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Archive of posts tagged process design

What is Process Mining?

Process mining techniques allow for extracting information from event logs. Process mining takes existing data records from your IT systems, extracts the business process (and its variations) and automatically generates understandable visualizations of the business process. Because existing IT records are the basis for process mining, objective visualizations of the real business process are obtained. The following video gives a short introduction on process mining:

See the following ressources for further information:

Developing an Enterprise Process Model Based on Cascading and Segmentation of Business Processes: A Case Study

This article introduces the study “Process Cascade- and Segmentation-Based Organizational Design: A Case Study” by Kohlbacher M. and Weitlaner D., which was presented at the IEEE International Conference on Industrial Engineering and Engineering Management in Singapore in December 2011.

The paper discusses the approach of process cascading and segmentation, a design principle which helps organizations to build its structure around its customer-oriented business processes. Cascading of processes is an approach where the organization’s business process design is based on internal customer-supplier relationships which ensure that every business process of the organization has a clearly defined (internal) customer which places an order and also receives the results. Segmentation of business processes refers to the idea of creating process variants of business processes which face heterogeneous market and/or customer requirements. Both principles – cascading and segmentation of business processes – complement each other. The paper shows how these design principles are applied in practice by using an Austrian manufacturing firm as a case study.

The poster of the presentation can be found here; the paper is available via IEEE Xplore.

The Principle of Process-Cascading and its Performance Impact

This article summarizes the study “The Performance Effects of Process Cascade-Based Organizational Design” by Kohlbacher M. and Weitlaner D., which was presented at the IEEE 2011 7th International Conference on Next Generation Web Services Practices in Salamanca, Spain, in October 2011.

An organizational design based on process cascades is an approach where the business process design of the organization is based on internal customer-supplier relationships. This design principle was originally developed by Schantin (2004) and Suter (2004; 2009). The principle is based on the idea that, in general, each business process is activated by an order which is placed by another business process. The receiving process executes the order and delivers the results back to the ordering process. The ordering process therefore acts as an internal customer for the receiving process, which acts as an internal supplier. The approach is recursive, i.e. the supplier process may act itself as a customer process which places an order to a third process, and so forth. The principle is illustrated by the following figure:

The principle of cascading business processes.

The principle of cascading business processes.

The study discusses the idea of process-cascade based organizational design and empirically investigates the impact of such a design on firm performance. The empirical findings of the study are that firms which implemented process-cascade-based organizational design achieve higher firm performance. The paper is available via IEEE Xplore.

Survey on Process Management: Definition and Documentation of Business Processes

This article discusses the issue “documentation of business processes” of the process management survey. Details on the survey (research design, sample, etc.) can be found here.

Most firms have defined a complete and uniform enterprise process model. The item “Our firm has developed a complete and uniform enterprise process model illustrating the business processes of the organization” was rated by the firms in the sample as follows:

  • 22,00%: Disagree
  • 16,67%: Neither agree nor disagree
  • 61,33%: Agree

Most firms document the design of their business processes (and keep the documentation up-to-date). The statement “The business processes of our firm are documented in a sufficiently detailed way” was rated by the firms in the sample as follows:

  • 15,33%: Disagree
  • 29,33%: Neither agree nor disagree
  • 55,33%: Agree

The statement “Process documentation is always timely updated after process design has changed” was rated by the firms in the sample as follows:

  • 18,00%: Disagree
  • 28,00%: Neither agree nor disagree
  • 54,00%: Agree

Most firms have defined inputs, outputs, customers and suppliers of their business processes. The statement “Inputs and outputs of our firm’s processes are clearly defined” was rated by the firms in the sample as follows:

  • 16,67%: Disagree
  • 36,67%: Neither agree nor disagree
  • 46,67%: Agree

The statement “The internal/external customers as well as the internal/external suppliers of our organization’s processes are clearly defined” was rated by the firms in the sample as follows:

  • 13,51%: Disagree
  • 37,16%: Neither agree nor disagree
  • 49,32%: Agree

The Characteristics of Process Orientation. Part 6: Process-Oriented HR-Systems

Human resources systems have to support the process approach (Hammer, 2007). In a process-oriented enterprise, the process design should drive job descriptions. Also, incentive systems should be implemented which emphasize the process’ needs.

  • Job descriptions based on process design: The process’ design should drive role definitions, job descriptions and competency profiles.
  • Reward systems (incentive systems) that emphasize the needs of the organization’s business processes: Old reward systems based on the functional model are no longer viable in a process-based organization (Armistead and Rowland, 1996). Traditional vertical management systems pull people in one direction, whereas they should work for the interest of interfunctional processes. Therefore, management systems also need to emphasize the process’ needs, otherwise conflict and confusion ensue, lowering performance (Hammer and Stanton, 1999).

Cascading and Segmenting: Two techniques of Designing an Organization’s Business Process Model

The idea of process cascades (representing internal customer-supplier relationships between business processes of an organization) was originally developed by Tipotsch (1997), Schantin (2004), and Suter (2004). The idea is illustrated in the figure below. Process A, acting as an internal customer, places an order to Process B, acting as an internal supplier. After receiving the order, Process B deals with the order and delivers the result back to Process A. Cascading of business processes is an recursive approach, i.e. process B may itself place an order to another process, and so on.

Cascading business processes

The idea of cascading business processes

The idea of business process segmentation was also originally developed by Tipotsch (1997), Schantin (2004), and Suter (2004). Other authors refer to this idea as well. For instance, Osterloh and Wübker (1999) call it “Triage”, and Gaitanides (2007) calls it “process variant”. The idea is illustrated in the figure below.

Segmentation of business processes

Segmentation of business processes

Segmentation of a business process refers to the idea of creating process variants of a business process which faces heterogeneous market and/or customer requirements. The objective is that every process variant created can then handle homogeneous requirements. Some possible examples of business process segmentation are depicted in the figure below (segmentation by degree of business case complexity, customer type and customer location).

Business process segmentation examples

Business process segmentation examples

The Characteristics of Process Orientation. Part 1: Design and Documentation of Business Processes

Business processes present a difficult challenge in identification and analysis since they are often unknown quantities, have no names, and are not visualized in organizational charts (Kiraka and Manning, 2005). A prerequisite for managing an organization based on its processes is to know which business processes are performed within the organization and how they are related to each other. A precise definition of the company’s business processes is the starting point for process management (Hinterhuber, 1995).

Design of a complete and uniform enterprise process model. The enterprise process model, which is also sometimes referred to as “macro design” (Suter, 2004), “macro model” (Schantin, 2004), or “macro enterprise process map” (Gardner, 2004), gives an overview of the organization’s business processes.

Documentation of processes. Business processes need to be specified in terms of how they are to be executed (Hammer, 2007).

Update of process documentation. Without a timely update of the documentation after a change of the process design, people will soon discontinue to use the documentation, making the documentation of business processes largely useless.

Definition of inputs and outputs for each process. Since processes can be defined as collections of tasks and activities that transform inputs into outputs, the specification of a business process needs to include a definition of these inputs and outputs (Walter, 2009; Schantin, 2004).

Definition of suppliers and customers for each process. A primary characteristic of a process is that it is initiated by and that it must provide results for a customer (Davenport and Short, 1990; Childe et al., 1994).