Business Process Engineering

Week # 1
Today’s Agenda
IntroductorySession
Course Objectives
Learning Outcomes
Administrative Items
Fundamental Concepts
Questions ?

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Haroon Abdul Waheed
Assistant Professor
Department of Software Engineering, FOIT – University of Central
Punjab, Pakistan (Sep 2012 – Present).

 M.Sc (Advanced Methods in CS) – QMUL UK

 MS (Computer Science) – Lahore University of Management Sciences
(LUMS), Pakistan.
 BS (CS) UCP Lahore

 Worked in Academia and  Research Interests:

Industry  Software Engineering and Allied
 Taught Undergraduate courses  Data Analytics
 Applied Artificial Intelligence
at like
 Software Processes & Metrics.
 SE,SRE,ISD,
 OS, DSA, OOP, PF , ITC
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Course Objectives
Help students to:
◦ understand the fundamental concepts of business process
engineering (how they can be improved and streamlined for optimum
efficiency in terms of performance.).

◦ learn the skills and knowledge required for:

 describing the lifecycle of a business process.
 modelling a business process
 Identifying business wastes
 mapping them into a business model.

◦ learn the methodologies of business process improvement

◦ understand how a business process could be re-

engineered

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Overall Learning Outcomes
Upon completion of this course, you will be
able to understand and describe:

◦ the significance of business process engineering

◦ lifecycle of a business process
◦ various business process modelling techniques
◦ the concept of business wastes
◦ how a business process could be improved
◦ the process of business process re-engineering

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Tentative Course Contents
Business Process – Basics, Origin, History and
Evolution (Hierarchy of Business, Processes and BPE, The Difference
between Functions and Processes)
Components of a Business Process
Business Process Management life cycle
Basics of a Manufacturing Process
Basics of a Service Process
Business Process Modelling Techniques
Business Process Improvement
Business Outsourcing
Business Process Re-engineering and improvement
cases
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Course Material
LectureSlides
Handouts/Research Papers
Reference Material
◦ Business Intelligence: A Managerial Approach by
E. Turban, R. Sharda, D. Delen and D. King, 2nd
Edition, Prentice Hall.
◦ Business Process Improvement: The
Breakthrough Strategy for Total Quality,
Productivity, and Competitiveness, by H. J.,
Harrington, McGraw-Hill Education.

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 Plagiarism Policy
Any form of cheating in assignments, homework
problems, quizzes, and exams will result in strict
action.
Plagiarism detection tools might be used to
determine who has cheated in assignments.
All the parties involved will be awarded Zero in
the first instance.
Repeat of the same offense will result in (F) grade.

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Course Schedule
Office: Cabin 4, Room F202
Email: [email protected]
 * will be updated during semester
08:00- 09:30- 11:00- 14:00- 15:30- 17:00-
Days
09:20 10:50 12:20 15:20 16:50 18:20
MONDAY Bpe-Se OFFICE
       
(P3) R301 HOURS*
TUESDA Bpe-Se OFFICE Bpe-Se
Y      
(P1) R104 HOURS* (P2) R301
WEDNES Bpe-Se
DAY (P3) R103          

FRIDAY Bpe-Se OFFICE Bpe-Se

     
(P1) R301 HOURS* (P2) R202
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Tentative Grading Policy *

Class Participation 05%

Quiz (10+) 15%
Assignments (4-6) 15%
Project (in phases) 5%
Mid Term 20%
Final 40%

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Course Sessions

Highly Interactive !!!

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Business Process
According to Gartner:

“An event-driven, end-to-end processing path

that starts with a customer request and ends with
a result for the customer. Business processes
often cross departmental and even
organizational boundaries.”

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Introduction
The first ever business process

The earliest known definition of a business process comes from Scottish

economist Adam Smith. Breaking down his idea to the simplest elements, in
1776 he described a business process in place at a theoretical pin factory,
involving 18 separate people to make one pin:
“ One man draws out the wire, another straights it,
a third cuts it, a fourth points it, a fifth grinds it at
the top for receiving the head: to make the head
requires two or three distinct operations: to put it
on is a particular business, to whiten the pins is
another and the important business of making a
pin is, in this manner, divided into about eighteen
distinct operations, which in some manufactories
are all performed by distinct hands, though in
others the same man will sometime perform two or
three of them.”

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Why should we care about how many people
it takes to make the pins, or how many
steps are in the process? Well, Smith found
that by creating a process and assigning
the steps to individual specialists and it
enhanced the productivity as it increased .

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Importance of Business Processes
Represent how processes are performed
inside a company
Help to measure the performance of a
business process
Help in hiring the right person for an
efficient execution
Enhance coordination among various
stakeholders
Improve a process by optimizing and/or
automating using a software
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Essential Attributes of a Business
Process
Repeatability
◦ Everyday processes of a business
◦ Totally part of an organization, whether they are visible to
customers or not
◦ Involve multiple defined inputs, which are affected by
different factors, and contribute to the final output value
Flexibility
◦ Main processes are not changed or updated by businesses
but still there is always room for improvement
◦ Every business process should be flexible without affecting
its stakeholders

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Essential Attributes of a Business
Process
Specific
◦ Should be well-defined by describing the start point, end
point and the series of these steps.
◦ Determine the individuals that perform in every step
◦ Should decide the reason why a process is automated
Measurable
◦ Should be measurable in every part to identify which part
of the process works well or not
◦ Nothing can be better without measuring first
◦ Helps in identifying which processes have more benefits
due to business process automation

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On a winter morning in 1907, Henry Ford took Charles E.
Sorensen to Piquette Avenue Plant, an empty building in
Detroit that would go on to become the birthplace of
America’s first mass-produced affordable car. “We’re
going to start a completely new job” he told the head of
production. 1
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Ford idea for a new process
Ford explained his idea for a new process. Instead
of one artisan creating a product alone, everyone
was taught to do one of 84 simple, repetitive jobs.
With this new approach to processes, Ford cut the
manufacturing time of the Model T down from
12.5 hours to 2.5 hours.
Not only was that a triumph for Ford’s bank
account, it was one of the most revolutionary
moments ever to occur, not just in the history of
cars or manufacturing, but in the entire history of
business.
Business Process Categorization
 Every business is different with the types of
business processes varying depending on the
business nature.

A specific type of task could be a support process

in one business and a core process in another.

 The output of a process and its contribution

towards the business determine the type of
business process.

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Types of Business Processes
Core Processes: How you deliver a value
◦ Directly serve external clients and generate income
◦ Also known as Primary Processes
◦ How does my business generate value and make its
income?
◦ What does my business primarily do?
Examples of Core Processes
◦ Developing and creating a product or service
◦ Marketing the product or service and conveying it to
the buyer
◦ After–sales service and support also add value and are
part of core processes
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If you are in a t-shirt company, one of
your core operational processes is taking
orders over the phone. Another would be
getting manufactured t-shirts off to be
shipped.
Whatever your business does at its core,
there should be watertight processes in
place to make your business scalable and
efficient.

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Types of Business Processes
Support Processes: Making Value Delivery
Possible
◦ Serve internal clients and do not generate income in
themselves
◦ Make it possible to carry out core processes
effectively
Example
◦ HR activities have nothing to do with customers, and
they don’t directly generate money, but without them
the business couldn’t function
◦ IT department doesn’t directly generate money, but
without the systems it oversees, the value-generation
part couldn’t function
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While these aren’t what the company
does to make money, they facilitate the
main revenue stream and make it so the
management processes have something to
manage, and that the operational
processes are as friction-free as possible.

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Types of Business Processes
Management Processes
◦ Optimize income generation
◦ Ensure the continued survival of the business as a
whole
◦ Involve planning, coordination, monitoring and
control of core and support processes
◦ Deal with opportunities and threats that could help or
harm the business
◦ Ensure meeting:
 regulatory compliance needs
 Financial targets and budgets

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An example of a management process
might be a CEO planning out how best to
organize the marketing team’s time and
energy for a PR launch campaign. The
process part would be allocating
resources, defining timeframes and
checking that the systems are in place and
optimized

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Examples of Business Processes
Order-to-cash

Quote-to-order

Procure-to-pay

Issue-to-resolution

Application-to-approval (document approval)

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• A business process is an activity or set
of activities that can accomplish a
specific organizational goal. Business
processes should have purposeful
goals, be as specific as possible and
have consistent outcomes.

• Is "a collection of related,

structured activities that produce
a service or product that meet the
needs of a client.
Business Process Engineering
Why do we need Business Process
Engineering?
The field of business engineering developed
primarily to fill the gap between the
management and technical or administrative
teams within a company.
Management may have difficulty translating
their plans to technical teams, who may in
turn find it challenging to develop products
and solutions to carry out these plans in the
real world.
Lahore Garrison University
Business Process Engineering
Business engineering acts as a bridge
between these two areas, and is designed
to help a company not only develop
effective goals, but also techniques for
carrying out these goals as efficiently as
possible. This may require changes in
every area of the company, from
marketing to administration, to computer
systems
Business Process Engineering
Unique aspect of BPE
Another unique aspect of the business
engineering field is that it can be applied to
a company at any stage of development.
Individuals who wish to form a 
new business can use these principles to
select the best product or market, or to
refine an existing idea.
Business Process Engineering
It can also be used to improve an existing
business. This may mean increasing profit or
cutting cost, but it can also refer to
improving employee satisfaction or retention
rates.
This process may involve making small
changing or incorporating new technologies,
or may require a complete redesign of the
company and all its processes.
Business Process Engineering
and software engineering
In many software engineering methods
approaches to requirements engineering
involve a detailed modeling of different
aspects such as system structure data or
behavior these models are an essential
means of
communication between system
developers and expert users
Business Process Engineering
and software engineering
Furthermore they are the basis from which
system design and implementation are
derived in later stages of the development
process
As the quality of requirements specifications
is a decisive factor for software quality and
correction costs day by day much effort is
usually spent on system modeling in the
early stages of the software development
process.
However the models developed quite often
only aim at providing the system developer
with a better understanding of the system to be
developed rather than producing a set of
unambiguous consistent and semantically
integrated documents which support an at least
half automated derivation of subsequent results
in the development process such as design or
implementation documents thus the high effort
spent on modeling is often not used efficiently
Business Processes – Historical
Perspective
Hundreds of years ago, work was the domain of
each individual
◦ They completed all parts of the end-to-end process
◦ They researched, created, sold and distributed their
products
Drawbacks
◦ Variations in the quality of produced/manufactured
product
◦ Least productive
◦ Expensive
◦ Person dependent
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Division of Labour
In 1776, Adam Smith wrote a book “The
Wealth of Nations” and introduced the world to
the Industrial Revolution
He defined the concept of “Division of Labour”
similar to what is known as function today
Smith explained the concept with an example of
making metal pins:
“Each person making a 10th part of 48,000 pins might be
considered as making 48,000 pins in a day. But if they
had all wrought separately and independently, and
without any of them having been educated to this
peculiar business, they certainly could not each of them
have made 20, perhaps not 1 pin in a day.”
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Division of Labour & Business Process
 Adam Smith’s definition of ‘Division of Labour’
formed the basis of modern day working methodology
 Functions are designed to complete specific tasks
 As companies, products and marketplaces became
more complex and segmented, there is a need to have
more complex and specialized functions within
organizations
 Organizations face challenges to manage the flow of
work across functional specialties
 Business Processes need to be defined properly to
represent the functional specialties

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Industrial Revolution (1760-1840)
 Era of transition from the traditional hand based
manufacturing to machines
 New chemical manufacturing and iron production
processes were introduced
 Increased usage of steam power and water power
for industrial processes
 Development of machine tools gave rise to
mechanized factory system
 Business Processes need to be defined properly to
represent the manufacturing and industrial processes

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Scientific Management
 In 1911, Frederick Winslow Taylor published “The
Principles of Scientific Management” for the American
Society of Mechanical Engineers
 Taylor advocated “enforced standardization of
methods, enforced adoption of the best implements and
working conditions, and enforced cooperation” in
order to improve efficiency
 Taylor’s focus was on scientific study of work,
standardization of process, systematic training and
sound structure of employees and management.
 The work was hugely unpopular with workers
 Taylor’s work laid foundation for modern industrial
engineering
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Assembly Belts and Statistical Process
Controls
 An assembly line production was used to produce the
first affordable automobile, Ford Model T, by Ford
Motor Company in 1908
 In 1913, Henry Ford introduced moving assembly belts
into plants producing Model T cars to increase
efficiency
 By 1916, the car costed less than half than it was in
1908
 In 1920, Walter A. Shewhart at Bell Laboratories
pioneered the use of Statistical Process Control to detect
and prevent manufacturing issues before they could
become problems.

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