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Process Intelligence for Dummies:
Chapter 1&2
2/11/2011 Process Intelligence For Dummies 1
Submitted by
Anshul PachouriSachin Arora
Ankur Saxana
Priyanka Pandey
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Process
Intelligence
Process Intelligence (PI) is the ability to
understand business processes and knowinghow to use them effectively.
Process Intelligence helps to adjust andapply your processes to compelling business
advantage.
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With Process Intelligence, you can
Discover opportunities for savings by seeing precisely
where waste and loss is occurring in your business
Know immediately when a business process, activity, or
transaction encounters a delay or commits an error
Uncover weaknesses and areas of exposure in any part of
a process or activity Understand the connections between high-level strategy
and operational activities
See the how value streams between you, your customers,
and your suppliers are working
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Process Intelligence:
Revenue
Profit TurnoverProductivity
Error Rates Cycle Times
Customer Satisfaction
Capabilities Process CostsReliability Levels
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Process-Driven
Organization a Reality
Successful process-driven organizations share
a sense of purpose and priority.
Successful enterprises can synchronize theirlong-term strategic goals with the everyday
tactical execution of their related processes.
And they accomplish this by applying Process
Intelligence.
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Intelligence is power
With Process Intelligence, you can assess your
business processes in terms of speed, cost,
quality, quantity, and other key measures, and
turn your business into a higher-performing
enterprise.
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Result
Better performance: Improved processes lead to improvedbusiness performance; youre more competitive and make moremoney.
An efficient early-warning system: Get out from under reactiveresponses by seeing critical key indicators of performance (quantity,
time, cost, quality) in real time or even predict potentialoutcomes.
Faster and better decisions: Identify process deficiencies morequickly, and take immediate corrective action before things get outof hand.
More with less: Get more out of your people, time, and money byreducing waste and eliminating mistakes in how work gets done.
Informative benchmarks: Understand whats happening now.Benchmark your processes so you know where to applyimprovements and best practices.
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The Three Levels of Process
Intelligence Strategic: Stakeholders need to answer questions like:
Where are we now, relative to plan?
Whats working?What isnt working?
Will we achieve our goals?
Tactical: Process owners need end-to-end detailed information. Tacticalstakeholders want to know is:
Where do we need to intervene?
Are our interventions, changes, and improvementsworking?
What further changes do we need to make?
Operational: They need to know whats happening within their individual
work processes right now, in real-time, on an event-by-event basis. Theoperational stakeholders seek answers to questions like:
How well is everything working right now?
Whats going wrong?What action should I take to fix it?
Whats coming next?What do I need to be ready for?
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The Cycle of Business Process
Excellence(BPE)
You can¶t have one without the other
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Process Status
Through Process Intelligence, one can easily
understood that whats the current status for
the process.
When a process is behaving, you want the
comfort of knowing everything is all right.
When a process is misbehaving, you want to
know everything about whats gone wrong.
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Views of the Process
Internal View(White-Box): Reveals process
inner workings and enables you to detect
critical failures and make fast adjustments
down to a single instance.
External View(Black-Box): how the process is
interacting with the outside world and how it
is performing as a member of the valuestream
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Knowing about Process
Everyone must have constant up-to-date
information about performance in their area
of responsibility.
Q uantitative, based on the measurement of
objective end-to-end process indicators.
Q ualitative, based on graphical or
organizational representations of the process
structure
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The As-is state
Every day is the as-is state.
Its always tempting to dismiss current difficult
conditions as the old way of working and tofocus energy and attention on developing new
and better ways.
If you dont, know where the problems are
and what to fix. You may unwittingly throw
away perfectly good things.
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Knowing that you dont know
what you dont know
Insufficiently modeled processes miss criticalprocess conditions. In order processing andservicing, these include:
When orders are unexpectedly modified by thecustomer
How orders are split apart by a supplier (due todelivery bottlenecks)
The way customers complain about invoices andservice
When incoming payments are partial, or missing,and reminders are necessary
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Tackling with Process Intelligence
True Process Intelligence provides a view intoevery process instance capturing andvisualizing them automatically.
When and how often are orders modified? How often and in which scenarios are orders
split?
What were customers complaining about?
How many reminders were necessary until thecustomer accepted and paid invoices in full?
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Single Process Instances
Automated Process Discovery (APD) tools can
extract and characterize all process-relevant data
and events from IT systems (such as ERP, CRM,
middleware, workflow engines)
APD constructs a visualization of each executed
process instance.
For simple process executions, the reconstructionshows a sequence of activities and functions,
called an Event-driven Process Chain (EPC).
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Aggregated Process View
For high-volume processes, dont try to analyze each singleprocess instance separately. Instead, aggregate theindividual instances of processes into a collection.
Process Intelligence technologies will aggregate these
processes and search for conditions and will deliver agraphical representation of the aggregated processes plusthe KPIs for the selected request.
Compare and benchmark the behavior of differentvariables.
By drilling into details, such as a low-performing region, youget a detailed picture of the behavior of the organizationand can compare it to the behavior of high performers thus identifying the best practices in your organization
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Visualization Techniques for Process
To generate a graphical visualization of anaggregated process, objects and connections thatfulfill equivalence criteria are combined to formone object or connection.
The logical workflow sequence is retained byincorporating connectors (AND, OR, and XORbranches) in the process work flow sequence.
The visualization of the discovered model thenbecomes the basis for a structural analysis of theprocess because it shows the most importantpaths and activities in the process.
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Automated Organizational Discovery
Process Intelligence tools can discover organizationalrelationships.
To optimize business activities and analyze processes,a behind-the organizational-chart view is needed.
In many scenarios, analysis of the team structure andpaths for cooperation are more important thananalyzing the process structure in detail.
Organizational Discovery (OD) uses techniques derived
from statistics and sociology, including social networkanalysis. Using this approach, users can identify who isperforming a particular task, how often, and withwhom, as well as their response and throughput times.
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Automated Discovery- Organization
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Indicating Performances: KPIs
Key Performance Indicators (KPIs) are the metrics thathelp you truly characterize processes.
Theyre the measurement points that reveal the innerworkings of the processes that drive your business.
KPIs come in two flavors:
1. External: Customers and suppliers see you from the
outside. For them, KPIs include time, quality, price, and
service levels.
2. Internal: Inside your enterprise, the focus is on theeffectiveness of processes. Internal KPIs includevolume, cost, risk, and resources.
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Getting the Route Cause
Getting to the root cause of whats driving internal andexternal performance.
When analyzing root cause, follow the path fromperformance indicators to both process structures and
organizational structures. This combination is especiallyimportant in obtaining a meaningful analysis of bottlenecks.
Analysis techniques from approaches like Lean and SixSigma come in handy when looking for root causes because
they provide methods and tools for determining the causesof process outcomes. These include fishbone diagrams, CT(critical to) trees, cause and effect (C&E) matrices, Paretoanalysis etc.
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Rolling it All
What are the results? What are the KPIs the
outcomes of our processes?
How were the results produced?What were the
process steps taken that generated these
outcomes?
Who was involved?What was the organizational
structure and contribution to these processes? Why did this happen? What caused these
outcomes?
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Benchmarking
Process Intelligence to benchmark processperformance against goals, markets, andcompetitors.
Compare indicators relative to one another (suchas throughput time or process costs in Region Aversus Region B).
Compare performance of a process relative to itsstructure and how effective that structure is indelivering key outcomes (such as complexity andstructure of processes in Region A versus RegionB).
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Comparison: Benchmarking
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Intelligent Capabilities
Process Intelligence requires the fast and easyassimilation of large volumes of information.
With a performance dashboard, you combine the
enterprise process landscape with a visualizationof associated KPIs. This combination enablespeople to immediately identify deviations fromplanned values.
You can filter data by time, region, product group,
and so on, and can use indicators like traffic lightsand trend charts to show deviations fromplanned values & analyze business performance.
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Predicting the Future
Process Intelligence can collect enough historyand observe enough behavior to know whencertain events are likely to follow certain others.
Through a mathematical inference algorithmbased on Bayesian statistical processing, theevent of a past fail be recorded as well as theconditions of all causal factors.
As the pattern of those causal elements repeats,
algorithm can predict with a calculated statisticallevel the probability that the event will occuragain can be determined.
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