introduction to business processes, how to analyze them, and how their analyses may be used

This module is an introduction to the concept of business processes, which may also be known as business activities, functions, tasks,

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which may also be known as business activities, functions, tasks, procedures, steps, etc.

This module makes extensive of actual process examples; but it does not detail any one organization’s processes.

The first section of this module on business processes answers the question “Why focus on them?”...

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question “Why focus on them?”...

Every business does WORK...

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•Objectives: WHY we work

•Functions: WHAT kinds of work are performed within the whole company

•Data: WHAT information is needed to perform work &/or results from work

•Processes: WHAT work tasks are performed by individual people &/or machines

•Organization: WHO are the people and HOW are they organized to perform work

•Procedures: HOW and WHEN processes are performed by people

•Technology: HOW and WHEN processes are performed by machines

Work is defined by the stable activities that a business does, like functions and processes.

All other non-activities (e.g., objectives, data, organizations) can be linked (related) to specific activities.

So, stable activities (functions, processes) can be used as the common denominator or focus for understanding HOW and WHEN work is done and WHO performs the tasks.

Sloan Management Review / Summer 1996. Davenport, Jarenpaa, Beers “Improving Knowledge Work Processes”:

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“Improving Knowledge Work Processes”:

Professional knowledge workers [e.g., Operations Managers, CSCs] center their professional intellect around:

• know-what [business activities, functions, processes, tasks]

• know-how [policies and procedures]

• know-why [business direction, goals and objectives]

• self-motivated creativity

... in job roles that involve the use and application of knowledge.

A process approach attempts to separate the work (what you do) from the particular worker (who does the work) and to obtain an end-to-end view of how to best structure, sequence and measure work activities to reach targeted outcomes.

Processes...are a specific ordering of work activities across time and place, with a beginning, an end, and clearly identified inputs and outputs: a structure for action. The process approach promotes an examination of what and how things are done from a viewpoint of producing value for a customer.

Every business organization is a collection of business activities (functions, processes, tasks, procedures). These business

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(functions, processes, tasks, procedures). These business activities produce value, serve customers and generate income. Managing these activities is a key to the success of the organization.

Business activities can be used as a focal point or the common

denominator with other basic business objects (i.e., activity-based):

� WHY: Business goals and objectives

� WHAT: Business data and information

� WHO: Organization roles & responsibilities and job descriptions

� HOW:

• Manual policies and procedures and/or

• Technology use as either tools / machines or computer systems

� WHERE: Locations and places

� WHEN: Timeframes when work is performed

“Dispatch Trip” and “Perform Trip” are two real examples business activities

that are the focal points for other basic business objects:

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that are the focal points for other basic business objects:

�WHY: Business goals and objectives

�WHAT: Business data and information

�WHO: Organization roles & responsibilities and job descriptions

�HOW:

•Manual policies and procedures and/or

•Technology use as either tools / machines or computer systems

�WHERE: Locations and places

�WHEN: Timeframes when work is performed

Continuous improvement is exhibited in customer satisfaction, business retention and growth.

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business retention and growth.

Business activities are used as a focal point or the common denominator for continuous improvement.

The process approach allows us to separate what work is performed (business activities) from who performs the work (workers). The process approach allows us to peel away the complexity of organizational structures, internal politics, personalities, and so forth, in order to concentrate on the processes that are the heart of business.

So, when a problem exists, we can use business activities as the focal point of problem solving, rather than the more common approach of looking for a scapegoat (e.g., pointing fingers at individuals or job roles within the organization). Using activity-based problem solving and continuous improvement allows for more logical, accurate, and complete business analysis and solutions.

The second section of this training module on business processes answers the question “What are they?”...

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answers the question “What are they?”...

A business action or series of actions may also be called one or more units of work.

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units of work.

A process approach focuses on the breakdown of work into small, standardized, measurable tasks (i.e., a work breakdown structure) and on how these tasks are interrelated to one another (i.e., the output of one task is the input to another task).

A business activity can be described and assessed in terms of :

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♣ What Work done / actions taken = the task

♣ Inputs Resources (people, materials, equipment,

finances, data)

♣Outputs Products and services

• Who Roles, organizations, skills, staffing levels

• Where Locations and places

• When Frequency, timing, durations, events

• How Manual and technology-enabled procedures

• Why Purpose and goals

• How much Measurements (volumes, costs)

♣ = the core ingredients of a business activity are the work performed,

the inputs and outputs to the work done

Four kinds of business activities are reviewed:

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Four kinds of business activities are reviewed:

•Functions

(which are the logical, ongoing activities that describe “what” the business does

at the highest level)

• Processes

(which are logical, executable activities that also describe “what” is done)

• Tasks

(which are lowest level processes that usually are performed by

one person or team)

• Procedures

(which are the physical steps that describe “how” a

specific task is performed)

“FUNCTIONS” are the largest kinds of activities that a business performs. Collectively, one company’s functions are generally very

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performs. Collectively, one company’s functions are generally very similar to other companies within the same industry (e.g., distribution or logistics businesses generally do the same kind of work).

For the City of Chicago, the highest level “FUNCTIONS” include

• Operations

• Administration

• Human Resource Management

• Customer Services

• Emergency Services

In other words, CHARACTERISTICS OF A FUNCTION:

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• Lower-level business activities are grouped together into a business function, which describes some major objective of the company (e.g., Human Resource Management)

• Functions have no-beginning and no-end. They keep going on and on. They are too high level for any one person to actually accomplish one occurrence of the activity

• By naming functions as nouns or verbal nouns (i.e., gerunds) according to this rule of thumb, they can be distinguished from lower level activities that do have a beginning and end.

The word “process” has different meanings and definitions.

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We are going to try to clearly define and clarify what a process is...

A process is another kind of business activity which is at a lower level and is more precise (i.e., more detailed), as compared to a business

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and is more precise (i.e., more detailed), as compared to a business function.

Since a process has a distinct beginning (starting point) and end (stopping point), a process can be “executed” or “performed” once or many times.

In other words, CHARACTERISTICS OF A PROCESS:

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• Since it only describes “what” work is performed (e.g., bill customer), a process name does not describe “how” the work is performed (e.g., mail bill to customer)

• A process describes or is part of a “work breakdown structure” that can be assigned to a specific job role, but that job role is never included in the name of the process

• A work processes does something that is valuable to the business; so you shouldn’t see an activity like “Wait for Customer Order” as a process, since it doesn’t have any meaningful result/output.

• Since a process is executable (i.e., starts and stops), the lowest level (i.e., most precise, detailed) processes usually are performed by one or more specific job role

• A process is named using an action verb with a singular noun phrase, which helps to distinguish it as an executable versus ongoing work activity

A task is a special kind of process, which is generally performed by one person or team from start to finish.

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person or team from start to finish.

Since a task is the lowest level kind of process, it cannot be further broken down and still describe “what” (versus “how”) work is accomplished..

• As a lowest level process,

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to try to decompose it further would only result in a procedure or

steps that describe how the process is performed.

• Usually, one person or team performs a task

from beginning to end

without needing to take a break ...

• e.g., “Dispatch Trip”

• usually one CSC dispatches a trip

• once the CSC starts to dispatch a trip to a driver,

s/he usually doesn’t stop

until the individual dispatch is completed.

FUNCTIONS (ongoing activities) are composed of

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PROCESSES (executable activities), which are composed of

TASKS (lowest level unit of work that still describes “what” not “how”)

FUNCTIONS are named using nouns/verbal nouns to denote ongoing activities,... no distinguishable beginning or end

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activities,... no distinguishable beginning or end

PROCESSES and TASKS are named using verb and noun phrases to denote executable activities which have distinct beginnings and ends

A procedure is

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• the lowest level of activity

(it’s a physical, not a logical activity like functions, processes and tasks)

•mapped to one or more processes(one procedure can accomplish more than one process... generally a computer system

or may perform only one process... generally a tool or a manual process)

• a means of executing or a way of performing a process

= method to do a task(ie, describes how a processes performed, not what is performed)

•a series of physical steps that perform a process by means of:

• a person or a team(e.g., an individual can accomplish the steps required)

• a technique using some kind of tool(e.g., using fingers vs pencil vs pen vs calculator vs computer)

• information technology

(e.g., a computer system or program, a database, a telecommunication system)

• named by a technology-specific or a role-specific verb & noun• process = route deliver; this may be accomplished by :

• the ROUTER application which constructs a route

•a CSC or a driver who manually or mentally figures out the route

In other words, CHARACTERISTICS OF A PROCEDURE:

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• The step-by-step way of accomplishing a task is a procedure

• In describing “how” to do a task, usually a procedure includes tools or instruments that are used, whether a person or a computer/machine does the task, and specific techniques that are used

• Procedure names describe “how” an activity is done, not “what” is done like a process does

Two real examples of related business activities:

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↓ Functions (logical, ongoing “what” is done)

↓ Processes (logical, executable “what” is done)

↓ Tasks (one person executes “what” is done)

↓ Procedures (the physical steps “how” it’s done)

...............................................................................................................................

• Operations: Trip Management

• Perform Trip

• Dispatch Trip

•Print Dispatched Trip Report


• Train Employee

• Orient Employee to Customer’s Facilities

• Walk New Employee Around Customer’sWarehouse and Dock

Both activity analysis techniques are used as means

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• to communicate our understanding of activities to others

• to illustrate and describe activities

• to document activities

• to better understand and analyze activities

• to perform continuous improvement on processes

These activity analysis techniques are known by many different names.

ACTIVITY DECOMPOSITION• Indented lists • Outlines• Hierarchy diagrams• Work breakdown structure

ACTIVITY FLOW DIAGRAMS• Dependency diagrams• Workflow diagrams• Process flow diagrams• Data flow diagrams

(segue... from previous slide’s bullets)

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Activity Decomposition illustrates that activities are related by

• Top-down specification of components

• Decomposition defines lower level activities by

detailing (or specifying) more specific activities

• Bottom-up generalization of components

• Composition reduces complexity

by categorizing or generalizing detailed activities

into higher level activities

As activities are progressively decomposed,

the lower level activities define more details

Decomposition begins by taking an activity and determining the precise activities that make it up.

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activities that make it up.

The parent activity must be completely defined by all of its children activities. If any children activities are missing, then the parent has not been completely decomposed.

Decomposition stops when all tasks (i.e., lowest level processes) have been identified.

Basically, follow the same rules of “outlining” that you were taught in grammar school...

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grammar school...

• For any activity to be appropriately decomposed,

it should have more than one child activity

• All siblings (children under one parent)

should be the same level,

either all functions or all processes:

• Functions are broken down

into either other functions or processes

• Processes are broken down

into multiple lower-level processes or tasks,

but not into procedures / steps

• Decomposition stops

when all tasks have been identified.

The purpose of ACTIVITY DECOMPOSITION is to easily understand work activities by breaking down work activities into increasing levels of

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work activities by breaking down work activities into increasing levels of detail.

The purpose, scope and definition of each parent work activity is fully identified by its explicit subordinate children activities.

If an activity can be detailed into two or more activities which when combined are equal in functionality to the parent activity, then these should be diagrammed as subordinate activities.

Activity analysis techniques are used as means

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• to communicate our understanding of activities to others

• to illustrate and describe activities

• to document activities

• to better understand and analyze activities

•to perform continuous improvement on processes

These activity analysis techniques are known by many different names.

ACTIVITY DECOMPOSITION• Indented lists • Outlines• Hierarchy diagrams• Work breakdown structure

ACTIVITY FLOW DIAGRAMS• Dependency diagrams• Workflow diagrams• Value stream and value chain diagrams • Process flow diagrams• Data flow and object flow diagrams

An activity flow diagram shows that each activity has

• , which are the outputs from other activities, and

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• inputs, which are the outputs from other activities, and

• outputs, which are inputs to other activities.

These inputs and outputs illustrate how one activity is related to or dependent upon another activity.

This activity flow diagram of the “Trip Management” function shows that

• Trip Management is composed of 5 processes (Process Orders, Schedule Resources, Perform Trip, Close Out & Document Trip, and Plan Long-Term Resources)

• Each of these 5 processes is interdependent or linked with another process because their inputs and outputs make them related

• All of the processes are performed in a sequence that is related to the order in which the inputs and outputs are made available.

Note that the only mandatory rule is the first which requires that

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Note that the only mandatory rule is the first which requires that

within an activity flow diagram, every activity has

• inputs, which are the outputs from other activities, and

• outputs, which are inputs to other activities.

All other rules are optional guidelines.

There are many types of activity flow diagrams:

• Dependency diagrams

• Process flow diagrams

• Data flow diagrams

• Event diagrams

• Use case diagrams

• IDEF diagrams

• Workflow diagrams,

which are usually the only diagrams that may include “procedures”.

• The use of a specific type of activity flow diagram is tailored

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• to analyze business activities

• to help solve business problems

• to best communicate with the business

• Workflow diagrams are often used for continuous improvement because they can include:

•HOW: manual procedures on steps how the task gets done

•HOW: technological machines and computers

that perform specific work activities or

that help people do work (i.e., enable workers)

•WHO: organizations, job roles and job titles

•WHERE: locations where work is done

•WHEN: time events and frequencies when work is done

•WHAT: resources are inputs and

products &/or services are outputs

Plan Trip

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Execute Trip

Close Out & Document Trip

DOT Payroll BillingCompliance

The final section of this module on business processes answers the question “How do they help us?”...

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question “How do they help us?”...

Every business organization is a collection of business activities (functions, processes, tasks, procedures). These business activities

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(functions, processes, tasks, procedures). These business activities produce value, serve customers and generate income. Managing these activities is a key to the success of the organization.

Because business activities are:

• the target of the organization’s mission

• used as the focal point for other business objects (e.g., goals, information, job roles, policies & procedures, technology, locations and timeframes)

• the keys to continuous improvement

they are essential to organization’s vision of the future, since they are used to:

• analyze, redesign and document the organization’s initiatives

• be the stable building blocks for front-line jobs.

AS IS processes

• Establishes initial current processes and baseline

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• Establishes initial current processes and baseline

• the way people are actually doing work today (warts & all)

• a fragmented, inconsistent ad hoc state for front-line processes

• difficult knowing what to do (not defined)

• limited and uncertain measuring of work (not improvable)

• limited and unclear controls (not repeatable, not managed)

SHOULD BE processes

• Defines and engineers our current processes and designs a new baseline of the way work should be performed and managed

• according to policy & procedures

• using our existent or short-term developed technology

(i.e., state of the practice versus state of the art)

• consistent, repeatable state (predictable) for front-line processes

TO BE processes

• Optimizes our processes into a totally integrated business solution for DOH customers

• adding all integrated logistics processes

• cutting edge, state of the art technology

• an optimized, integrated state for processes

Part of MAGIC’s recommendations deal with detailing all the work processes that the front-line currently performs and then selecting which

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processes that the front-line currently performs and then selecting which processes should be performed in the future.

The functional scope of MAGIC focuses on 3 highest level functions which in turn decompose into the following functions and processes:

Operations

• Trip Management

• Customer Logistics / Finance Planning

• Safety & Security

• Quality Assurance

• Compliance

• Administration


Review the names of all the lower level functions and processes that are the children of the higher level functions above them.. This activity decomposition comprises the entire work breakdown structure for front-line employees and is the scope of MAGIC.

Part of MAGIC’s recommendations deal with accurately measuring the performance of its front-line processes and then rolling these

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Part of MAGIC’s recommendations deal with accurately measuring the performance of its front-line processes and then rolling these performance measurements up into Critical Success Factors.

Activities link process performance measures to CSFs.

Front-Line Functions

Each of 7 highest level front-line functions contains many low level processes or tasks. These tasks can be objectively measured.

Performance Measures

Some of these tasks have special outputs which are key performance measurements that indicate how well these tasks are performed at customer locations by front-line employees.

Critical Success Factors

The key performance measurements not only can yield objective information on how well location-tasks are performed, but also can be rolled up (i.e., data is accumulated and summarized) to the manager/supervisor level, Department/Commissioner level and the City/Office of the Mayor level. When these performance measurements are rolled up, they are funneled into the appropriate major categories that are well-known as Critical Success Factors.


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Since all front-line activities have been analyzed, the data output of specific tasks can now also be captured, reported on, analyzed and managed.

This example illustrates that the outputs of the processes involved with Trip Management: Close Out & Document Trip (e.g., captured in the the details of the Driver Exception Report, Driver HOS Report and Driver Log Audit) are used as the inputs to the processes involved in DOT Compliance: Comply with Drivers HOS Records.

Part of MAGIC’s recommendations deal with streamlining work away at the front-line. Work was selected to be removed where it could be

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the front-line. Work was selected to be removed where it could be accomplished more proficiently, more cost-effectively or with better quality by other job roles.

Examples of removing work from the front-line include:

• Extensive use of functional experts

• Full utilization of the Driver Recruiting Centers

• Safety & Security functional experts assisting customer locations with developing safety action plans

• Leveraging a team of Operational Vehicle Deputies across Departments to deal with

dispatching and work management responsibilities.


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This example illustrates how the tasks in Safety & Security, that should be performed by and/or supported by functional experts, are defined.

This type of functional expert / Go To Person list is now available in hardcopy and is accessible on-line in the MAGIC computer application linked to each task.

This capability is possible because each RIL process was analyzed and because the job role responsible to perform each task was designated.


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As these example extracts from 2 different job descriptions (i.e., CSC and Ops Manager) illustrate, different job roles generally perform different work tasks. The CSC role performs many more tasks in Trip Management than the Ops Manager. But the opposite is true in other front-line functions.

This capability is possible because each process was analyzed and because the job role responsible to perform each task was designated.


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This is a more complete version of an example job description for the CSC, than the previous slide.

Note that not only are all job tasks listed for the specific job role, but the frequency (i.e., “when” it’s done) for each task is also defined.

These job descriptions are now available in hardcopy and are basis of how the on-line user’s main MAGIC desktop window is laid out (i.e., by job-specific job tasks).

Part of MAGIC’s recommendations deal with enabling front-line workers with better tools, techniques and procedures.

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workers with better tools, techniques and procedures.

Work was selected to be enabled by technology (e.g., tools and computers) where it could be accomplished more proficiently, more cost-effectively or with better quality.

Examples of technology enabled work are:

• Leveraging existent technologies

• Deploying On Board Computers (OBCs) in all City vehicles to completely and accurately capture trip data at its source

• Implementing new technologies to help perform some processes

• Using Computer Based Training (CBT) for specific types of front-line training

•Creating MAGIC computer application as a user-friendly way to deploy process-oriented work


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�HOW:

• Manual policies and procedures and/or

• Technology use as either tools / machines or computer systems


The City’s Operations Policy & Procedure Manual has been significantly augmented in the MAGIC initiative:

•to include all the business processes and

•to cross-reference (i.e., map) each process to all relevant policies and procedures

The revised City’s Operations Policy & Procedure Manual will be available in hardcopy and accessible on-line in the MAGIC computer application linked to each task.



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�HOW: •Manual policies and procedures and/or

•Technology use as either tools/machines or computer systems


The MAGIC computer application is a Windows-based client/server PC tool that contains a series of process menus which correlate directly to MAGIC’s business processes. MAGIC’s desktop is designed to be the standard computer interface for all front-line personnel at all locations that uses this process-based interface as the...

• foundation for standardized job-specific functions, processes & tasks

• base architecture for the development of the MAGIC suite of application modules / automated procedures

• driver access into MAGIC’s information systems (i.e., automated procedures)

• launching tool to various policy & procedure manuals and references

• deployment vehicle for MAGIC’s training and process-specific HELP

• framework for interfacing and integrating current technologies (eg, 311, GIS/GPS)