Business process

Business process is covered here in 6 connected parts: Business process, Business process management, Business process management in the Philippines, History of Business process management, Culture and traditions of Business process management, Business process management: key facts and timeline.

Business process

A business process, business method, or business function is a collection of related, structured activities or tasks performed by people or equipment in which a specific sequence produces a service or product (that serves a particular business goal) for a particular customer or customers. Business processes occur at all organizational levels and may or may not be visible to the customers. A business process may often be visualized (modeled) as a flowchart of a sequence of activities with interleaving decision points or as a process matrix of a sequence of activities with relevance rules based on data in the process.^[1]

Overview

A business process begins with a mission objective (an external event) and ends with the achievement of the business objective of providing a result that provides customer value. Additionally, a process may be divided into subprocesses (process decomposition), the particular inner functions of the process. Business processes may also have a process owner, a responsible party for ensuring the process runs smoothly from start to finish.^[1]

Adam Smith

An important early (1776) description of processes was that of economist Adam Smith in his famous example of a pin factory. Inspired by an article in Diderot's Encyclopédie, Smith described the production of a pin in the following way:^[1]

Frederick Winslow Taylor

American engineer Frederick Winslow Taylor greatly influenced and improved the quality of industrial processes in the early twentieth century. His Principles of Scientific Management focused on standardization of processes, systematic training, and clearly defining the roles of management and employees. His methods were widely adopted in the United States, Russia, and parts of Europe and led to further developments such as "time and motion study" and visual task optimization techniques, such as Gantt charts.^[1]

Peter Drucker

In the latter part of the twentieth century, management guru Peter Drucker focused much of his work on the simplification and decentralization of processes, which led to the concept of outsourcing. He also coined the concept of the "knowledge worker," as differentiated from manual workers – and how knowledge management would become part of an entity's processes.^[1]

Other definitions

a structured, measured set of activities designed to produce a specific 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. A process is thus a specific ordering of work activities across time and space, with a beginning and an end, and clearly defined inputs and outputs: a structure for action. ...^[1]

Workflow

Workflow is the procedural movement of information, material, and tasks from one participant to another. Workflow includes the procedures, people and tools involved in each step of a business process. A single workflow may either be sequential, with each step contingent upon completion of the previous one, or parallel, with multiple steps occurring simultaneously.^[1]

Business process re-engineering

Business process re-engineering (BPR) was originally conceptualized by Hammer and Davenport as a means to improve organizational effectiveness and productivity. It can involve starting from a "blank slate" and completely recreating major business processes, or it can involve comparing the "as-is" process and the "to-be" process and mapping the path for change from one to the other. Often BPR will involve the use of information technology to secure significant performance improvement.^[1]

Business process management (BPM)

Though the term has been used contextually to mixed effect, "business process management" (BPM) can generally be defined as a discipline involving a combination of a wide variety of business activity flows (e.g., business process automation, modeling, and optimization) that strives to support the goals of an enterprise within and beyond multiple boundaries, involving many people, from employees to customers and external partners. A major part of BPM's enterprise support involves the continuous evaluation of existing processes and the identification of ways to improve upon it, resulting in a cycle of overall organizational improvement.^[1]

Knowledge management

Knowledge management is the definition of the knowledge that employees and systems use to perform their functions and maintaining it in a format that can be accessed by others. Duhon and the Gartner Group have defined it as "a discipline that promotes an integrated approach to identifying, capturing, evaluating, retrieving, and sharing all of an enterprise's information assets. These assets may include databases, documents, policies, procedures, and previously un-captured expertise and experience in individual workers."^[1]

Related: Business process management · Business process management in the Philippines · History of Business process management

External references: ^[1][2][3]

Business process management

Business process management (BPM) is the discipline in which people use various methods to discover, model, analyze, measure, improve, optimize, and automate business processes. Any combination of methods used to manage a company's business processes is BPM. Processes can be structured and repeatable or unstructured and variable.^[4]

Evolution and scope

Business process management has evolved from earlier management and quality movements, including total quality management and business process reengineering, into a broader organisational discipline concerned with the end-to-end governance, performance, and continuous improvement of processes.^[4]

Comparison with program management

It can be differentiated from program management in that program management is concerned with managing a group of inter-dependent projects. From another viewpoint, process management includes program management. In project management, process management is the use of a repeatable process to improve the outcome of the project.^[4]

Comparison with project management

A key distinction between process management and project management lies in repeatability and predictability. If the structure and sequence of work are unique, then it is a project. In business process management, a workflow can vary from case to case due to gateways, conditions, and business rules.^[4]

Changes

The concept of business process may be as traditional as concepts of tasks, department, production, and outputs, arising from job shop scheduling problems in the early 20th century. The management and improvement approach as of 2010, with formal definitions and technical modeling, has been around since the early 1990s (see business process modeling). Note that the term "business process" is sometimes used by IT practitioners as synonymous with the management of middleware processes or with integrating application software tasks.^[4]

Life-cycle

Business process management activities can be arbitrarily grouped into categories such as design, modeling, execution, monitoring, and optimization.^[4]

Design

Process design encompasses both the identification of existing processes and the design of "to-be" processes. Areas of focus include representation of the process flow, the factors within it, alerts and notifications, escalations, standard operating procedures, service level agreements, and task hand-over mechanisms. Whether or not existing processes are considered, the aim of this step is to ensure a correct and efficient new design.^[4]

Modeling

Modeling takes the theoretical design and introduces combinations of variables (e.g., changes in rent or materials costs, which determine how the process might operate under different circumstances).^[4]

Execution

Business process execution is broadly about enacting a discovered and modeled business process.^[4]

Related: Business process · Business process management in the Philippines · History of Business process management

External references: ^[4][5][6]

Business process management in the Philippines

One of the most dynamic and fastest growing sectors in the Philippines is the information technology–business process outsourcing (IT-BPO) industry. The industry is composed of eight sub-sectors, namely, knowledge process outsourcing and back offices, animation, call centers, software development, game development, engineering design, and medical transcription. The IT-BPO industry plays a major role in the country's growth and development.^[7]

History

In 1995, the Special Economic Zone Act, thus establishing the Philippine Economic Zone Authority, was passed by the Philippine Congress. This Act provided lower area requirements for developments and tax incentives, which consequently attracted foreign investors.^[7]

BPO setups (captive markets and offshoring/third party outsourcing)

Due to the lower cost of producing specific goods or services in another country, outsourcing has become a common business strategy for many multinational firms. There are two common practices of outsourcing, and these are using third-party outsourcing or a captive market. These two differ based on the level of risk management, cost effectiveness or the need for managerial control.^[7]

Third-party outsourcing

Outsourcing gives a perfect job environment for the people in other nations and significantly the states with the economic issues. Additionally, it would aid the companies to save more cash. Therefore, it can also aid the interior economy.^[7]

Related: Business process · Business process management · History of Business process management

External references: ^[7][8][9]

History of Business process management

Business process modeling (BPM) is the action of modeling processes of an enterprise. BPM is used to analyze, improve, and possibly automate business processes. BPM is typically performed by business analysts in collaboration with subject matter experts.^[10]

Overview

According to the Association of Business Process Management Professionals (ABPMP), BPM is one of the five key disciplines within business process management, alongside process analysis, design, performance measurement, and transformation. The skill is recognised in the SFIA framework as Business modelling.^[10]

History

Techniques to model business processes, such as the flow chart, functional flow block diagram, control flow diagram, Gantt chart, PERT diagram, and IDEF have emerged since the beginning of the 20th century. The Gantt charts were among the first to arrive around 1899, the flow charts in the 1920s, functional flow block diagram and PERT in the 1950s, and data-flow diagrams and IDEF in the 1970s. Among the modern methods are Unified Modeling Language and Business Process Model and Notation.^[10]

Objectives

The objective of business process modeling is a, usually graphical, representation of end-to-end processes, whereby complex processes are documented using a systematized representation. BPM typically begins with determining the environmental requirements: The goal of the modeling, the model addressees, and the business processes.^[10]

Related: Business process · Business process management · Business process management in the Philippines

External references: ^[10][11][12]

Culture and traditions of Business process management

Management (or managing) is the administration of organizations, whether businesses, nonprofit organizations, or government bodies through business administration, nonprofit management, or the political science sub-field of public administration respectively. It is the process of managing the resources of businesses, governments, and other organizations. Larger organizations generally have three hierarchical levels of managers, organized in a pyramid structure:

Senior management roles include the board of directors and a chief executive officer (CEO) or a president of an organization.^[13]

Etymology

The English verb manage has its roots in the fifteenth-century French verb mesnager, which often referred in equestrian language "to hold in hand the reins of a horse". Also the Italian term maneggiare (to handle, especially tools or a horse) is possible. In Spanish, manejar can also mean to rule the horses.^[13]

Definitions

Henri Fayol (1841–1925) stated: "To manage is to forecast and to plan, to organize, to command, to co-ordinate and to control".^[13]

Theoretical scope

Management involves identifying the mission, objective, procedures, rules and manipulation of the human capital of an enterprise to contribute to the success of the enterprise. Scholars have focused on the management of individual, organizational, and inter-organizational relationships. This implies effective communication: an enterprise environment (as opposed to a physical or mechanical mechanism) implies human motivation and implies some successful progress or system outcome.^[13]

Related: Business process · Business process management · Business process management in the Philippines

External references: ^[13][14][15]

Business process management: key facts and timeline

Definitions

The Workflow Management Coalition, BPM.com and several other sources use the following definition:^[4]

Related: Business process · Business process management · Business process management in the Philippines

External references: ^[4][16][17]