cfp. mit. edu> 27

Example: Interacting business processes (case 2) Source: M. Weske, 2007 Petros KAVASSALIS <petros@cfp. mit. edu> 28

Interacting business processes (case 2) Source: M. Weske, 2007 Petros KAVASSALIS <petros@cfp. mit. edu> 29

Business modeling is a process by itself! n n n Stage 1: Analysis Stage 2: Design Stage 3: Implementation <pkavassalis@atlantis-group. gr> 30

Business Process Management Notation (BPMN) n Graphical notations are being used to expressing orderings between activities of a business process n There are several graphical notation languages for business process modeling, with the more simplified variant being the Business Process Modeling Notation (BPMN) Petros KAVASSALIS <petros@cfp. mit. edu> 31

BPMN Diagrams from scratch n n Events (i. e. the occurrence of states in the real world 0 are represented by circles Activities are represented by rounded rectangles Execution ordering of activities is expressed by directed arrows Branching and joining of nodes (i. e. the split behavior of the flow of control between activities) is represented by diamonds (called “gateways”) that can be marked by > > A “+”: Parallel Fork ? Join (AND) A “x”: Exclusive Decision / Merge (XOR) Petros KAVASSALIS <petros@cfp. mit. edu> 32

Events Petros KAVASSALIS <petros@cfp. mit. edu> 33

Activities Petros KAVASSALIS <petros@cfp. mit. edu> 34

Flows Petros KAVASSALIS <petros@cfp. mit. edu> 35

Gateways Petros KAVASSALIS <petros@cfp. mit. edu> 36

Pools, Lanes (sub-partitions within a Pool) and Executable Pools n Models of human-enabled process are not “executables” Petros KAVASSALIS <petros@cfp. mit. edu> 37

Special: Sequence flow and Gateways (1) n Sequence flow: control flow. It is represented by > > n Normal flow: represents > n An Event (start and even) Continues > n Expected and Desired behavior of the process Starts and Ends with > n Solid Arrows between Activities, Events and Gateways Via a a set of flow objects (activities, gateways etc. ) Gateways act > > As either a join node Or a split node Petros KAVASSALIS <petros@cfp. mit. edu> 38

Special: Sequence flow and Gateways (2) n Joint nodes: > > n Split nodes > > n 2 incoming arcs (at least): 1 outgoing edge One incoming arc 2 outgoing edges (at least) Remind: > Each Gateway acts as a join node or as a split node Petros KAVASSALIS <petros@cfp. mit. edu> 39

Special: Sequence flow and Gateways (3) n “Exclusive or” splits > n “Inclusive or” splits “Data-based exclusive or split” (x) o o There is gate with an associated condition (gate condition / data based) Once a gate condition evaluated the true, the corresponding branch is taken, and the other conditions are disregarded Petros KAVASSALIS <petros@cfp. mit. edu> o o There is gate with an associated condition (gate condition / data based) An arbitrary number of outgoing branches is selected (not only 1) 40

Special: Sequence flow and Gateways (4) n A complex gateway allows the definition of a combined split and join behavior > “And split/join” o o The process starts with getting an order Then, a “parallel” gateway triggers the execution of number n activities (2 and more) These activities are completed simultaneously When they are completed, the “and join” synchronized the parallel flows, and the process terminates Petros KAVASSALIS <petros@cfp. mit. edu> 41

application with: Intalio|BPMS [http: //community. intalio. com/ ] Source: M. Weske, 2007 <pkavassalis@atlantis-group. gr> 42