BPM at FHNW - Fachhochschule Nordwestschweiz

= steps organizations take to generate customer value!

"a structured, measured set of activities designed to produce a specified output for a particular customer or market. It implies a strong emphasis on how work is done within an organization, in contrast to a product focus’s emphasis on what." (Davenport, 1993, p.5)

"A business process as a collection of inter-related events, activities, and decision points that involve a number of actors and objects, which collectively
lead to an outcome that is of value to at least one customer.” (Dumas et al., 2018)

What are examples for business processes?

–Order-to-Cash
–Quote-to-Order
–Procure-to-Pay
–Issue-to-Resolution
–Application-to-Approval

BPM is a management discipline that requires an end-to-end organizational view. (cf. Jeston & Nelis, 2008)

BPM is a holistic and principle-oriented discipline concerned with efficient and effective business processes. (Schmiedel & vom Brocke, 2015)

“[Business strategy is] the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals".

“Alignment focuses on the activities that management performs to achieve cohesive
goals across the organization.”

Strategic alignment is “the extent to which the IS strategy supports, and is supported by, the business strategy.”

“Strategic alignment is defined as the tight linkage of organizational priorities and enterprise processes enabling continual and effective action to improve business performance.”

–Successful strategy implementation requires its prior operationalization.
–That is, KPIs need to be specified which determine the contribution of processes to strategy implementation, or the extent to which strategic goals are reached.
–One method of aligning processes with corporate strategy is an instrument known as the Strategic Process Alignment matrix (SPA matrix).
–The SPA matrix establishes formal, KPI-based relations between strategy and
those processes with strategic relevance.

Strategic Process Alignment Matrix

–Assess existing business strategy for process directions
–Consult with process customers for performance objectives
–Benchmark for process performance targets and examples of innovations
–Formulate process performance objectives
–Develop specific process attributes

–Process objective
>Overall process goal and numeric target, e.g.,
»Reduce new drug-development cycle time by 50% in three years
»Double customer service satisfaction levels in two years
»Reduce involuntary employee turnover to 10% by the end of the next fiscal year
»Reduce processing costs for customer orders by 60% over three years
–Process attribute
> Principles of process operation, e.g.,
» Link order management systems worldwide, but keep them local
»Create automated sales assistant tools for product information and pricing
»Offer direct shipments from manfuacturing to customers – no warehouses
»Render invoices and payments electronically

The term business process governance refers to the direction, coordination, and control of individuals, groups, or organizations that are at least to some extent autonomous: that is, not directly subject to the same hierarchical authority.

3 Indicators
–Strategic Importance:
> Find out which processes have the greatest impact on the strategic goals.
> Consider profitability, uniqueness, or contribution to competitive advantages.
> Select those processes for process management that relate to strategy.
–Health:
> Determine which processes are in the deepest trouble.
> These processes may profit the most from BPM initiatives.
–Feasibility:
> Determine how susceptible process is to BPM initiatives, incidentally or continuously.
> Culture and politics may be obstacles.
> BPM should focus on those processes where it is reasonable to achieve benefits.

–Vertical / hierarchical authority
> Pro: effective for activities that occur entirely under the direct authority of a line manager
> Con: Not sufficient for business processes which cross intra- or interorganizational lines