Analysis of Business Processes
The aim of Business Process Management and Business Performance Management is to gear the business processes of every department and the work of every employee toward improving performance. This requires awareness of business processes and business process transparency.

The BPM Application Wheel

The structure of the application wheel, indicating possible approaches to BPM. As indicated by the “phase” arrow, the right-hand side of the wheel shows how IDS Scheer’s major BPM concepts have evolved.

BPM Concepts
The ARIS House was created by professor Scheer as a basic concept for describing business processes. The House of Business Engineering was created as a lifecycle concept for Business Process Management. “Advanced BPM” refers to IDS Scheer’s current concepts and products, which enable tighter control of process execution.

BPM Objects
Data describes the results of business activities, rather than the activities themselves. Nonetheless, with many forms of analysis – especially data warehouse methods – analysis is focused on such data. It describes the outcome of business activities for a certain period, a sales territory, or an organizational unit, enabling statistical evaluations and comparisons. Although using data models to describe data structures is a useful aid to configuring data warehouse systems, data analysis alone can only deliver limited organizational insights. Business process models map all process execution options held to be significant. This can result in a large number of confusing branches in the case of complex processes. One important means of reducing description complexity is to extract the rule knowledge that controls branching and make it part of separate rule documentation.

Process Hierarchy
Business Process Management can refer to different types of business processes, which are displayed in a hierarchy. Operational business processes are closely associated with an organization’s production activities and how its performance is defined. The “Y” model in the inner circle describes core operational processes. The right-hand arm of the “Y” stands for the service/product development process, represented in the example here by the systems used to develop physical products in a manufacturing company. The lefthand arm describes the logistics involved, i.e., how the products are linked with the procurement and sales markets and, in the lower section, how production orders are linked with the data that describes the products.

Time

The data generated by business processes can be presented in various forms by using reporting tables. Since this data relates to completed transactions, it represents historical information. By contrast, monitoring involves tracking live business processes and revealing their current status. Companies are placing increasing emphasis on future developments and probability-based prediction, using current monitoring information and what-if functionalities.

BPM Lifecycle

Business Process Management is based on a lifecycle concept comprising methods that support the design of optimized business processes (i.e., the design phase) and subsequent implementation of the associated execution systems. This close coupling of design phase and implementation ensures that the models created in BPM projects are translated into corporate reality.

BPM User Groups
The first generation of BPM discussions saw the concept being addressed to specially selected experts within the organization. Business process modelling was usually performed by trained specialists, often recruited from the company’s IT department. Organizational activities were then carried out and changes applied to the business processes.

Process-Control

Structure Business processes can be categorized as well structured, semi-structured, or unstructured, with the latter also being referred to as knowledge-based processes.

Level of Abstraction
The aim of Business Process Management is to control workflows. The work to be created can initially be represented by paper documents that contain planning information and details of progress made and results achieved. If data is captured directly from the work creation process in digital form, it is more timely. The third phase sees the work objects themselves becoming information senders and receivers.

Organization Scope
When Business Process Management takes place as part of organizational change, the approach is more project-oriented. However, if a complete business unit is reorganized and new business process structures and management systems put in place, a more far-reaching approach without any time limits applies. If the entire organization adopts a process-oriented approach, with business process owners being designated for all business process types and comprehensive performance indicators defined, the result is the desired holistic business process organization.

BPM Metrics
Where management of business processes and business process performance is purely finance-based, the results of corporate processes are recorded in terms of revenues and costs. The key to detailed analysis and control of business processes is the use of more extensive performance metrics, such as quantities, quality, time, organizational reshuffles, etc. If these metrics are used across the enterprise, cross-location benchmark comparisons can be made, thereby enabling identification of best practices and more focused optimization.

BPM Technology Wheel
Many of the above points have illustrated the close correlation between new management concepts and advances in information technology. A BPM technology wheel will now be presented to match the application wheel. Here again, the individual aspects are divided into three rough phases, each of which demonstrates advances in IT.

Modeling
When a stand-alone modeling tool is used, modeling results are stored in the tool’s repository. The data itself is not reused within the technology. For ERP integration to take place, enterprise software providers must have documented the process content of their applications using models. When enterprise software is model-driven, the link between modeling method and software product is even closer. Configuration and software customization is only possible via model settings and changes.

Software Architecture
When used in conjunction with business process platforms and applications structured as services (SOA), this type of software architecture represents the most advanced solution currently available.

Database
The first phase of data management involved managing all operational data in a standardized database management system.

Communication

Sending e-mail between users, and between systems, allows asynchronous human-to-human, human-to-system, and system-to-system communication. Portal technologies enable users to communicate with each other simultaneously, each having a transparent view of the other’s work progress, which is controlled by workflows. Web 2.0 technology supports communication between and among group members.

Process Integration
Where an organization has adopted a process-oriented approach but only integrated individual process steps across multiple functions, the term “cross-functional” is used (fig. 18). A shared database is available for the integrated process functions.

User Interface
The trend toward user-centric computing means that user interfaces are also gaining in importance.

Software Focus
In the initial phase of business software development, the focus was on supporting individual applications. The second phase involved the development of an integrated application concept for ERP systems using the uniform set of data referred to previously. With user-centric computing, the name says it all: users take priority, while data integration and process logic are regarded as a given.

Dialog
With batch processing, data input is separated from data output by a processing stage without any user involvement. Interactive processing brings data input and processing closer together. Tasks are entered and processed individually. In a real-time enterprise, this principle is applied across the board: all objects involved in creating and utilizing work are controlled in real time.

Control Flow
In traditional application systems, the sequence of individual statements is hard-coded in the computer program. When a workflow system is introduced, transactions are placed in an in-tray for processing and removed from an out-tray after execution. The use of rule engines splits out the process control logic embedded in workflow systems (e.g., logical branches or allocation to individual workstations), and transfers it to a separate rule control system.

BPM Checkup
The application wheel and technology wheel can be used to evaluate any organization’s BPM status (“BPM checkup”). Fig. 23 shows both views for a fictitious company.

BPM Checkup
The blank wheels in figure 24 can be filled in to check the BPM status of your own organization.

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