by Daniele Chenal
Summary:Business process analysis gives you the opportunity to model processes and then understand what kind of ROI you would really get.
Reengineering existing business processes is expensive. Making mistakes when designing automated business processes is expensive. Delays caused by cultural change challenges when deploying process improvements are expensive. We all want to make the most of our business process management (BPM) systems in a way that minimizes risk when dealing with new and existing processes.
Business process analysis (BPA) allows you to do just that - to minimize the risks involved in BPM design and deployment. BPA allows you to go one step beyond the here and now to create what-if scenarios and analyze your processes safely under real-life virtual conditions before deployment. Both new and existing automated processes can be optimized using BPA techniques.
If you are just starting out with automating business processes using BPM, there is a cost associated with process reengineering and engineering. In addition, there is the challenge of cultural acceptance when making changes. BPA gives you the opportunity to model processes and then understand what kind of ROI you would really get. Can you really achieve better service levels? Can you reduce the number of people? BPA allows you to experiment with those changes without having to actually do it first.
If you've already implemented BPM, you might have processes that have room for improvement. Are there steps within it that they can further automate? Would a rules engine be beneficial? If you could eliminate decision steps in the process and use a rules engine for that, how many steps can you really get rid of? If you can get rid of the steps, how much can you save in terms of human or system resources and how will that affect your overall costs?
How Does BPA Fit into the Overall BPM Methodology?
BPA is made up of two basic steps: simulation and optimization.
In the context of business process management and improvement, simulation can be thought of as a way to understand and communicate the uncertainty related to making the changes, while optimization provides the way to manage that uncertainty.
When changes are proposed to business processes in order to improve performance, the projected improvements can be simulated and optimized artificially using BPA. The effect of making the changes can be examined and quantified, reducing the risk of actual implementation. Changes may entail adding, deleting and modifying processes, process times, resources required, schedules, work rates within processes, skill levels and budgets. Performance objectives may include throughput, costs, inventories, cycle times, resource and capital utilization, start-up times, cash flow and waste.
To accomplish these what-if exercises, you can first model your process using BPM tools and then analyze it using BPA tools. You analyze a replication of your business process model so that no changes are made to your production environment. In the same way that you would set attributes on a process such as who's going to do the work and what application is the person going to be using, you set characteristics in BPA such as, "How fast does work come into the process?" If it were a claims process, "How many claims do we receive in a day? How many people do we have to do the first step in the process?" BPA allows you to set attributes about things such as how much of a percentage of time do people work on these tasks?
For example, if you know that it costs a certain dollar amount per transaction, every time a transaction goes through this step in the process, you can put a fixed cost on each transaction, each activity in the process or the whole process. And, you can apply those dollar amounts and see how they change when you change process variables.
A Real-World Claims Processing Example
Let's go back to the claims processing example we briefly mentioned. Not all businesses process claims, but the processes are similar to many that all companies face: incoming customer requests and fulfillment and integration with existing systems and third-party participants. On top of that, you have the ever-present SLA (service-level agreement) that is familiar to all who deal with customers. BPA can help with every phase in claims processing, from initial notification by the customer to cost recovery after the claim has been paid out. What if you imaged all of your claims instead of manually moving them around? You can take it one step further: what if you used a rules engine to make some of the decisions such as classifying the claim on the imaged documents?
BPA allows you to build upon the level of automation and keep what-iffing to take steps out or reduce cycle times to see what advantages or gains you can achieve. And you can do all that in a virtual environment without implementing anything. You haven't changed anything. You haven't changed the culture of people. You haven't implemented or spent money on infrastructure. BPA allows you to play around in a virtual BPM world with the business model and the business without affecting anything. You can simulate results that help you determine things like whether a rules engine is worth your investment. Wouldn't that be a really good thing to know before you spent money on the engine?
You can analyze parameters such as the average time it takes to perform a claims processing step or the whole claims process based on a calendar that you define. For example, let's say you receive 1,000 claims a day. You've got x number of people to do all these given steps. You can set the clock on this process for one week and run the hypothetical model for one week. If this is how many claims you have coming and here is how many each person can process in that timeframe, then here is where your bottlenecks are going to start to happen. Then BPA can tell you what the cost is going to be. Then you can do more what-ifs and start asking questions like, "What if I got rid of two people over here, or put a more experienced person at initial intake?" "If I automate three steps in this process, how will it improve my service level and ROI?"
BPA allows you to classify and optimize resources and make decisions based on who does what. What if I hire someone with better skills? What if I put a decision-making person in this seat instead of just having to pass it along? If I have to process 1000 claims and I have seven people, are seven people busy 100 percent of the time? Or, based on different distributions of when the work comes in, how long does it take a previous step to occur? Maybe two of your resources are overworked and have bottlenecks and then downstream one of your resources is underutilized and only has a 40 percent workload. How can you shift and realign your potential resources to achieve process optimization?
Claims processing is far more complicated than just the initial notification. You can play what-if at ever step in the entire process. In addition to performing the basic analyses that might apply to any company and any process such as optimizing cycle times, removing process inefficiencies, analyzing utilization rates and identifying bottlenecks, you can what-if even further through the entire claims processing value chain. The table below provides some details on the kinds of detailed analyses you can make when using BPA.
Whether you are implementing BPM for the first time or are looking to optimize processes already implemented, applying BPA to your process designs enables you to forecast outcomes, estimate resource requirements, and make other business decisions without risk based on real-world conditions. By modeling business processes in a virtual environment, analysts can make adjustments to inputs, deadlines, constraints, resources and other variables. Playing what-if without having to actually implement changes makes r eengineering existing business processes less expensive, allows you to reduce the costs associated with existing BPM processes through process optimization, and eases cultural change by giving you a big picture view of how people do their jobs. BPM and BPA is a winning combination.
Daniele Chenal is vice president of product management and marketing at HandySoft Global Corporation of Vienna, Virginia. HandySoft's enterprise BPM platform, BizFlow, provides state-of-the-art BPA tools. You can contact Chenal at dchenal@handysoft.com. |
