Business process perspectives: Theoretical developments vs. real-world practice

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Int. J. Production Economics 114 (2008) 91–104 www.elsevier.com/locate/ijpe

Business process perspectives: Theoretical developments vs. real-world practice K. Vergidis, C.J. Turner, A. Tiwari Decision Engineering Centre, School of Applied Sciences, Cranfield University, Cranfield, Bedfordshire MK43 0AL, UK Received 27 March 2007; accepted 22 December 2007 Available online 19 January 2008

Abstract Business processes have been discussed for more than a decade now. However, there are not as of yet comprehensive and substantial benefits that can justify the hype around the concept. This paper contrasts and summarises the main findings of literature research and a targeted survey conducted within the service industry in order to investigate the current state of research and practice regarding key aspects of business processes. The survey involved the participation of 25 respondents working in service industry sectors such as finance, public sector and consultancy. The paper demonstrates that although theoretical developments are dealing with sophisticated issues around business processes, the service industry is reluctant to adopt a similar perspective and still uses simple and manual techniques in dealing with business processes. The main reason is that the service industry is not convinced that a business process approach could bring significant tangible and measurable benefits. This is due to the fact that there is no comprehensive and systematic solution proposed in terms of a fully functional business process software suite. The requirements for an integrated business process management tool include some of the paper’s findings. r 2008 Elsevier B.V. All rights reserved. Keywords: Business processes (bp); (bp) Mining; (bp) Modelling; (bp) Analysis; (bp) Improvement; (bp) Conformance

1. Introduction It is more than a decade now that business processes have captured the interest of both researchers and practitioners. However, there is still a variety of different perceptions on how an organisation can benefit by adopting a business process perspective. There is an appealing range of business process Corresponding author. Tel.: +44 1234 750111x5654; fax: +44 1234 754605. E-mail addresses: k.vergidis@cranfield.ac.uk (K. Vergidis), c.j.turner@cranfield.ac.uk (C.J. Turner), a.tiwari@cranfield.ac.uk (A. Tiwari).

management (BPM) software in the market and an abundance of interesting findings regarding business processes in the literature. However, there is no comprehensive understanding as of yet regarding the benefits that business processes can bring to the service industry. The phenomenal gap between the theoretical developments and the service industry issues regarding business processes is the main focus of this paper. To underline this gap and to highlight the potential of future directions for business processes, this paper combines the findings of literature research with a targeted service industry survey as described in the next section.

0925-5273/$ - see front matter r 2008 Elsevier B.V. All rights reserved. doi:10.1016/j.ijpe.2007.12.009

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2. Methodology The aim of this paper is to compare the theoretical issues regarding business processes with the real-world practical problems. Associating and examining these two can assist researchers to recognise and address more practical problems and can also highlight the requirements and solutions that the service industry is seeking. In order to bring these two approaches together, a twofold method was followed: a. literature research, to investigate the theoretical part and b. a targeted service industry survey, to convey the real-world issues. The literature research provided an overview of the key business process issues and underlined the diversity of opinions and approaches reported by various researchers. The aim of the literature research sections in the paper is not to provide a detailed insight into current work but rather to highlight the gaps and potential developments regarding the business process issues that are examined. These sections stress the theoretical issues that researchers are concerned with and whether these have been adequately addressed. Extensive literature research regarding business processes is provided by Vergidis et al. (2007) who present a classification of modelling techniques regarding business processes in the context of analysis and optimisation. This paper presents a selection from those references based on their relevance and significance to the aspects of real-world practice discussed here. Melao and Pidd (2000) also present a literature review focused on business processes and modelling. They adopt four different perspectives for understanding the nature of business processes and identifying the most common modelling approaches for each perspective. The survey highlights the issues that service industry has to deal with and works as a comparison with the current state and orientation of research. Kettinger et al. (1997) have also conducted a thorough study of business process reengineering methodologies, techniques and tools that are adopted by 25 international consultancy firms. They report a widespread use of process capture and modelling techniques and also present a comprehensive list of the appropriate software tools and the techniques (e.g. process flowcharting, data flow

diagramming) that each of the tools supports. The survey presented in this paper targeted service industry practitioners engaged in business processrelated activities in a range of service organisations. The total number of participants was 25 from various types of service-oriented organisations detailed in Table 1. It was decided that the best form of data capture for this survey would be provided by the questionnaires. This was due to the nature of the subject being researched and the need to be consistent and precise in the questions. The questionnaires are able to deliver a more accurate view of the overall trends in the service industry with reference to business process issues that this paper is concerned with. The survey was conducted using two types of questionnaire: (i) semi-structured questionnaire for faceto-face interviews and (ii) on-line questionnaire (containing mostly multiple-choice questions). The semi-structured questionnaire for face-toface interviews was partly survey based and partly fully structured. A fully structured questionnaire has predetermined open response questions and differentiates from a survey questionnaire in which questions are more likely to be closed (Robson, 2002). In total, five face-to-face interview questionnaires were conducted, each lasting approximately 1 h and containing a mixture of open and closed questions. This included a multiple-choice section that repeated some key questions for confirmation. Participants from face-to-face interviews were selected from service sector-based companies that deploy the concept of business processes. Results from the face-to-face interviews were analysed to develop the on-line version of the questionnaire. The on-line version of the questionnaire is a selfcompletion survey. The purpose of the on-line questionnaire was to capture a wider audience and ensure generality. It allowed 20 respondents to answer a range of multiple choice and short-answer questions via a web-based fill-in form. The average Table 1 Number of surveyed respondents based on their organisation type Organisation type

No. of participants

Finance & banking University & public sector Consultancy Other service-based organisations Total

7 7 3 8 25

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time of completion was 15 min. The on-line questionnaire, while lacking in detail in some areas, was able to deliver a quantitative view of the overall trends in the service industry with reference to business process modelling, mining, optimisation and conformance. In this case, the reliance on the interviewee to interpret the questions correctly and provide responses made it even more important to trial the questions. Both questionnaires were piloted by three people from a service-based organisation. Oppenheim (1992) puts forward the concept of dividing the questionnaire into modules with each module concentrating on one concept or variable. This notion has been incorporated into the design of the questionnaire used in this research, breaking it down into three main sections: 1. business process basics, 2. modelling and mining, 3. analysis, improvement and conformance. Both the interview and online questionnaires were structured in a similar way and contained these three sections. These sections illustrate the areas of business processes that this work is focusing on. The remaining part of this paper is also organised in a similar way. Each section of this paper is broken down into two main parts: the first part discusses the theoretical developments based on the literature research findings and the second part presents the service industry perspective based on the survey results. Section 3 of the paper focuses on the understanding of basic concepts around business processes. Section 4 examines the various modelling and mining techniques used both in the literature and real-world practice. Section 5 focuses on the potential that business processes offer for quantitative analysis, improvement and conformance. Finally, Section 6 underlines the main findings of the paper by contrasting the theoretical developments versus real-world practice regarding the business process issues that the authors selected to focus on. 3. Business process basics The first issue regarding business processes is the understanding about the concept itself and the benefits it can bring to an organisation. This section demonstrates that both in the literature and in the service industry there is a generic—and sometimes vague—understanding about business processes. This is one of the main reasons for the diversity of

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approaches that seek to address issues vital to the elaboration of the business process perspective. The first part of the section underlines the different viewpoints in the literature for a definition of business processes and BPM, and the second part goes beyond that, exploring how business processes are perceived and treated in the real world. 3.1. Business process definitions in literature There are plenty and diverse business process definitions found in relevant literature. Still there is no precise and commonly agreed definition about business processes that can ground them as a unique research area. Havey (2005) provides a simple definition of business processes as ‘step-by-step rules specific to the resolution of a business problem’. A more formal definition from the Workflow Management Coalition (WfMC, 1999) states that: ‘A business process is a set of one or more linked procedures or activities which collectively realise a business objective or policy goal, normally within the context of an organisational structure defining functional roles and relationships’. These and many other definitions are generic and do not adequately describe the nature and the application area of business processes. Since the 1990s when business processes appeared in the literature, many authors have come up with their own version of business process definition usually with one purpose: to try and orient business processes towards a particular direction by highlighting specific aspects. However, in almost every reference in this area, two particular business process definitions are reverently cited. The first comes from Hammer and Champy (1993) who state that ‘a business process is a collection of activities that takes one or more kinds of inputs and creates an output that is of value to the customer’ and the second is from Davenport (1993) who claims that ‘a business process is defined as the chain of activities whose final aim is the production of a specific output for a particular customer or market’. There are references such as Lindsay et al. (2003), Melao and Pidd (2000) and Tinnila (1995) that provide compilations of the various business process definitions. Although most definitions tend to be similar in the concepts they use to express and describe business processes, they have received criticisms for not adequately highlighting the ‘business’ component and not sufficiently distinguishing them from manufacturing or production processes (Lindsay et

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al., 2003). Volkner and Werners (2000) claim that no generally accepted definition of the term business process exists due to the fact that business processes have been approached by a number of different disciplines. Lindsay et al. (2003) report that most business process definitions are limited in depth and the corresponding models are also constrained and confined to a mechanistic viewpoint. The problem with business process definitions in the literature is twofold: either they are too simplistic and basic thus too generic to provide any tangible contribution or they are confined to a very specific application area that prevents them from wide acceptance and applicability. The notion of BPM is among the key trends regarding business processes. According to van der Aalst et al. (2003), BPM is a field of knowledge that encompasses methods, techniques and tools to design, enact, control and analyse business processes. BPM differs from business process reengineering, a management approach popular in the 1990s, in that it does not aim at one-off revolutionary changes to business processes, but at their continuous evolution. Lindsay et al. (2003) suggest that BPM strives to better understand the key mechanisms of a business in order to improve, and in some cases radically change, the business performance by identifying new business opportunities, for outsourcing, for improving business efficiency and for areas within the business where technology can be used to support business processes. The implementation of BPM software in an organisation can enhance the existing enterprise resource planning (ERP) solutions. Existing ERP solutions deliver visibility of critical information such as stock levels, order processing, cost centres or distribution schedules, whilst providing the functionality to formalise and process business transactions. However, they still remain user-driven, departmentalised in their focus and disconnected from external business events. According to Jarrar et al. (2000), BPM software can resolve these problems by transforming static, user-driven ERP applications into powerful solutions that have the capability to automate a variety of business processes. 3.2. The service industry perception of business processes The survey respondents were first asked about the perception of business processes. This contributed

to understanding the diversity of approaches and issues. Our interest was not only in asking for a definition from the service industry practitioners but also investigating the structure of their organisation, the flow of the business processes and the use of any business process-related software tools. Based on the answers provided, the understanding of business processes is characterised by three distinctive points of view: (i) as structured processes similar to production processes, (ii) as methodologies to achieve a business goal and (iii) as complex sociotechnical constructs that involve elements from both the above categories but with more emphasis on human interactions and relationships. The participants were asked to rate the above three approaches. Their ratings focused on the structured process view (with clearly identified inputs and outputs) and the view of process as enactment of actors aiming to achieve a business goal (softer and unstructured perspective). The definition regarding the sociotechnical perspective received little coverage. In all, 21 of the respondents (84%) feel more comfortable in dealing with business processes in a structured way rather than a softer approach that involves non-quantifiable business goals from a strategic level. Service industry practitioners want a clear and concise view of the business processes within the organisation and a solid understanding about their flow rather than discussing about the social interactions and effects that the process triggers. The need for rationalising business processes is one of the major drivers for business process modelling and the reason an abundance of modelling techniques available at hand. Having this perspective of business processes treated as structured processes within the organisations, we could discuss with confidence issues regarding the control of the process flow and the organisational structure from a business process perspective. Business process pioneers envisioned business-process-centric organisations, where all the resources are organised around the organisation’s business processes. This would remove the necessity of reinforcing an explicit process flow across the different departments because the departments would function a priori in a business processoriented fashion. However, this survey suggests that this is far from being realised in the real world where the traditional departmental segmentation dominates the organisational structure. Fig. 1 demonstrates the responses of the 25 participants regarding the organisational structure.

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Organisation built around business processes 24%

Other 4%

Crisp departmental segmentation 8%

64% Departmental segmentation with cross-functional teams

Other 16%

32% Shared process knowledge among the main participants

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No one has explicit knowledge about the complete process flow. 8%

44% Specific process owner for each business process

Fig. 2. Business process ownership within organisations.

Fig. 1. Business processes and organisational structure.

A total of 64% provide a recognisable common practice regarding business processes. This, although preserves the traditional departmental segmentation, recognises the need for cross-departmental coordination and co-operation for processes to be effectively enacted. This process enactment comes smoothly for the 24% who responded that their organisation has moved away from traditional structures and operates around the main business processes. In the majority of the cases in which the organisation is not built around business processes, controlling the process flow becomes a crucial issue for uninterrupted and immaculate process enactment. In order to control the process one has to own and manage it first. The results shown in Fig. 2 communicate the responses about the current practice of process ownership and process flow knowledge within an organisation. It is encouraging that 44% of the respondents (11) claim that their organisation appoints specific process owners responsible for each business process. Central coordination and understanding of the complete process is essential in order to manage its enactment efficiently. Another 32% state that the process knowledge is shared among the main participants of the process, which implies that there is loose process knowledge shared among the main participants. This usually results in the lack of concrete understanding and central co-ordination in business process enactment. There is also an 8% (2 participants) who respond that no one has explicit knowledge about the complete process flow. This percentage can be easily matched with the 8%

of the previous question who stated that the various departments work independently in the organisations (see Fig. 1). Departmental segmentation without established interdepartmental communication results in isolation of the different operations and this can have detrimental effects on the processes at stake. Business process automation (BPA) is one of the main trends regarding business processes and involves the automation (part or complete) of the process using software enactment tools. Automating a business process gives the opportunity to collect real execution data continuously from which exact information about the process performances can be obtained and can then be used for monitoring, work balancing and decision support (Abate et al., 2002). The benefits of such automation are that the processes can be executed faster, with lower costs (due to the reduced human involvement), and in a controlled way, since the enactment system can detect exceptions or delays in process executions (Castellanos et al., 2004). For the organisations that participated in the survey, there is at least a 50:50 split between automated and manual processes. The overall percentage of automated processes was identified as 66% for banking and finance organisations, which was the highest of any sector. The lowest level of automation was to be found in the university and public sector with only 30% of processes automated, followed by the consultancy sector at 33%. It is important to note that, as more and more processes become automated, the focus of both service industry and academia shifts from deployment to process monitoring, analysis and

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optimisation (Castellanos et al., 2004). These issues are investigated and discussed in the sections that follow. The last question related to the basics of business processes examined whether the organisations that participated in the survey make use of the capabilities of the contemporary BPM tools (a list of representative business process software was provided). Over half the respondents stated that their organisation uses BPM software, a fact that is encouraging for the development and elaboration of business process-oriented software tools. Among the software packages named by the respondents, SAP NetWeaver and various components from ARIS Platform were the most commonly implemented solutions. Other organisations reported customised tools where the process management elements consisted of custom built code integrated with corporate databases or existing process/task specific software. Customised tools aim to address critical software integration issues among the specific solutions that have been implemented in the organisation. The other half of the respondents claimed that either their organisation does not use any software or they are not aware of a business process suite being used within their company. These findings indicate that the market for BPM software is growing and it is finding its way to the corporate environment. Based on the survey answers, the requirements from a business process suite are: visual editor for process modelling (requested by 28% of the respondents), customised specification of key performance indicators (KPIs) (16%), support for process simulation (12%) and generation of optimised process models (8%). Other requirements include process execution/enactment capability, different process detail levels (e.g. hierarchical) and capability to model services. 4. Modelling and mining After investigating the essence of business processes, the second major part of the survey seeks to identify the service industry practices regarding business process modelling and mining and compare them with the theoretical developments that are described in the literature. Business process modelling is concerned with depicting and representing adequately a business process emphasising its aspects that need to be communicated and dealt with. Business process mining is the capability of discovering business processes from logs that store

past process executions. Both are extensively discussed in the literature but the service industry practice seems to have fallen behind as the survey sub-section suggests below. 4.1. The theory for business process modelling and mining The need to represent a business process is related to the understanding about them. According to van der Aalst et al. (2003), business process modelling is used to identify and specify business processes. Lindsay et al. (2003) describe business process modelling as a snapshot of what is perceived at a point in time regarding the actual business process. According to Volkner and Werners (2000), business process modelling is essential for the analysis, evaluation and improvement of business processes as it is used to structure the process, such that the existing and alternative task sequences can be analysed systematically and comprehensively. Business process modelling is a useful tool to capture, structure and formalise the knowledge about business processes (Guha et al., 1993; Abate et al., 2002). There is an abundance of business process modelling techniques that capture different aspects of a business process. Aguilar-Saven (2004) provides a review regarding business process-modelling techniques and suggests that business process models are mainly used to learn about the process, to make decisions about the process and to develop business process software. For each of these purposes, some business process-modelling techniques are better suited depending on their particular constructs. Aguilar-Saven (2004) also provides an extensive and updated list of software tools that are associated with the process-modelling techniques presented in the paper. The most common diagrammatic techniques for business process-modelling are flowcharts, IDEF and Petri-nets. However, there is a need for models that are able to address the design complexities and identify problems encountered in modern business processes. Despite the existence of many formal process-modelling notations, the majority of the business process community uses simple diagrammatic modelling techniques. In terms of process mining, one of the first explorations was made by Cook and Wolf (1998), who mined data sets to construct models of software processes. The work of van der Aalst and Weijters (2004) is of particular interest in the practice of business process mining. van der Aalst and Weijters

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(2004) and Alves de Medeiros et al. (2003) outline the main achievements in this area while also describing some of the challenges that process mining faces. The problem of process rediscovery is fundamental to process mining and is addressed by van der Aalst et al. (2002). These authors explore the class of business processes, which in their view can be rediscovered from workflow logs. The mining of concurrent processes has been explored by Schimm (2004) who concentrates on the task of mining exact workflows from event-based data. Cook et al. (2004) also examine the problem of mining concurrent workflows. The use of genetic algorithms for process mining is an area explored by Alves de Medeiros et al. (2005). This technique allows for process patterns to be represented as chromosome strings. Research has been conducted into most of the problems encountered in process mining such as noise and mining loops. The most widely investigated perspective of process mining is the control flow perspective, which concentrates on the ordering of tasks (van der Aalst and Weijters, 2004). van der Aalst and Weijters (2004) also suggests that almost any transactional information system can provide suitable data for mining the process tasks. 4.2. The real-world process-modelling and mining practices The second major part of the survey seeks to identify the service industry practices regarding

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business process modelling and mining. Given the abundance of process-modelling techniques, the authors wanted to identify whether there is a common practice in capturing and depicting business processes within organisations. The participants were provided with a list of the most common business process-modelling techniques, identified from the relevant literature research: flowcharts, IDEF models, Petri-nets and documentation (textual description of the business process). The participants were asked to identify and rank how frequently each of these techniques is used within their organisation. The results demonstrated in Fig. 3 show that the majority of participants (11) use basic flowcharts with informal notation. A vast 44% responded that flowcharts are ‘common practice’, 32% responded ‘frequently used’ and 24% responded ‘sometimes used’. IDEF models are ‘sometimes’ used by 32%, while 60% ‘rarely’ or ‘never used’ this modelling technique for business process modelling, although relevant literature seems to strongly favour it. For Petri-nets—that are strongly supported by authors related with workflows—31% responded that they are ‘rarely used’, while the vast majority (68%) have not used them at all. Process documentation is a common practice for 12%, while another 78% claim that it is ‘frequently’ or ‘sometimes’ used. While process documentation is ignored in business process literature—as it can be argued whether it is a modelling technique—it is well established as a technique for describing and detailing business

Fig. 3. Business process modelling techniques used within organisations.

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processes. In all, 36% of the respondents (9) claim to use other modelling techniques for business process modelling without providing further details. Discussions about business process modelling often involve the patterns that are observed and supported by the various business process models. A modelling pattern is ‘the abstraction from a concrete form which keeps recurring in specific nonarbitrary contexts’ (Riehle and Zullinghoven, 1996). A process-modelling pattern is a cluster or a constellation of process activities arranged in just the right way to solve a difficult problem. The survey participants were asked to select from a predefined list one or more of the patterns that appear in their business process models. The business process patterns that were listed were (i) sequential flow, (i) parallel flow, (iii) decision and (iv) feedback loop. These were considered to be the most profound, based on the list of patterns that Havey (2005) cites. All these business process patterns were recognised by the vast majority of the respondents (22) as frequently occurring in their organisational business processes. Some participants even reported other process patterns that they have encountered such as asynchronous flow, event- and rule-driven flow. Business processes do have complex constructs that need to be taken into account when modelling or mining. For process mining to occur there should be some sort of process-monitoring capability within the organisation. The survey results reveal that around 56% of respondents said that there was some form of monitoring in place for their business processes. Several open responses to this question added that the monitoring was sometimes patchy and inconsistent between the various departments. A large percentage of respondents (72%) highlighted that their organisation regularly undertook reviews of their business processes. Some respondents mentioned that the reviews took place on a project-byproject basis and overlooked processes across the organisation. Other respondents mentioned that they were trying to organise regular departmentwide reviews of processes. Only 12% of the respondents (3) stated that their company undertook process mining activities, despite the fact that 60% of the respondents (15) confirmed that their organisation did retain records of past process executions. The maintenance of past records varied between different departments of the same organisation. This along with the general acceptance of the need for regular process reviews does point to the

No such requirement 12%

Don't know/ Not sure 8%

80% Need enhanced process mining capabilities

Fig. 4. The demand for advanced process-mining capabilities.

potential for wider acceptance of process mining software in service-based organisations. However, the existing process mining tools offer limited capabilities. The vast majority of the respondents (80%) said they would require a software tool with enhanced capabilities in mining processes from stored logs of past process executions (Fig. 4). These advanced capabilities involve the quantification of disparities between template and actual processes. 5. Analysis, improvement and conformance The final section of the survey dealt with process analysis, improvement and conformance. These are the three essential aspects of business processes that can justify their potential for organisational improvement. Process analysis is a term used with a broad meaning, but still is inherently linked with process improvement. Conformance is the next step after improvement in order to check if the improved process is actually incorporated in the organisational practice. This section briefly discusses the main literature findings in these subjects and then goes further to see whether they match the survey findings. 5.1. Theoretical developments Business process analysis is a term used with a broad meaning including simulation and diagnosis, verification and performance analysis of business processes. Most of business process analyses performed are based on subjective rather than objective methods (Valiris and Glykas, 1999). Boekhoudt et al. justify the necessity for the analysis of business process models in order to clarify the business process characteristics, identify possible bottlenecks

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and compare any potential process alternatives. Process improvement can also occur through formal techniques (van der Aalst et al., 2003) that support both the modelling and the analysis of business processes (van der Aalst and van Hee, 1996). Unfortunately, the current state of analysis of business processes often consists only of simple inspection of process diagrams (Phalp and Shepperd, 2000). This analysis approach can be time consuming and heavily dependent upon the experience of the modeller whose conclusions are frequently based on his/her knowledge of the particular business domain and his/her skills (Ould, 1995). Furthermore, process analysis has little value, unless it can help in improving or optimising a business process (van der Aalst et al., 2003). A holistic approach towards business processes should capture a business process (business process modelling), provide the necessary means for bottleneck identification and performance analysis and—finally— generate alternative improved business process(es) based on specified objectives. But often the last part (business process optimisation) is overlooked—if not completely neglected (Hofacker and Vetschera, 2001). Current process conformance research focuses on the measurement of software processes. An early study by Sorumgard (1996) defined process conformance as ‘the degree of agreement between a process definition and the process that is actually carried out’. Cook and Wolf (1999) also looked at the ‘validation’ of software processes against process models and put forward a set of validation metrics. Later, Breu et al. (2001) demonstrated a five-level conformity model for the measurement of software processes against a generic software process model. While there has been much work conducted into process conformance of software processes, work in the area of business processes is limited. Delta analysis is one method that may be used to compare business processes (van der Aalst, 2005), with the caveat that at present there is no agreed standard for comparing processes; therefore, a need for the definition of a mathematical index for business process conformity exists. One possible method of process conformance, which may form the basis for a mathematical index of business process conformity, is benchmarking. Benchmarking is a quality measurement technique commonly used in business; its definition and basic use is highlighted by Pulat (1994). Only a few quantitative methods of process conformance exist at present.

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However, the string distance and benchmarking methods outlined by Cook and Wolf (1999) and Juan and Ou-Yang (2004), respectively, do offer a potential base for a more formal generic approach to process comparison. Juan and Ou-Yang (2004) propose an algorithmic method for identifying and quantifying process conformance gaps in their attempts to quantify qualitative information using a semantic similarity score. 5.2. The service industry perspective Business process analysis can significantly contribute to the organisation by locating any bottlenecks in their processes. Analysis can be carried out in a qualitative or quantitative fashion. The service industry is focused on quantitative analysis as only this can result in measurable business process improvement. A total of 80% of the survey participants (20) responded that quantitative analysis of business processes occurs in their organisation and it is performed using the concept of KPIs. The KPIs are measurable factors that assess either direct results of business processes or aspects that are directly affected. A total of 36% of the respondents (9) use simulation packages to simulate and extract quantifiable results from business process executions. Simulation packages allow the definition of various KPIs but the results are not of the same use as the ones based on real process execution data. Other approaches to quantitative business process analysis involve manual processing, customer feedback and measurements provided by BPM suites. Since KPIs are widely used within the service industry, the most widely adopted KPIs in terms of analysing business processes were identified from the participants. The main responses are grouped and summarised in Table 2, along with the percentage of respondents who reported using the same KPI. Five of the survey participants indicated as an established measure of a business process the time that it takes to complete and produce or satisfy the business outcome (lead time). The use of balanced scorecard to measure/evaluate processes is common among four participants. The scorecard contains a range of KPIs such as the ones cited in Table 2. Three participants evaluate business process performance based on client acceptance and appreciation. This occurs by filling customer satisfaction surveys that are subject to quantification and further analysis. Process cost has also been mentioned as

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Table 2 Responses about the most widely used KPIs

Table 3 Responses about business process improvement techniques

Business process KPIs

% Of respondents (no. of respondents)

Business process improvement techniques

% Of respondents (no. of respondents)

Lead time/cycle time Balanced scorecard Client acceptance/appreciation Process cost KPIs customised for each particular process KPIs mapped to strategic/business goals Benchmarking Profitability Financial/stock measures

20 16 12 8 8

(5) (4) (3) (2) (2)

16 (4) 12 (3)

8 4 4 4

(2) (1) (1) (1)

Six sigma Software assisted—ARIS Platform, PRISM, Intelicorp Corporate internal methodologies/ projects Lean techniques Total quality management—TQM Observational analysis/process reuse

an important factor for evaluating the business processes by two participants. Apart from specific KPIs, two different generic perspectives were mentioned by four respondents. Two of them use process-customised KPIs, while the other two use KPIs that are mapped to strategic and business goals, thus relating the processes directly to the corporate strategies. Other KPIs (or approaches to process measurement) reported are benchmarking, profitability and other financial/stock measures. One respondent also reported that the findings of the process evaluation are fed back into the execution of the process. This concept of continuous feedback based on real execution data is a very appealing subject for business process improvement and it is encouraging to encounter it in the real-world practice. However, a dominating 56% of the respondents (14) stated that there is no improvement initiative for the organisation’s business processes. The remaining 44% reported process improvement techniques that are grouped and summarised in Table 3. The most popular approach is Six Sigma as stated by four participants. Three stated that their processes are improved using software tools, such as ARIS Platform, PRISM, Intelicorp, and another three claimed that there are internal projects or improvement methodologies within their organisations, without providing further details. Lean techniques and total quality management were reported as process improvement initiatives by two participants. Another two reported observational analysis and process reuse as part of improving the organisation’s business processes. It is important to note that none of the improvement approaches cited in Table 3 is exclusive to business processes. Most of

12 (3) 8 (2) 8 (2) 4 (1)

the techniques are borrowed from managementrelated disciplines. The lack of a consistent optimisation technique created and customised for business processes is evident. The idea of evolving a dedicated optimisation technique for business processes appealed to the vast majority of the participants. They were also asked to rank the importance of four different factors about the development of such an optimisation technique. The most important factor was ‘resource allocation’ as 56% of the respondents ranked this factor as ‘very important’ for a business process optimisation approach. Second with 40% responses is the ‘activities reduction/consolidation’ element and third with 32% is ‘company policy/ rules’. Finally, 24% of the respondents would take into account ‘external environment/competitors’ in a business process optimisation framework. It has been mentioned previously that a majority of respondents stated that there were regular reviews of business processes within their organisations. However, when asked about the methods used to identify ‘bottleneck’ issues within existing processes, a massive 60% of the respondents (15) said that their organisation did not have a formal method for undertaking this activity as Fig. 5 shows. Furthermore, 16% (4) suggested that the various process bottlenecks are identified only from manual inspection and 24% (6) reported partially or fully automated bottleneck detection. Process conformance activities do occur within the majority of the participating organisations as suggested by Fig. 6. However, a wide variety of approaches are used ranging from manual flowchart comparison to process model software simulations. According to the survey results, many organisations use existing enterprise applications— not designed for process conformance activities—to

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Partial/full automated detection 27%

58% No formal method for bottleneck identification

Fig. 5. Bottleneck problem identification.

Rarely

12.00%

8.00%

Sometimes

Frequently 0.00%

analysis of statistics and/or simulation models. From the findings of this survey it is evident that there is no particular consensus on methods used for the comparison of business processes within the service industry. 6. Overview and discussion

15% Manual detection

Never

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68.00%

12.00% 20.00%

40.00%

60.00%

80.00%

Fig. 6. Frequency of process conformance activities within the organisations.

draw conclusions about the operation of processes and their comparison with an ideal template. It was noted from the responses given that the more complex the process the more likely that the conformance activity would be manual in nature. It is interesting to note that there is some limited use of the relatively new Business Process Modelling Notation (BPMN) standard designed specifically for the modelling of business processes. In terms of the quantification of disparities between process templates and actual processes, the overall view was mixed. A total of 36% of the respondents (9) had no particular method of quantifying disparities and 24% (6) had a qualitative manual method with a few citing methods such as the balanced scorecard. The remaining 40% (10) used some form of software-based statistical analysis to arrive at a measure of disparity. Such methods ranged from benchmarking techniques to softwarebased simulation of processes. It was noted that the qualitative approaches for process comparison and disparity analysis were also manual in nature. Only quantitative approaches employed software for the

This section summarises and discusses the main findings of this paper. This paper contrasted the theoretical developments versus the survey results on a number of key aspects of business processes. The overall outcome is that although practitioners are aware of business processes and the potential benefits they can offer, their organisations do not provide essential support in areas such as process modelling and improvement where the benefits of a business process-oriented approach can be justified. Both the academic researchers and service industry practitioners feel more confident in dealing with structured and defined business processes. This is justified by the fact that a structured process with expected (or predefined) inputs and outputs is subject to quantification and measurable evaluation. Dealing with or discussing about business processes in a more soft perspective usually results in management theories with no direct applicability or tangible results. Although structured and formal approaches to business processes are accused of being ‘mechanistic’, the service industry is not willing to adopt a business process-oriented practice unless there are tangible benefits, since the adoption of such an approach usually requires internal restructuring. This also explains the fact that organisations are still operating under the traditional departmental structure. Having a departmental structure, however, means that business processes are being imposed like an external separate entity that demands the participation of disparate departments, resources, actors, etc. This results not only in a continuous challenge for effective business process enactment but also in a lukewarm attitude by the main stakeholders. In order to manage a business process that is ‘enforced’, process ownership is crucial. The lack of concrete process management results in vague knowledge about the process, its main elements and its flow. Business processes without explicit ownership and management become fragmented within the various departments and their scope and outcomes become unclear.

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In order to highlight the value that business processes can offer to an organisation, there must be a standardisation of the techniques used for the key aspects examined in this paper. Investigation of business process modelling both in the literature and in the service industry proved that simple diagrammatic techniques such as flowcharts still dominate the area. This reflects the need for a simple, communicative and effective illustration of business processes. Using advanced—and perhaps more complex—modelling methods does not guarantee a more formal and structured approach towards business processes; it might even discourage the community. Business processes need standards such as BPMN that provide exclusive business process-oriented modelling constructs that result in simple and communicative models. Also such standardised modelling techniques provide support for all the patterns that are required to build a business process model, making its construction hassle free. Process mining is an area that needs to gain further appreciation in order to be incorporated in the service industry practice. The necessity for the development of advanced process mining techniques is underlined both by researchers and practitioners. Having the ability to search and discover ‘hidden’ business processes—or parts of them—in process logs offers the capability of tuning and adjusting the business process models based on their actual flow of execution. The potential to conduct process mining does exist in most organisations as a large amount of data exists from past process executions. This can also help in identifying bottlenecks and problems that could not be identified otherwise. Process analysis shares a similar situation as it is still largely perceived as the manual inspection of diagrams. Due to the qualitative nature of business process modelling, quantitative analysis and process evaluation are hard to apply. Manual or qualitative analysis approaches, such as diagram inspection, overshadow techniques that can be used for performance analysis to aid process improvement initiatives. Based on the service industry survey results, it can be concluded that business process reviews take place within the majority of respondents’ organisations; however, they are largely manual. There are, however, few formal approaches for identifying bottlenecks in existing processes. Most methods for this are ad hoc in nature and are based on manual analysis of flowcharts or observation of processes in action. It is encouraging,

however, that the survey participants have a clear focus on the quantitative KPIs they would like business processes to be evaluated with. But this quantitative evaluation currently takes place only in a small number of the participating organisations. The state of process analysis has a significant effect on the potential for process improvement. Comprehensive process analysis can highlight any bottlenecks in the process and can demonstrate the various KPIs. It can reveal the potential of the process or the threats/risks that it is exposed to. Business process improvement in an automated fashion is perhaps the most attractive potential that can grant a valuable advantage to business processes and secure them with a brand new direction for their future development. With 58% of respondents not using a structured methodology for improving their business processes, there is a large gap and a potential for a methodology for automated improvement (i.e. process optimisation) based on a standard process model. The few existing optimisation approaches are borrowed from related disciplines, e.g. scheduling. An optimisation technique exclusive to the nature and elements of business processes would provide them with an advantage over other concepts, since the benefits of adopting a business process perspective would become clear and tangible. Having the capability of generating optimised process models will also establish process conformance as a method for comparing the actual process that is executed with the optimum one. However, current practice involves process comparison activities that are largely qualitative and manual in nature and vary depending on the organisation. Efforts are currently being made to quantitatively compare processes; however, this is usually performed with software systems not designed for process comparison. It is evident throughout the paper that most of the business process-related activities are undertaken with software originally not designed for BPM. Although the participants claimed a high level of BPA in the service industry—with more than 50% of process automation in many sectors— BPM software exists only in a limited number of organisations. The existing BPM solutions lack comprehensive and advanced functionalities that can establish the benefits of a business process solution. Functionalities such as business process mining, analysis, optimisation and conformance are largely lacking in most commercial software systems available in the market today. A business process

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suite could be potentially developed addressing the above elements in a holistic way with the aim of providing a truly beneficial solution for the requirements of business processes. 7. Conclusions This paper discussed the current state of business processes within the literature and the service industry. This paper highlights that business processes still need to prove and demonstrate clear and tangible benefits to the practitioners in order to gain wider acceptance. Fragmented approaches and isolated solutions have resulted in disbelief and misunderstandings about the potential of a business process perspective. Researchers have attempted to develop sophisticated techniques for tackling business process issues but the service industry still uses basic manual techniques for dealing with issues such as process modelling, analysis and improvement. The potential advantages of a business process centric approach within an organisation have neither been clearly demonstrated as of yet nor been supported by existing software solutions. Partly this is due to the fact that much of the process management software available today does not provide a holistic approach to business process automation. There is a need for a business process suite that would provide support for most of the business process elements discussed in this paper. This software suite should provide a complete and comprehensive approach that embraces all aspects of business processes (i.e. definition, modelling, enactment, analysis, optimisation and conformance), demonstrating the tangible and measurable benefits that it can offer to service industry. References Abate, A.F., Esposito, A., Grieco, N., Nota, G., 2002. Workflow performance evaluation through WPQL. In: Proceeding of the 14th International Conference on Software Engineering and Knowledge Engineering, vol. 27, ACM Press, New York, pp. 489–495. Aguilar-Saven, R.S., 2004. Business process modelling: Review and framework. International Journal of Production Economics 90, 129–149. Alves de Medeiros, A.K., van der Aalst, W.M.P., Weijters, A.J.M.M., 2003. Workflow Mining: Current Status and Future Directions. In: Meersman, R., et al. (Eds.), CoopIS/ DOA/ODBASE. Springer, Heidelberg, pp. 389–406. Alves de Medeiros, A.K., Weijters, A.J.M.M., van der Aalst, W.M.P., 2005. Genetic process mining: A basic approach and its challenges. In: Castellanos, M., Weijters, T. (Eds.), First

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