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Business Process: The Model and The Reality

P. Szmodics
Abstract This paper gives an overview about the business process managements main perspectives. First it defines the differentiation between public and private value drivers then it assesses the difficulties in the process modeling. It shows the process compliance as the key of the practical success and gives some idea about its management. It also reveals the BPM as source of possible holistic risk in the society. In this paper the key elements of the future research of the author are introduced. Index Terms Business process, Compliance, Problem complexity, Readiness, User/Machine systems, Value of information

gers). It is also necessary for the identification of risky decisions, processes, nodes. The main elements of the event-based process management are the events, functions, roles, documents, systems, the triggers/predecessors, the follow-up activities and the logical operators which describe relations amongst the processes and the directions in flow [3].

HE business process management (BPM) is the main pillar of the information management. The deeper understanding of the processes helps the actors with the performance managing, business risk handling and identifying new opportunities. Since the processes compose a holistic system, they are connected at least indirectly; therefore it is useful to think out of the box and to have a strategic view as well, in order to be able to grasp the value addition phenomena in the business processes. The ability to recognize the value gives the possibility to render the business processes to the real business demands earlier than the competitors. The visionary leadership and the corporate path finding [1] are the part of the key success factors in order to create value. Next to the strategic process approach it is also required to have the sufficient level of resources as the base of the coming changes, in one hand it might come from outer sources or in the other hand it might be based on slack resources [2]. The BPM gives more than simple performance assessing in practice, it provides the intelligence for the business. The BPM can be used with efficiency in those systems where the processes are unified, can be parameterized, and at the end there is a structure. The structure helps with the documentation process what builds the grounds for the continuity. The documentation facilitates the exploration of the inconsistencies, with the help of the documentation the different actors can have about the same process a common accepted interpretation. The common sense and the common language reduce the variation of the processes, it supports the determination of the priorities and the identification of the developments. The delimitation of the responsibilities generates transparency. The performance management becomes univoque, the maximization of the profit simpler. The process management can be used e.g. by managing critical pure information, analogue, financial systems, roles, event-management (especially trig


In assessing the systems there is always a problem how to determine the value. What is value at all and for whom? The dominant values are usually the financial perspectives: reduced costs, maximized value, higher profit; or dynamics: shorter response time/reaction time. The main problem with the value is how to find the common value for the stakeholders and for a specific time horizon. In the most cases it is difficult to determine the attributes of the common value, which might mean similar preferences for everybody/everything (or at least for the majority). In the practice there are more negative common values which are rejected (e.g. anti-tolerance). The value problems business process management aspect is even more interesting: what is the market value (historical cost + brand value), the real value (historical value) and the value of utilization of the goods (the realized value from the usage), these are usually significantly different. In the future it might be really interesting which values might be the common value, will be a rapprochement or not. Anyway the business process management will deliver the inputs for the assessing the reality deeper and deeper. The drivers of the value (Fig. 1.) might be distinguished from the public and the private aspect. In order to secure the long term business activities it is important to maximize the private value (e.g. profit, market share, collaboration etc.), but it cannot harm significantly the public value (e.g. tolerance, knowledge, security, prevention).

P.Sz. Author is with Corvinus University of Budapest, Budapest, Hungary



3.2 Process compliance factors

The process has to have a trigger and a target, between these points happens the modeled reality. How the process reaches the target, depends mainly on human and technical factors, once the business process is set adequate. The human factors are the motivation and the capability, the technical factor is represented with the system (Fig. 2.).

Fig. 1. Value drivers

On Fig. 1. the horizontal axis marks the private values which are usually strictly connected to the business processes, the vertical axis represents the public values which are mainly connected to the society and the human elements and processes. The different type of values cannot exist without each other, a successful business entity has to provide a mixture from the different type of values. The business processes might cover the private values completely but the real business cycles require inherent public values built in the business processes. The best example for this dichotomy is the reputation itself, once the business cannot comply with the factors of the reputation, it has an immediate loss. The adequate identification of the public and the private value gives a mixture which contains all of the relevant elements with the specific weights. For the realistic projection it is crucial to recognize the existence of the public values.

Fig. 2. Compliance factors



3.1 Realistic projection

The surrounding environment is subjective for the most of the human entities, that is the why it is important how the given process catches it. There is also the problem of the gaps of the visualization and the imagination about the reality which can derive an unrealistic approach. The common interpretation must be always the ground of the cooperation. It is important that the roles in the specific environment (with specific limitations) have the common definitive directory: the same activity should carry the same meaning for everybody. Using the business processes there is the interesting fact that the business processes alter the environment continuously, the impact of the constitutive and implementer actors might be also significant in the process lifecycle and for the environment. Once the constitutive worked out the framework of the processes, it is critical whether it is implemented/used or not, the process compliance factors are able to run the process or not.

The motivation represents the cooperation willingness of the human entity (mental state, physical state, motivation set etc.), the capability shows whether the human entity is able to comply with the process physically (body skills, technical skills, competency set, licenses etc.). [3.2.2 Readiness indicators] The system shows whether the physical environment fits the current requirements (hardware, software, network etc.). [3.2.1 Systems] The precondition for this Compliance factors model is that: there is an interaction between at least one human role and one system and there is a business process. If one of these elements has a failure the process cannot reach the target. There are different levels set which symbolize the minimum requirement, in this example the levels should separately reach the minimum of 80% level in order accomplish the target. Once one fails, the whole process fails. The following two points describe the system and the human factor deeper relating to Fig. 2.

3.2.1 Systems If the actors cannot isolate themselves somehow and provide the resources for sustaining themselves on the long term, they have to cooperate with someone or something by necessity. The cooperation means usually at least one legal dependency, but this connection might be material, technological or financial etc. If the actor is a human entity, the dependency can be expanded with addiction which is commonly a material, consumption or behavioral practice simultaneously (e.g. regular time spending). The trade secrets and the patents have a very special dependency (lock-in) which means usually a technological binding [4]. The current business can more or less



handle the dependent systems, but the households are not any more able to recognize the dependencies, the hidden mechanism of the relations cannot be usually revealed for them since the knowledge is accumulated by the private business sector. The process managements development path might be in one hand the knowledge restructuring at the households (change from the status: clever business vs. silly households). At first it might be strange to involve the households but the deeply connected networks, the networking get more importance, the critical mass and the mass effects develop the social dynamics in such a way which cannot be left out of consideration. The customers are motivated to follow the mainstreams what implies the common movements and acts which can lead to high risk, especially in loss of trust (e.g. run on the bank). The systems mean not just the environment but also the fact of the dependency.

The human and artificial systems work with each other usually smoothly in a pre-determined environment, if it is not so well-determined the exploration of the complexity of the problems or business cases might be the value driver itself.

3.2.2 Readiness indicators The technical and human factors are always parallel in the process since they often, almost always, cooperate with each other. The different knowledge-intensive systems require already a wide competency set in order operate. Each human entity has an own competency map which describes his/hers knowledge, but these maps are usually relative static and not completely objective. The process management can deliver the framework to make these maps dynamic. For this it is important to measure the processes and the real compliance of the roles, how they are prepared and if they are ready to fit the compliance in practice. The E-readiness indicator is a widely accepted solution for this problem, it covers the connectivity, infrastructure, the social environment, the legal environment and the business elements. From the perspective of the BPM a similar but more distinguished model should be developed. This ad hoc example shows just some of the basic elements of the human readiness: e/d electronic/digital l legal f finances/money m mobility t time usage a alphabetization c creativity h - health residual This example is relative simple, not complete and till now it has not got any specific content (and there are cause and effect relations which are not described) but as an illustration it shows well what kind of potentials are in the business process management. Logging every relevant steps and piece of knowledge might be useful for the business units. The characteristics of the logs can draw the real profile of the business and the given human entity, which will be more and more useful in performance assessing. Since the logs describe the reality, there is also a moral hazard element in the whole theory.

3.3 Human/Automatic systems vs. Complexity The formalization of the processes determines in which system the process can be run. The less it can be structured, the more difficult it is to be reconstructed and be simulated or implemented in another environment. The processes, which can be structured well, are a type of a parameter system which can be realized by semiautomatism and automatism. The more explicit the knowledge, the better the process can be structured and the more simple the copying and programming of it. Since the pure processes get more transparency, the business processes are also clearer. The tacit knowledge will be soon the key element of the competency [5] next to the networking.

3. Complex

2. Simple 1.


Fig. 3. Human/Automatic systems vs. Complexity

In order to visualize the problem scope the interactions and the complexity is marked. The ratio amongst the human and automatic systems shows the type of interactions. The both ends represent pure human or pure automatic interactions, in the practice the interactions happen somewhere in the mixed zone. The other visualized element is the complexity of the problem. The simple problem is the completely structured problem which has an algorithm e.g. an event based process, the non-structured, complex problem has got no structure at all, these are also two endpoints. Interactions: 1. Human 2. Mixed 3. Automatic Problem: 1. Non-structured (Complex) 2. Structured 3. Completely structured (Simple) The schematic illustration is simple, but it shows the basic difficulties for the business process structuring.



3.3.1 The documentation The structure of the processes gives an opportunity to get the process documented. Once the given process is adequate documented, it can be measured as well. The lack of documentation makes difficult to interpret the process, in this case just the affected roles might know it. During the cooperation it is necessary to have the parameters, otherwise the connections amongst the processes cannot be set. The complete lack of documentation is a source of problem, in the other hand if the process is too deeply documented, the too detailed process might swallow the value of the process, the unimportant elements can have more focus, the real value cannot be driven. It is important to put emphasis on reliability and expedience in addition. The common goal of the business process management is to create the adequate guarantee system about the documentation not just in every business unit, but also in the public administration. The documentation creates competitive advantage: fast adaption ability, copying ability, information and knowledge sharing. But how to do this? The answer is simple: every relevant step should be logged. 3.3.2 Tracing/Logging The tracing and the logging creates the environment for the process evolution [6], but it seems to be sometimes too transparent. The information systems get more integrated, the possibility of isolation is a kind of privilege. The better realistic process projection reaches the boundary of the business domain, it is in the doorstep of the public domain via integration. The information systems are open, the data privacy control is far behind the technology. The tracing and the logging solutions can be set in every information system. The main phenomena: who is following who and why?

(e.g. creative) and automatized processes, there is already an isolation mechanism. The questions whether these non-automatized processes should be integrated or not; anyway once they are not the inherent part of the process mass, the risk of the full system might be lower. The BPM gives the opportunity to assess the performance and the risks easier and more punctually. Since it gives the business directly competitive advantage and the profit realization, it is worthy to use it, but there are boundaries strongly connected with the public and private values which should be taken into consideration.

The structure and documentation of the business processes gives the parameters to the communication channels. The processes become the part of the business network and get integrated, so the complex reality can be modeled always better. The tracing of the logs makes the former static approaches dynamically which has several benefits but also risks which is accumulated mainly in the acts of the critical mass and the privacy.

The author wish to thank the Department of Information Systems at Corvinus University of Budapest for their support.

[1] [2] H.J. Leavitt, Corporate Pathfinder. Homewood, Ill.: Dow Jones-Irwin, 1986. J.V. Singh, Performance, slack and risk taking in organizational decision making, Academy of Management Journal, vol. 29, pp. 562-585, 1986. A.W. Scheer, ARIS business process modeling. Saarland University, 1998. H.L. Varian, J. Farrel, and C. Shapiro, The Economics of Information Technology. Cambridge: University Press, pp. 54-72, 2004. M. Polnyi, The Tacit Dimension. London: Routledge, 1966. H.L. Van de Ven, Suggestions for studying strategy process: A research note, Strategic Management Journal, vol. 13, pp. 169188, 1992.

[3] [4] [5] [6]

4.1 Privacy The process management makes the processes transparent; the personal private domain, the companies and the state exchange information more and more. Currently the households are in the center of the privacy intrusions. The BPM is already affected via the integrated processes. The transparency and the isolation from the integrated information system are both privilege. With the transparency the set of action can be easily characterized of the given entity. 4.2 Society tensions The determination of the value (in the reality) is not simple, there should be therefore more such scenarios where there are more coexisting values which can form rupture. The networking can reduce the cultural differences which can attenuate the identity of the subgroups. The too common preferences may cause common acts which means a high risk, the mass serving systems are not enough flexible to deliver the services for concentrated demand. There is also a rupture amongst the non-automatized

P. Szmodics holds MSC: in Business Information Systems (2007), and in Economics (2011), he is currently a PhD student at Corvinus University of Budapest; he is the employee of Tata Consultancy Services; his current research interest covers business process management and related document management; is member of the John von Neumann Computer Society.