INTRODUCTION TO BUSINESS PROCESS
MANAGEMENT
Business Process Management (BPM) = the art and science of overseeing how work is performed in an
organisation to ensure consistent outcomes and to take advantage
of improvement opportunities
Improvement initiatives may be one-off or of a continuous nature; they may be incremental or
radical.
BPM is about managing entire chains of events, activities, and decisions (= processes) that ultimately
add value to the organisation, and its customers.
1.1 PROCESSES EVERYWHERE
Each organization has to manage a number of processes.
Examples of processes:
• Order-to-cash
o performed by vendor
o starts when a customer submits an order to purchase a product or a service
o ends when the product or service has been delivered to the customer and the customer has
made the corresponding payment
• Quote-to-order
o precedes an order-to-cash process
o starts when a supplier receives a Request for Quote (RFQ) from a customer
o ends when the customer places a purchase order based on the received quote
o order-to-cash + quote-to-order = quote-to-cash
• Procure-to-pay
o starts when someone in an organisation determines that a given product or service needs to
be purchased
o ends when the product or service has been delivered and paid for
o counterpart of the quote-to-cash process in the context of B2B interaction
o for every procure-to-pay process there is a corresponding quote-to-cash process on the
supplier’s side
• Issue-to-resolution
o starts when a customer raises a problem or issue
o ends when the customer or the supplier or preferably both agree that the issue has been
resolved
o variant in insurance companies: claim-to-resolution
• Application-to-approval
o starts when someone applies for a benefit or privilege
o ends when the benefit or privilege is either granted or denied
o government agencies, admissions process in a university
Business processes are what companies do whenever they deliver a service or a product to customers. The way
processes are designed and performed affects both the quality of the service that customers perceive and the
efficiency with which services are delivered.
Business Process Management 2021-2022
1
, 1.2 INGREDIENTS OF A BUSINESS PROCESS
A business process encompasses a number of events and activities:
• Events: things that happen atomically, which means that they have no duration
• An event may trigger the execution of a series of activities
• Task: an activity that is rather simple and can be seen as one single unit of work
• The term task refers to a fine-grained unit of work performed by a single process participant, while the
term activity is used to refer to both fine-grained or coarse-grained units of work
• Decision points: pints in time when a decision is made that affects the way the process is executed.
• Actors: internal (= process participants) or external (= business party)
• Physical objects
• Informational objects
• Outcomes: result of the execution of a process → Ideally, an outcome should deliver value to the actors
involved in the process – positive and negative outcomes
• Customer: actor that consumes the output
FIGURE 1: INGREDIENTS OF A BUSINESS PROCESS
Business process = 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.
BPM = a body of methods, techniques, and tools to identify, discover, analyze, redesign, execute, and monitor
business processes in order to optimize their performance.
→ business processes are the focal point of BPM + BPM involves different phases and activities in the lifecycle
of business processes
Related disciplines:
• Total Quality Management (TQM) – continuously improving and sustaining the quality of products, and
services
• Operations Management – managing the physical and technical functions of a firm or organization,
particularly those relating to production and manufacturing
• Lean – elimination of waste: activities that do not add value to the customer
• Six Sigma – focus on the minimization of defects
Business Process Management 2021-2022
2
, 1.3 ORIGINS AND HISTORY OF BPM
THE FUNCTIONAL ORGANIZATION
Key idea of BPM is to focus on processes when organizing and managing work in an organization.
FIGURE 2: HOW THE PROCESS MOVED OUT OF FOCUS THROUGH AGES
Prehistoric times: consumers and producers of a given good were often the same persons – they carried out their
own production process. They had knowledge of how to produce many different things (= generalists).
Ancient times: intermediate level of specialism.
Middle ages: craftsmen
Industrial revolution: pure specialisation – division of labor – workers were concerned with only a single part of
one business process → emergence of managers → functional organization
THE BIRTH OF PROCESS THINKING
Business Process Reengineering/Redesign (BPR): the fundamental rethinking and radical redesign of business
processes to achieve dramatic improvements in critical, contemporary measures of performance (cost, quality,
service and speed).
Managers need to look at entire, end-to-end processes when trying to improve the operations of their business,
instead of looking at one particular task or business function.
THE RISE AND FALL OF BPR
Many companies terminated their BPR projects and stopped supporting further BPR initiatives by the late 1990s
• Concept misuse
o Every change program of improvement project was labelled BPR, even when business
processes were not the core of these projects.
• Over-radicalism
o Some early proponents of BPR emphasized form the very start that redesign had to be radical,
in the sense that a new design for a business process had to overhaul the way the process was
initially organized.
• Support immaturity
o Even in projects that were process-centered from the start and took a more gradual approach
to improving the business process in question, people ran into the problem that the necessary
tools and technologies to implement such a new design were not available or insufficiently
powerful.
Business Process Management 2021-2022
3
, Organisations that were process-oriented factually did better than non-process-oriented organisations. Process-
oriented organisations showed better overall performance, tended to have a better esprit de corps in the
workplace, and suffered less from inter-functional conflicts.
Different types of IT systems emerged, most notably ERP systems and Workflow Management Systems (WfMSs).
This idea of a single shared and centralized database enables the optimization of information usage and
information exchanges, which is a key enabler of process improvement.
Business Process Management Systems (BPMS) are just one type of IT tool that supports the implementation
and execution of business processes. There are many other Process-Aware Information Systems (PAISs),
including ERP systems, CRM systems, and Document Management Systems (DMSs).
Difference between BPR and BPM:
• BPR is primarily concerned with planning and organizing the process
• BPM provides concepts, methods, techniques and tools that cover all aspects of managing a process –
to plan, organize, and monitor it – as well as its actual execution
• BPR should be seen as a subset of techniques that can be used in the context of BPM
• BPM encompasses the entire lifecycle of business processes
1.4 THE BPM LIFECYCLE
1st question: “Which business process do we aim to improve?”
Process identification: the BPM team has to start by at least identifying the processes that are relevant to the
problem on the table, delimiting the scope of these processes, and identifying relations between these processes.
Process architecture: a collection of inter-linked processes covering the bulk of the work that an organization
performs in order to achieve its mission in a sustainable manner.
Before starting to analyze any process in detail, it is important to clearly define the process performance
measures that will be used to determine whether a process is in good shape or not. Typical process performance
measures relate to cost, time, quality, and flexibility.
Process discovery: understand the business process in detail with as outcome as-is process models.
Diagrams allow us to mere easily comprehend the process, there is less room for any misunderstanding. These
diagrams may still be complemented with textual descriptions.
Activity nodes describe units of work that may be performed by humans or software applications, or a
combination thereof.
Control nodes (gateways) capture the flow of execution between activities.
Event nodes tells us that something may or must happen, within the process or in the environment of the
process, that requires a reaction.
Swimlanes denote different organizational units.
Once we have understood the as-is process in detail, the next step is to identify and analyze the issues in this
process.
Process analysis: the identification and assessment of issues and opportunities for process improvement.
Business Process Management 2021-2022
4
MANAGEMENT
Business Process Management (BPM) = the art and science of overseeing how work is performed in an
organisation to ensure consistent outcomes and to take advantage
of improvement opportunities
Improvement initiatives may be one-off or of a continuous nature; they may be incremental or
radical.
BPM is about managing entire chains of events, activities, and decisions (= processes) that ultimately
add value to the organisation, and its customers.
1.1 PROCESSES EVERYWHERE
Each organization has to manage a number of processes.
Examples of processes:
• Order-to-cash
o performed by vendor
o starts when a customer submits an order to purchase a product or a service
o ends when the product or service has been delivered to the customer and the customer has
made the corresponding payment
• Quote-to-order
o precedes an order-to-cash process
o starts when a supplier receives a Request for Quote (RFQ) from a customer
o ends when the customer places a purchase order based on the received quote
o order-to-cash + quote-to-order = quote-to-cash
• Procure-to-pay
o starts when someone in an organisation determines that a given product or service needs to
be purchased
o ends when the product or service has been delivered and paid for
o counterpart of the quote-to-cash process in the context of B2B interaction
o for every procure-to-pay process there is a corresponding quote-to-cash process on the
supplier’s side
• Issue-to-resolution
o starts when a customer raises a problem or issue
o ends when the customer or the supplier or preferably both agree that the issue has been
resolved
o variant in insurance companies: claim-to-resolution
• Application-to-approval
o starts when someone applies for a benefit or privilege
o ends when the benefit or privilege is either granted or denied
o government agencies, admissions process in a university
Business processes are what companies do whenever they deliver a service or a product to customers. The way
processes are designed and performed affects both the quality of the service that customers perceive and the
efficiency with which services are delivered.
Business Process Management 2021-2022
1
, 1.2 INGREDIENTS OF A BUSINESS PROCESS
A business process encompasses a number of events and activities:
• Events: things that happen atomically, which means that they have no duration
• An event may trigger the execution of a series of activities
• Task: an activity that is rather simple and can be seen as one single unit of work
• The term task refers to a fine-grained unit of work performed by a single process participant, while the
term activity is used to refer to both fine-grained or coarse-grained units of work
• Decision points: pints in time when a decision is made that affects the way the process is executed.
• Actors: internal (= process participants) or external (= business party)
• Physical objects
• Informational objects
• Outcomes: result of the execution of a process → Ideally, an outcome should deliver value to the actors
involved in the process – positive and negative outcomes
• Customer: actor that consumes the output
FIGURE 1: INGREDIENTS OF A BUSINESS PROCESS
Business process = 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.
BPM = a body of methods, techniques, and tools to identify, discover, analyze, redesign, execute, and monitor
business processes in order to optimize their performance.
→ business processes are the focal point of BPM + BPM involves different phases and activities in the lifecycle
of business processes
Related disciplines:
• Total Quality Management (TQM) – continuously improving and sustaining the quality of products, and
services
• Operations Management – managing the physical and technical functions of a firm or organization,
particularly those relating to production and manufacturing
• Lean – elimination of waste: activities that do not add value to the customer
• Six Sigma – focus on the minimization of defects
Business Process Management 2021-2022
2
, 1.3 ORIGINS AND HISTORY OF BPM
THE FUNCTIONAL ORGANIZATION
Key idea of BPM is to focus on processes when organizing and managing work in an organization.
FIGURE 2: HOW THE PROCESS MOVED OUT OF FOCUS THROUGH AGES
Prehistoric times: consumers and producers of a given good were often the same persons – they carried out their
own production process. They had knowledge of how to produce many different things (= generalists).
Ancient times: intermediate level of specialism.
Middle ages: craftsmen
Industrial revolution: pure specialisation – division of labor – workers were concerned with only a single part of
one business process → emergence of managers → functional organization
THE BIRTH OF PROCESS THINKING
Business Process Reengineering/Redesign (BPR): the fundamental rethinking and radical redesign of business
processes to achieve dramatic improvements in critical, contemporary measures of performance (cost, quality,
service and speed).
Managers need to look at entire, end-to-end processes when trying to improve the operations of their business,
instead of looking at one particular task or business function.
THE RISE AND FALL OF BPR
Many companies terminated their BPR projects and stopped supporting further BPR initiatives by the late 1990s
• Concept misuse
o Every change program of improvement project was labelled BPR, even when business
processes were not the core of these projects.
• Over-radicalism
o Some early proponents of BPR emphasized form the very start that redesign had to be radical,
in the sense that a new design for a business process had to overhaul the way the process was
initially organized.
• Support immaturity
o Even in projects that were process-centered from the start and took a more gradual approach
to improving the business process in question, people ran into the problem that the necessary
tools and technologies to implement such a new design were not available or insufficiently
powerful.
Business Process Management 2021-2022
3
, Organisations that were process-oriented factually did better than non-process-oriented organisations. Process-
oriented organisations showed better overall performance, tended to have a better esprit de corps in the
workplace, and suffered less from inter-functional conflicts.
Different types of IT systems emerged, most notably ERP systems and Workflow Management Systems (WfMSs).
This idea of a single shared and centralized database enables the optimization of information usage and
information exchanges, which is a key enabler of process improvement.
Business Process Management Systems (BPMS) are just one type of IT tool that supports the implementation
and execution of business processes. There are many other Process-Aware Information Systems (PAISs),
including ERP systems, CRM systems, and Document Management Systems (DMSs).
Difference between BPR and BPM:
• BPR is primarily concerned with planning and organizing the process
• BPM provides concepts, methods, techniques and tools that cover all aspects of managing a process –
to plan, organize, and monitor it – as well as its actual execution
• BPR should be seen as a subset of techniques that can be used in the context of BPM
• BPM encompasses the entire lifecycle of business processes
1.4 THE BPM LIFECYCLE
1st question: “Which business process do we aim to improve?”
Process identification: the BPM team has to start by at least identifying the processes that are relevant to the
problem on the table, delimiting the scope of these processes, and identifying relations between these processes.
Process architecture: a collection of inter-linked processes covering the bulk of the work that an organization
performs in order to achieve its mission in a sustainable manner.
Before starting to analyze any process in detail, it is important to clearly define the process performance
measures that will be used to determine whether a process is in good shape or not. Typical process performance
measures relate to cost, time, quality, and flexibility.
Process discovery: understand the business process in detail with as outcome as-is process models.
Diagrams allow us to mere easily comprehend the process, there is less room for any misunderstanding. These
diagrams may still be complemented with textual descriptions.
Activity nodes describe units of work that may be performed by humans or software applications, or a
combination thereof.
Control nodes (gateways) capture the flow of execution between activities.
Event nodes tells us that something may or must happen, within the process or in the environment of the
process, that requires a reaction.
Swimlanes denote different organizational units.
Once we have understood the as-is process in detail, the next step is to identify and analyze the issues in this
process.
Process analysis: the identification and assessment of issues and opportunities for process improvement.
Business Process Management 2021-2022
4
