INFS3604 Business Process Management

Week 1 – Introduction to BPM

What is a Business Process?

Definitions
 “A complete end-to-end set of activities that provide value, through the delivery of a
product or service, to the customer of the service”. Sharp and McDermott
 “How an organisation does its work – the set of activities it pursues to accomplish a
particular objective for a particular customer.” Thomas Davenport
 “Process: an organised group of related activities that together create a result of
value to the customer.” Michael Hammer
 “A collection of inter-related events, activities and decision points that involve a
number of actors and objects, and that collectively lead to an outcome that is of
value to at least one customer.” Dumas et al.

 Business process is a way to split all these tasks into units so when there is a
problem, you will know where to look
 In an organisation you will have several teams (finance, HR, technology etc.), but
none of these produces what the customer wants. Outbound logistics is the people
who deliver the product to the customer.

Example 1 (Shipment)
 PO Received  Check and Confirm PO  Package Products  Load Truck  Notify
Shipment  Issue Invoice  Match Payment  Payment Made
 PO Issued  Obtain PO Confirmation  Schedule Delivery  Unload Truck  Issue
Delivery Receipt  Check Invoice  Schedule Payment  Goods Arrived

Example 2 (Restaurant)
 Customer Arrived  Greet and Seat  Take Order  Bring Menu  Serve Meal 
Present Bill  Issue Invoice  Customer Paid
 Kitchen is Dirty  Load Dishwasher  Clean Kitchen Surfaces  Brush Grills 
Collect Laundry  Sweep and Mop  Unload Dishwasher  Kitchen is Clean
Typical Processes in Organisations
 Order-to-cash
o Performed by a vendor – starts when a customer submits an order and ends
when order has been delivered to customer and customer has paid.
 Quote-to-order
o (Quote-to-order + order-to-cash = quote-to-cash)
o Typically precedes order-to-cash
o Starts when supplier receives a Request for Quote (RFQ) from customer and
ends when customer places an order based on quote.
 Procure-to-pay (aka Purchase-to-Pay)
o Starts when organisation individual determines something needs to be
purchased, ends when order/service has been delivered and paid for
 Application-to-approval
o Starts when someone applies for benefit or privilege and ends when these
are granted or denied
 Issue-to-resolution
o Starts when customer raises issue and ends when customer and/or supplier
has resolved the issue.

Value Proposition
 Example: “My washing machine doesn’t work”
o Negative outcomes (value- reducing):
 Fault not repaired in a timely manner
 Fault repaired but customer pays more than expected
o Positive outcomes (value-adding):
 Fault repaired immediately with minor intervention
 Fault repaired, covered by warranty

Elements of a Process
 Event: things that happen automatically (no duration). Events trigger processes.
 Activity: a set of tasks that are initiated (triggered) by an event. Simple activities are
tasks.
 Decision points: a decision that affects the way the process is executed.
 Actors: human actors; organisations; IT systems.
 Physical objects: equipment; materials; products; locations; hard copies.
 Immaterial objects: electronic documents and records; emails.
  Outcome: the execution of a leads to one or several outcomes. Outcomes should
deliver value to actors (customers) involved in the process.
 Customer: the actor who consumes the output of the process.

Example of Elements
 Event: Appliance owner makes a service call
 Activity: Schedule technician visit
 Decision points: Is item under warranty?
 Actors: Customer service representative
 Physical objects: Spare parts
 Immaterial objects: Technician availability calendar
 Outcome: Appliance fixed under warranty
 Customer: Appliance owner

Example 2

 Event: Invoice received

 Activity: Enter invoice details, check invoice mismatches, post invoice, block invoice
 Decision points: Is there a mismatch? Should I post or block invoice?
 Actors: ERP, Senior Finance Officer, Finance Department
 Physical objects: Equipment material, printed invoices
 Immaterial objects: Email documents stored digitally in system
 Outcome: Invoice posted; invoice blocked
 Customer: Customer who is receiving invoice
What a Business Processes IS and IS NOT
 A process is:
o A guide
o Clarity as to who does what and why
o How to understand contribution
o About collaboration, not ‘pass the parcel’
o Sharing in a customer outcome
o Focused on the customer
o About adding value.
 A process is not:
o A low-level task definition
o A functional internal way of doing things
o What you do to fulfil job responsibilities.

What is Business Process Management?

Improving Performance (Rummler’s Framework)

Process Performance
 If you had to choose between two services, you would typically choose:
o Faster
o Cheaper
o Better
 Three dimensions of process performance
o Time
o Cost
o Quality
 Improving process performance:
o Customer Arrived  Greet and Seat  Take Order  Bring Menu  Serve
Meal  Present Bill  Issue Invoice  Customer Paid
o Can improve by:
  Outsourcing to customer
 Standardise (daily specials)
 Eliminate Cooking
 Automate
 Eliminate Waiters
 Re-sequence
 Invest and Build

Business Process Management (BPM)

 Body of principles, methods, and tools to design, analyse, execute, and monitor
business processes, with the aim of improving their performance.

Why BPM?
 If we merely apply technology solutions to poor processes, we may not get better
outcomes for our customers.
 “The first rule of any technology used in a business is that automation applied to an
efficient operation will magnify the efficiency. The second is that automation applied
to an inefficient operation will magnify the inefficiency.” – Bill Gates

Importance of Business Process Management

1. Agility to make changes to processes and cost reduction
2. Customer focus
o Better meet customer needs
3. Old business models are no longer effective
o BPM helps you to understand your current processes and make new ones
4. Increased productivity
o Removal of problems and redundant steps
5. Remain competitive
6. Retain customers
 7. Sustainability
8. Measurability
o When integrated with technology, BPM provides reporting and analytical tools
for making executive decisions
9. Technology Integration (BPMS)
o Bridging the gap between business users and IT people
10. Cross-department collaboration

The BPM Lifecycle

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Every organisation follows a flow of business activities, all of which are directed toward
the completion of a business transaction. The effectiveness of these activities has a
direct and significant impact on the organisation’s outcome.
 BPM Lifecycle is the set of activities that constitutes the foundation of business
process management methodology. It lies at the heart of the business process
management discipline and provides us with a strategy for systematically and
continually improving company processes.
 This section provides an overview of the concepts, methods, techniques and tools
that compose the BPM discipline through the lens of BPM lifecycle. This lens
provides a structured view of how a given process can be managed.
 Process Identification
o Describes the overall process organisation in terms of a process architecture
 Process Discovery
o Comes up with the as-is process model to describe the current process,
where you identify weakness and their impact on the performance of the
process.
o This will help you redesign your process to the to-be process model
o You implement the to-be process model into an information system, provide
the IS infrastructure for running the process, and educate the people invoiced
in how it is meant to operate.
 o Afterwards, individual cases will be executed so they can be monitored,
providing insight into the conformance and performance of the process
Process Identification

Process Enables Strategy

 In each organisation, there are enablers which support the business processes (core
processes), which support the strategy of the organisation.
 In this course, we focus on workflow design and information systems enablers
Process Improvement in Context: Value Chain Model

 Michael Porter introduces the concept of the value chain. This is a collection of all
activity’s performance to design, produce, market, deliver and support any product
line.
 The middle row represents the primary activities of the organisation.
 E.g., when manufacturing a product, the raw materials are received by inbound
logistics, made available to operations, and then converted to a product. This
product is in strategy with the organisation.
o When manufactured, this product is sent to outbound logistics who distribute
through their channels  marketing and sales who promote the product and
service providers to provide support to customer.
o Customer is ready to pay a margin to receive this product

Process Identification in the BPM Lifecycle

  Process identification refers to systematically defining business processes of
organization and establishing criteria to select processes for improvement.
 Output is process architecture, which represents processes and interrelations.
 Process architecture serves as framework for defining priorities and scope of
projects.
 First, we discuss the context of process identification.
o We present a method based on process architecture definition and process
selection.
o Definition is concerned with listing initial set of processes and their
architecture.
o Selection considers criteria for defining priorities of processes using a
portfolio.

We will talk about:

 How we basically find a business process,
 How we name those processes, and
 How we measure how these business processes are performing.

Within the process identification phase, the Business Process Analyst (BPA) will ask the
following questions:
 Which processes are we dealing with?
 How can we measure the outcome?

A BPA will need to define the start and end of a process to eliminate confusion (e.g., the as-is
process).
 If the company has engaged in BPM initiatives in the past, it’s possible that parts of
the process will already be defined and documented. However, if the company has
not engaged in BPM initiatives, it needs to identify the processes that are relevant to
the problem/issue and define which relationships they have.
 Measuring value is a crucial step in BPM, because without measuring you cannot see
the improvement that the process has made.
 A process can be measured as:
o Cost related - Decreasing costs while keeping the same/better quality.
o Time related - Improving the cycle time (time to do a process), while keeping
the same/better quality.
o Quality related - Reducing error rates (times processes end up in a negative
outcome)
 In each organisation, there is a range of stakeholders involved in the process,
however, only a handful of those stakeholders have a full understanding and
overview of the business processes in their organisations.
o Those few stakeholders have an important role in identifying the processes
with high priority in order to closely manage and improve them.
 BPM is costly, i.e., not all organisations are able to rigorously analyse, redesign and
control all their processes.
o Some business processes need to receive higher priorities because they
support the strategy of the organisation and help achieve its business goals.
1. Context of Process Identification

Definition of Business Strategy

 Business strategy is an organizational perspective on setting and meeting business
goals. (Mintzberg)

The Process Checklist

 At the lowest level, we also need to list out the processes that exist in each category.
o There could be many distinct processes in each category, or different versions
of particular a process.
o For example, if an organisation serves BOTH wholesalers and normal
consumers, there could be two types of order-to-cash - order-to-cash for a
B2B wholesale customer AND order-to-cash direct to consumer.
 It may not be easy to decide on what to consider as a business process. A chunk of
work that is frequently repeated might not be a business process on its own. To
prevent poor scoping decisions, it is useful to consider the following process
checklist:
 Is it a process at all?
o It must be possible to identify main action, which is applied to a category of
cases.
o Name is of form verb + noun.
 Can the process be controlled?
o Repetitive series of events and activities to execute individually observable
cases.
o Without a clear case notion, process management is not feasible.
o Also, without any sense of repetition, a group of business activities may
better qualify as a project than as a business process.
 Is the process important enough to manage?
o There is customer who is willing to pay for outcomes,
o Organization that carries out the process would be willing to pay another
party for taking over, or
o Legal, mandatory framework compels an organization to execute it.
 Is the scope of the process not too big?
o 1:1 relation between initial event and activities.
 Is the scope of the process not too small?
o Rule of thumb: there should be at least three different actors – excluding the
customer – involved.
o If there are no handoffs between multiple actors or systems, there is little
that can be improved using BPM methods.

2. Definition of the Process Architecture

Process Categories (Process Landscape Model)
 E.g.
,
this

case shows a generic manufacturing company where there are strategic and
management processes at the top, support processes in the bottom around
personnel, management, and assets, and core processes in the middle

Example: UNSW
 Question: What are core, support, and management processes of UNSW?
o 2025 Strategic vision: UNSW aspires to be Australia’s global university,
improving and transforming lives through excellence in research, outstanding
education and a commitment to advancing a just society.
 Solution:
o Management Processes: Vision, Strategy, Goals
o Core processes (groups of): Research, teaching (and advancing society).
o Support processes: Estate Management, HR, IT, student societies etc.

What is Process Identification?

 What?
o Identify an organization’s business processes
 Have to name them, where do they start/finish, what is the outcome,
how do we measure that this process is doing well?
o Prioritize their management based on certain criteria
 Why?
o Understand the organization and scope of improvements
o Maximize value of BPM projects
 Few organisations have all the resources required to model all their
processes in detail, rigorously analyse and redesign, deploy
automation technology to support each process, and continuously
monitor the performance of all processes in detail.
  Even if such resources were available, it would not be cost effective to
spend them in this way – BPM is not free. Therefore, need to focus on
a subset of processes to prioritise.

 E.g., you work for an IT company and the manager tells you there is a forecasting
problem.
o You assign them to a data scientist, and you can get some improvement by
trying to build a better model given what is currently wrong.
o However, you can help them more by looking globally to make a better
improvement e.g., synchronising the marketing campaign with the purchasing
process so you can use data from one to the other to maximise the value of
your BPM project.

Process Identification Steps

1. Designation step
a. Enumerate main processes Process Architecture
b. Determine process scope
2. Prioritization step (aka Process selection). Prioritize processes based on:
a. Importance
b. Health Prioritised Process Portfolio
c. Feasibility

Process Enumeration
 “Most businesses have just three core processes:
1. Sell stuff
2. Deliver stuff
3. Making sure you have stuff to sell and deliver” - Geary Rummler

Porter: Types of Processes

  Top-down approach
 Example: Core, support and management processes  actions we take to transform
the goods we receive from suppliers and partners into the products supplied to
customers
 Wholesaler
o Core processes
 Critical to adding value to the customer
 Sales (lead-to-quote, quote-to-order, order-to-cash)
 Purchase-to-Pay (direct procurement, e.g. supplies
replenishment)
o Support processes
 Processes which support core processes
 Purchase-to-pay (indirect procurement, e.g. parts
replenishment, operational resources replenishment...)
 HR (policies update, recruitment, induction, probation...)
 Finance
o Management processes
 Suppliers management (suppliers planning, suppliers acquisition...)
 Logistics management (logistics planning, logistics controlling...) ...

Relations between Core, Support, Management Processes

 All these processes have interactions with each other

Example: Process Architecture
 Wholesaler

 Insurance Company

 University

Process Scope
 Processes are interdependent → insights into interrelations required
o Horizontal: upstream – downstream processes and their value chains
(sequence)
o Vertical: main processes – sub-processes (Decomposition)
o Specialization: general – special product/ service
Relationships between Processes

Value Chain Modelling

 Chain of processes an organization performs to deliver value to customers and
stakeholders
 More generally, a mechanism to group high-level business processes according to an
order relation (can be applied to core, support, and management processes)

Guidelines to identify horizontal boundaries in value chains

1. Change of key business object in the process
2. Change of granularity of main business object
3. Change in frequency/time
4. Change in intermediate outcome/resolution/objective
Example: Value Chain
Wholesaler
Core Processes

Process Architecture: Hierarchical View

Process Landscape Models

3. Process Selection
Designation via Reference Models
 A reference model is used as a template to design the process architecture
 Examples:
o Information Technology Infrastructure Library (ITIL)
o Supply Chain Operations Reference Model (SCOR)
o Process Classification Framework (PCF)
o Control Objectives for Information Technology (COBIT)
o Value Reference Model (VRM)
o Voluntary Interindustry Commerce Solutions (VICS)
o eTOM Business Process Framework

Prioritisation (aka Process Selection)

 Importance
o Find out which processes have the greatest impact on the strategic goals.
o Consider profitability, uniqueness, or contribution to competitive advantages.
o Select those processes for process management that relate to strategy.
 Which processes have greatest impact on the organization‘s strategic
objectives?
 Health (or Dysfunction)
o Determine which processes are in deepest trouble.
o These processes may profit the most from BPM initiatives.
 Which processes are in deepest trouble for the organisation internally
and externally?
 Feasibility
o Determine how susceptible process is to BPM initiatives, incidentally or
continuously.
o Culture and politics may be obstacles.
o BPM should focus on those processes where it is reasonable to achieve
benefits.
 Which processes are most susceptible to successful process
management?
 Is it a costly and time-consuming investment required?
 Are there organisational or political obstacles that might prevent this
process from being changed?
o For example, a process which requires a multi-year technology upgrade to
improve may not be feasible to change.
o Similarly, a process that is considered “sacred” because an executive has a
favoured way of doing things may not be feasible to change.

How to define Process Landscape Model

1. Clarify terminology:
a. Define key terms.
b. Use organizational glossary.
c. Use reference models.
d. Ensure that stakeholders have a consistent understanding of process
landscape model.
 2. Identify end-to-end processes:
a. Those processes interface with customers and suppliers.
b. Goods and services that organization provides are good starting point.
c. Properties help to distinguish processes, including: Product type, Service
type, Channel, Customer type.
3. For each end-to-end process, identify its sequential processes:
a. Identify the internal, intermediate outcomes of end-to-end process.
b. Perspectives help set boundaries: Product lifecycle, Customer relationship,
Supply chain, Transaction stages, Change of business objects, Separation.
4. For each business process, identify its major management and support processes:
a. What is required to execute the previously identified processes.
b. Typical support processes are management of personnel, financials,
information, and materials.
c. However, these can be core processes if they are integral part of business
model.
d. Management processes are usually generic.
5. Decompose and specialize business processes:
a. Processes of process landscape should be further subdivided into abstract
process on Level 2.
b. Further subdivision until processes can be managed autonomously by single
process owner.
c. Considerations when this subdivision should stop: Manageability and Impact.
6. Compile process profile:
a. Each of the identified processes should be described using process profile.
b. Process profile supports definition of boundaries, vision performance
indicators, resources, etc.
7. Check completeness and consistency:
a. Reference models can be used to check whether all major processes are
included.
b. Reference models can help to check consistency of terminology.
c. Check whether all processes can be associated with functional units of
organization chart and vice versa.

Example: Prioritised Process Portfolio

 Financial Institution
Exercise 2.10: University
 A university defined four core processes in relation to teaching. An evaluation of
strategic importance, health, and feasibility using a survey among the department
chairs has resulted in the following assessment:
o Develop and Manage Study Programs: Importance 90%, Health 90%,
Feasibility 40%.
o Market Study Programs: Importance 75%, Health 80%, Feasibility 60%.
o Schedule Courses: Importance 95%, Health 30%, Feasibility 50%.
o Deliver Courses: Importance 95%, Health 70%, Feasibility 30%.
o Manage Student Services: Importance 85%, Health 50%, Feasibility 40%.
o Manage Facilities: Importance 40%, Health 35%, Feasibility 70%.
 Draw a process portfolio and suggest one process to be selected for process
improvement. Justify your choice.

Recap
 Business processes are important because:
o All organisations manage processes
o They execute an organisation’s mission, strategy, goals and objectives
 The Value Chain Model (Porter 1985) enables us to view process improvement in
terms of:
o Core vs. Non-core processes
o Sources of competitive advantage (low cost vs. differentiation)
 Business Process Management (BPM) focuses on continuous improvement of cost,
time, accuracy, value, customer experience and/or efficiency
 Process identification
o Process architecture definition aims at enumerating major processes of
organization.
o Process architecture defines relationship between processes.
o Seven-step method for definition of process architecture including process
landscape model.
o Process selection is concerned with prioritizing processes.
o Priorities upon importance of processes, health, and feasibility of
improvements.
o Assessed by process owners or grounded on process performance measures
and objectives.
o Most common performance dimensions are time, cost, quality, and
flexibility.
o Process portfolios help in selection of processes for improvement.
o Selected processes become subject of remaining phases of BPM lifecycle.
Week 2 – Introduction to Process Discovery

What is Process Discovery

 “Process discovery is defined as the act of gathering information about an existing
process and organising it in terms of an as-is process.” (Dumas et al. 2018, p159).”

 Process identification sits between process

identification and process analysis in BPM lifecycle
 Process modelling starts with process discovery
where you collect information including what is
involved, who is involved etc.
o BPM steps may occur concurrently and not
always follow the same order i.e. process
discovery and process analysis can occur at
the same time.
o Gathering information about a process is not
an easy task, it is cumbersome and can be
very time consuming – there are 4 main
steps:
1. Define the setting: Assemble your team of experts responsible for
discovering and understanding the process.
 E.g., Your team of experts oversees understanding the ”Order
to Cash” Cocktail process.
2. Gathering information: Build your process understanding with
different discovery methods.
 E.g., We will discuss different methods for gathering
information to understand the order to the make a cocktail.
3. Conduct the modelling task: Conduct a systematic approach to map
out the process model.
 E.g., You will need to use the BPMN modelling language you
will learn in weeks 2 and 3.
4. Assuring process model quality: Conduct quality assurance check to
determine whether process model meets your key criteria. E
 E.g., Based on the model you created, can you execute the
Cocktail Order to Cash Process?
Who is Involved in Process Discovery
 Two main roles of process discovery are 1) process analyst and 2) domain expert
o Process analysts are individuals who have expertise in business process
“modelling skills”
o Domain experts are individuals who have expertise in the “business domain”.
 E.g., in a cocktail bar, the process analyst is YOU, the expert who wants to improve
the efficiency of the end-to-end cocktail order process.
o You have to work with domain experts who are the individual cashier at the
bar, the individual mixer of the drink, the individual bouncer at the door to
figure out what this process may look like.
 Process analysts and domain experts complement
each other
o Process analysts will need to work with domain
experts to understand the requirements of a
business process.
o Based on the insights from the domain experts, the process analysts will
create a business process model using their skills.

Challenges in Process Discovery

1. Fragmented process knowledge – Process analysts often have limited prior
knowledge in the business process domain. They will need to collect information
from multiple sources and different domain experts. Based on this fragmented
knowledge, the process analysts must synthesise an appropriate model to integrate
all the raw data.
a. E.g., the cocktail domain expert making cocktails may not know how the
inventory manager expert tracks the drinks in stock. As a process analyst, you
will need to speak to a domain analyst in both areas to ensure drinks can be
made with enough stock levels.
b. E.g., in a loan process, usually with business processes there are different
people involved in being responsible for different tasks. Each of these process
participants have a fragmented view of business processes. The person
responsible for contact credit check may not know what happens in the back
office of processing that loan. Process discovery is about putting these
fragmented pieces of knowledge together. We need to iteratively validate the
process to make sure these fragmented pieces fit together.
2. Instance-level thinking – Process analysts often develop processes that apply to
multiple different instances. However, domain experts bring expertise on specific
instances or business cases. Process analysts are required to generalise multiple
instances into a generalised process.
 a. E.g., cocktail domain experts may remember specific instances when they
unintentionally served non-alcoholic drinks for an alcoholic order but they
will not be able to generalise the percentage of times this mistake occurs.
b. E.g., Domain experts know a very detailed process. If you think of a travel
booking, a person working here may say that every trip is different. They may
say that you cannot compare these processes as they are never the same. The
challenge here is to abstract. When we discover a process, we are interested
in the commonalities between the different process cases.
3. Lack of process modelling language – Domain experts lack the process modelling
skills i.e., process modelling language (BPMN). Consequently, they need guidance
from the process analyst to understand the diagram. Additionally, their feedback on
the model will be limited.
a. E.g., Without a fundamental understanding of the BPMN notations, it would
be difficult for you to grasp the BPMN diagram in the later parts of the
module.
b. E.g., If you are not a BPMN expert, how could you readily understand what is
represented in the diagram? When a process analyst is interacting with a
domain expert, it is a task of the process analyst to talk with the domain
experts in everyday language to make she the diagram is right.

Introduction to Process Modelling

Process Modelling Definition

 Process modelling is the graphical representation of business processes or workflows
and its related sub-processes
 Generates comprehensive quantitative activity diagrams and flowcharts, and they
contain the critical insights into the functioning of a given process. Includes:
o Events and activities (what?)
o Who owns those events and activities (pools/lanes)
o Decision points/ Gateways (when)
o Objects (devices) involved (which)
 E.g., information systems, databases
o Timelines of the overall process
o Success and failure rates

Why Process Modelling?

 Provides visualisation
 Could be inspected more easily
 Help to understand how the processes work in their current (as-is) state and how
they can be improved
 Improve efficiency
 Gain transparency
 Ensure best practice
 Create understanding
 Business orchestration
How is Process Modelling used in Business Process Management (BPM)?
 Discover
 Model
 Analyse
 Measure
 Improve, and optimise business procedures
 Allows you to see all the activities to analyse processes and reduce waste in business
processes.

 Process modelling is
an essential part of
the process discovery
phase in the BPM
lifecycle.
 In this course, we will
be using Business
Process Modelling
Notation version 2.0
(BPMN 2.0) to model
processes.
 BPMN 2.0 is an
international standard
that is governed by
the Object Modelling
Group (OMG). Most BPM modelling tools adhere to the BPMN 2.0 standard.
 In this course, we will be using Signavio as the BPMN 2.0 tool.

Getting Started with BPMN

 A model is a type of flow chart that shows all the things that need to happen to
execute a process.
o The process model shows what happens for each instance of an activity –
e.g., one order; one service ticket.
o There are likely multiple instances of the process running at any point in time,
all at different stages – a company might handle hundreds of orders at the
same time, some just received and some ready to be dispatched etc.
 Processes MUST begin and end with events. For example for the beginning:
o customer emails an order.
o Client books an appointment.
o User logs a service ticket.
 The end of the process is also an event. For example:
o Order is received
o Appointment is completed
o Problem is resolved
 In between, the organisation does all the work (represented by activities could be
also called tasks) to complete the process.
Core Elements of BPMN 2.0

 Activity: captures something that is done (we may refer to this as “work” during the
course) in the organisation.
 Event: captures when something happens, like the start and end events discussed
above. Represents the process’ triggers
 Gateway: captures when the flow goes in different directions, either to split (or
duplicate) the process flow and then to join it back up again. Gateways usually
represent decisions or conditions when a process might work differently in different
situations.
 Sequence flow: is the path that the process travels, showing the order of execution,
where the process goes to next after each step.

Basic Model in Signavio

 Log onto Signavio  New  Business Process Diagram
o Will open up in new Signavio tab for the editor view
o Give a name to the process e.g., Order-to-Cash
o Save
 Look at the left menu bar and press “start process”
and drag onto diagram
o Click the rectangle icon on the right of the
“start” icon to add a task easily
o Note: Always have events as the noun first
and then the past principal of the verb
o Difference between the start event and end event is that the end circle is in
bold
Breaking down the Elements

Events
 The start event kicks off a single instance of the process – for example, an order
arrives via email.
o An orders’ clerk may arrive at work in the morning to find that 10 orders that
have come in overnight.
o This means the start of 10 instances of the process.
 It is useful to think of each instance as a token that travels along the path until it gets
to the end (i.e. until the token is consumed or when it dies)
 The end event shows a token being “consumed” or it can be visualised as a “token
sink.” This signals the completion of a process.
 Every process has at least one start and one end event.

Gateways

XOR Gateways
 The most common type of gateway is a decision gateway – if the stock is available,
we can accept the order. However, if the stock is not available, we will reject the
order.
 This is known as an eXclusive OR (or XOR) – A token can take only ONE path of the
XOR gateway.
 XOR gateway can “split” or “join” the sequence flow (we may refer to this as a path).
o When we use an XOR-split in a model, we label the sequence flows
coming out, to show which instance would follow which path,
remembering there can be only one path used for each instance (for
an XOR):
 In this example, there are two possible paths, but there can be
more in case there are more than 2 conditions.
 For example, an order could be accepted (condition 1), rejected
(condition 2), or placed on hold (condition 3).
o When we use an XOR-join in a model, remember the process is expecting
only ONE token. Once the token passes through the XOR join, it moves on to
the next parts of the process

AND Gateway
 AND gateway splits the token and follows two paths simultaneously.
 AND split means that the token takes both paths at the same time

 AND join can only continue when ALL the paths have been completed and are ready
to re-join
OR Gateway

 OR gateway can create 1 or more paths for the token to follow at the same time. So,
the OR split takes 1 or more branches, the OR gateway is a smart gateway because it
knows if one or more branches need to be taken:

 OR join only continues when ALL ACTIVE branches have completed

 Example: Here, OR gateway is required as although we might have split into two
tokens at the end split, it is also possible we lost one after activity E, so we wait for all
active tokens.
Using Gateways for Re-work or Repetition
 XOR gateways are frequently used to send a process model back to a previous step
for re-work. In the example below, if the response is not accepted, it needs to be
prepared again (as depicted in the model, we use XOR gateway)

Implicit vs. Explicit Gateways

 If no gateway is used but the sequence flows join, it is assumed to be an XOR
join (this occurs quite frequently).
 If no gateway is used but the sequence flow splits, it is assumed to be an AND
split. This is not recommended – please avoid it!

Pools and Lanes

 Active resources:
o Process participant
o Software system
o Equipment
 Resource class:
o A group of (active) resources that are interchangeable, e.g., a role, an
organizational unit or the whole organization.

 It is often important to show who is doing what activity. To begin with, we want to
be clear about the boundaries of the organisation. This is modelled as a “pool”:

 A pool is known as a “resource class”, and the

sub-classes are “lanes” within the pool. These
represent specific resources (and groupings if
required)
 o Pool: Generally used to model a business party (e.g. a whole company)
o Lane: Generally used to model departments (e.g. shipping, finance), internal
roles (e.g. Manager, Associate), software systems (e.g. DBMS, CRM) or
equipment (e.g. Manufacturing plant)

 We usually start modelling within the subject organisation, within one pool,
identifying the internal organisational actors as lanes.
o When we create other pools (e.g., for customers and other external parties)
we leave them as a “black box”, that is something that we can’t see into, and
we don’t know exactly what is happening inside.
o In rare instances, we may also model the process as it appears to our
customers. However, we NEVER model a process traversing between two
pools – each pool starts and ends an independent process with a sequence
that is completed with the pool

Message Events and Flows

 Messages are communications that flow BETWEEN POOLS. This represents the
different parties (organisations) participating in the process. They are NOT used
within a pool.
o Messages can be any flow of information e.g., emails, documents send by
physical mail or other forms of communication.
 A message can flow from or to:
o A specific event (i.e. a message event)
o A task, where a message is captured and processed within that task.
o A pool, often an external party such as a customer; we often don’t map the
activities outside of our organisation, so we treat the other organisation like a
black box.
  Message flows always travel between pools, while sequence flows can only travel
within pools.
o One common use of messages is to trigger the
start of a process with a communication from
the customer, using a “start message” event.
o Adding in messages will make it clear what
information is being passed from our
organisation to the customer. Make sure to
label your message flows, so it is clear what
information is being passed back and forth.

Example:
 Go to the BPMN elements dropdown and select BPMN complete to see more
elements  swim lanes  collapsed pool. Change start event to “start message
event”
 We want to model the customers pool as a black box. We don’t model any activities
or events inside this pool as we don’t have control on what the customer will do.
 Note: make sure when dragging message element, there is a green dot or else it will
show up as a warning when saved. Cannot submit assignment tasks with any
warnings – errors are ok.
Syntax
1. The Sequence Flow cannot cross the boundaries of a Pool
2. Both Sequence Flow and Message Flow can cross the boundaries of
Lanes
3. A Message Flow cannot connect two flow elements within the same
pool

Business Objects
 Data is also used and altered by the process, and we may need to represent this in
our model. Data can be either physical or electronic.
 Data object: represents an artefact used by (input) or created by (output) an activity.

 Data store: is a place containing data objects that are persistent (they are
persistent, are stored beyond start and finish boundaries of the process)

Example
 BPMN Complete  Data Objects  start with Data Store then Data Object
o Note: don’t have to add in every data store/object for assignments and exams
because it may become messy.
Example 2
 Order-to-cash
 The purchase order document serves as an input to the stock availability check
against the Warehouse DB. Based on the outcome of this check, the status of the
document is updated, either to “approved” or “rejected”. If the order is approved, an
invoice and a shipment notice are produced. The order is then archived on the
Orders DB.

o The purchase order document serves as an input to the stock availability

check against the Warehouse DB. Based on the outcome of this check, the
status of the document is updated, either to “approved” or “rejected”. If the
order is approved, an invoice and a shipment notice are produced. The order
is then archived on the Orders DB.
 o Beware: This diagram is a too detailed. It is for illustration purposes.
In practice, try to only model the most important data objects and
associations. Keep the model readable!!
o For exam: only model data objects if you are asked to.
o For assignments: model data objects but only the most important (a few)

Text Annotations
 We can add annotations to our model for clarity. These do not affect the flow of
tokens; they are only for extra information.

Example of BPMN
 Order-to-cash
o A typical order-to-cash process is triggered by the receipt of a purchase order
from a customer. The purchase order has to be checked against the stock
regarding the availability of the item(s) requested. Depending on stock
availability the purchase order may be confirmed or rejected.
o If the purchase order is confirmed, an invoice is emitted and the goods
requested are shipped. The process completes by archiving the order or if the
order is rejected.
 Breaking it down:
o A typical order-to-cash process is triggered by the receipt of a purchase order
from a customer.
o Upon receipt, the purchase order has to be checked against the stock
regarding the availability of the item(s) requested.
o Depending on stock availability the purchase order may be confirmed or
rejected.
o If the purchase order is confirmed, an invoice is emitted and the goods
requested are shipped. The process completes by archiving the order or if the
order is rejected.
  Naming conventions:
 Event: noun + past-participle verb (e.g. insurance claim lodged)
 Activity: imperative verb + noun (e.g. assess credit risk)
 Give a name to every event and task
 For tasks: verb followed by business object name and possibly
complement
o Issue Driver Licence, Renew Licence via Agency
 For message events: object + past participle
o Invoice received, Claim settled
 Avoid generic verbs such as Handle, Record...
 Label each XOR-split with a condition
o Policy is invalid, Claim is inadmissible

Example 2
 Order distribution process
o A company has two warehouses, one in Amsterdam, the other in Hamburg,
that store different products. When an order is received, it is distributed
across these warehouses: if some of the relevant products are maintained in
Amsterdam, a sub-order is sent there; likewise, if some relevant products are
maintained in Hamburg, a sub-order is sent there. Afterwards, the order is
registered and the process completes.

Other Guidelines
 Model in blocks
 o Pair up each AND-split with an AND-join and each XOR-split with a XOR- join,
whenever possible
o Exception: sometimes a XOR-split leads to two end events – different
outcomes (cf. order management example)

Process Mapping Checklist

 Have you named all components: The model itself? All events and tasks?
 Have you used the right naming conventions?
o Tasks: Verb – Object e.g. Issue Licence
o Events: Object – Past participle e.g. Licence Issued
 Have you used the best words? E.g. the most specific verb possible (“handle” is not
very clear – it could mean a lot of things; “Despatch order” is more specific than
“Handle order”)
 Have you labelled the conditions for your gateways, so we know which path is
which? e.g. “order accepted”, “order rejected”.
 Do your gateways join up, so that you have your AND split and AND join in a clear
block? If not, is this complexity important for the model to be correct?
 Does your process have at least one start and end event?
 Are your message flows all labelled? And only between pools?
 Is your process able to run from start to finish within one pool? Following clear
sequence flows
What is a Good Process Model?
 As a Business Process Analyst (BPA), a good process model communicates clearly to
the person using your model.
 Who might use a process model?
o An automation tool (or developer) to deliver automation steps
o A process participant (actor) to verify their steps have been correctly
modelled; to understand the up- and downstream implications of their work
o A manager in the organisation to fully visualise the process; to clarify
understanding
 To deliver these outcomes a process must be:
o Accurate: A process model should accurately depict the real-life execution of
the process
o Complete: A good process model should include all elements.
o Understandable: the model is primarily a communication tool. The accuracy
and completeness are meaningless if the model cannot be understood.
 We use the visual structure and rules of BPMN 2.0 to reduce ambiguity and increase
understandability.

Important Notes
 Do not leave too much space in lanes
 Make sure the text is readable

Good Model
 High level (5
steps max),
which each of
these steps
modelled as a
subprocess
 Name
everything
clearly with
gateways and
start/end
event
Resources

 http://www.bpmb.de/images/BPMN2_0_Poster_EN.pdf

Recap
 Order-to-cash cocktail
  Chapter 5 sections 5.3, 5.4 for steps to move from interpreting a business problem to
creating and validating your BPMN models
RAT Test
1. What are the benefits of modelling processes?
a. To increase the understanding of existing processes
b. To help process analysts to analyse the processes
c. To facilitate a shared understanding of how a process works
d. To apply future changes
2. Who might use the supply chain process model for Woolworths?
a. Woolworths supplier
b. Woolworths customer
c. Woolworths manager
d. Woolworths developer
i. In this course, we are just focusing on the internal usage of the
process
3. Of the process names below which one does not meet the guidelines for naming a
process?
a. Accept order
b. Deliver pizza
c. Message customer
d. Enrol student
e. None of the above
4. Which of the statements below describes an action event?
a. A person or an organisation decides to do something; customer decides to
place an order, a company needs to purchase materials from a supplier, a
statutory authority issues a new guideline
5. A process is ____
a. How to understand contribution
b. Sharing in a customer outcome
c. About adding value
d. About passing the parcel
6. In a process-orientated organisation, who is directly accountable for poor
performance of a process?
a. The process participants
b. The executive management team
c. The process owner
d. The process analyst
7. A process is NOT
a. About adding value
b. A low level task definition
c. A functional internal way of doing things
d. What you do to fulfil your job responsibilities
8. Which of the below is NOT a process
a. Placing an online order
b. Paying the bill after receiving the goods
c. Setting a drive through order at KFC
 d. Ordering groceries online from the supermarket
i. The rest are all order-to-cash processes but paying the bill after
receiving the goods is a task inside an order-to-cash process.
9. Which of the below gateways should you consider using last?
a. OR Gateway
b. XOR Gateway
c. AND Gateway
i. You should use OR gateway at the end as the last option. You start
using XOR or AND
10. A pool will be used to represent a
a. Department in the organisation
b. Organisation
c. Process
d. Group of people
i. E.g., UNSW as a pool and departments (administration, student
services, admission etc.) as lanes within the pool.
Week 3 – Advanced Process Modelling

BPMN Main Elements – Recap

BPMN Gateways

Exclusive (XOR) Parallel (AND) Inclusive (OR)

Exclusive decision take Parallel split Inclusive decision take
one branch take all branches one or several branches
depending on conditions

Exclusive merge Proceed Parallel join proceed Inclusive merge proceed

when one branch has when all incoming when all active incoming
completed branches have completed branches have completed

Process Decomposition
 An activity in a process can be decomposed into a “sub-process”

 Use this feature to:

o Improve understanding by breaking down large models
o Identify parts that should be:
 Repeated
 executed multiple times in parallel
  interrupted, or
 compensated

Example

 There are 22 nodes in this

process which is complicated.
 We can use subprocesses to
make this less complicated and
bring down the node count

 Subprocesses
increased
understandability in
business process
modelling
In Signavio

Linking the sub-process in Signavio

Sub-processes
 An activity in a process can invoke a separate sub-process
 Use this feature to:
o Decompose large models into smaller ones, making them easier to
understand and maintain

Guideline: Multi-level modelling

 Level 1: value chain
o Simple linear description of the phases of the process
o No gateways
o Each activity chain is a sub-process
 Level 2+: expand each activity in the value chain, add incrementally the following:
 o Decisions, handoffs (lanes, pools)
o Parallel gateways, different types of events
o Data objects & data stores
o And as much detail as you need, and no more
 At each level, decompose according to:
o Logical milestones towards achieving the outcome of the process
o Major objects used in the process
 Decompose until processes are of “reasonable” size
o e.g., up to 20 nodes (tasks + events + gateways) per model

Non-BPMN value chain “chevron” notation - (e.g. Signavio, ARIS)

 This example shows an end-to-end process from product development to customer

care. There are 2 subprocesses for product development and sales processing.

Value chain with sub-processes

  Example: purchase-to-pay process where someone in the organisation needs
something to be purchased until the things have been delivered and paid for.

Value Chain in Signavio

When should we decompose a process model into sub-processes?

 This then begs the question:
o What are the quality attributes of a process model?
 Readability
 Understandability
 Accuracy
 Completeness
 Use sub-processes when the model becomes too large:
o Hard to understand
o Increased error probability
Rework and Repetition

Block-structured repetition: Loop Activity

 BPMN also provides the loop activity construct to allow the repetition of a task or
sub-process
 You can create a sub-process loop for something that is a single repeating fragment,
with one incoming sequence flow, and a single exit sequence flow.
 The last activity in the fragment must output the decision condition that will
determine if the loop is completing.

More rework and repetition

 SESE = Single Entry Single Exit fragment, i.e. a fragment delimited by a single entry
node and a single exit node (there are no other incoming arcs into the fragment or
outgoing arcs from the fragment)
 In this process, if the response is not approved, we have to go back and redo. We can
take what is inside and make this a subprocess.
Example: block-structured repetition

 The advantage of using activity loops is that the size of the model can be reduced
and the details of the repetition block are hidden inside the collapsar process
 The loop icon means until the response is approved, it will keep repeating the
process

Parallel repetition: multi-instance activity

 The multi-instance activity provides a mechanism to indicate that an activity is
executed multiple times concurrently

 Useful when the same activity needs to be executed for

multiple entities or data items, such as:
 Request quotes from multiple suppliers
 Check the availability for each line item in an order
separately
 Send and gather questionnaires from multiple witnesses
in the context of an insurance claim

Example: multi-instance activity

 Procurement
 In procurement, typically a quote is to be
obtained from all preferred suppliers
(assumption: five preferred suppliers
exist). After all quotes are received, they
are evaluated and the best quote is
selected. A corresponding purchase order
is then placed.
  Example:
 In a purchase to pay example, when we want to purchase something above a
certain amount, we have different suppliers to send them a request to quote.
We do not have to wait for these quotes to come one after the other, we
can try get all of these at the same time (in parallel).
 The problem with the right-side process is that it is very cumbersome if you
have a lot of suppliers and you have to wait for all to respond to you since
there is an AND gateway.

 The solution to this problem is parallel repetition, where “obtain quote” is a

subprocess and it will be repeated until we receive the number of quotes that
we want.

Handling Events

Events Handing
 In BPMN, events model something instantaneous happening during the execution of
a process
 They affect the process flow:
 Start (Start Events)
 Intermediate (Within a process)
 End (End Events)
BPMN Event Types
 Untyped Event – Indicates that an instance of the process is
created (start) or completed (end), without specifying the cause
for creation/completion
 Start Message Event – Indicates that an instance of the process is
created when a message is received

Message Events
 Events where information is received or sent externally (e.g., to customer,
supplier) are called message events.
 Message events are either called “catching” events, where the event
receives in incoming communication (the white envelopes) or “throwing”
events, where the event sends an outgoing communication (the black
envelopes).
o A process can start by receiving a trigger externally; and end with
sending a trigger externally.
 All message events will have a message flow outwards to the party we are
communicating with.
o We sometimes use message flows coming directly out of an activity, if one
part of the activity definition is to send a message.
o We only use a message event if the ONLY work to be done is to send the
message.
o This means that our models can look like either of these options:

The second option would be used if there was more work to be done
that just the send (e.g. generating the invoice etc.)
 However, an activity will never replace a start message event. If there
is work to be done after the message is received, this will be in the
first activity of the process.
Example: message events
Comparison with sending/receiving tasks

 Use message events only when

the corresponding activity would
simply send or receive a message
and do nothing else (i.e. when
activity does not really represent
a unit of work)

Temporal events (timer events)

 Timer events (also known as
temporal events) indicate a specific time requirement. If something has

to wait until the next Monday. Or it has to wait for 3pm; or the 3 hours to pass.
 Process can be started (triggered) at a particular time, or timer events can occur
within a process, where continuation is triggered at a particular time or day; or after
a specified delay time.
o Start Timer Event – Indicates that an instance of the process is created at
certain date(s)/time(s), e.g. start process at 6pm every Friday
o Intermediate Timer Event – Triggered at certain date(s)/ time(s), or after a
time interval has elapsed since the moment the event is enabled (delay)
 Timer events are catching events only
 The process does not generate the timer, but reacts to it
Example:
 PO handling
o A Purchase Order (PO) handling process starts when a PO is received. The PO
is first registered. If the current date is not a working day, the process waits
until the following working day before proceeding. Otherwise, an availability
check is performed and a PO response is sent back to the customer.

Recap: Message and Timer events

Racing events: Event-based decision

 With the XOR-split gateway, a branch is chosen based on conditions that evaluate
over available data
o The choice can be made immediately after the token arrives from the
incoming flow
 Sometimes, the choice must be delayed until an event happens
o The choice is based on a “race” among events

 For example, we review a document, and then the XOR gateway can take one path if
it approved, another if not approved.
 o But what if we don’t know what will happen next? Perhaps we have send a
message to our customer asking for confirmation. The process will take one
path if the customer confirms; another if the customer cancels.
o We can’t use an XOR gateway after “Request confirmation” because we don’t
know what will happen next. We can use an event driven XOR split (also know
as an event driven gateway; or a racing event, because the first event to arrive
“wins the race” and the process follows that path).

Example
 Model the following process.
 A restaurant chain submits a purchase order (PO) to replenish its warehouses every
Thursday. The restaurant chain’s procurement system expects to receive either a “PO
Response” or an error message. However, it may also happen that no response is
received at all due to system errors or due to delays in handling the PO on the
supplier’s side. If no response is received by Friday afternoon or if an error message is
received, a purchasing officer at the restaurant chain’s headquarters should be
notified. Otherwise, the PO Response is processed normally.

Example 2:
 After a supplier notifies a retailer of the approval of a purchase order, the supplier
can receive:
o An order confirmation
o An order change
o Or an order cancellation from the retailer
 It may happen that no response is received at all. If no response is received after 48
hours, or if an order cancellation is received, the supplier will cancel the order.
 If an order confirmation is received within 48 hours, the supplier will process the
order normally
  If an order change is received within 48 hours, the supplier will update the order and
ask again the retailer for confirmation. The retailer is allowed to change an order at
most 3 times. Afterwards, the supplier will automatically cancel the order.

 Order to cash process: Event driven XOR split is used as the other party (retailer) is
making the decision, not the supplier. Whatever the retailer decides to do first, the
supplier will let it execute and proceed with the order.
 Immediately after an event based gateway or racing event, you should not use
activities or tasks. Instead, you should use message or timer events as shown above
as you would be waiting for something to happen from the other party.
 Terminate end event is used after “cancel order” as it is a negative outcome
 The XOR join is used to bring the “seek confirmation” back to the start to keep it not
messy – it can join the event-driven XOR split instead but this will look messy/
overlapping.

Example 3
 What is wrong with the
following process?
o The seller process
will never
complete in the
case when they
are already
registered.
  Solution:

Handling Exceptions

Process Abortion
 Exceptions are events that deviate a process from its “normal” course
 The simplest form of exception is to notify that there is an exception (negative
outcome)
 This can be done via the Terminate end event: it forces the whole process to abort
(“wipes off” all tokens left behind, if any)

Example 1: terminate event

 Signal the negative
outcome…
Example 2: terminate event
 Abort the process by removing all tokens...

Exception Handling
 Handling exceptions often involves stopping a sub-process and performing a special
activity
 Types of exceptions for an activity (task/sub-process):
o Internal: something goes wrong inside an activity, whose execution
must thus be interrupted. Handled with the Error event
o External: something goes wrong outside the process, and the execution
of the current activity must be interrupted. Handled with the Message
event (e.g., customer cancelled the order)
o Timeout: an activity takes too long and must be interrupted. Handled
with the Timer event
 All these events are catching intermediate events. They stop the enclosing
activity and start an exception handling routine.
 The error events are a result of something incorrect or problem result within the
task/process.
o The end version occurs within the sub-process, and
“throws” the exception the intermediate exception which
“catches” the exception and kicks off the exception
handling.
Example: Extending PO Handling Process
 PO handling
o A PO handling process starts when a PO is received. The PO is first registered.
If the current date is not a working day, the process waits until the following
working day before proceeding. Otherwise, an availability check is performed
and a PO response is sent back to the customer.
  A PO change request may be received anytime after the PO is registered. This
request includes a change in quantity or line items. When such a request is received,
any processing related to the PO must be stopped. The PO change request is then
registered. Thereafter, the process proceeds as it would do after a normal PO is
registered. Further, if the customer sends a PO cancelation request after the PO
registration, the PO processing must be stopped and the cancelation request must be
handled.
 Solution:

Internal exception: error event

 Error Event – Indicates an error: the end version generates an error event while the
catching intermediate version consumes it when attached to the boundary of an
activity

Example: internal exception

 PO handling
 o Consider again our “PO Handling process” example with the following
extension: if an item is not available, any processing related to the PO must
be stopped. Thereafter, the client needs to be notified that the PO cannot be
further processed.

 After we check for availability, we insert XOR gateway and if all the items are
available, then we will continue as normal.
 If one item is not available, we will throw a thunder. This will stop the process and we
will catch this error via a boundary error.
o The boundary error has to have the same name for both.
o The above error event is thrown from the subprocess

Example: activity timeout

 Order-to-transportation quote
o Once a wholesale order has been confirmed, the supplier transmits this order to
the carrier for the preparation of the transportation quote. In order to
prepare the quote, the carrier needs to compute the route plan (including all
 track points that need to be traversed during the travel) and estimate the
trailer usage.
o By contract, wholesale orders have to be dispatched within four days from the
receipt of the order. This implies that transportation quotes have to be
prepared within 48 hours from the receipt of the order to remain within the
terms of the contract.
 Solution

More on PO Handling example:

 The customer may send a request for address change after the PO registration. When
such a request is received, it is just registered, without further action.

Non-interrupting boundary events

 Sometimes we may need to trigger an activity in parallel to the
normal flow, i.e. without interrupting the normal flow.
 This can be achieved by using non-interrupting boundary events
 Solution:
  Example: When we receive an address change request, we register it and no change
occurs to the process.

Week 4 – Process Mining

From Process Discovery to Process Analysis

  One of the key questions process analysts ask is “where can I find the key sources of
information for business process modelling.”
 To gain process information process analysts can use evidence-based and interview-
based data collection and analysis (and other discovery methods) as discussed in the
Week 2 and Week 3 Process Discovery modules.

Evidence-based approaches
 Some examples of evidence-based approaches are:
o Document analysis: internal processes and procedure documentation
o Observation: following or participating in individual cases of process
execution (e.g., ordering a product from a company, and following that order
through all the internal steps for fulfilment)

Interview and Workshop Approaches

 To gain information, process analysts can also conduct individual interviews with
domain experts or conduct workshops. It is recommended to involve a variety of
process participants: domain experts, individual participants, customers, and
suppliers.

Automated-based discovery
 We have also seen in week 3, automated process discovery, which requires the use of
event logs. Event logs (refer to figure below) include data captured from source
systems involved in the process:
1. It is important that the event log contains the Case ID, which is a unique
identifier for each instance of the process being analysed. For example, this
could be an order number, an application number, a request number, etc.
2. An activity descriptor is also needed, to provide information on the step
sequence, as well as a timestamp.
3. Other information might also be captured such as the case’s qualitative or
quantitative data (e.g., order source, order value, or in this case loan type and
loan amount). These data points can help with the calculation of quantitative
analysis. The process participant in each step should also be recorded.
 Using event logs, the automated-based discovery helps process
analysts map out potential triggers, steps and exceptions.
 For example, in a grocery store, there are multiple different types of
checkout processes that occur. Some of these processes may include
the purchase of one item and others may include errors due to
barcode scanning. All these individual instances are recorded in event
logs. Based on all these different instances, a process model can be
created.
Log Entries
 Examples of log entries (elements: label; sequence; time stamp)
o Check Invoice for Invoice No. 4567 completed on 12.11.2010 at 9:19:57
o FunctionStoreCustomerData(„Müller“,c1987,
„BadBentheim“)completedon12.11.2010at9:22:24
o Send Invoice for Invoice No. 4567 completed on 12.11.2010 at 9:23:18
 Logs contain valuable information to answer questions like:
o When and how many process instances have been executed?
o Are there recurring patterns in the execution of activities?
o Can process models be derived from the data?
o Which paths of execution are used how often in the process models?
o Are there paths which are never taken?

Discovery and Analysis Tools and Approaches

 There are numerous techniques (Document Analysis, Interviews, Workshops, and
automated process discovery) that have been refined for analysing processes.
 These approaches can be deployed during the discovery phase to identify and
understand the specific details of the process.

 As a process analyst, what type of approaches might you use to conduct your
investigations?
o Review and existing process model
o Interview customers of the process
o Use data from information system used in the process
o Conduct empirical studies of the process, through observation or document
review
 o Interview process participants

 You may assume that data is the most important, but often people (interviewees) can
provide you with more insights both on the “why” and where there are expectation
gaps.
 Increasingly, as Information Systems participate in a wider variety of processes, we
can use the data from the systems to inform our process analysis.
o The automated tools we use for measuring process analysis may also be used
for process monitoring.
 Often the source data that is captured during process execution is not in an easily
translatable and analysable format.
o There are numerous data analysis and presentation tools that can be
employed by business users for collating and reporting.
o To analyse processes, we will be examining a tool called Process Mining.
Process Mining specifically supports process analysis.
o By using Process Mining, in conjunction with a variety of quantitative and
qualitative analysis, we can understand the issues and challenges in our
current process.

Why and how do we analyse processes?

 To improve a process it would be to make it:
o Better (improving the quality of the output)
o Faster (speeding up the process)
o Cheaper (reducing the cost of the process)
 Many of the automated tools we use for measuring the process in our analysis phase
may also be used for ongoing monitoring of the process.

Overview of Process Analysis

 To understand the process details, we may gather information and data that goes
beyond the model. This will assist us in understanding the process and its
corresponding requirements.
o Some questions that could be asked include:
 “What challenges are faced within the process?”
  “Are there more undesirable outcomes occurring than we would
expect?”
 “What are the real issues and the causes of those issues?”
o Uncovering these elements usually requires the use of multiple
techniques.
 For example, to gain objective data about why a process is taking longer than the
customer’s expectation, we might use several quantitative techniques.
o The quantitative techniques may examine the average length of the
process and identify specific instances where delays occur.
o We might also use qualitative techniques to review the process to
understand whether there are unnecessary steps that contribute to this
delay.
 To better understand the point of view of the customer and the participant in the
process, we may use qualitative tools such as value-added analysis, waste
analysis and stakeholder analysis which will be discussed in Qualitative Analysis
of Week 5.
o We can summarise all of these analyses into an issue register by
documenting the details of the most important challenges faced in the
process. This will ensure we are prioritising the efforts on improving the
most challenging issues, thus elevating the overall efficiency and
effectiveness.
 Process mining tools and techniques can help us to collate and interpret
quantitative process data. We can also use tools like flow analysis and queuing
analysis to evaluate the process which will be covered in the Quantitative
Analysis of Week 7.

Using Process Mining Tools

 Starting with the process data, we can use it as a baseline to further our
understanding of the process.
 For example, we can apply this to the automated process discovery that we
discussed earlier.
o Event logs not only assist process analysts in understanding the process, they
can also be used to evaluate the overall process health.
o Process analysts can examine which activities and errors occur most
frequently.
o It can also drill down into who completed the most tasks, for example in
Figure 1, under the “Resource” column, Sue completed the most tasks.

Process Mining Tools

 There are a wide variety of process mining products on the market, with a diverse
range of functions and capabilities, including at the enterprise level automated
connections to the source systems for event logs
Process Mining Core Functions
 The core functions of most of these systems are in 4 categories:
o Automated process discovery: using the sequence of steps in the event log to
create a draft process model
o Conformance checking: using the event log to validate an existing process
model or set of process rules
o Performance mining: using the data to illuminate the importance of the
execution features of the process (e.g. elapsed time analysis), and to monitor
ongoing process execution metrics
o Variant analysis: evaluate process performance for different variants of a
standard process (e.g. a particular type of instance may cause most of the
issues)

Process Measurements
 Understanding the key metrics of process performance is critical when targeting
process improvement. The most common dimensions of process improvement will
be recapped in Quantitative Analysis of Week 7:
o Quality
 We can measure elements like customer satisfaction, product returns,
customer complaints
o Time
 We can measure the time it takes to execute the process as a whole or
a specific process variation.
o Cost
 We can measure the cost required for the completion of the process
as a whole or a specific process variation. There can be important
trade-offs with fixed and variable costs, and substantial improvement
investments versus reduced running costs over time.
 When we evaluate the as-is process, it is important to consider the baseline metrics
and the potential improvements. The method for measuring the improvements must
also be considered in the business case. This information can be used as the
foundation for ongoing process monitoring.
Celonis Process Mining Lecture

What is Process Mining?

 A process is a series of consecutive steps/actions with a specific end goal/objective
e.g., steps taken to order pizza
 A business process is a set of related and structured activities in specific sequence
with an objective which contributes to the accomplishment of a specific organisation
goal such as provide services or produce products
o Must have defined number of steps, repeatable, flexible
o Examples of business process:
 Every business is a collection of interconnected processes
Discovering how Business Processes Run in Real Life

 “What method would you use as a manager to understand how a business process
actually runs in your multinational corporation?”
o Interview staff, however this would take a lot of time and won’t give you the
complete, up-to-date information

 Interviews fail to find many insights.

 Automation of tasks are divorced from
reality and from how people really
work.
 These tools oversimplify reality and do
not cover the true lifecycle.
 Since the 1990s, such process tools
have been a disappointment.
 We need a view as close to the real
world as possible.

Solving the Problem Related to

Understanding Business Processes
 The customer
o IT Help Desk of Bayerisher Rundfunk
 The problem
o Slow and inefficient processes
 The team
o Three student consultants from Academy Consult e.V.
 The solution
o The first enterprise software for Process Mining
What to do to get process insights?

 Process mining is based on real empirical data so it’s very accurate with high
transparency

Celonis Execution Management System

 The real next big thing in business automation: process mining will help automate
business long before chatbots do - The Economist
o process inefficiencies can cost businesses between 20% and 30% of annual
revenue
o follow the release of Gartner's Magic Quadrant for Process Mining Tools
o untangle the procedural spaghetti with process mining - one of the fastest-
growing areas of information technology
o reveal performance and compliance problems
o potential of automatically creating process models

Discovering how Business Processes Run in Real Life

 “Process Mining: Beyond Business Intelligence“
o Something completely NEW
o Something people said:
 wasn't possible;
 the data wasn't there
to allow for systems
that could really map
out a process.
o Abundance of accessible data.
o Provides insights you could
never find just in interviews.
o View as close to the real world
as possible.
o New step showing how
processes are really being executed.
o Allows the design and improvement of processes.
Process Mining Overview

 In the real world you have a bunch of processes inside the company
 Most companies have some sort of electronics system of records
o All this generates a massive amount of data
 Celonis software connects to all these records, reads the data and reconstructs the
processes
Process Mining vs. Data Mining
 Process mining
o Analyses process
o Examines extracts data from event logs
o Discover, monitor, improve real business process
o Insight on process:
 performance
 optimization
 Data Mining
o Analyses large data sets
o Broad application and techniques for data extraction
o Discover previously unknown information
o Insight on various relationships within data in any field
 Process Analysis
o Performance
 Why are these cases late?
 Where are bottlenecks?
 Which resources are overloaded?
 Important as if your process performance is not optimal, you
are losing money, your employees are unhappy, employees are
doing useless tasks trying to fix inefficiencies in the process
o Conformance
 Process Conformance is a technique to analyse the relationship
between log data and process models
 Input: Logs and process model
 Output: information on the relationship, e.g. fitness
 How often are four-eyes principles violated?
 Which activities are often skipped?
 Which resources cause deviation?
 Important as not following processes is unsafe, your company
might get a huge fine for regulations and legal actions
o Enhancement
 Where to change activities?
 How should the process be redesigned?
 Which activities could be automated?

An interdisciplinary science
  Research classification: Process mining lies at the intersection between process
science and data science, bridging the gap between model-based process analytics
and data-centred analytics.

Process Mining Theory

 Definition: Process mining is a data analytics technology to reconstruct, analyse, and
improve business processes based on log data from transactional IT systems. Process
mining bridges the gap between model-based process analyses and data-centric
analysis techniques.

 Process mining extracts the event log, then goes through discovery, conformance and
enhancement. You can then look at the data and see what’s happening again

Celonis Execution Management System

1. Extract data from the source systems

2. Transform the data and make it ready for process mining
3. Make insights available for different functions in the organisation
How the Celonis EMS works
 Turning insight into actions in a single motion

Demo
 Pre-uploaded data sets on the left
 Go to Order-to-Cash and select Order to Cash Demo – EN (USD)

Short Exercise
 ANALYSIS OF PROCESS FLOW IN THE VARIANT EXPLORER
o Please open the O2C process and navigate to the “Process” sheet. In this
step, you will learn how to interpret the process graph and how to identify
inefficiencies and bottlenecks. Please note that one or multiple answers
might be correct.

1. How many sales order (SO) items follow the second

process variant?
 a. 168,038

2. What’s the overall average throughput time (in days) for the happy path from
process start to end?
a. 16

 Happy path is found through conformance and look at the

process model. The ones in green is the “happy path”. The
happy path is therefore the 3rd most common variant.

3. Display the first 17 variants in the variant explorer. How does the 17th most common
variant look like (use process animation)?
a. The order is cancelled and afterwards, a delivery document is created.

 WORK WITH AN ANALYSIS

o After learning the basic functions in Celonis, you continue with a more in-
depth analysis of the O2C process. For this task, go to the “Overview” sheet.

1. Look at sales order items where the goods are returned. Who is the dominant
customer for these positions in terms of number of sales order items?
a. Queen Industries 11044

2. Have a look at customer Fast Section 2560. Observing the number of SO items and
the net value over time, what attracts your attention?
a. The net value of sales orders drops noticeable in March 2018.
  Search up Fast Section 2560 and apply the filter.

Week 5 – Qualitative Analysis

Introduction
 We use the qualitative approach to categorise
how a problem is structured.
  As a process analyst, your job is to reduce the defects in the process, to reduce the
cost, to minimize customer complaints, etc…
 There are 5 techniques: Value-added analysis, Waste Analysis, Root-cause Analysis,
Pareto Analysis, and Issue Register.
o These techniques allow us to break down the process, pinpointing any
process inefficiencies and weaknesses.
 First, we want to cover a set of techniques for analysing the process and determine
what adds value, what does NOT add value and how value is being added.
 From an internal perspective, we also want to know if there is any work done in the
process that should not be done, which means waste. We need to find out what we
are doing right and what we are doing wrong in that process.
 From an external perspective (e.g. the root-cause analysis), when we know about the
problem from other parties (e.g. customer complaint: very frequently the delivery
arrives to the customer 3 days late and the customer is NOT notified of the delay).
o The root-cause analysis allows us to search for the root cause of the problem.
It allows the process analyst to ask the stakeholder questions that can lead to
the root-cause of the problem.
 The issues, both internal and external, that have been identified are recorded in the
“Issue Register”. We can prioritise the issues in this register using a Pareto chart.

Value-Added Analysis
 The value-added analysis is a very simple technique that decomposes the process
tasks into steps that are pieces of work and for each piece of work or each step, we
want to know if it adds value to the customer or to the business.
 Consider the task of putting an elephant in a refrigerator. If we were to break this
task down into three steps, what would those steps be?
o Open the refrigerator
o Put the elephant in the refrigerator
o And close the refrigerator.
 Every task can be decomposed into some steps, e.g., 1) setup, 2) the actual work,
and 3) the completion phase, where the work is transferred to the next person.
o To decompose a task into 3 steps: we ask ourselves:
 What do we need to do to start the task?
 What do we need to do to the task?
 What do we need to do to close the task?
o When we decompose the tasks into steps, we need to consider if there are
any conditional steps.
o Remember the elephant in the refrigerator? Now consider putting another
animal in the fridge in 4 steps.
 You open the refrigerator
 If there is another animal, you take it out
 You put the new animal into the refrigerator
 And you close the refrigerator
o When we decompose a task into steps, we consider a conditional step, this
step is the cleanup (e.g. clean the fridge – remove the elephant)
  In this Value-Added analysis, we will take the tasks and decompose each task into
steps then label each step. We are working with steps – not tasks. We will label the
steps as: Value-Adding (VA), Business Value-Adding (BVA) or Non-Value-Adding
(NVA).

Value-Adding Activities
 A step is Value-Adding (VA) if it produces value or satisfaction to the customer of the
process.
 There are criteria for VA steps:
o The step is VA if the customer is clearly willing to pay for it. In a university,
student’s admission process, assessing your application as a student is a VA
step (positive criterion)
o The second criterion: would the customer agree that this step is necessary to
achieve their goals? (positive criterion)
o The third criterion is the negative side, If the step is removed, would the
customer perceive that the end product or service is less valuable? In other
words, if we stop doing this, will the customer scream?
 For example: in the order-to-cash process: the customer sends you the
order and you confirm the delivery. This is VA. If you do not confirm,
the customer will contact you to ask if you will be sending the order.
 Delivering the products is also important. Let’s take the university
admission process, when you - as a student submit - an application,
the university admission office does lots of steps; they assess your
application, and they notify you of your application outcome. If they
do not notify you, you will be chasing them, so those steps are VA. For
you as a customer, it appears that the steps are only those ones.
 Another example: you order something from eBay with a few clicks
and you receive them in a couple of days.

Business Value-Adding Activities

 Necessary or useful for the business to operate.
o Criteria
 Is this step required in order to collect revenue, to improve or grow
the business?
 Would the business (potentially) suffer in the long-term if this step
was removed? Does it reduce risk of business losses?
 Is this step required in order to comply with regulatory requirements?
o Example
 Order-to-cash process: Check purchase order, Check customer’s credit
worthiness, Issue invoice, Collect payment, Collect customer feedback
 University admission process: Verify completeness of application,
Check validity of degrees, Check validity of language test results
 In the order-to-cash process, the first thing you do after you receive a PO is to check
for inventory. The customer does not pay for you to check your inventory, and they
are not interested if you check or not, they will be happy if you deliver their items on
time. But if you - as a business - do not check your inventory and you might get low
 stock; at some point, you will not be able to sell the products because you might not
have stock, or you did not order stock on time. Checking the inventory is a necessary
step to enable you as a business to deliver value in the long term. That is BVA
(matches criterion 1 above).
 Checking your customer’s creditworthiness in a B2B transaction: as a business you
need to check the customer’s credit history before you ship the product, if they have
a bad record you need to know that, in case they do not pay your invoice. Therefore,
for this step, the customer does not care about it, but checking credit helps you as a
business to reduce business risk, so this is BVA (matches criterion 1).
 Issuing the invoice and collecting the payment, are necessary to collect the
revenues, so these also are BVA (matches criterion 1).
 Collecting customer feedback is also BVA, because it allows you to improve your
business, it also allows you to detect cases when the customer is unhappy (criterion
1).
 The university admission process, verify the completeness of the application, check
the validity of the degree, check language test results, those are also BVA steps (a
mix of criterion 1 and 2).
o For each step, you ask yourself: is this VA? Yes or no.
 If yes, then full stop!
 If no, you ask: is it BVA? you check the criteria and you ask yourself: is
this BVA?
 If yes, you label it as BVA.
 If no, then it NVA. No Value Adding
o Please ensure each step is rationalised with a reason.

Non-Value Adding Activities

 The NVA steps are what you want to remove from your process. Everything that you
do and that the customer is not willing to pay for and everything else that is NOT
necessary to the business.
 These include:
o Handovers: all these things in the process that are not necessary or could be
avoided or automated. For example, when a person sends something to
another person (could be emails, letters etc), that second person receives a
message, opens it, etc. all that is NVA.. Your job is to remove these steps, or
try to automate them. The NVA that you could not remove, should be
automated – or should be as invisible as possible in the process. For the
university example, sometimes the admission officer checks the application
and checks the English test, and then the committee member for admission
checks the application in, signs it and they approves it, and it goes back to the
admission office. We need to make handover as invisible as possible such as
handing over the application going backward and forward.
o Waiting times and delays: any step that implies a waiting or a delay, that
waiting time or delay is also NVA.
o Rework: every time you repeat a task again because it was not done well the
first time, this is called rework - for the purpose of defect correction; this is
also NVA. For example, if you have a process where you are ordering
 something and sometimes you might have a step for writing a
recommendation for a purchase manager to read and approve, the
purchasing manager reads and says that you missed one of few steps. You
have to repeat the task by considering these criteria that you missed the first
time. This step which is to review or repeat the purchase request, is a second
repetition, and is classified NVA; we should eliminate it. You will try to find
out if you can improve the check list of the purchase requisition, trying to
have nothing repeated. Therefore this is NVA.

Example: Extract of Equipment Rental Process

 First break up each activity into steps
o Fill request is value adding as the site engineer believes this is necessary for
them to do the work or achieve goal.
o Send request to clerk is NVA as this is considered handover.
o Record recommended equipment is BVA as it is necessary to do this to run
reports later on.
o Communicate issues is BVA as we need this in order to agree on how to
reduce costs etc.
  How to present this analysis in table format:
o Have to add a fourth column for justification – REQUIRED FOR ASSIGNMENTS
AND EXAM
Waste Analysis
 When analysing a business problem, it's essential to determine which actions are
necessary and which ones should be avoided. You must consider both the positive
and negative aspects of the situation.
 Value analysis (VA) primarily focuses on identifying Value-Adding steps (VA), Business
Value Analysis (BVA), and Non-Value-Adding steps (NVA).
o However, relying solely on VA analysis may not reveal all NVA steps since
some of them may not be evident in the process model. A step-by-step
analysis of the process model may overlook NVA.
 In 1970, Taiichi Ohno developed the waste analysis framework to identify hidden
sources of waste in Toyota's operations. While conducting a value analysis (VA) and
reviewing each step of the process, some forms of waste may not be apparent.
 Ohno's approach involved examining the entire timeline of a customer's order, from

when the order is placed to when payment is received. By scrutinizing every step of
the process and eliminating Non-Value-Adding wastes, such as overproduction,
waiting, and unnecessary inventory, the timeline could be reduced.

Seven Sources of Waste

 Move
o Unnecessary Transportation
o Motion
 Hold
o Inventory
o Waiting (and Idleness)
 Over-do
o Defects
o Over-Processing
o Over-Production
Move
Unnecessary Transportation
 Send or receive materials or documents (incl. electronic) taken as input or output by
the process
 Example:
o University admission process: to apply for admission at a university, students
fill in an online form. When a student submits the online form, a PDF is
generated. The student is requested to download it, sign it, and send it by
post together with the required documents:
 1. Certified copies of degree and academic transcripts
 Results of language test
 CV
o When the documents arrive at the admissions office, an officer checks their
completeness. If a document is missing, an e-mail is sent to the student. The
student has to send the missing documents by e-mail or post depending on
document type.

Motion
 Motion of resources internally within the process
 Common in manufacturing processes, less common in business processes
 Examples
o Vehicle inspection process, a process worker moves with the inspection forms
from one inspection base to another; in some cases inspection equipment
also needs to be moved around
o Application-to-approval process: a process worker moves around the
organization to collect signatures
 E.g., in a travel requisition form, a worker has to move from, one desk
to another to obtain the acquired approvals. Approval for expenses,
approval, travel plan etc.

Hold
Inventory
 Materials inventory (more inventory than what is strictly necessary)
 Work-in-process (WIP) – Inventory waste shows up in the form is WIP. WIP is the
number of cases that have started and have not yet completed.
 Examples
o University admission process: About 3000 applications are handled
concurrently
o Vehicle inspection process: when a vehicle does not pass the first inspection,
it is sent back for adjustments and left in a pending status. At a given point in
time, about 100 vehicles are in the “pending” status across all inspection
stations
 E.g., hospitals keeping excessive levels of medicines in stock, knowing
they won’t be able to use them before the expiry date.
Waiting
 Task Waiting for materials or input data
 Task waiting for a resource
 Resource waiting for work (resource idleness)
 Examples
o Approval-to-approval process: Request waiting for approver
o University admission process: Incomplete application waiting for additional
documents; batch of applications waiting for committee to meet
o Vehicle inspection process: A technician at a base of the inspection station
waiting for the next vehicle

Over-do
Defects
 Correcting, repairing or compensating for a defect
 Defect encompasses rework loops (because of defect)
 Examples
o Travel approval process: Request sent back to requestor for revision
o University admission process: Application sent back to applicant for
modification; request needs to be re-assessed later due to incomplete
information
o Vehicle inspection process: A vehicle needs to come back to a station due to
an omission

Over-processing
 Tasks performed unnecessarily given the outcome of the process
 Unnecessary perfectionism
 Examples
o Travel approval process: 10% of approvals are trivially rejected at the end of
the process due to lack of budget
o University admission process: Officers spend time verifying the authenticity of
degrees, transcripts and language test results. In 1% of cases, these
verifications uncover issues. Verified applications are sent to the admissions
committee. The admission committee accepts 20% of the applications it
receives
o Vehicle inspection process: Technicians take time to measure vehicle
emissions with higher accuracy than required, only to find that the vehicle
clearly does not fulfill the required emission levels

Over-production
 Unnecessary process instances are performed, producing outcomes that do not add
value upon completion. These instances in the process should never have existed and
enough information should be provided at the initial stages of the process to stop
this from happening.
 Examples
o Order-to-cash: In 50% of cases, issued quotes do not lead to an order
 o Travel approval: In 5% of cases, travel requests are approved but the travel is
cancelled
o University admission: About 3000 applications are submitted, but only 800
are considered eligible after assessment

Example

Equipment
Rental Process: Wastes
 Transportation
o Site engineer sends request to clerk
o Clerk forwards to works engineer
o Works engineer send back to clerk
 Inventory
o Equipment kept longer than needed
 Waiting
o Waiting for availability of works engineer to approve
 Defect
o Selected equipment not available, alternative equipment sought
o Incorrect equipment delivered and returned to supplier
 Over-processing
o Clerk finds available equipment and rental request is rejected because
equipment not needed
o Rental requests being approved and then cancelled by site engineer
 Over-production
o Equipment being rented and not used at all

Stakeholder Analysis
 While waste analysis primarily focuses on identifying internal inefficiencies, we will
now shift our attention to external factors through stakeholder analysis.
 To conduct a stakeholder analysis, we must first identify all the individuals or groups
involved in the process, including customers, managers, workers, contractors, and
other relevant parties.
 Stakeholder analysis is about gathering data from multiple sources by interviewing
stakeholders of different types and reconciling their viewpoints. In BPM, stakeholder
 analysis is commonly used to gather information about issues that affect the
performance of the process from different perspectives.
 There are typically five categories of stakeholders:
o The customer(s) of the process.
o The process participants (workers).
o The process owner and the operational managers who supervise the process
participants.
o The external parties (e.g., suppliers, sub-contractors) involved in the process.
o The sponsor of the process improvement effort and other executive managers
who have a stake in the performance of the process

Typical Stakeholder Concerns

 Customers are often concerned about slow cycle time, defects, lack of transparency,
or lack of traceability (inability to observe the current process status).
 Process participants might be rather concerned about:
o High resource utilization, working under stress.
o Defects arising from handoffs in the process and wastes.
 External parties (e.g. suppliers and sub-contractors) are generally concerned about
having a steady or growing stream of work from the process, being able to plan their
work ahead, and being able to meet contractual requirements.
 The process owner is responsible for ensuring that the process performs efficiently in
terms of cycle times, processing times, and minimizing defects and wastes.
Additionally, they must ensure compliance with both internal policies and external
regulations.
 The sponsor and other top-level managers are primarily focused on ensuring that
the process aligns with the organization's overall strategic objectives and contributes
to key performance indicators. They are also concerned with the process's ability to
adapt to changing customer expectations, competition, and market conditions.
 As a process analyst, your responsibility is to gather representatives from each
stakeholders’ group and conduct interviews with them to identify any issues they
may have with the process. During these interviews, it's important to ask about
potential "rainy days" scenarios.
o For example, you might ask about situations where the process did not work
correctly, or if it was entirely broken, causing frustration or dissatisfaction.
You need to collect enough information about such cases to determine the
root cause of the problem.
o By gathering input from all stakeholders and analysing their feedback, you can
identify areas of the process that require improvement and develop strategies
to address them.

Issue Register
 The purpose of the Issue Register is to:
o maintain, organize and prioritize perceived weaknesses of the process (issues)
o Assess their impact both qualitatively (e.g. nuisance to the customer) and
quantitatively (e.g. financial loss).
o Sources of issues:
  Input to a process modelling project
 Collected as part of ongoing process improvement actions
 Collected during process discovery (modelling)
 Value-added/waste analysis
 As a process analyst, you should talk to different people through a series of
interviews, you should take interview notes, and you need to compile them into a
table that we call it Issue Register.
 The Issue Register can take the form of a table including the below columns:
o Issue identifier
o Priority
o Short name
o Description
o Assumptions
o Impact: Qualitative and Quantitative
o Possible improvement actions

Example of Issue Documentation

 Issue name
o Equipment kept longer than needed
 Description
o Site engineers keep rented equipment longer than needed by asking for
deadline extensions
 Assumptions
o 3000 pieces of equipment rented p.a.
o In 10% of cases, equipment is kept two days more than needed
o Average rental cost is 100 per day
 Quantitative Impact
o 0.1 x 3000 x 2 x 100 = 60,000 p.a.
 Sometimes issues cannot be quantified and only have qualitative
impact

Issue Register
Example
Pareto chart
 Useful to prioritize a collection of issues
 Bar chart where the height of the bar denotes the impact of each issue
 Bars sorted by impact
 Superposed curve of cumulative percentage impact

Pareto Chart Example (Rental Equipment)

 Have all quantitative impact in the same unit e.g., dollar values
 You solve the issues from the one that has the highest impact to the one that has the
lowest impact.
 Then a cumulative line is drawn with percentages that say that this issue alone
counts for 78% of the total value of the issues etc.
o If all issues are costing, for example, $10,000, then this issue is costing
$7,800, the second costs $9,700. The third issue is costing 100% of the total
value of what we are losing because of this issue.
o Usually we’ll have more issues e.g., 12-15
 Your target is a Pareto target  means you address those issues that come between
60-80% of the total value
 80/20 rule applies here as well – where 80% of profit comes from 20% of your
customers. In here, 80% of the benefits or values can be reached by fixing 20% of the
issues – if you prioritise well, the first 20% of issues will reflect 80% of values.

Root-Cause Analysis
 Our last qualitative analysis is the root-cause analysis
  After conducting an analysis of our issue register, we prioritize the issue that has the
most significant impact on our organization. From there, we pinpoint the critical
factors and underlying root cause of the issue using a method called why-why
analysis. Alternatively, we can use a cause-effect diagram to approach the analysis
from a different perspective.

Why-Why Analysis
 Why-why analysis can facilitate interviews and workshops with stakeholders. This
approach involves presenting specific instances of issues, such as instances of late
delivery to customers, and working with stakeholders to understand the underlying
reasons for each occurrence. The goal is to gain insight into why the issues that arose
and identify potential solutions.
 Your task is to investigate why
the customer received the
product three days later than
expected without any prior
notification.
o To accomplish this, you
collaborate with
stakeholders to compile
a list of potential factors
that contributed to the
issue, also known as
first-level factors.
o Then, you analyze and prioritize these factors to identify the underlying
causes. This is where the why-why analysis comes in. By delving into each
factor and asking "why" it occurred, you can uncover the root causes of the
problem, up to five levels deep (going being the fifth level is not
recommended). Addressing all factors at the fifth level is necessary to resolve
the issue effectively. This approach is based on empirical practice and
experience.

Why-Why Diagram Example

 Asking why for each step of the
diagram – why does the site
engineer keep equipment for
longer than needed?
o Why does the site
engineer fear equipment
will not be available when
needed?
o Why is the time too long?
 The red is the 5th level, which is
the root cause.
Cause-effect Diagram
 There are some other techniques for analysing issues based on classifications:
 The Six Ms:
o Machine: factors stemming from the technology used
 Lack of suitable supporting software functionality
 Poor User Interface (UI) design
 Lack of integration between systems
o Method: factors stemming from the way the process is designed, understood
or performed
 Unclear assignments of responsibilities
 Unclear instructions
 Insufficient training
 Lack of timely communication
o Material: factors stemming from input materials or data
 Missing, incorrect or outdated data
o Man: factors stemming from wrong assessments or incorrect performance of
steps attributable to:
 Lack of training and clear instructions
 Lack of motivation
 Excessive process worker demands
o Measurement: factors stemming from reliance on:
 Inaccurate estimations
 Miscalculations
o Milieu: factors outside the scope of the process
 Delays from unresponsive external actors
 Sudden increases in workload due to special circumstances
 These factors can be visually represented in a cause-effect diagram, which resembles
a fishbone, hence the name "Fishbone diagram.
RAT Quiz

1. In an order-to-cash process, which of the following are likely to be business-value-

adding steps?
a. Check availability of products in stock
b. Match payment with invoice
c. Remind customer that payment is made
d. Confirm delivery date with customer
i. This is value adding not business value adding
2. In a complaint-to-resolution process, which are likely to be value-adding steps (from
a customer perspective)?
a. Send email to customer to acknowledge receipt of complaint
b. Investigate complaint and devise possible resolution
 c. Discuss proposed resolution with customer
d. Enter complaint details in the issue tracking system
i. This does not add value to the customer – only to the business as you
are putting it into the system to keep track.
3. Which of the following techniques are always useful when prioritising issues in a
process?
a. Cause-effect diagrams
b. Why-why diagrams
c. Pareto charts
d. Issue register
4. Value adding activities:
a. Produce value to the customer
b. Are the positive criteria (i.e. the customer is willing to pay for them)
c. Produce satisfaction to the customer
d. The customer agrees that these steps are necessary to achieve their goals
5. Business value adding:
a. The step is required in order to collect revenue or improve the business
b. Removing this step would affect the business negatively
c. The step is there in order to comply with regulatory requirements
6. Transportation is about
a. Sending materials
b. Receiving materials
c. Sending online documents
d. People moving
i. This is motion not transportation
7. Inventory could be
a. Materials
b. Work in process
8. What is included in the issue register
a. Short name
b. Description
c. Assumptions
d. Qualitative and quantitative impact

Lecture Case Pharmak

1. In terms of value proposition what type of process is Pharmak’s “Tap-n-Pick”?
a. The value proposition is that customers are prepared to pay for their script to
be made up correctly, safely, and delivered on time
2. Place the above discussion in the context of activities in processes: value add;
business value add; non-value add (waste)

 Collect and pack medicines in bag

o Divide into steps: collect medicine, obtain bag, put medicine in bag
o Value adding as the customer is happy for the technician to collect the
medicine and put it in the bag.
 Place bag in “Quality Assurance” area
o Steps: Walk to QA area, put the bags there
o Usually, any movement or motion we classify as a waste
o Non-value adding: Waste as it is a movement step
 Pick up bag
o Non-value adding as it is a movement step
 Verify medicines inside bag
o Value adding as customer would be happy to have their script correct and
verified
 Fix issue
o Business value adding
o Can also be put as rework so non-value adding
 Check whether requires special instruction
o Value adding as customer would like to know the instructions for how to take
their medicine
 Mark bag with red “X”
o Value adding
 Place bag in pickup area
 o Non-value adding as it is a movement/motion step

 Retrieve order details

o Business value adding
 Look for bag in pickup area
o Non-value adding as it is a movement/motion step

Value-added Analysis Example

Waste Analysis Example

Issue Register
 Select the most important issues(s) and document them into an Issue Register. Make
sure that you document any assumptions that you make
o Write an issue register for this process. Including a column for qualitative and
quantitative impact
 Main issue for customer:
o Long queue times, order is not ready when the customer comes for pickup
 Need to put this in table format with priority, description with what is
happening to the customer
 Note: example below missing priority
Why-Why Analysis
 Why did the customer have to wait?
o The order is not ready
 Why is the order not ready?
o I don’t know where the medicines bag is
 Why can’t I locate the bag?
o I don’t have a tracking system

Example 2
Root Cause Analysis
Week 7 - Quantitative Analysis

Different quantitative views and measure

 Remember that our process improvement efforts are:
o Better
o Faster and/or
o Cheaper
 The importance of measuring the performance of a process can not be overstated or
over estimated.
 Aligning process performance to organisational goals is the primary reason for
undertaking process management practices.
 Last we used Process Mining tools to clarify our understanding of the real world
performance of these processes, and used these tools to gain some quantitative
understanding of the processes.
 Understanding the time taken for a process (cycle time) is critical to evaluating if or
how we could make the process faster. Time be related to cost – the more people
and time a process takes, the more resources are likely to be used.
 There are also measures of quality we can use, for example:
o Product quality can be measured by defect rates
o Delivery quality can be measured by on-time, i.e., complete deliveries.
o Customer satisfaction can also be a measure of overall process quality.
 There can be trade-offs between each element, when trying to optimise the use of
resources. With time and cost, for example to ensure customers never wait at a fast-
food restaurant, you could pay to have plenty of staff who stand idle most times, but
are ready to serve a customer immediately. If you have too few staff, customers will
often wait a long time for service.
 Resource utilisation is:
Different Types of Analysis
 The most common quantitative analysis are:
o Flow analysis (of cycle time)
o Queuing analysis
o Simulation.
 Flow analysis allows us to combine what we know about the performance of
activities in a process, with the process model to calculate process performance, and
particularly to see the source of particular performance challenges in the process.
o We will drill more deeply into using flow analysis to calculate cycle time, but it
can also be used to analyse resource costs.
 Queuing analysis and simulations address one of the problems with flow analysis,
that is does not consider resource contention when considering when and how an
activity is performed.
o Queuing problems occur when process instances do not require even
resources and are not evenly spaced apart.

 To drill further into the analysis of process performance we can use probabilistic
simulations to evaluate as-if process performance as well as consider “what if”
scenarios. These simulations use the process model, and statistical information or
 assumptions about activity performance. Large volumes of process executions are
simulated, and the results can be analysis to see issues and opportunities.
 We will not cover the mathematical queuing and simulation models here, but if you
are interested to learn more, it is covered in Dumas et al (2018) Chapter 7.

Flow Analysis of Cycle Time: Deep Dive

 One of the most common time-related process performance measures for a process
is cycle time.
 The cycle time of a process is the average time between the moment an instance of a
process starts, and the moment it ends.
 For example, in an Order to cash process, we look at the moment when we receive
the PO, and we also look at the moment when the customer paid the invoice, after
we delivered the item. That time is measured for one instance, one case, or one
occurrence.
 Let us assume that in the last 12 months, we executed a business process ten
thousand times (10,000 cases), the cycle time of this order-to-cash process, over this
period of time, this is the average of the cycle time of all these 10000 cases - from
the time they started, to the moment they ended.

How to calculate the Cycle Time (CT) during the execution of the process.
 Cycle time has two components:
o The processing time (also called service time), which is the time actually
spent doing work, meaning doing activities of the process. This is when
someone is working on the process, i.e., doing work. It does not matter if it is
one or 10 people, as long as there is work done on this process instance.
o Waiting time, which is the rest of the time (when no one is working on the
process). Waiting time has several sources, most notably the fact that a given
activity may be ready to be executed, but the resource that will execute it is
not available. Waiting time could be in the form of:
 Idle time: waiting time in the process
 Transit time: time spent in transit between steps, working being
moved but no value is being added
 Queue time: The time an item is lined up before a critical or
bottleneck resource: the work item is ready to go on, but is waiting for
the resources for the next step to get to it.
 Setup time: time required for a resource to switch from one type of
task to another.
 Once we know the processing time and the waiting time for every process instance,
we can calculate the average of the processing time and the average of the waiting
time.
 The average processing time + the average waiting time is called the Cycle time.
 In summary, Cycle time = Difference between a jobs’ start and end time.
Flow Analysis
 Flow analysis is a technique to estimate and understand the
performance of a process, given a process model and performance
measures of the activities in the process.
 For a process model, if we have information about the performance
of each activity in this process model, we can calculate the process
performance.

 For example, if we are given a process model and the cycle time of each activity in
the process, we can use flow analysis to calculate the performance of the process. In
doing so, we can understand where the performance of the process is coming from,
that is, which activities in the process affect most the performance of the overall
process.

 Note: Cycle time analysis: the task of calculating the average cycle time for an entire
process or process fragment
o Assumes that the average activity times for all involved activities are available
(activity time = waiting time + processing time)
o Pay attention to time units (e.g., weeks, days, hours, minutes…)

Flow Analysis of Cycle Time

 In the following, we will show how flow analysis works using time measures

 In this example, we have this process model and the cycle time of each activity in the
process. For the flow analysis, we should be able to calculate how many days on
average this process takes.

 As a process analyst, you will take a sample and ask questions to the people in the
sample of “When did it end?”. You can also make some assumptions.
Calculating cycle time: sequential path

 Assuming task A takes 10 hours and task B takes 20 hours, where the cycle time
includes waiting time and processing time, the cycle time is 30 hours.

Multiple branch XOR

 Fragment of a process (XOR block) single entry and exit point

Example: Alternative paths (XOR Gateway)

 What is the average cycle time?
o This depends on how often we take branch B and how often we take branch
C.
 If we have 50/50, total cycle time would be 25 hours (10 from A, 10
from B, 5 from C)
o If we don’t have 50/50,
 Frequency of the branches (another measure):
 10% going to C, 90% going to B (branching probabilities)

Parallel paths (AND gateway)

Example: Parallel paths (AND gateway)

 C would not make a difference as it would have to wait for B to be completed

Rework Loop

Example: Rework Loop

 What is the average cycle time?

 We have to work out the probability of having the rework
o If we have 100% exit and 0% of rework, this would be 10+20=30 hours
o If we have 1% exit and 99% of rework,
 C=T/(1-r), so C=10+[20/(1-0.99)] = 2010 hours
 Note: will never have 0% exit because it would take forever
  If we have 80% exit and 20% rework, it will take 35 hours

Flow Analysis Equations for cycle time

Back to example
Example 2:
 Let us assume that in 90% of the cases the credit is granted. What is the average
cycle time for the process segment in this figure?

 Cycle time = 1 + 3 + 3 + (0.9x1)+(0.1x2) = 8.1

Example 3:
 Consider the process model given below, calculate the cycle time
 under the following assumptions:
o Each task in the process takes 1 h on average.
o In 40% of the cases the order contains only Amsterdam products.
o In 40% of the cases the order contains only Hamburg products.
o In 20% of the cases the order contains products from both warehouses.

Cycle Time Efficiency

 We have seen the Cycle Time and the Processing Time. We need to define the
Efficiency of a process – we call this Cycle Time Efficiency (CTE).
 CTE is the percentage of time we spend working on the process instances. If the
Cycle Time is 10 working days, and we spend 1 working day working on this case, the
remaining days are just waiting time; in this case the Cycle Time Efficiency of 10%, 1
out of 10, this is very low.
  When you want to get your Student card, it might take few days from when you
applied till when you received your student card. If it takes 2 or 3 days, this does not
mean, someone was working on your ID card for that long. The most of the time is
waiting, idle. It could be 1 or 5 days, but the actual work could be only 20 or 40
minutes.
o Note: you have to be very careful how you pick your timing in a business
process. We usually use business hours, for example 8 hours per day Monday
to Friday as a measurable cycle time, simply because people do not work
after hours or on the weekend.
 Now you should have an idea of what a Cycle Time Efficiency is. And how much time
is spent when people are working on your case? Versus how much time it takes for
you to receive that service delivered to you.

Example:

 Must find out when someone started working on the task and finished working on
that task (get information from database)
o Here, the system does not include waiting time.
 The processing time would be 8.9 hours. The cycle time efficiency is processing time/
cycle time. We first have to change 8.65 days to hours.
o We assume 8 hours a day so 8.65 x 8 hours.
 In this case, it is not a good process as most of the time is waiting time.
Example 2:
 Calculate the overall cycle time, theoretical cycle time (processing time), and cycle
time efficiency of the ministerial enquiry process introduced in Example 3.7 (page
90). Assume that the rework probability is 0.2 and the waiting times and processing
times are those given in the table below:
 In the treasury minister’s office, once a ministerial inquiry has been received, it is first
registered into the system. Then the inquiry is investigated so that a ministerial
response can be prepared. The finalization of a response includes the preparation of
the response itself by the cabinet officer and the review of the response by the
principal registrar. If the registrar does not approve the response, the latter needs to
be prepared again by the cabinet officer for review. The process finishes only once
the response has been approved.

 Solution:
CTE of Pharmak O2C as-is process

 If cycle time does not include processing time, you add each of the processing time
to each of the CT.
 If cycle time includes processing time, you do it separately and leave PT to the end
and calculate.
  It is not a good process
as there is a lot of
waiting time.

Quiz
1. What is the average CT with the probability of the upper branch being executed
being 90% and the lowest branch 10%?
a. 29 units = 10 + (0.9x20)+(0.1*10)
 2. What is the average cycle time for the process segment in this figure?
a. 10+max(20,10) = 30

3. Let’s assume that in 90% of the cases the credit is granted. What is the average cycle
time for the process segment?
a. 1+3+3+(0.9*1)+(0.1*2) = 8.1

4. Flow analysis ______

a. Can be used to calculate cycle time
5. BPM is about continuously assessing and improving process performance through
b. Time
c. Cost
d. Quality
6. Why do we need to measure process performance?
a. To align the process performance to organisational goals
b. To be able to manage the process
7. When we use the term “cycle time”, we are referring to
a. Average cycle time
8. Flow analysis is a technique to estimate and understand the _____ of a process
a. Performance

Week 8 – Process Redesign

Introduction
  Process redesign falls in the middle of the BPM lifecycle, following the analysis
stages.
 During the analysis phase, we created an issue register and conducted root-cause
analysis to identify the process issues. In this module, we will apply specific principles
and heuristics to brainstorm and derive ideas on how to solve these issues and
improve the process.
 The application of heuristics and principles will lead to improvements of certain
performance measures which ultimately leads to improvement in areas such as Cycle
Time.
 This module will demonstrate to us how to enhance our process. To begin, we must
have a comprehensive understanding of our process. This involves creating a well-
designed BPMN model of the as-is process and gaining a thorough understanding of
how it operates.
 Our objective is to create the to-be model, which will serve as the blueprint for our

process implementation. This area requires creativity, you need to come up with a
variety of ideas. To accomplish this, we will use redesign heuristics, which are a set of
principles that guide us on how to develop these ideas.

Process Redesign Methods

 In this module we will cover two methods for redesign
o 1) incremental and
o 2) Transformational approaches.
 The incremental approach (transaction) involves working with the existing process
as it is.
o For example, we may examine a pharmacy prescription and consider how we
can improve it. One of the suggestions is to remove the box system. This is an
incremental improvement. Instead of putting the prescription in the box, we
can hand it directly to a technician who can do the stock check and fill up the
 prescription immediately in the system. As such, we are keeping the existing
process as it is, by eliminating, merging or rescheduling some of the steps.
o Another method is changing the business rules when there is a DUR check. If
it is a certain type of medicine, then drug check will not be required as these
drugs belong to a well documented category. All these things are incremental
as we are keeping the existing process with the existing resources and existing
tasks by deleting a few steps. These changes are known as incremental
changes.
 On the other hand, transformational redesign means forgetting about the existing
process by starting from scratch. If we have a new process, what would it look like?
This approach allows for significant changes that completely alter the process,
resulting in a process that is entirely different from the original.
 There are two complementary approaches that we can take when looking at a
process in a company.
o In situations where politics within the organization make it challenging to
convince stakeholders to undergo significant changes, an incremental
redesign approach may be more appropriate. In this case, small changes are
made to the existing process.
o However, in some cases, the process may be so severely broken that
incremental improvements alone will not suffice. In such situations, it may be
necessary for management to recognize the urgency for change and apply a
transformational redesign approach to develop an entirely new process.

Transformational Methods

Business Process Reengineering

 Business Process Reengineering (BPR) is one of the transformational methods.
Transformative method means “forgetting about the current process” and focusing
on the process outcomes.
 In other words, we will focus on the customer’s needs and identify key requirements
and information to achieve the goals. This includes determining key decisions
required to achieve the desired outcomes, when it needs to be accomplished as well
as who needs to complete the task. The key is to achieve the desired outcome.
Additional sources for gathering the required information include event logs. Based
on the information, we need to make decisions such as whether should we serve the
required prescription, should we contact the customer, should a replacement
description be provided etc… These are some of the questions that need to be asked.
The Ford Case Study
 Ford needed to review its procurement process to:
o Do it cheaper (cut costs)
o Do it faster (reduce turnaround times)
o Do it better (reduce error rates)
 Accounts payable in North America alone employed > 500 people and turnaround
times for processing POs and invoices was in the order of weeks
 Automation would bring some improvement (20% improvement). But Ford decided
not to do it... Why?
 o a) Because at the time, the technology needed to automate the process was
not yet available.
o b) Because nobody at Ford knew how to develop the technology needed to
automate the process.
o c) Because there were not enough computers and computer-literate
employees at Ford.
o d) None of the above
 At the time, Ford acquired Mazda, who used a more lean style and
they tried to learn from Mazda.
 Mazda had only 16 people in their accounts payable at that time,
where Ford had significantly more. Therefore, they also had more
error rates – and they wanted to call for transformation processes.

As is process
 Here, accounts payable will end up
with a pile of receipts, invoices,
and purchase orders.
 They will have to do three-way
matching, where they take an
invoice, look at the corresponding
purchase order and check the
corresponding delivery receipt.
  A suggestion by the company that Ford hired was for Accounts Payable to
computerise everything given to them (as a lot were done on paper), which would
save 20% of the process.

Reengineered Process (to be)

 Purchase order is stored in database
that is accessed by different
departments in the organisation.
 When warehouse people receive
items, they can now check
corresponding orders from the
database to make sure it is correct, as
the earlier you catch a problem the
better it is.
 The system is not only used for sorting
data, but is also used to detect
exceptions and prevent them from
occurring.
 Called evaluated receipts settlement – most widely used design for purchase to pay
processes, particularly accounts payable

Outcome
 75% reduction in head count
 Simpler material control
 More accurate financial information
 Faster purchase requisition
 Less overdue payments
 Lessons:
o Why automate something we don’t need to do at all?
o Automate things that need to be done.

Business Process Reengineering Principles from Ford

 Based on the Ford case study video, 5 principles can be derived:

1. Capture information in the process once and only once at the source.
a. Shared data store
i. All process workers access the same data
ii. Don’t send around data, share it!
b. Self-service
i. Customers capture data themselves
ii. Customers perform tasks themselves (e.g., collect documents)
2. Subsume information-processing work into the real work that produces the
information
 a. Evaluated receipt settlement: when receiving the products, record the
fulfillment of the PO, which triggers payment
b. Do not have tasks that simply “catch” information. Do not have data entry
tasks in the process. Do not have a task where you only enter data. These
tasks are not constructive. Ensure the task is completed as part of their job or
work so the data gathering task is part of the actual work. This will allow the
worker to subsume the information-processing work (data entry) into the real
work that produces the information. Ensure information is part of the actual
work and it is recorded when completed.
3. Have those who use the output of the process drive the process
a. Vendor-managed inventory (VMI)
i. E.g. if Woolworths need products from suppliers, an inventory
manager will be looking at this to see that products are running low.
However, in some cases, by the time they order the products, the
inventory might have already ran out. The problem here is that the
inventory manager may not have the highest incentive to do this.
ii. The vendor would have the highest incentive as they want to sell their
products so they should have access to Woolworth’s stock level and
issue the order themselves when stock is running low.
b. Scan-based trading
i. Vendor-managed inventory may have some issues if it is borderline
unethical, scan-based trading is used.
ii. More common in manufacturing
iii. If a factory wants lots of materials, the supplier brings a track
container and they put it into the manufacturer with a door and
scanning machine at the door. What is inside the container is for the
supplier. When an employee needs to use an item from the container,
they will open the door to the container and scan the item.
Immediately, the supplier knows that the item is scanned and it now
belongs to the factory. The supplier can then invoice the factory.
iv. The items are the supplier’s as long as the items are not scanned.
v. Reduces warehouse cost
c. Push work to the actor that has the incentive to do it
i. We can refer back to the idea of performing PO matching at delivery,
rather than postponing this till the invoice is received.
 o Left diagram is not convenient for the client as they have to make the claim
themselves, wait for approval, arrange repair, get invoice etc.
o Therefore, the work is not being done by the one who has incentive to do it
(the glass vendor)
o The process can be redesigned with the glass vendor in mind, where the
claim should be made by the vendor and insurer pays directly to vendor.
4. Put the decision point where the work is performed, and build control into the
process
a. Empower the process workers
i. E.g., letting people rent equipment without approval if under $500,
but only approval when above $500
b. Provide process workers with information needed to make decisions
themselves
c. Replace back-and-forth handovers between workers and managers
(transportation waste) with well-designed controls
i. Instead of controlling every single invoice, you let the invoices go
through, and then control based on statistical basis by checking a
sample at the end of month etc.

 This applies the 4 principles above to equipment rental process.

 For principle 3, scan based containers can be used for the smaller equipment. If
equipment is not in container, they can rent it the normal way.

5. Treat geographically dispersed resources as though they were centralized.

a. If same people perform the same function in different locations, integrate and
share their work wherever possible (e.g, the account payable example where
such as having five people in one department and five others in a different
department both handling accounts payable, it is recommended to merge
these departments)
b. Larger resource pools → less waiting times even with relatively high resource
utilization
.
Transaction Methods
 We have seen Business Process Reengineering as an example of a transformational
approach to process redesign where we take certain principles and we try to
redesign our process radically according to these principles. In this part, we will talk
about an alternative approach which is more detailed, less philosophical and much
more practical to redesign a process, and then we are going to be applying some
scenarios.
 This is called Heuristic process redesign. We call it transactional process redesign –
because it is incremental. We are modifying at the level of small transactions in the
process. It is inward-looking – that means we are not trying to modify what the
process is, if we have an insurance claim and we close it, we still have this insurance
claim and we process it with the same boundaries – it starts when we put a claim
and it ends when the claim has been settled, so we operate within the scope and
context of the as-is process.
 It is analytical: this means it is based on a set of redesign heuristics that capture the
tradeoffs between the 4 dimensions: Time, Cost, Quality and Flexibility.

Performance measures: The Devil’s Quadrangle

 When you stretch it in one direction, it will shrink in the other direction.

Flexibility
 Ability to react to changes in:
o Workload
o Customer demands and expectations
o Resource and business partner availability and performance
 E.g., people are on leave, business partner lowering their performance
 Example: Following natural disasters (e.g., storms), the number of home insurance
claims increases by tenfold
o To address this surge, flexibility is required at:
 Resource level: Staff redeployment, faster performance
  Process level: Performing tasks differently to speed up the front-end
 Management: Relaxing business rules and controls where possible
 E.g., during COVID when lots of people lost jobs and were queuing up at Centrelink,
the government added flexibility in letting people make claims online

Redesign Heuristics
 The Devil’s Quadrangle is one part of the theory. The second part of the theory is the
improvement patterns by looking at how companies have been improving business
processes for many years. Over time, modifications have been implemented to
enhance the process, and we record these alterations as redesign heuristics or
patterns.
 We will go through 9 most common of the heuristics, broken down into:
o Task Level
 Task elimination
 Task composition/decomposition
 Triage
o Flow-level
 Re-sequencing
 Parallelism enhancement
o Process Level
 Specialization & standardization
 Resource optimization
 Communication optimization
 Automation

Task Level Heuristics

Task Elimination
 Eliminate non-value-adding steps wherever these can be isolated
o Forward, send, receive, ...
 Consider reducing manual control steps
(checks & approvals) by:
o Skipping them where feasible
o Replacing them with statistical
controls
o Skipping them selectively
 Consider trade-off between the cost of the
check and the cost of not doing it
o Examples:
 Procure-to-pay process: some types of employees are empowered to
trigger isolated purchases below $500 without supervisor approval
 Order-to-cash process: invoices from trusted suppliers under $1000
are not checked on a one-by-one basis
 University admission process: authenticity check is very expensive, yet
it leads to only 1% of applications being rejected
Task Composition/Decomposition
 Consider composing two tasks to eliminate transportation and reduce
“context switches”,
o Composition example:
 Procure-to-pay process: Merging two checks: “Check
necessity of purchase” and “Check budget” done by 2
different people to be done by 1 person – reduces waiting time and
improves flexibility

 OR, consider splitting a task into two and assign to separate, specialized
resources
o Make-to-order process: Separate a single thick “prepare quote” task
into “prepare bill of materials”, “prepare production plan” and
“estimate costs and delivery time”
o Useful if they can be split into tasks requiring different expertise

Triage
 Specialize a task: divide a general task into two or more
alternative tasks
o Specialization example:
 Procure-to-pay process: Separate
approvals of small purchases, medium
purchases and large purchases

 Generalize tasks: integrate two or more alternative

tasks into one general task
o Generalization example:
 Make-to-order process: Integrate quote
preparation for two product lines into
one single task

Flow-level Redesign Heuristics

Re-sequencing
 Re-order tasks according to their cost/effect
ratio to minimize over-processing
o Postpone expensive tasks that may
end up not being necessary until
the end
o Put knock-out checks first in order
to identify problems early
  Make-to-order process: If “Prepare production plan” is time-consuming, postpone it
until after the quote price has been tentatively accepted by the customer
 Procure-to-pay process: If “Check necessity of purchase” leads to 20% of knock-outs
and “Check budget” leads to 2%, perform “Check necessity of purchase” first
 University admission process: authenticity check (very slow) leads to
1% of applications being rejected while committee’s check leads to
80% of applications being rejected. Put committee’s check first

Parallelism Enhancement
 Parallelize tasks where possible to reduce cycle time

 Example:
o Procure-to-pay process: Parallelize “Approve budget” and
“Approve necessity of purchase”
o Make-to-order process: After “Prepare bill of materials”,
perform “Prepare production plan” and “Estimate costs”
in parallel

Process-level redesign heuristics

Process specialization/standardization
 Process specialization
o One process is split into multiple ones: by customer class, by geographic
location, by time period (winter, summer), etc.
o Resources are split accordingly
o Example:
 Procure-to-pay process: One process for Direct procurement (e.g. raw
materials) and one for Indirect procurement (MRO - Maintenance,
Repair and Operations)
 Claims handling process: One claims handling process for the summer
season (stormy season - peak) and one for the winter season (off-
peak)
 Process standardization
 o Two processes are integrated
o Resources are pooled together
o Example:
 Claims handling process: Integrate claims handling for motor
insurance across different brands of a group

Resource Optimisation
 Use resources of a given type as if they were in one room
o Avoid one group of people overloaded and another (similar) group idle
 Let people do work that they are good at
o However, avoid inflexibility as a result of specialization
 When allocating work to resources, consider the flexibility in the near future
o Allocate work to specialized resources first
o When there is a task, give to junior person first because the senior might be
needed for a harder task
 Avoid setups as much as possible
o Chain multiple instances of the same task [sequential]
o Batch multiple instances of the same task [parallel]

 Resource integration example:

o Claims handling process: Share resources across different types of claims (e.g.
motor and personal insurance)
 Batching example:
o Claims handling process: Batch all claims for a given geographic area and
assign them to the same resources
o University admission process: Batch all applications and handle them to the
assessment committee

Communication Optimisation
 Automate handling, recording and organization of messages
 Monitor customer interactions, record exceptions
 Optimize
o Number of interactions with customers and business partners
 Gather sufficient information to get to the next milestone (reduce
external interactions)
o Type of interaction (synchronous vs. asynchronous)
 Synchronous interactions effective to resolve minor defects
 Asynchronous to notify, inform, resolve major defects, request
additional information to reach next milestone
o Timing of interactions
 Front-loaded process: bulk of information exchange and processing
happens upfront
  Complete-Kit Concept: “Work should not begin until all pieces
necessary to complete the job are available” - Boaz Ronen
 Principles for complete-kit process design
o Provide complete and easy-to-follow instructions for
those who will initiate the process.
o If a process cannot start, the client should be notified
of all defects that could be reasonably identified at the
onset of the process
o Consider the trade-off between “incomplete-kit”
process initiation vs. roundtrip to revise and resubmit a
request
 Back-loaded process: bulk of information exchange and processing
happens downstream
 Example: CVS Pharmacy in early 2000s

Automation
 Use data sharing (Intranets, packaged enterprise systems) to:
o Increase availability of information to improve visibility and decision-making
(subject to security/privacy requirements)
o Avoid duplicate data entry and transportation
 Use network technology to:
o Replace physical flow (e.g., paper documents) with information flow
o Enable self-service via e.g., online forms and Web data services
 Use tracking technology to identify and locate materials and resources
o Identification: Bar code, RFID
o Location: GPS, indoor positioning
 Use business rules technology to automate information processing tasks (including
decisions)
 Automate end-to-end processes with a dedicated BPM system or system with
process automation functionality

SAP Signavio Process Mining [Guest Lecture]

SAP Signavio Functionality

Sap Signavio Process Transformation Suite

 SAP Signavio Process Collaboration Hub
o Enable insights and enterprise collaboration.
 SAP Signavio Process Insights
o Locate and prioritize process improvement
potential for specific SAP solutions.
 SAP Signavio Process Intelligence
o Embrace a data-driven approach to discover,
analyze, and mine your end-to-end processes.
  SAP Signavio Process Manager
o Capture, document, compare, and simulate your process portfolio.
 SAP Signavio Journey Modeler
o Design customer journeys and connect with processes.
 SAP Signavio Process Governance
o Manage and drive process management–related tasks and governance in a
human-centric way.
 SAP Process Automation
o Repair and enhance processes to improve effectiveness, efficiency, and
business user productivity.

Process Analysis and Mining

 SAP Signavio Process Intelligence:
o Connect to SAP and non-SAP systems to get a
complete view of your end-to- end processes
o Get visibility into your real process execution
o Focus to identify why, where, and how they
occurred
o Drill deeper with advanced insights and
analytics on process and experience data
o Trigger process changes in SAP Signavio Process
Manager to achieve operational and
experience excellence
 SAP Signavio Process Insights:
o Readily acquire data from SAP systems (plug and play)
o Get an overview of a broad scope
o Quickly find out where your problems are
o Benefit from ready-to-use business-friendly content
o Quickly improve your processes at the system and technical level with
improvement pathways and recommendations
SAP Process Intelligence – From Data to Insights

SAP Signavio Process Intelligence

What is Process Mining?

How does Process Mining work?

 Most IT systems record many details of what happens in a process in the form of
event / change logs
 These traces people leave behind moving through the process are called ‘digital
footprints’
 Process mining captures these digital footprints, allowing you to analyse the business
processes involved
 From Event Logs to real-life Process Models and Insights
Process Mining Basics

From transactional raw data to process mining

Events and Attributes

Under the HOOD
 PI Process Data Mangagement is the data processing component in SAP Signavio
Process Intelligence. It automates data extractions and transformations from external
source systems and loads it directly into the system.

Overview of SAP Signavio Process Intelligence

SAP Signavio Process Intelligence

Analytics Investigations

Customer Journeys

The Problem Statement

 As a Service Manager
 I do not know how my technician’s time is utilised
 What changes do we need to make to improve technician and customer experience
 How do we reduce the variations in the process

The Approach
Context – The Break to Fix Process

Recommended Actions
Qualified Benefits

Context – Standard Order to Cash Process

Defined Use Cases / KPIs

Insights
 We analysed 1.9 million Sales document items and 445K Sales orders created from
1st Mar – 5th May 2022 for 2 Sales Organisations (0500,0601) in Signavio Process
Intelligence.
 Key Insights
o 33 % of Sales Order being changed of which 18% are related to Master data-
Improvement here will increase the cycle time and efficiency
o Return order and delivery changes, attributes to about 82% manual work-
Scope for automation
o Setting Delivery Block in Sales order seems to be manual here- Automation
can be done at config level or custom exit functionality
o 17% return orders are created of which Trade return constitute the major
part- Business analysis required on why there is a high rate
o Cycle time for Sales Organisation 0500 appears to be thrice than Sales
Organisation 0601- Business analysis required
o Credit release cycle time takes an average 3 days – Scope of improvement by
automating /improved turn around in approvals
o About 26 % of order items are getting into back orders- ‘material x’ being one
material group to be focused on- Stock requirements/MRP settings can be
fine tuned to improve the cycle time here.
o 160K sales order items appear as rejected items- Scope to improve rework
and efficiency
Focus Areas

Quiz
1. Which of the following processes is the least suitable for being redesigned?
a. The production of a wafer stepping machine
i. If you redesign it, you probably won’t do much since it would just be
manufacturing
b. Providing financial advice on composing a portfolio
c. Dealing with a customer complaint
d. Obtaining your student ID card at UNSW
2. For a purchase order (PO), when do you match received items?
a. Upon receiving the delivery/items
3. Put the decision point where the work is performed, and build control in the process
a. Empower the process workers
b. Replace back and forth handovers between workers and managers
4. Self-service is to give work back to the customer and the customer thanks you
because you make them more powerful. This is:
a. Automation

Pharmak Process Redesign

 Identify the elements of the Pharmak process to assist with the focus of the re-
design (as per Dumas)
 Discuss which elements will be targeted in the re-design, how they could be
leveraged (perhaps relate to the issues of the process)

 Internal and External Customers

o The retail customers of Pharmak. The Pharmak corporation (a major
stakeholder in terms of the overall success of the business)
 Need to let the customers know when their prescription is available,
come and pick it up.
  Process Operation View
o The as-Is model
 Business process operation
o The as-is model and event log
o Do process conformance using event log
 The organisational view
o Focus on the roles in the pharmacy and retail customers
 The information used or created
o Script information, customer information (transactional/script, health history)
 The technology
o Tap and pick app, the pharmacy IS
 The external view
o The market and Pharmak’s performance in the market

 Using the issues register from week 5, add an “improvements” column

 Identify the heuristics that best match the improvements specified.
 Does each suggested improvement have a matching heuristic? If not, why not?
 Provide some extrapolation measures, both qualitative and quantitative, that may be
accrued from the suggested improvements
 Discuss the Devil’s Quadrangle in terms of possible tensions between the elements
and the desired outcome of the improvements
 Develop a to-be process model for the Tap-and-Pick app (choose different colours for
the updated parts of the model)

Solution:
 1) Notification. Customer has to wait when picking up orders. The description of the
issue can be found in the issue register. There could be seen that the Pharmak loses
approximately $100 000 per year because of issue 1 and $60 000 because of issue 2.
The two issues are closely connected, so they should be fixed together.
o Send a notification to the customer via the mobile app or via SMS once the
order is ready, so that they don’t have to come and wait for nothing. Also,
give them an estimated timeframe when the order would be ready when they
put their order, so they are happier because they can plan their day better.
 2) Order tracking. To prevent the “where’s the bag” events, which further contribute
to issues 1 and 2, the pharmacy should introduce an order tracking system using bar
codes or QR codes. When a bag is assigned to a customer (by the technician), a bar
code is attached to it and this bar code is associated to the customer record. Every
time the bag moves from one station to the next one in the process, the
corresponding actor (technician, pharmacist, customer service rep) will scan the bar
code and mark the order as “under collection”, “collected”, “ready for pickup” and
“delivered” respectively.
 3) Automated medicine check. Push the manual check performed by pharmacist to
an automated check, performed when the customer places the order. This redesign
suggestion is based on the issue number 3 in the issue register. The meaning is that
the pharmacist does not have to check manually the orders to decide if there is a
need for additional interview. This could be easily done by computer programs.
 o If the customer places an order, have him / her fill in the form of their health
indicators, special conditions, and any other relevant information. Then have
the system to fetch the information from the national health databases and
perform automatic checks if the customer needs to be aware of some drugs
or anything else. If the system detects something, the order should get the
marking that there is a need for pharmacist interview. The same information
is then told to the customer as well, so he/she knows, that the order must be
collected by the pharmacist, which is a bit more time consuming.
o The cost to pharmacist salaries are approximately ($60 000) per year, because
of this issue. The IT system development would cost about $120 000 as a
purchased development service. The whole project would benefit in two
years’ time. It would also increase customer satisfaction, because they know
if they need to talk to the pharmacist or can just get the package.
 Reference from week 5 issue register on Pharmak

Week 9 – Process Automation

Introduction
 If we look at the BPM lifecycle, you can see that we went through Process Discovery
and learnt how to capture a business
process.
 Subsequently, during Process Analysis,
we employed both qualitative and
quantitative approaches to identify
issues within the process, determine
their underlying causes, assess their
impact, and prioritise them based on
their significance.
 We utilized this analysis to develop
strategies to improve the process by
addressing the issues we identified,
thereby enhancing its efficiency and effectiveness.

 The result of the changes let us get to the to-be process model which we document
in BPMN.
 The next step is to take this to-be process model and turn it into an executable
process model. We can automate this model with the use of an Information System
(IS).
o There are a few ways of doing this:
 One way is to take the to-be process model as the basis, derive
requirements and build an IS using whatever software development
methods we want to apply.
 The second approach is suitable for scenarios where there are
numerous process changes, and it involves transforming the complete
process model into an executable format. The outcome is to deploy
the artefact in a specialised application server – this is called a
Business Process Management System (BPMS) and then generate the
forms, messages, inputs, outputs, and all requirements to execute this
process. This is how to take a to-be process model and turn it into
something that has all the information needed to execute the
process.
The Business-Engineering Gap
 The challenge is you have to deal with 2 different communities – the business
analysts who are producing the “to-be” process models and the process owners, as
well as the IT experts.
 These people need to turn the process into an artifact.

Two Sides of the BPM Story

 Conceptual “to-be” process models
o are made by domain experts
o provide a basis for communication amongst relevant stakeholders
o must be understandable
o must be intuitive and may leave room for interpretation
o contain purely a relevant set of process information
 Executable process models
o are made by IT experts
o provide input to a process enactment system - BPMS
o must be machine readable
o must be unambiguous and should not contain any uncertainties
o contain further details that are only relevant to implementation
 Between the conceptual and executable model, we should consider having a bridge
– the “to-be executed” model.
Bridging the Gap: A 5 step method
 Let’s see how we can go from the to-be process model to the to-be executed process
model and then to an executable process model. We propose a five-step method
whereby we incrementally transform the conceptual process model to obtain an
executable counterpart.
1. Identify the automation boundaries
2. Review manual tasks
3. Complete the process model
4. Adjust task granularity
5. Specify execution properties
 The first 4 steps allow us to obtain the “to-be-executed” model. In the final step, the
“to be executed” model gets transformed into the fully executable process model, by
specifying execution properties.
 Let us see this example from your textbook.

 Typical order-to-cash process with the seller, customers, supplier.

 The seller sends purchase order to suppliers and receives invoices. The suppliers
sometimes receives orders for raw materials to produce what the customer needs
 You must decide who you are and what you are going to automate – if you want to
automate the process from the perspective of the customer, you would do
something different to doing in perspective of seller/supplier.
 Assuming we want to automate the seller, the first thing we do is ONLY highlight the
seller pool.
 We want to split this seller pool further.
 This is an order-to-cash process, where an order is received for the product. We
check if the stock is available and if we have it, we can ship the product.
o If it is available, we retrieve it from the warehouse and confirm order with
customer and invoice customer.
o If the product is not available, we check if we have the raw materials to
produce the product. We contact the suppliers and if available, they will ship
materials to us. After we receive product, we can manufacture product and
confirm order with customer and get shipment address.
Step 1: Identify the Automation Boundaries
 As part of the to-be model, we need to scope the boundary. We need to know what
we are automating or what we can automate, this is because NOT everything in the
process can be automated. So, we need to start by identifying each task’s type.
 We distinguish three types of tasks:
1. Automated Tasks: Automated task is a task that can be fully automated. What
you need to do is to specify the scope of the fully automated task. For
example, make an electronic transfer.
2. User Tasks: User tasks are processes where participants need to provide input
to the process, typically via the use of web forms. These user tasks can be
partially supported by the system, but they still require human intervention.
For example, in an insurance claim handling process, we have a task for
assessing an insurance claim. You need a person – a claim handler to look at
the case and make a decision and as such, you cannot automate this decision.
A person should look at this case – but support could be provided to assess the
claim by providing all the details of the claim - the history of the customer,
what information you have about that claim etc... The provided information
helps the claim handler to make a decision about the claim. This is one of the
most common tasks.
3. Manual Tasks: Manual tasks cannot be automated, requiring physical
movement to do something. For example, retrieving a product from the
warehouse, delivering a parcel and giving it to someone. These are entirely
manual and are not easy to automate. There is a lot in the manual task that
does not easily allow us to automate it.

Specify Task Markers

 In BPMN, we have 3 types of tasks (manual which has hand icon, user which has
person icon, and automated task).
 In BPMN, there are 4 types of automated tasks.
o Send Task: When we want to notify the customer that an order has been
delivered.
o Receive Task: If we are in the process and expecting to receive a message
from the customer e.g., customer has to save confirmation email for order
 o Service Task: comes from web service e.g., making query to system to report
remote procedure
o Script Task: do not require communication with external system. Needs some
computation to take place e.g., calculate entitlement for insurance claim.

Example:

 Check stock availability can be automated  purchase order could be received

online, where we could take the product details and check if they are available or
not.
o Check raw materials  automated.
o Manufacturing product  automated, this could be a service task. We
assume the requirement for manufacturing this product from the perspective
of the application is to schedule the production of the product in the
manufacturing system.
o Message tasks of sending message to suppliers to request raw materials 
automated
 Retrieving product from warehouse  manual, cannot be automated.
o Receiving raw materials in the warehouse is also a manual task.
 Confirming order  using task, a sales manager is looking at the data of the order
and confirming the order can be delivered.
Step 2: Review Manual Tasks
 Next step, we have an annotated process model where the task has notations that
tell us whether they are automated tasks, user tasks or manual tasks.
 We do not know what to do with the manual tasks. We can review each manual task
to see whether we can automate them or have the task isolated.
o Option 1 is we have to figure out if we can hook the manual task to the
process.
o Or option 2: is to move the task out of the scope of our application.
 So, either we find a way of getting enough data from the manual task in our process
automation application to determine when the task is completed, or we can split the
process into two parts and leave the manual part out of scope (making it invisible).

 For example, if we have this manual task to retrieve a product from the warehouse,
where someone has to go and pick up the product and gets it ready for shipment. We
want to turn it into a user task where someone will enter data into the system, so
how do we do that? What should we do to turn a physical manual task involving
movement into a user task – not an automated task but a user task where someone
enters it into a system?
o We use what is called tracking technology – like barcodes, QR codes, RFID,
etc…
o So we turn it into something where someone will scan the barcode when the
product is ready for shipment, which means somewhere else the code of that
product should be recorded in the system, therefore we might need to split
the task into 2:
1. Initially, we allocate an exclusive code to each order. Subsequently, we
generate a label featuring a QR code or barcode, which is then affixed
to the product that is about to be retrieved from the warehouse. After
printing the barcode label, a manual process follows where the label is
handed over to a worker who attaches it to the product.
2. Following that, the label is scanned at the shipment bay and may be
placed on a pallet, as an instance, in preparation for shipping.
o So what do we do? We can replace this manual task with two parts:
1. We notify the warehouse workers to retrieve the product from the
warehouse and attach the corresponding label to it.
2. Subsequently, the next step involves tracking the moment when the
label is scanned at the shipment bay, indicating the completion of this
task.
 As you can see, we replaced the manual task with a send task and a receive task.
How do we do this? How do we notify the people at the warehouse? Do we send an
email or push a list to the people at the warehouse with the copy of the labels they
have to stick to the product, or we might do it in bulk (all orders at the same time)?
Here, we are not automating the manual tasks, we are tracking the tasks. When we
track these tasks, we have to isolate the manual tasks and automate the rest by
leaving the manual tasks out.
Alternative: Isolate Manual Tasks

 Process for university admission, where there is a lot of checks done on the
application.
 At one stage, there is a batch of applications sent for assessment to the committee.
This committee is not supported by the systems, they only do papers
 As a systems analyst, we assume you have tried to see if you can modify the process
to automate but it did not work due to politics and costs.
 We have split the task using the green line, where we try to automate what is on the
left and right before and after the manual task.

 Out of these 3 segments, segment 1 is the process we can automate. The

applications are handled electronically.
  We cannot automate the black box manual task (assessing applications by
committee) – there are the people that you, as the system manager, could not
convince to use the system.
 Segment 3 can automate after the decision have been made once we notify
applications of their acceptance or decline.

Example 2:
 Prescription fulfillment process:
o Once the prescription passes the insurance check, it is
assigned to a technician who collects the drugs from
the shelves and puts them in a bag with the
prescription stapled to it.
o After that, the bag is passed to the pharmacist who
double-checks that the prescription has been filled
correctly.
o After this quality check, the pharmacist seals the bag
and puts it in the pick-up area.
o When a customer arrives to pick up their prescription,
a technician retrieves the prescription and asks the
customer for their payment.
 Assume the pharmacy system automates this process.
Identify the type of each task and link manual tasks to the
system.
o Check insurance  automated task as we can connect this to the insurance
provider using some sort of APIs and find out if the customer is insured and
how much they are eligible to pay
o Collect drugs from shelves  manual task at the moment.
 Can be turned into user task, where when the order arrives, we can
create a barcode that we attach to bag. Technician can scan bar code
and mark the order has been collected. System now knows the
product has been collected.
o Check quality  manual task at the moment.
 This can be turned into a user task, where the pharmacist can take the
bag, scan it and check that it’s completed using the barcode.
o Seal bag and add to pickup area  manual task at the moment
 This cannot be turned into user task, so we are isolating or eliminating
it.
o Retrieve prescription bag  manual task at the moment
 In the picture, it has been eliminated but we can turn it into a user task
(PREFERRED)
o Collect payment  manual task at the moment
 This could be automated by having eftpos machine linked to system
where the customer can just scan their card and pay.
Step 3: Complete the Process Model
 The third step is to complete the process model. When we are doing the conceptual
process model, we might have exceptions that are very infrequent. When automating
something, we have to consider these exceptions and the path they take.
 Usually, we provide a workaround to deal with them if they are extremely
infrequent.
 If they are not too infrequent, we might need to integrate these exceptions into the
process itself.
 We have to find out the exceptions in this to-be process model and determine how
we are going to handle these exceptions.
 How do we find exceptions in a process, here are some rules to consider:
1. Every time we send something, something can go wrong. Whether we are
sending a package to a vendor, a supplier, or a customer, we must bear in mind
that there may be a lack of response or delay in receiving a response. We need
to weigh our choices carefully, considering alternative routes, and evaluating
the performance of the entire process before making a decision on how long
we are willing to wait.
2. Second is to determine what messages they might send. We use what is called
CRUD analysis. This is to determine which objects are involved in the process.
For example, if we are dealing with POs, we send POs, requests for quotations,
or we send invoices, etc. We need to know what CRUD operations we need to
provide to the external parties on those objects. If we send an invoice, do we
need to provide a way for the customers to be able to view the invoice? Do we
provide a way to update the invoice? Or do we need to provide an option to
cancel the invoice? To consider all of these operations, the best approach is to
identify the business objects that drive the process. Then, we must determine
the create, read, update, and delete capabilities of each party that may access
the data. This analysis enables us to identify the additional operations that our
 system should provide to external parties to manipulate the objects of the
process. Also, we need to specify which electronic business objects we have in
the process, and we need to determine who can create, read, update or delete
them. For every gateway or decision point, it is necessary to ascertain the
objects that are required to determine the next course of action after passing
through the gateway.

Example

 In our example we start with the to-be process model and we ask ourselves what can
go wrong in “check raw materials”.
o E.g., the materials could be unavailable so we cannot obtain them on time to
manufacture the product.
o In this case, we notify the customer and have the purchase order cancelled.
 When we check stock availability from the database, we can find out which product
is available and the quantity. We can also check for raw materials in the warehouse.
 So generally, every task in the process should have an input and output.
o This way, it gives you the scope of implementing the task.
Step 4: Adjust Task Granularity

 Principle: BPMSs add value if they coordinate handovers of work between resources.
o Aggregate any two consecutive tasks assigned to the same performer
 Sometimes, we may find that these tasks are the same. Therefore, we
should put them together if they are done by the same person to save
time.
 The more tasks you have, the more you will have to automate.
o Split tasks if they require different
performers
 For “enter and approve money
transfer”, these might be done by 2
different people so we split the task.

An Exception to the Rule

 When there are two tasks performed by the same performer but it is necessary to
split them because there is empty time between those 2 tasks.
 E.g., post documents and after a few days, you receive them. Therefore, they cannot
be performed by the same person in one single go.
Our Example

 We end up with something like this after the 4th step.

 There is ability to cancel the order which we did not have in to-be process model.
 This is the “To-be executed” process model and we can start automating the process.

Step 5: Specify the Execution Properties

 This means to bring execution into the to-be process model.
 We take each of these tasks and add execution properties to determine how the
tasks will be performed.
o Process variables, messages, signals, errors
 Turn tasks into variables of certain data type.
o Task and event variables and their mappings to process variables
o Service details
 What service are we calling and where is it located?
o Code snippets
o Participant assignment rules and user interface structure
o Task, event, and sequence flow expressions
o BPMS-specific: work queues, forms, connectors
 E.g., connectors to Oracle database
Enlift Lecture

 Robotic processes can make connections even on unstructured documents e.g., to

check ABN of something, even if it’s not in the same format, robotics can be taught
to know the ABN value is always next to the word “ABN:”.
o Can be a key part to solve Admissions processes
 If you feed machines enough information of customer queries and what products
they ended up choosing based on the solutions given, they can start giving these
solutions themselves.
 For sending out contracts, someone may be able to prepare this, and automation can
send it to the person who needs to authorise. For manual forms, you don’t know
how many different types are coming in, how long it takes etc. However, automation
will allow for this information to be known and allow continuous improvement.
 We may need to do as much work as we need upfront with human touchpoints and
then use automation as we don’t want a human touch point every 5 steps etc. We
may need to change the structure and use business process reengineering to do this.
Admissions Case Study

 Students putting in academic considerations request case.

 Sort out which students need the most help more quickly.

Quiz
1. When automating a process, all parts of that process that cannot be automated
should be removed
a. False
2. When automating a process, it is NOT recommended to breach each task to as many
steps as possible
a. True, it may create more problems for you
3. The to-be-executed model is:
a. A bridge between the conceptual and executable process model
b. The responsibility of the system analysts
4. What is the first step to reach the executable process model?
a. Identify the automation boundaries
5. When we automate a process, we must automate all tasks in it, otherwise the
process is considered not automated.
a. False, we cannot automate everything – we must put a boundary and the
human role must still be there.
b. For UNSW Admissions, you must have someone look at the application. For
example, if someone was doing medicine, would you trust someone getting in
without looking at their profile?
Pharmak Example
 Collect and pack medicines in bag  can split into “collect medicines” and “check
and pack medicines”.
o Collect medicines can be a service task (automated)
o Check and pack medicines will be a manual task
 Put bag in QA area  manual task
 Pick up bag  manual task
 Verify customer details  user task
o This is a user task as something has to do something using a computer
 Verify medicine correctness  user task
 Fix issue  manual task
 Check for special instruction  manual task
 Mark the bag with Red X  manual task
 Pack bag in pickup area  manual task

 When the customer comes and the medicine is not ready, you can automate by
placing lockers where you send a PIN code to the customers’ app where they can
scan using smartphone or enter code manually to open the locker and get the
medicine.
 By doing this, a lot of this second part of the process can be automated. The
customer will only have to come to the service desk when there is a red X on the
back of the medicine.
 NOTE: THIS IS TO-BE EXECUTED MODEL ONLY THAT USES THE ICONS ON BPMN. FOR
ASSIGNMENT, IT IS TO-BE ONLY