Business Process Analysis
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Transcript Business Process Analysis
Business Process
Analysis and Modelling
Integrerade affärssystem och
affärsprocesser
Contents
ARIS
– eEPC method
Business process management
– Process measures
– Process cost analysis: ABC-costing
ARIS Background
ARIS: a recognized market leader in
business modelling (Gartner Group, 1997)
Developed by Prof. August-Wilhelm Scheer
at Department of Information Systems,
University of Saarland, Germany, in
collaboration with SAP AG.
ARIS: a product of IDS Prof. Scheer GmbH
(set up in 1992; a public company IDS
Scheer AG in 1999; merged with
Changeware Group in 2006)
ARIS
(Rob Davis, 2001)
ARIS: Architecture of Integrated
Information Systems
– a method rather than one technique
– a framework for business modelling (not only
limited to process modelling, but focus on the
support of business processes)
– support requirement definition, conceptual
design to logical design and physical
implementation descriptions
ARIS Toolset
– software tool/environment for modelling
following the ARIS method
ARIS
Business process models in accordance with
the ARIS concept and framework
ARIS provides a modelling framework and
method
– a semi-conceptual method for describing
process-organizational issues (organization
charts, network diagrams moved one step
further in ARIS)
– helps to captures a wide range of descriptive
aspects of business process
– tools for generating, constructing and
configuring models
ARIS Method
Aims at modelling all aspects of a complex
business. It can model:
– processes, data, organizations, systems, information,
products, knowledge, business objectives, information flows
ARIS:
– supports software system modelling using UML
– uses Event-driven Process Chain (EPC) methodology
– has a strong focus on modelling complex business
relationships
– is a multi-user process design tool
– is capable of fully distributed model development
One main use is defining business implementations
of the SAP R/3 ERP systems
Business process models in ARIS
Business process models should address
multiple aspects of business processes:
process structure, organization, document
resources, etc. – numerous description
methods are necessary
ARIS was developed independently of any
particular method; ARIS concepts
especially excel in creating enterprisewide as well as inter-business business
models and production models
ARIS Background
Process models need to be linked to the achievement
target and objects, with metrics gathering built into
them
Regulations places additional requirements on a business
More complex relationships between businesses: no
longer is there a simple business-to-business competitor
or supplier-customer relationships. The interfaces
between businesses are now many and complex.
The move to e-business operations will make these
interfaces more common and will require them to be
automated.
How the nature of business has changed over the last
few decades and how business modelling has changed
with it?
ARIS models
Acknowledge links between models
It is becoming necessary to share parts of
your business model with other businesses,
suppliers, quality assessment organizations,
regulators, etc.
a global business modellling method will be
ideal, but of course no such method exist
– a number of well-known, slightly different
business modelling methods exist: ARIS,
Catalyst, Zackman Framework
– language standards, BPML (www.bpmi.org),
UML
ARIS
A framework that provides a way of
expressing business concepts sufficiently
precise to allow detailed analysis
An architecture for describing business
A set of modelling methods with an
associated meta-model
The core of ARIS concept is the
representation of business processes in
diagramatic forms as chains of events and
process tasks.
It can also model other business objects
and relationships between any objects
ARIS Concepts
Business modelling: a single large model
from one single viewpoint is not so useful
It is more useful to build many small models
from specific viewpoints and relate them to
one another
Each model may contain many objects and
relationships. Objects used in one model
may be used in another model.
For any specific purpose, only one or two
models will be built, supplemented by a
small number of special models focusing on
certain small aspects
The ARIS Concept
Different models can be built from four different
views:
– Organizational view: What types of organizational devices
exist? (e. g. purchase, distribution, accountancy)
– Data view: What types of information are relevant? (e. g.
customers, suppliers, article, list of materials)
– Functional view: What types of functions are to be
executed? (e.g. create enquiries, verify accounts)
– Control view: Coherency of data, functions and
organizational devices
The ARIS House or ARIS House of Business
Engineering (HOBE)
ARIS House
ARIS Model types
Different description levels in ARIS
ARIS Concepts and principles
ARIS supports all phases of business
design:
–Phase I
–Phase II conceptual development
(capture and model requirements;
capture and model conceptual design)
–Phase II logical development
ARIS
Analysis and simulation tools can be used to test
the models at each stage and validate it against the
objectives and requirements
Conceptual design:
– defines in very broad terms how the objective can be
reached
Logical design
– decompose these ideas into a detailed design, but
does not tell how the design will be implemented
Physical design:
– shows in details how the design will be implemented
using specific equipment, software applications or
communication devices
ARIS model - Function tree
ARIS model - Organigram
ARIS model – Technical term model
ARIS model – eEPC (enhanced
Event-driven process chain)
eEPC combines the different views (data,
organization, function, resources) in one single model
Business process management
- process measures and cost
analysis
Business Process Management
5 steps:
– Business process
– Business process
– Business process
– Business process
– Business process
evaluation
identification
analysis
modelling
change/implementation
monitoring, control and
Business Process Performance Variables
(Alter, 2002)
Activity rate
Output rate
consistency
productivity
cycle time
downtime
security
cost
What is important is to find the right value
for each process performance variable, and
find balance between the measures.
How to evaluate business processes?
Measuring process performance
– achieved business objective or not?
– how well does it support business goals?
– how to estimate process performance?
• simulation
– Performance measurement:
• qualitative measures
• quantitative measures
– DEA method: a technology for the empirical
calculation of the most effective combination of
resources that can be used to perform a process
that is performed in many different places (of
similar organization)
Cost Analysis
One of the most common motivation of BPM is to
reduce costs.
Cost is one dimension of measurement of inputs and
outputs.
It may prove to be difficult to decide how much a
process costs:
– one problem is in deciding how to allocate costs that arise
from multiple processes.
– infrastructure (overhead) is a major problem
Beyond the concept of cost, the main concern is
about the bottom line (i.e. margin or profit).
Reducing costs does not automatically lead to
increased benefits.
Cost analysis
Pay attention to different types of costs:
– variable and fixed costs
– average costs, total costs, opportunity costs…
Charts of accounts can be a useful source of
cost information
Cost classification:
– employment expenses, employee travel,
property occupancy costs, utilities, buildings, raw
materials, office supplies…
– Some costs are related to infrastructure where
as other costs are related directly to production
and delivery of goods and services.
Cost analysis
Conventional approach to cost allocation:
– overhead per person
– overhead per machine hour
– overhead per square meter
Opportunity costs: consider alternatives to
the decision to do the process
– could resources be used for a different process?
– could the process be done by someone else at a
lower cost?
– would a different process lead to higher
revenues or higher added value?
Cost analysis – cost drivers
Cost drivers are a step towards
Activity based costing
Cost drivers can be identified from
activities performed – in other
words identifying the components
of business processes
Events and inputs are usually the
cost drivers of processes.
Cost analysis – Activity Based Costing
Conventional approach to cost allocation
poses problems because it allocates costs
to functions rather than processes
Activity Based Costing is an alternative
approach, which is concerned with
identifying activities (processes) that
contribute the most to the emergence of
overhead costs.
Determines how a process and its subprocesses consume resources by
identifying cost drivers to activities
Example: ABC-costing
A
B
Units produced
10000
50000
Labor input (hrs) (cost: 10€/hrs)
1000
500
Machine hours input (cost: 5€/hrs) 2000
5000
Overhead: 25000 €
Total costs= (1000 +500)*10 + (2000+5000)*5 + 25000= 75000
Direct production costs of A and B can be defined, but what about allocation of
overhead? We can use ”units produced”: Overhead/unit= 25000/60000=0.4166
Production costs A= (1000*10) + (2000*5) + (10000*0.4166)=24166,66
Production costs B= (500*10)+ (5000*5) + (50000*0.4166)=50833,33
ABC-costing (2)
We need to identify the cost drivers of the
production process:
– Labor? Machine hours?
– Labor as cost driver:
• Labor cost driver 25000/(1000+500)=16,666
• Production costs A= (1000*10) + (2000*5) +
(1000*16,666)=36666,66
• Production costs B= (500*10)+ (5000*5) +
(500*16,666)=38333,33
– Machine hours as cost driver:
• Machine hours cost driver: 25000/(2000+5000)= 3,571
• Production costs A= (1000*10) + (2000*5) +
(2000*3,571)=27144
• Production costs B= (500*10)+ (5000*5) +
(5000*3,571)=47856
ABC-costing (3)
Depending on how overhead is
alllocated, costs will be different
When performing process analysis, it is
important to consider how the cost
calculation method will be influenced by
different cost drivers.
ABC helps understanding the cost
structure.