Chapter 2: Process Identification

Contents
1. The Context of Process Identification
2. Definition of the Process Architecture
1. Process Categories
2. Relationships Between Processes
3. Reuse of Reference Models
4. Process Landscape Model
5. The Example of SAP’s Process Architecture
3. Process Selection
1. Selection Criteria
2. Process Performance Measures
3. Process Portfolio
4. Recap

SEITE 1
Process Identification in the BPM Lifecycle

Process
Management Processes

Define Vision Develop Strategy Implement Manage Risk

Strategy

identification Core Processes

Procure Procure Market Deliver

Manage
Customer
Materials Products Products Products
Service

Support Processes

Process architecture Manage Personnel

Manage
Information Manage Assets

Conformance and Process As-is process

performance discovery model
insights

Process Process
monitoring analysis

Executable Insights on
process weaknesses and
model their impact

Process Process
implementation To-be process redesign
model
Chapter Overview

 Process identification refers to systematically defining business processes of

organization and establishing criteria to select processes for improvement.
 Output is process architecture, which represents processes and interrelations.
 Process architecture serves as framework for defining priorities and scope of projects.
 First, we discuss the context of process identification.
 We present a method based on process architecture definition and process selection.
 Definition is concerned with listing initial set of processes and their architecture.
 Selection considers criteria for defining priorities of processes using a portfolio.

SLIDE 3
 Process identification

4
Chapter 2: Process Identification

Contents
1. The Context of Process Identification
2. Definition of the Process Architecture
1. Process Categories
2. Relationships Between Processes
3. Reuse of Reference Models
4. Process Landscape Model
5. The Example of SAP’s Process Architecture
3. Process Selection
1. Selection Criteria
2. Process Performance Measures
3. Process Portfolio
4. Recap
SEITE 5
Definition of Business Strategy

Business strategy is an organizational perspective on

setting and meeting business goals. (Mintzberg)

SLIDE 6
Balanced Scorecard (Kaplan & Norton)

Learning and
Financial Customer Internal
Growth
Perspective Perspective Perspective
Perspective
Product/Service Operations Management
Attributes Processes
Improve Cost
Culture
Structure Price Supply Distribution
Production Risk Mgmt.
Quality

Increase Asset Availability Customer Management

Utilization Processes
Selection Leadership
Selection Retention
Functionality Acquisition Growth
Long-Term
Shareholder
Value Innovation
Relationship Processes
Alignment
Service Opportunity Design
Expand Revenue Research Launch
Opportunities Partnership

Regulatory and Social

Processes
Enhance Image Teamwork
Customer Value Environment Employment
Brand Safety/Health Community

SLIDE 7
Enterprise Architecture according to TOGAF

 Organizational perspective:
actors, roles, and organizational structure.
 Product perspective:
products and services along with their relationships.
 Business process perspective:
process architecture.
 Data perspective:
informational entities and their relationships.
 Application perspective:
different pieces of software with their dependencies.
 Technical infrastructure:
computer hardware and communication networks.

SLIDE 8
Exercise 2.1: Construction Company BuildIT

Construction Sight of WU Vienna‘s New Campus opened in 2013.

Source: Wikimedia Commons
Equipment Rental Process at BuildIT

 BuildIT is a construction company specialized in public works, such as roads, bridges, pipelines, tunnels
and railroads. Within BuildIT, it often happens that engineers working at a construction site (called site
engineers) need a piece of equipment, such as a truck, an excavator, a bulldozer, a water pump, etc.
BuildIT owns very little equipment and instead it rents most of its equipment from specialized suppliers.
 The existing business process for renting equipment goes as follows. When site engineers need to rent a
piece of equipment, they fill in a form called “Equipment Rental Request” and send this request by email to
one of the clerks at the company’s depot. The clerk at the depot receives the request and, after consulting
the catalogs of the equipment suppliers, selects the most cost-effective equipment that complies with the
request. Next, the clerk checks the availability of the selected equipment with the supplier via phone or
email. Sometimes the selected option is not available. In these cases, the clerk has to select an alternative
piece of equipment and check its availability with the corresponding supplier.
 After finding a suitable and available piece of equipment, the clerk adds the details of the selected
equipment to the rental request. Each rental request has to be approved by a works engineer, who also
works at the depot. In some cases, the works engineer rejects the equipment rental request. Some
rejections lead to the cancelation of the request, i.e., no equipment is rented at all. Other rejections are
resolved by replacing the selected equipment with another equipment – such as a cheaper piece of
equipment or a more appropriate piece of equipment for the job. In this latter case, the clerk needs to
lodge another availability request.
Equipment Rental Process at BuildIT

 When a works engineer approves a rental request, the clerk sends a confirmation to the
supplier. This confirmation includes a Purchase Order (PO) for renting the equipment. The PO
is produced by BuildIT’s financial information system using information entered by the clerk.
The clerk also records the equipment rental in a spreadsheet that is used to monitor rentals.
 In the meantime, the site engineer may decide that the equipment is no longer needed. In this
case, the engineer asks the clerk to cancel the request for renting the equipment.
 In due time, the supplier delivers the rented equipment to the construction site. The site
engineer then inspects the equipment. If everything is in order, the site engineer accepts the
engagement and the equipment is put into use. In some cases, the equipment is sent back
because it does not comply with the requirements of the site engineer. In this case, the site
engineer has to start the rental process all over again.
 When the rental period expires, the supplier comes to pick up the equipment. Sometimes, the
site engineer asks for an extension of the rental period by contacting the supplier via email or
phone one to two days before pick-up. The supplier may accept or reject this request.
 A few days after the equipment is picked up, the supplier sends an invoice to the clerk by
email. At this point, the clerk asks the site engineer to confirm that the equipment was indeed
rented for the period indicated in the invoice. The clerk also checks if the rental prices
indicated in the invoice are in accordance with those in the PO. After these checks, the clerk
forwards the invoice to the financial department. The financial department eventually pays the
Exercise 2.1-2: Construction Company BuildIT

Consider the construction company BuildIT and its procure-to-pay process that is
described on page 2.
 To which category in the internal perspective of Figure 2.1 does this process belong?
 How does it influence different aspects of the customer perspective?
 How is it shaped by aspects of the learning and growth perspective?
 Which aspects in the organizational, product, data, application, and technical
infrastructure perspectives have to be described to understand this process?
Changes of Strategic Relevance: Mannesmann

19th century 20th century 1990

Sources: stahlseite.de, Copyright Uwe Niggemeier,
SLIDE 13
deutsches-telefon-museum.eu, ebay-kleinanzeigen.de,
wanne-eickel-historie.de
The Process Checklist

It may not be easy to decide on what to consider as a business process. A chunk of work
that is frequently repeated might not be a business process on its own. To prevent poor
scoping decisions, it is useful to consider the following process checklist:
 Is it a process at all?  Is the process important enough to manage?
 It must be possible to identify main action, which  There is customer who is willing to pay for
is applied to a category of cases. outcomes,
 Name is of form verb + noun.  Organization that carries out the process would be
 Can the process be controlled? willing to pay another party for taking over, or
 Legal, mandatory framework compels an
 Repetitive series of events and activities to
organization to execute it.
execute individually observable cases.
 Is the scope of the process not too big?
 Without a clear case notion, process management
is not feasible.  1:1 relation between initial event and activities.
 Also, without any sense of repetition, a group of  Is the scope of the process not too small?
business activities may better qualify as a project  Rule of thumb: there should be at least three
than as a business process.
different actors – excluding the customer – involved.
 If there are no handoffs between multiple actors or
systems, there is little that can be improved using
BPM methods.

SLIDE 14
Chapter 2: Process Identification

Contents
1. The Context of Process Identification
2. Definition of the Process Architecture
1. Process Categories
2. Relationships Between Processes
3. Reuse of Reference Models
4. Process Landscape Model
5. The Example of SAP’s Process Architecture
3. Process Selection
1. Selection Criteria
2. Process Performance Measures
3. Process Portfolio
4. Recap
SEITE 15
Process Categories

Management Processes

Define Vision Develop Strategy Implement Manage Risk

Strategy

Core Processes

Manage
Procure Procure Market Deliver
Customer
Materials Products Products Products
Service

Support Processes

Manage
Manage Personnel Information Manage Assets

SLIDE 16
Exercise 2.3: University

WU Vienna‘s New Campus opened in 2013. Source: Wikimedia Commons

Exercise 2.3: University

 What are core, support, and management processes of a university?

Exercise: classify by process type

These groups of processes are typically performed at a university.

Categorize each process group as core, support or management

Sport Indirect
HR
services procurement

Strategic Teaching
Management award courses

IP
Marketing
Management

Course Additional
Management services mgt

Language Admission IT
training

Market Teaching
management professional courses
Solution: identify process types
Relationships between Processes

Sequence

Manage
Procure Procure Market Deliver
Customer
Materials Products Products Products
Service

Decomposition Specialization

Procure Handle Job

Products Application

Handle Job Handle Job

Process Assemble
Application Application
Parts Parts
(Austria) (Germany)

For a process architecture, we can distinguish three types of relationships

between processes: sequence, decomposition, and specialization.
SLIDE 21
Exercise 2.4: Relationships

 Can you think of other types of relations that are useful to distinguish between
processes?
 Hint. Think about the purpose of identifying the relations between business
processes
 Value chains
 Technology
 Goals
 Context-specific relations

Process Architecture

Generic Process Architecture British Telecom

Model structure, methodology and

Meta modelling standards
Level 1 Level
Defines business activities

Operations Levels Process Levels Business Levels

Level A
Process
Distinguishes operational customer
oriented processes from management
Business Activities and strategic process

Landscape Shows groups of related business

Level B Logical
(incl. Value Chains)
functions and standard end-to-end
processes (e.g. Service Streams)
Process Groupings Levels
Level C Core processes that combine together to
Level 2 Core Processes
deliver Service Streams and other end-
to-end processes

Business Processes Level D Decomposition of core processes into

(e.g. BPMN)
detailed ‘success model’ business
Business Process Flows process flows

Detailed operational process flows

Level E Physical
Level 3+
with error conditions and product and
Operational Process Flows geographical variants (where
Levels required).

Sub-processes and Tasks Level F Further decomposition of detailed

(e.g. BPMN) Detailed Process Flows operational where required

© British Telecommunications (2005)

SLIDE 23
APQC Process Classification Framework

https://www.apqc.org/process-frameworks

SLIDE 24
Process Landscape Model:
Example of Wienerlinien (Vienna Public Transport)

Management Processes

Manage Communicate Manage Manage Manage Risks and Manage

Enterprise in and out Processes Quality Opportunities Innovation

Core Processes
Manage
Contact Manage Foster
Customer
Customer Sales Relationship
Relationship

Operate Plan and Buy Maintain Check

Vehicles Vehicles Vehicles Vehicles

Transport Plan Customer Transport Evaluate

Customer Transport Customer Transport

Provide Plan Build Maintain Evaluate

Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure

Support Processes

Manage Manage Manage Manage Manage Provide Winter

Personnel Financials Information Materials Disruptions Service

SLIDE 25
How to define Process Landscape Model

1. Clarify terminology:
 Define key terms.
 Use organizational glossary.
 Use reference models.
 Ensure that stakeholders have a consistent understanding of process landscape model.
2. Identify end-to-end processes:
 Those processes interface with customers and suppliers.
 Goods and services that organization provides are good starting point.
 Properties help to distinguish processes, including: Product type, Service type, Channel, Customer type.
3. For each end-to-end process, identify its sequential processes:
 Identify the internal, intermediate outcomes of end-to-end process.
 Perspectives help set boundaries: Product lifecycle, Customer relationship, Supply chain, Transaction
stages, Change of business objects, Separation.
4. For each business process, identify its major management and support processes:
 What is required to execute the previously identified processes.
 Typical support processes are management of personnel, financials, information, and materials.
 However, these can be core processes if they are integral part of business model.
 Management processes are usually generic.
SLIDE 26
How to define Process Landscape Model

5. Decompose and specialize business processes:

 Processes of process landscape should be further subdivided into abstract process on Level 2.
 Further subdivision until processes can be managed autonomously by single process owner.
 Considerations when this subdivision should stop: Manageability and Impact.
6. Compile process profile:
 Each of the identified processes should be described using process profile.
 Process profile supports definition of boundaries, vision performance indicators, resources, etc.
7. Check completeness and consistency:
 Reference models can be used to check whether all major processes are included.
 Reference models can help to check consistency of terminology.
 Check whether all processes can be associated with functional units of organization chart and vice versa.

SLIDE 27
Exercise 2.5: Construction Company BuildIT

Construction Sight of WU Vienna‘s New Campus opened in 2013.

Source: Wikimedia Commons
Exercise 2.5: Construction Company BuildIT

 Which APQC categories on Level 1 are relevant for a construction company like
BuildIT?

SLIDE 29
Example 2.2: Construction Company BuildIT

The following passage describes the company BuildIT from a more general perspective.
With this information, we will construct its process landscape model.
The overall end-to-end process of BuildIT starts with a customer demand and ends with
the expiry of the warranty of construction works. The business development department is
responsible for identifying customer demands and public tenders. Together with the
presales engineering department, they select projects for which BuildIT prepares bids.
Bids that are approved lead to contract negotiations. Once contracts are signed, the
contract is transferred to execution. Contract execution starts with the project initiation,
which includes engineering, design, and planning. What follows then are the actual
construction works. The procure-to-pay process that we already know from Example 1.1
also belongs to these initiation procedures. Once the construction works are finished, the
construction sight is commissioned to the customer. What can still follow are corrective
works to meet warranty obligations.
Process profile of BuildIT‘s
procure-to-pay process
Name of Process: Procure-to-Pay
Vision: The objective of the procurement process is to secure that the
entire range of external products and services becomes available on time
and is at the required level of quality.
Process Owner: Chief Financial Officer (CFO)

Customer of process: Expectation of customer:

 Requesting unit  Timely, economic and complete
provision

Outcome: Delivered products or provided services for the requested unit

Trigger: Need is identified

First activity: Submit Request

͙..
Last activity: Create Purchase Order
Interfaces inbound: Plan-to-Procure
Interfaces outbound: Construct-to-Complete

Required resources:
 Human resources:
Site Engineer, Clerk, Works Engineer
 Information, documents, know-how:
procurement guidelines, supplier rating, framework contract
 Work environment, materials, infrastructure:
Procurement information system

Process Performance Measures:

 Cycle Time
 Operational Costs
 Error Rate

SLIDE 31
Process Architecture

Management Processes

Develop Vision Develop and Manage Business Market and Sell

and Strategy Manage Services Capabilities Services

Core Processes

Contract
Demand-to-Selection Selection-to-Bid Approval-to-Contract
Acquisition

Contract
Contract-to-Plan Plan-to-Completion Completion-to-Expiry
Execution

Support Processes

Manage Human Manage Financial Manage Risk and Manage External

Capital Manage IT Resources Manage Assets Compliance Relationships

SLIDE 32
Exercise 2.6: University

WU Vienna‘s New Campus opened in 2013. Source: Wikimedia Commons

Exercise 2.6: University

 Create a process landscape model for a university by applying the seven steps
described in this section. Use the APQC Process Classification Framework as an
aid.
Exercise 2.7: Manageabilty and Impact

 Explain how the trade-off between impact and manageability works out for broad
and narrow processes, respectively.

 A broad process has by definition a large scope. Managing it actively can

potentially have a large impact on an organization’s performance.
 The flip side is that it is more difficult to actively manage such a broad process and
the improvement projects that are related to it.
 For a narrow process, this is exactly the other way around: given its smaller scope,
it is more easily managed but it will probably have a lesser impact on an
organization’s performance as a whole.
Example of SAP Process Map

Management Processes

ManageDefine, Operationalize, and Track Strategy Sales, Franchise, and Partner Management
Manage
Enterprise Innovation

Core Processes

Innovate Sell Deliver

Support Processes

Workplace and Corporate Finance Shareholder and

Procure to Pay
Attract, Develop, and Infrastructure and Operational Stakeholder
Retain Workforce Provision Compliance Management

SLIDE 36
Chapter 2: Process Identification

Contents
1. The Context of Process Identification
2. Definition of the Process Architecture
1. Process Categories
2. Relationships Between Processes
3. Reuse of Reference Models
4. Process Landscape Model
5. The Example of SAP’s Process Architecture
3. Process Selection
1. Selection Criteria
2. Process Performance Measures
3. Process Portfolio
4. Recap
SEITE 37
Selection Criteria

 Strategic Importance:
 Find out which processes have the greatest impact on the strategic goals.
 Consider profitability, uniqueness, or contribution to competitive advantages.
 Select those processes for process management that relate to strategy.
 Health:
 Determine which processes are in deepest trouble.
 These processes may profit the most from BPM initiatives.
 Feasibility:
 Determine how susceptible process is to BPM initiatives, incidentally or continuously.
 Culture and politics may be obstacles.
 BPM should focus on those processes where it is reasonable to achieve benefits.

SLIDE 38
Exercise 2.8: Selection Criteria

 Exercise 2.8. Consider again the procure-to-pay process of BuildIT (page 2) and
the admission process of a university (page 5) as described in Chapter 1.
 Discuss their strategic importance, their health, and the feasibility of a potential
improvement to these processes.
Further Questions:
 Given all the discussed criteria, does an assessment of the importance, health, and
feasibility always point us to the same processes to actively manage?
 Should all processes that are unhealthy, of strategic importance, and feasible to
manage be subjected to BPM?

SLIDE 39
Process Performance Measures

Performance Measures Performance Objectives

 Time  Formulate performance objectives of the
process at a high level, in the form of a
 Cost
desirable state that the process should
 Quality ideally reach, e.g., customers should be
 Flexibility served in less than 30 minutes.
 For each performance objective, identify the
relevant performance dimension(s) and
aggregation function(s), and from there,
define one or more performance measures
for the objective in question, e.g., the
percentage of customers served in less than
30 minutes. Let us call this measure ST(30).
 Define a more refined objective based on
this performance measure, such as
ST(30) >99%.

SLIDE 40
Example 2.3: Restaurant

 A restaurant has recently lost many customers  In this scenario, most relevant performance
due to poor customer service. The dimension is serving time.
management team has decided to address  One objective is to completely avoid waiting
this issue first of all by focusing on the delivery times above 30 min.
of meals.
 Percentage of customers served in less than
 The team gathered data by asking customers 30 min should be close to 100%.
about how quickly they liked to receive their
 Thus, the percentage of customers served in
meals and what they considered as an
acceptable wait. less than 30 minutes is relevant performance
measure.
 The data suggested that half of the customers
 Threshold mentioned in scenario is 15 min.
would prefer their meals to be served in 15
min or less. All customers agreed that a  Choice between two performance measures:
waiting time of 30 min or more is unacceptable average meal delivery time or percentage of
customers served in 15 min.

SLIDE 41
Exercise 2.9: Travel Agency

 Consider the following summary of issues reported in a travel agency.

 A travel agency has recently lost several medium-sized and large corporate
customers due to complaints about poor customer service. The management team
of the travel agency decided to appoint a team of analysts to address this problem.
The team gathered data by conducting interviews and surveys with current and
past corporate customers and also by gathering customer feedback data that the
travel agency has recorded over time.
 About 2% of customers complained about errors that had been made in their
bookings. In one occasion, a customer had requested a change to a flight booking.
The travel agent wrote an email to the customer suggesting that the change had
been made and attached a modified travel itinerary. However, it later turned out that
the modified booking had not been confirmed in the flight reservation system. As a
result, the customer was not allowed to board the flight and this led to a series of
severe inconveniences for the customer.

SLIDE 42
Exercise 2.9: Travel Agency

 Similar problems had occurred when booking a flight initially: the customer had
asked for certain dates, but the flight tickets had been issued for different dates.
Additionally, customers complained of the long times it took to get responses to
their requests for quotes and itineraries. In most cases, employees of the travel
agency replied to requests for quotes within 2-4 working hours, but in the case of
some complicated itinerary requests (about 10% of the requests), it took them up to
2 days.
 Finally, about 5% of customers also complained that the travel agents did not find
the best flight connections and prices for them. These customers essentially stated
that they had found better itineraries and prices on the Web by searching by
themselves.
1. Which business processes should the travel agency select for improvement?
2. For each of the business processes you identified above, indicate which
performance measure the travel agency should improve.

SLIDE 43
Balanced scorecards with cascading
process performance measures

SLIDE 44
Process Portfolio

High Selection Focus Feasibility

Rating
Loan Contract
Controlling Prepatation Low
Loan
Decision
Loan Market
Medium
Evaluation
Importance

Handling
High
Payments

Loan
Loan Planning
Application
Low

Poor Health Good

SLIDE 45
Exercise 2.10: University

WU Vienna‘s New Campus opened in 2013. Source: Wikimedia Commons

Exercise 2.10: University

A university defined four core processes in relation to teaching. An evaluation of strategic

importance, health, and feasibility using a survey among the department chairs has
resulted in the following assessment:
 Develop and Manage Study Programs: Importance 90%, Health 90%, Feasibility 40%.
 Market Study Programs: Importance 75%, Health 80%, Feasibility 60%.
 Schedule Courses: Importance 95%, Health 30%, Feasibility 50%.
 Deliver Courses: Importance 95%, Health 70%, Feasibility 30%.
 Manage Student Services: Importance 85%, Health 50%, Feasibility 40%.
 Manage Facilities: Importance 40%, Health 35%, Feasibility 70%.
Draw a process portfolio and suggest one process to be selected for process improvement.
Justify your choice.
Exercise 2.10: University

High Schedule Develop and Manage Feasibility

Courses Manage
Study Programs
Student
Services Low
Market
Study
Programs Medium
Importance

Deliver Courses
High

Manage
Facilities

Low

Poor Health Good

Chapter 2: Process Identification

Contents
1. The Context of Process Identification
2. Definition of the Process Architecture
1. Process Categories
2. Relationships Between Processes
3. Reuse of Reference Models
4. Process Landscape Model
5. The Example of SAP’s Process Architecture
3. Process Selection
1. Selection Criteria
2. Process Performance Measures
3. Process Portfolio
4. Recap
SEITE 49
Recap

 In this chapter, we discussed process identification.

 Process architecture definition aims at enumerating major processes of organization.
 Process architecture defines relationship between processes.
 Seven-step method for definition of process architecture including process landscape model.
 Process selection is concerned with prioritizing processes.
 Priorities upon importance of processes, health, and feasibility of improvements.
 Assessed by process owners or grounded on process performance measures and objectives.
 Most common performance dimensions are time, cost, quality, and flexibility.
 Process portfolios help in selection of processes for improvement.
 Selected processes become subject of remaining phases of BPM lifecycle.

SLIDE 50