business process modeling

A conceptual framework for understandingbusiness processes and business processmodellingNuno Melo & Michael Pidd

Department of Management Science, The Management School, Lancaster University,Lancaster LA1 4YX, UK, email: [email protected]

Abstract. It is increasingly common to describe organizations as sets of busi-ness processes that can be analysed and improved by approaches such as busi-ness process modelling. Successful business process modelling relies on anadequate view of the nature of business processes, but there is a surprising diver-gence of opinion about the nature of these processes. This paper proposes aconceptual framework to organize different views of business processes underfour headings. It also aims at providing an integrated discussion of the differentstreams of thought, their strengths and limitations, within business process mod-elling. It argues that the multifaceted nature of business processes calls for plu-ralistic and multidisciplinary modelling approaches.

Keywords: Business process management, business process modelling, businessprocess re-engineering, business processes, conceptual framework, modellingapproaches

INTRODUCTION

Recent years have seen an increasing interest in methodologies, techniques and tools tosupport the (re)design of business processes under the banner of business process model-ling (BPM). Many books, papers and theses have been produced, some of which are dis-cussed in this paper. It is the subject of many undergraduate and postgraduate courses, aswell as the main topic of investigation in several research centres around the world. The hypearound BPM has also been fuelled by the enormous practitioner interest. For example,Kettinger et al. (1997) surveyed 25 methodologies, 72 techniques and 102 tools. It is a require-ment for many ISO 9000 quality programmes (Ould, 1995) and is at the crux of the imple-mentation of many IT systems, such as workflow management systems (for example, seeGeorgakopoulos et al., 1995) and enterprise resource planning (for example, see Robinson &

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Dilts, 1999). BPM includes a number of approaches, both hard and soft, which allow alter-native process scenarios to be explored.

Although its origins can be traced back to the advent of scientific management around the early years of this century, it was only with the introduction of business process re-engineering (BPR) that BPM has emerged as a distinct field. Both BPR and BPM are basedon the notion that a business process is a fundamental element of analysis. However, thereseem to be almost as many definitions of business process as there are BPR books and BPMtechniques and tools. Most of the published literature provides rather superficial discussionsof this theme, although there are exceptions (e.g. Ould, 1995; Armistead & Rowland, 1996).Given the prominence of BPR in recent years, such superficiality is a little puzzling. Further-more, most of the literature on BPM and the nature of business processes is fragmented oris restricted to a specific type of model and devoid of any thorough discussion of the field asa whole.

The aim of this paper is to discuss the nature of business processes with a view to under-standing how they can be modelled in order to improve their effectiveness. It groups differentnotions of business processes under four headings. Although this does not provide a com-plete classification scheme for business processes, it does provide a useful way of organiz-ing and discussing different points of view about business processes and BPM. It alsosuggests avenues for further research.

FROM RE-ENGINEERING TO PROCESS MANAGEMENT

The early 1990s saw great interest in BPR. It was first described in North America by Davenport & Short (1990) and Hammer (1990). It quickly became popular with managementconsultancies (e.g. CSC/Index). Best-selling books appeared (e.g. Davenport, 1993; Hammer& Champy, 1993), specialist conferences and journals (e.g. BPR Europe Conference, Busi-ness Change & Re-engineering Journal) and network discussion groups (e.g. BPR MailingList BPR-L) were formed. Its rhetoric convinced many companies that dramatic breakthroughsin performance could only be achieved by moving away from functional hierarchy towards aprocess-based paradigm using the power of IT. BPR became a panacea for many companiesaround the world. The remainder of this section provides the setting for the rest of the paperby discussing certain aspects of BPR that are the rationale for the emergence of BPM.

The paradoxes of BPR

Despite its popularity, BPR has many internal contradictions (Jones, 1994, 1995), which haveled to much confusion. From its early days, different management consultants used BPR asa way to sell their own proprietary methods (Francis & MacIntosh, 1997; Grover & Malhotra,1997). Inevitably, this led to confusion and disagreements. Responding to the claims of BPRand the resulting confusion, the academic community criticized the powerful rhetoric andvested interests of many consultancies for having no sound theoretical basis. Earl & Khan

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(1994) questioned whether there was much that was new in BPR. Mumford (1994, 1996) askedsimilar questions, although focusing on some similarities between BPR and sociotechnicaldesign. Deakins & Makgill (1997) and Tinaikar et al. (1995) argued that the original literature of BPR was essentially anecdotal, lacking serious and rigorous research to supportits recommendations and assertions.

The more recent literature strongly suggests that the radical approach to change, as presented by the early BPR, is being softened by a number of lessons gleaned from both successes and failures in the course of implementations. Perhaps, the best example is Davenport & Stoddard (1994), who report on a field study and challenge some of the centraltenets of re-engineering in terms of myths. Their distinctive insight triggered others (e.g.Burke & Peppard, 1995; Grover & Kettinger, 1995) and is the focus of current trends in thefield. The following summarizes these state-of-the-art issues around which debate has beencentred.

1. Novel vs. established. Hammer & Champy (1993) defined BPR as a conceptually new busi-ness model that has little or nothing in common with other improvement programmes.However, various writers, for example Earl & Khan (1994), Jones (1995) and Peppard & Preece(1995), have disputed this claim of novelty. Instead, they argue that the original proposal for BPR linked together existing approaches in a novel way.2. Radical vs. incremental. Hammer & Champy (1993) presented BPR as the radical redesignof business processes for dramatic improvement. However, more recent empirical research(e.g. Stoddard & Jarvenpaa, 1995) supports the view that, although the radical approach workswell in some companies, others, perhaps more conservative, prefer an incremental view, oreven something in between. For example, Cock & Hipkin (1997) compared the incrementalapproach of TQM with the radical view espoused in early BPR. Even Hammer (1996), inBeyond Re-engineering, recognizes his original mistake in asserting that the keyword of there-engineering concept was radical. This word, he admits, was responsible for the bandwagoneffect and excitement among managers. He now asserts that the most important word in thedefinition is process.3. Clean slate vs. existing process. Hammer & Champy (1993) stated that BPR has a throw-it-all-out-and-start-again flavour. However, Davenport & Stoddard (1994) and Stoddard & Jarvenpaa (1995) assert that such clean slate change is rarely found.4. Broad vs. narrow. The original notion of BPR was that it usually involved the redesign ofcross-functional business processes. However, research (e.g. Stoddard & Jarvenpaa, 1995;Zairi & Sinclair, 1995) revealed that BPR initiatives within a single function can also providesignificant improvements and that this may sometimes be preferable as they are less demand-ing and less risky.5. IT-led vs. IT-enabled. Both Hammer (1990) and Davenport & Short (1990) stressed thecentrality of IT in BPR. Emerging research coupled with case evidence offers support foranother perspective IT is an enabler and a creator of opportunities. Coombs & Hull (1995),Galliers & Baker (1995) and Guha et al. (1997) argued that BPR is possible without this centralsupport of IT.

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6. Mechanistic vs. holistic. The original BPR literature is heavily dominated by a hard sys-tems approach and by machine metaphors of organization. But an increasing number ofauthors call for a more holistic and softer approach in order to take into account strategic and people issues. Earl et al. (1995) reported on field studies that demonstrated the dangerof a mechanistic approach. Galliers & Baker (1995) argued that soft OR, which assumes that the world is problematic rather than given, provides one possible way of approachingBPR.7. Dramatic vs. modest. Hammer & Champy (1993) claimed that BPR involved dramaticimprovements in critical, contemporary measures of performance. Yet, empirical investigation(e.g. Grover et al., 1995) reveals that BPR initiatives are delivering much less than they havepromised.8. Top-down vs. bottom-up. Hammer & Champy (1993) insisted that BPR never, ever happensfrom bottom up. Nevertheless, several studies found that the participation, commitment,ownership and initiative from the front line were vital for many successful BPR programmes.For instance, Willcocks & Smith (1995) explored some of the human dimensions of suchchange.9. Inspiration vs. methodology. Hammer (1990) and Hammer & Champy (1993) argued thatBPR cannot be planned meticulously. Instead, they believed that BPR depends largely onimagination, creativity and experience. As with many movements, such inspiration may workwell for the pioneers; however, the next generation may need to see things formalized. Morerecently, therefore, the field has seen the introduction of various methodologies and model-ling tools to address BPR issues systematically. Kettinger et al. (1997) surveyed a number ofthese methodologies, techniques and tools.

In view of these developments, it could be argued that the original concept of BPR is itselfbeing re-engineered to take a broader perspective. Davenport (1996), one of the pioneers ofBPR, claims that re-engineering is effectively finished, at least in the USA. He argues that, tomost business people in the US, re-engineering is associated with restructuring, with layoffsand with failed change programmes. He admits that the reason for its failure is that peopledo not like to be re-engineered. As discussed earlier, even Hammer (1996) has backed offfrom the notion of radical change, instead focusing on the need to be process centred ratherthan re-engineered.

Although the use of the term re-engineering may be dying, the focus on business processesremains important. Business processes may be a natural way for work to be done in organi-zations in order to create value for internal or external customers. This (for example, see Earl& Khan, 1994; Ould, 1995) usually implies a distinction between different types of processesbased on value chain concepts, such as the following:

core processes (which have external customers and include the primary activities of thevalue chain);

support processes (which have internal customers and concern secondary activities in thevalue chain);

management processes (which manage core and support processes).

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It therefore seems reasonable to agree with Cypress (1994) that the first generationre-engineering, which presented BPR as a new, radical, IT-led, mechanistic and inspira-tional approach, is evolving to a second generation process management. Process man-agement views BPR as a hybrid, contingent, IT-enabled, holistic and systematic approach(Figure 1). This evolution results from the recognition of an overemphasis on reductionist andmechanistic aspects, in which crucial issues such as people and strategic issues were simplyignored.

A process management perspective, as espoused latterly by BPR pioneers such as Hammer(1996) and Davenport (1995), as well as by their critics (e.g. Kettinger & Grover, 1995; Peppard,1996), is a continuum of approaches to process improvement. It includes radical (re-engineering) and incremental (continuous improvement) perspectives, both of which shouldbe customized to the problem and context under consideration. The hallmark of process man-agement is its focus on business processes. To support their improvement, the developmentof process modelling approaches and tools is an important item in the new research agenda.

RESEARCH IN BUSINESS PROCESS MODELLING

Reports of research on BPM can be classified in various ways. Here, it is done under threeheadings: reports by practitioners; attempts to develop theoretical positions; and discussionsof the nature of business processes. This illustrates that there are many ways of viewing theactivities and tools associated with BPM. In particular, it identifies the importance of suitableand inclusive definitions of what might constitute a business process.

Reports by practitioners

The first group examines BPM as an activity by matching the typical process stages againstthe tools and techniques commonly used by practitioners. Elzinga et al. (1995) derived a



Figure 1. From re-engineering to process management and business process modelling.

generic methodology by examining those used by different consultancies. From this, they discussed a number of techniques and software tools that may help with implementing a par-ticular stage or activity of that generic methodology. In like vein, Kettinger et al. (1997) sur-veyed 25 methodologies, 72 techniques and 102 tools for supporting business process changeprogrammes. From this, they constructed a generic methodology, matching its stages with theavailable techniques and tools. This leads to a conceptual framework for tool and techniqueselection, based on the characteristics of the project. These studies confirm that practitionermethodologies share many common features, despite the differences in philosophical orien-tation towards IT, scale of change and people issues. Most consultancies have their own pro-prietary methodologies and tools and stress a well-defined sequence of stages and activities.

A second group discusses the use of existing techniques for modelling business processes.The appendix to Johansson et al. (1993) provided a brief overview of different processmapping techniques with multifarious origins in work study, organization and method studies,process control, process simulation, business modelling and systems engineering and analy-sis. Similarly, Miers (1994) discussed and compared a number of techniques and their appli-cation in modelling business processes, including flow charts, IDEF0, action workflowdiagrams and role activity diagrams. From an IS perspective, Darnton & Darnton (1997) sug-gested a number of techniques and skills that should form part of the background of everybusiness process analyst.

A third group reviews and compares different software tools. Classe (1994), for example,usefully reviewed 19 tools to support process improvement and redesign, including static,dynamic, CASE and workflow. She illustrated how these tools are used through case studiesconducted in seven UK companies. She suggested that a contingent approach best describescurrent practice, with the contingent adaptation based on a number of factors, such as thegoals of the project, scale and scope of change, the opportunity for IT support, culture, etc.That is, although advanced modelling may sometimes be important, often simple word proces-sors and spreadsheets are adequate for a BPM exercise. More formal BPM tools are usednot only to provide technical rigour and to test the impacts of alternative designs, but also tosupport communication and participation. Similar, although more limited, studies were pre-sented by Spurr et al. (1994), Bradley et al. (1995), Cory (1995), Cheung & Bal (1998) and byYu & Wright (1997). Most of these described the features and functionality offered by variousBPM tools and were quickly outdated after publication.

This examination of reports of practice suggests a lack of distinct methodologies, tech-niques and tools to address the unique demands of modelling business processes. Instead,practitioners have adapted techniques and tools from manufacturing, industrial engineering,information systems, quality movement or human resource management and have appliedthem to a BPM context.

Although this may sometimes be adequate, it is important to consider the nature of busi-ness processes. Childe et al. (1995) reported a fieldwork exploration of BPR experiences, inwhich they found that UK companies in general had an adequate understanding of the busi-ness process concept and that further research should be directed towards other areasinstead. This paper is not so sanguine about this issue and argues that a better understand-

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ing of the nature and features of business processes is crucial if modelling is to be more effective.

Theoretical views of BPM

Perhaps surprisingly, there are fewer academic papers on BPM than there are from thoseproposing particular methodologies and approaches. An early theoretical view is that of Curtiset al. (1992), who reviewed several modelling approaches and suggested a conceptual frame-work for process modelling in the context of software engineering. This framework places busi-ness processes in four positions: functional, representing the activities being performed withrelevant flows; behavioural, representing when and how the activities are performed; organi-zational, representing where and by whom the activities are executed and what physical com-munication mechanisms and storage are used; and informational, representing entities flowingthrough the process, their structure and relationships.

Ould (1995), in proposing the role activity diagram (RAD) approach, also discussed mod-elling issues and principles, although in the context of role activity diagrams. Scholz-Reiter &Stickel (1996) and Scholz-Reiter et al. (1999) reviewed state-of-the-art issues on BPM froman interdisciplinary point of view.

These apart, there are few significant attempts to develop theoretical positions on possibleapproaches to BPM, possibly because the development of BPM has been driven by practi-tioners rather than by academics.

Business processes the core of BPM

Without suitable definitions of business processes, it is hard to develop suitable approaches,whether theoretical or practical, to BPM. It would, however, seem that providing suitabledefinitions is more difficult than might appear to be the case. Most of the literature simplyquotes (or adapts) the vague definitions put forward by the re-engineering pioneers. That is,a business process is a set of related activities that are of value to a customer.

Moreover, most attempts to take this debate a step further have a rather mechanistic feel.For example, Armistead & Rowland (1996) dedicated four chapters of their BPR book to busi-ness processes, but their strong operations management bias, with its mechanistic empha-sis, shone through. Similarly, Kock & McQueen (1996) reported an empirical study of 15business processes in three companies but chose to stress structural features and informa-tion flows, using ideas from industrial engineering and systems analysis and design. Bothstudies argued that a business process is best viewed as a transformation of inputs from sup-pliers into outputs to customers and that this transformation can be hierarchically decomposedinto subprocesses and activities. Although such views are not without value, they do ratherignore the human side of business processes.

Moving away from such views, Ould (1995) argued that real-world processes are messierthan the inputtransformationoutput view might suggest and that the neat and tidy hierar-chy hid as much as it revealed. Instead, he argued that business processes are best viewed



as networks in which a number of roles collaborate and interact to achieve a business goal.This still has a less-than-human feel about it, but seems a step in the right direction. Goingfurther, Scherr (1993) emphasized peoples roles and relationships, but added a new dimen-sion a business process is seen as a set of closed loops of commitments.

Given this diversity of views, what are the implications for business processes? A usefulway to understand business processes is perhaps to regard them as multifaceted. Each per-spective on business process is based on a set of assumptions about, for example, the natureof organizational life, and these, in turn, affect the way in which approaches to BPM are devel-oped. Each world view thus acts as a filter that allows us to see certain things but to missothers.

FOUR PERSPECTIVES ON BUSINESS PROCESSES

Background

This section organizes views of business process around four themes, each with a differentemphasis and each illustrating important features of business processes. Two of these viewsare similar to two metaphors found in Morgan (1997), whereas the other two are not reallymetaphors, but viewpoints. Morgans metaphors have been widely used elsewhere and infields close to BPM. For instance, Peppard & Preece (1995) applied them to BPR, Pidd (1995)to OR/MS and Walsham (1991) to IS. It seems obvious that views and understandings aboutorganizations are important when discussing BPM, as organizations provide the arena for business processes. The four points of view suggested here view business processes asdeterministic machines, complex dynamic systems, interacting feedback loops and social constructs.

The conceptual framework presented here does not attempt to match each authors de-finition of business processes with a single perspective. Even one persons views can be mul-tifaceted! Instead, it provides a useful way of organizing different points of views aboutbusiness processes and allows a discussion of the assumptions underlying BPMs mainstreams. Thus, a richer and wider picture is likely to occur. As with Morgans metaphors oforganization, each viewpoint sheds light on some elements, while it obscures others, and eachhas strengths and limitations. However, when considered together, they produce a set of com-plementary, yet competing, perspectives from which the nature of business process emerges.

Business processes as deterministic machines

The first view regards a business process as a fixed sequence of well-defined activities ortasks performed by human machines that convert inputs into outputs in order to accomplishclear objectives (Figure 2). Not surprisingly, this standpoint is very close to Morgans bureau-cratic machine metaphor, and it assumes that the nature of a business process is unques-tioned, and its design is analogous to a technical engineering activity.

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This view emphasizes the structure (tasks, activities and areas of responsibility), proce-dures (constraints and rules of the work to be performed) and goals (nature of the output tobe obtained) of the business process being designed. The main criterion of good processdesign is efficiency in the use of money, resources and time, subject to the constraint of sat-isfying customers needs. Information technology plays an important role in this perspective:automating, co-ordinating and supporting the re-engineered process. This accords well withmany structured processes found in stable manufacturing-type environments (e.g. orderfulfilment and fast food processes) and many bureaucratic paper-based processes found insome service environments (e.g. credit application and back-office processes).

The notion that a business process is a deterministic machine can be traced back to Taylorsscientific management, in which manufacturing processes were made more efficient by ananalytical approach. This divided manufacturing processes into well-defined tasks to be per-formed by interchangeable people. Each task was to be organized optimally by a managerwho would instruct and train the worker in the best way to do the task. This would lead to anefficient overall manufacturing process.

In this vein, Davenport & Short (1990) defined a business process as a set of logically relatedtasks performed to achieve a defined business outcome. Clearly, this notion, along with theirnew industrial engineering metaphor, is symptomatic of a mechanistic view. Hammer &Champy (1993) gave a similar definition, although highlighting customer orientation and cross-functional activity. This is also the view of Armistead & Rowland (1996) and Kock & McQueen(1996), whose focus was on the structural and operational features of business processes.Early criticisms, which argued that BPR is the use of industrial engineering techniques appliedto office and service environments, were therefore inevitable (e.g. King, 1991).

Static business process modelling

As far as BPM is concerned, the view of a business process as a deterministic machine cor-responds to the body of work underlying much of the hard and static approaches to BPM. In



Figure 2. Business processes as deterministic machines.

this, the stress is on mapping and documenting the flow of items, the activities, their logicaldependency and the resources needed. In recent times, many techniques from operationsmanagement, operational research and information systems have been repackaged to a BPMcontext.

A frequently used technique, adapted from work study, is process flow charting and its exten-sions (discussed by Johansson et al., 1993; Harrington et al., 1997). The simplicity of its basicelements activities and decisions makes it easy to understand and communicate. Otherwidely used techniques are IDEF0 and IDEF3, advocated for example by Hunt (1996) andMayer & DeWhite (1999). These are descendants of data flow diagrams with a functional,structured approach. Their modelling constructs, inputs, activities, outputs, mechanisms andcontrols in IDEF0 and units of behaviour, elaboration, referents, junctions, links, objects statesand state-transition arcs in IDEF3 reveal their mechanistic perspective.

Some approaches included in this perspective are more subtle. For example, rather thanfocusing on procedures and data, Ould (1995) proposed a more process-oriented techniquecalled role activity diagrams (RADs). A RAD allows a business process to be modelled diagrammatically through roles, goals, activities, interactions and business rules. Scherr (1993)suggested another approach called customersupplier protocol, based on speech acts (Winograd & Flores, 1987). Here, a business process model is a network of a set of closedloops of commitments between a customer and a performer involving four phases, namelypreparation, negotiation, performance and acceptance. Reijswoud et al. (1999) described a similar approach. Unlike flow charts and IDEF techniques, both RAD and the customersupplier protocol are more appropriate for modelling business processes that involve the co-operation of several entities and less appropriate for modelling complex routings. Examplesof other approaches include production engineering techniques (e.g. Doumeingts & Browne,1997) and continuous improvement techniques (e.g. Schonberger & Knod, 1994).

Difficulties with a mechanistic view

Although these approaches have different strengths and limitations, it could be argued thatthe mechanistic view has two major drawbacks. First, by assuming that business processescan only be designed in rational and technical terms, it neglects human and organizationalissues. Empirical evidence (e.g. Willcocks & Smith, 1995) strongly suggests that IT-driven BPRprojects and a lack of attention to sociopolitical and organizational issues are major reasonswhy so many BPR projects fail. This does not mean that a concern for technical and rationalissues is not important. Rather, it means that their consideration should not be overempha-sized at the cost of the mismanagement of human and organizational issues. Writing on thissame theme, Morgan (1997) stated by placing primary emphasis on the design of technicalbusiness systems as the key to change, the majority of re-engineering programs mobilisedall kinds of social, cultural and political resistance that undermined their effectiveness (pp.3839).

The second criticism of this mechanistic view is that business processes are assumed tobe static. Static models are simplified representations of business processes at a particular

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point in time. As such, they ignore dynamic behaviour, which may change over time as a resultof resource competition, interactions or other sources of uncertainty. This does not mean thatstatic models are pointless. In fact, static models are very useful in understanding and repre-senting the structural features of business processes and can be valuable means of com-munication. However, business processes often display complex interactions that can only beunderstood by unfolding behaviour through time.

Business processes as complex dynamic systems

Rather than viewing a business process as an assembly of interchangeable components, thissecond viewpoint focuses on the complex, dynamic and interactive features of businessprocesses. The basic idea is close to Morgans metaphors of organism and flux and trans-formation, in which an open system adapts to a changing environment in order to survive.Whereas the mechanistic view focuses exclusively on structure and static objects, this viewemphasizes interaction and dynamic behaviour.

Viewed in these open systems terms, a business process can have inputs, transformation,outputs and boundaries (Figure 3). A business process can then be defined as a set of sub-systems: people, tasks, structure, technology, etc., which interact with each other (internalrelationships) and with their environment (external relationships) in order to fulfil some objec-tive(s). Each subsystem can be seen as a system, which can in turn be hierarchically decom-posed into further levels of detail. This in turn implies the definition of interfaces betweensubsystems so that they are able to communicate with each other. The view of a businessprocess as a system, for example, is illustrated by Earl & Khan (1994), who said that the inter-dependent, interactive, boundary-crossing, super-ordinate goal conceptualisation of processis essentially a systems view (p. 24).



Figure 3. Business processes as complex dynamic systems.

The mechanistic perspective ignored important issues such as interactions with the exter-nal environment, but this viewpoint pays much more attention to this. Therefore, effectiveness(e.g. quality and service level) is likely to be a major design criterion rather than solelyefficiency. Another characteristic of this point of view is holism, stressing the behaviour of abusiness process as a whole rather than its parts. For example, Hammer (1996) argued thata sensible view of a business process sees not individual tasks in isolation, but the entirecollection of tasks that contribute to a desired outcome (p. 11, authors emphasis). The useof multiskilled and autonomous workers/teams to deal with a business process in a holisticway illustrates particularly well how this holistic thinking can be put into practice. However, em-pirical evidence, for example Zairi & Sinclair (1995), shows that it is not always possible toapproach business processes holistically, because it may be more risky and require moreresources than simply analysing a single component or set of components.

Discrete event business process simulation

Business processes are dynamic because of the interaction of their internal components andbecause of the interaction of the process with its environment. Discrete event simulation (Pidd,1998) provides a suitable way to model this dynamic behaviour in terms of entities (e.g. itemsand resources) and discrete events (e.g. begin task and end task). The simulation model canthen be used to conduct what if experiments, avoiding the need for building or disrupting thereal-world business process (Melo & Pidd, 1999). Modular, parsimonious construction ofmodels (Pidd, 1999) may usefully be employed by a modeller who needs to understandcomplex business processes. Other, more complex approaches, such as high-level Petri nets(e.g. Aalst & Hee, 1996), or less known approaches, such as qualitative simulation (e.g.Nissen, 1996), could also be applied under this stream.

Vreede & Eijck (1998) described a discrete event simulation approach, Dynamic Modelling,developed at Delft University. This is a problem-solving approach that uses simulation and ani-mation techniques to analyse as is business processes and evaluate future to be businessprocesses. In particular, they see a business process as a network of interacting objects thatdisplay dynamic behaviour. They argue that a business process can be modelled in terms ofthree parent object classes: items (composed of three leaf object classes: message, productand person); item processors (made of three leaf object classes: actor, repository and link);and actor actions (composed of two object leaf classes: tasks and decisions). Each objectclass has attributes and actions, which in turn are translated into blocks of SIMAN code. Themain strength of this approach is that the objectattributeaction world view represents anatural way of modelling in the sense that it resembles real-world business processes.However, the translation of the object-based conceptual modelling to the block-based SIMANmodel is not always straightforward. This problem has been addressed through the develop-ment of an ARENA template (Eijck & Vreede, 1998).

Also in the context of BPM, Davies (1997) developed a data-driven simulator called SCOPEthat allows the simulation of information flows for high-volume back-offices. In an analogy withmanufacturing, he argued that office processes behave in a similar way to job shops, as

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documents pass through several functional departments for processing with routings that maydiffer. However, he insists that office processes present unique modelling challenges, such ashigh volume and mix of items. Furthermore, business processes have a mixed of front (coreprocesses) and back-office (support processes) components. Each item may require a dif-ferent process, and there may be constant changes in workload and unpredictability intro-duced by the human factor. SCOPE is capable of modelling the following elements: items,teams, shifts, telephone calls, tasks, procedural flows and volumes. Although SCOPE is easyto use, its main difficulty is that it is rather inflexible because the modeller is restricted to thesepredefined modelling constructs and has no easy way of modifying or extending them. Likethe dynamic modelling approach, SCOPE seems to be more appropriate for modelling busi-ness processes that display complex flows, but less appropriate for modelling businessprocesses that involve the co-operation of several entities.

Difficulties with a complex dynamic systems view

If the organic viewpoint is taken to an extreme, it also has weaknesses. First, it may lead tothe neglect of the sociopolitical dimension of a business process, as there is an implied beliefthat a business process can only be approached in logical and rational terms. The humanaspect is only regarded as relevant as a resource for executing tasks, that is, the humanity ofthe human is ignored. In this sense, this perspective is much like the previous one the natureof the business process and of its actors is taken for granted. Better process designs are, inthis view, based on an understanding of the logic of complex interactions with a view tomeeting the objectives set for the process in question.

The second problem is that such approaches obviously have a cost. The time and skillsrequired to build a dynamic computer model of simple systems may not add any value oversimple flowcharts or spreadsheets. Third, it ignores the feedback loops that may determinethe behaviour of many real-world business processes. Nevertheless, this viewpoint remindsus that different subsystems of a business process interact to produce complex dynamicbehaviour.

Business processes as interacting feedback loops

This third perspective extends the organic viewpoint by highlighting the information feedbackstructure of business processes. Like the organic perspective, the stress is on the complex,interactive and dynamic features of business processes using systems thinking principles.However, whereas the organic viewpoint focused on business processes with no intrinsiccontrol (i.e. open loop systems), this perspective claims that business processes are closedloops with intrinsic control. This standpoint is thus an attempt to understand the dynamicbehaviour of a business process not in terms of individual components but in terms of inter-actions between internal structure and policies.

The concept of a business process as a network of interacting feedback loops is shown in Figure 4. This depicts a business process as flows (rates) of resources (physical or non-



physical) from outside its boundaries through a sequence of stocks (levels) representing accu-mulations (e.g. materials) or transformations (e.g. raw material to finish product). The flows are regulated by policies (decisions), which represent explicit statements of actions to be takenin order to achieve a desired result (Pidd, 1996). These actions are taken based on informa-tion, and this is where the notion of the information feedback loop comes into play. Such aview of business process fits well with the notions of system dynamics discussed by Vennix(1996) and van Ackere et al. (1993), who stressed the need to understand information feed-back loops.

System dynamics

Within the BPM field, the view of a business process as interacting feedback loops is supported by system dynamics modellers. Whereas a discrete event simulation is concernedwith modelling discrete state changes and individual entities, a system dynamics model ofa business process operates at a more aggregated level of abstraction, in which flow ratesare modelled as continuous variables. System dynamics models can be used in two ways(Wolstenholme, 1990; Pidd, 1996; Vennix, 1996). First, in a qualitative mode, in which thestructural features of the process are made explicit through diagrams (e.g. causal loop andflow diagrams). These in turn may become a basis for debate about the process behaviour.For example, if a process were to be organized along particular lines, then such qualitativemodels could provide insight into their potential stability. Second, system dynamics can beapplied in a quantitative mode by transforming the diagrams into a set of equations, so thata simulation of the process can be conducted. This allows a modeller to provide quantitativeestimates of system effects.

Surprisingly, there are few reports of the application of system dynamics modelling in aBPM context. The few research studies conducted in this area have been primarily concerned

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Figure 4. Business processes as interacting feedback loops.

with justifying the use of systems dynamics in a BPM context and illustrating the potential of its different uses, but going little further. This may suggest two things. The first is that theBPM community may not be entirely convinced of the value of systems dynamics models.The second is that this area remains relatively unexplored and thus presents rich opportuni-ties for further research. For example, van Ackere et al. (1993) discussed the difficulties incontrolling the behaviour of logistical processes resulting from commonly occurring feedbackand delay structures using the classic beer game to do so. They then showed the value ofcontinuous simulation in redesigning the structure of business processes in terms of decisionprocesses, physical processes and information channels. Fowler (1997) made a similar argument.

Stevenson (1993) and Wolstenholme & Stevenson (1994) took a rather similar line, butshowed the value of both qualitative and quantitative system dynamics in mitigating the misperceptions of feedback loop structure using the ITHINK system dynamics software. A more critical line was followed by Davies (1996), who attempted to show the relevance of bothqualitative and quantitative system dynamics to the BPM field. He concluded by asserting thatchallenges for the future development of business dynamics centre on ease of use, integra-tion with other methods, and education (p. 241) in order to challenge some of the scepticismabout system dynamics. It might also be argued that the application of system dynamics toBPM is limited by the difficulty of deriving generic implications of different internal structuresfor the organizational design.

Difficulties with a feedback loop view

As with the previous perspectives, the view of a business process as interacting positive andnegative feedback loops has its limitations. First, when this perspective is taken to an extreme,there is the risk of considering the human factor as only an instrument to be controlled or asan instrument exercising control. System dynamics methods can be used in a sensitive, inter-pretive mode, but the method itself carries no such guarantees. Indeed, it could be arguedthat its roots in control theory and the apparent ease with which models may be constructedcould encourage an unthinking dehumanization of business process modelling.

Secondly, as Lane (1995) commented, there is still too much belief and too little evidence(p. 617). Also taking a critical stance, Davies (1996) wrote, system dynamics is easy to knowbut impossible to apply (p. 241). That is, system dynamics approaches are easy to under-stand at a superficial level, but may be difficult to use properly. Wolstenhome (1993) suggestedthat system dynamics methods should be used in a qualitative mode as a means to elicit dif-ferent views, to foster learning and to generate commitment. As far as BPM is concerned, thismay well be a sensible way to proceed, especially when time and difficulties in quantificationare critical constraints to the modelling exercise.

Perhaps these comments suggest that researchers might profitably devote some oftheir efforts into engaged research (see Nandhakumar & Jones, 1995) in which they attemptto use system dynamics methods in real-world business process modelling as actionresearch?



Business processes as social constructs

Instead of seeing a business process as a predictable machine or as a dynamic organismpursuing clear objectives, this fourth perspective emphasizes business processes as madeand enacted by people with different values, expectations and (possibly hidden) agendas. Thisimplies that business processes need not exist in the objective and concrete sense as in theprevious perspectives. Rather, they are abstractions, meanings and judgements that peopleput on the real world, which result from a process of subjective construction of the minds ofpeople. The focus here is on subjective and human aspects of the business process.

From this standpoint, a business process can be defined in terms of different perceptionsconstructed by various individuals and groups as a result of different frames of interpretation.These frames, shaped by beliefs, values, expectations and previous experience, act as filtersenabling people to perceive some things but ignore others. For example, a production managermay regard an order fulfilment process as a way to ensure that the orders are manufactured ontime, while a marketing manager may regard it as a way to satisfy a customers needs.

The existence of multiple (and often conflicting) views about what is going on and about howthe process is being and should be carried out means that a different view of change isrequired. It implies that changes should result from a process of negotiation of conflicting inter-ests, difficult though this process may be. The view of a business process as a social constructfits well with strategic, less tangible processes, in which human activity is the major driver, suchas health, social and educational services. This view comes across quite strongly, for examplein Tinaikar et al. (1995), who called for a more humanistic social constructionist perspective inan attempt to encourage the adoption of an alternative conceptualization of business process.

Soft business process modelling

It should be no surprise that this view of business processes as social constructs is closelylinked to a soft strand of thinking about BPM. Unlike the previous viewpoints, soft models aresense-making interpretive devices developed to generate debate and learning about how theprocess is being and should be carried out. It should be noted that the technical view is notentirely ignored. Indeed, techniques may be called in this perspective if the organizationalcontext requires it.

Several authors suggested the application of Checklands soft systems methodology (SSM)to provide a more balanced approach to modelling business processes. For example, Galliers(1994) observed that little attention has been given to exploring the role of soft modelling in dealing with process issues and then goes on to outline an SSM-based approach to undertake IS strategy/process change studies. Taking a more practitioner perspective, Patch-ing (1995) showed how SSM provides a high-level, process-based language to approach business process change from a holistic point of view. In the same vein, Chan & Choi (1997) illustrated how SSM can be used to provide methodological support and an analyticalframework as well as to deal with ill-defined situations in a business process setting.

In these studies, SSM is used to represent a business process as a would-be purposefulhuman activity system consisting of a set of logically interconnected activities through which

120 N Melo & M Pidd


actors convert inputs into some outputs for customers. In addition, the business process operates under certain environmental constraints, and monitoring and control is executed byprocess owners. Moreover, the purposeful activity of the business process can be seen fromdifferent angles (Figure 5). Soft BPM also relates to the humanistic view advocated byMumford (1994), in which a business process is seen as a set of interacting sociotechnicalsystems. The objective is an integration of both social and technical needs through a partici-pative approach. Unlike SSM, sociotechnical design places little stress on the cultural andpolitical environment.

The social constructionist viewpoint, when considered as the sole basis for modelling busi-ness processes, may also have its own difficulties. First, the stress on cultural feasibility mayimpede the attainment of more efficient and radical designs. Secondly, this perspective aloneis unable to provide an objective, quantitative assessment of business process changes.Finally, although it recognizes the political environment, it offers no way of dealing with it otherthan the need to conduct several analyses of the type suggested by Checkland & Scholes(1990). There have been a few reports, for example Lehaney et al. (1999), linking a con-structionist view, using SSM, with hard modelling tools, but the benefits from doing so are notyet clear in practice. Nevertheless, this does seem to be an avenue worth pursuing further.

DISCUSSION AND FURTHER RESEARCH

This paper stresses that BPM can be seen as a collection of methodologies, techniques andtools supporting the analysis and improvement of business processes. It has been arguedthat, to achieve greater modelling effectiveness in BPM, it is crucial to understand the natureof business processes. For this purpose, this paper proposes that a business process may



Figure 5. Business processes as social constructs.

be viewed from different and competing angles deterministic machines, complex dynamicsystems, interacting feedback loops and social constructs.

Relating the perspectives with each other and with the paradigms

It is important to note, however, that these perspectives are not independent of each otherand that it is difficult to identify clearly where one perspective begins and the other ends. Figure6 attempts to visualize these relationships and shows that these perspectives are bestregarded as inter-related facets of a multifaceted reality. The easiest linkage to grasp is,perhaps, between the complex dynamic systems and the feedback loop perspective. Bothfocus on the organic and dynamic features of business processes. However, the latter viewextends the former in an attempt to consider information feedback structure. Both perspec-tives are related, in turn, to the mechanistic view, as they all tend to overlook social consid-erations if taken to extremes.

On the other hand, the links with the social construction view are more difficult to perceive,as it attempts explicitly to consider what other perspectives missed out the human natureof business processes. However, it is still possible to establish relationships with the complexdynamic systems and the feedback loop perspective in the domain of SSM. All have incommon systems ideas, although they are used in different ways. Whereas in the complexdynamic systems perspective, systems ideas are used to represent real-world businessprocesses, in the social construction view, systems thinking is applied as an intellectual deviceto reason about peoples perspectives. In the feedback loop view, the use of systems ideasis not so obvious, because it can be used in both a positivistic and an interpretive way.

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Figure 6. Business process views vs. paradigms.

As mentioned earlier, each perspective has its own strengths, but also limitations when takento extremes. When combined, however, they provide, like metaphors, a range of complemen-tary ideas from which one can better consider the nature of business processes. The combi-nation of views proposed in this paper lead us to state that business processes have a mixedand apparently conflicting nature. They have technical and social, tangible and intangible,objective and subjective, quantitative and qualitative dimensions. Supporting this view, Groveret al. (1995) reported on a large-scale survey of the implementation of BPR, in which theyfound that business processes are best seen as dynamic sociotechnical systems. In thebroader field of IS, Checkland & Holwell (1998) used the well-established SSM-based actionresearch approach in an attempt to carry out a conceptual cleansing of the field. They arguedthat real organizations have a mixed nature as both social units, rationally pursuing well-defined objectives, and (changing) social constructs, in which individuals or subgroups havedifferent interests and agendas. Or, as they neatly put it, simultaneous would-be purposefulmachines and quasi-families (their stress) (p. 221).

Figure 6 also shows that each perspective makes different philosophical assumptions aboutthe nature of business processes and the relationship between the modeller and the businessprocess being modelled. For example, the roots of the mechanistic view in hard, technicalsystems lead to an ontology in which the nature of the business process is objectively given,is external and is composed of a number of discrete and tangible things. Epistemologically,the role of the modeller is independently to abstract the real-world business process in orderto propose a cost-effective design that meets the objectives given. Similarly, in the complexdynamic systems perspective, there is an implicit belief that business processes are out thereand consist of external, although interacting, entities. The role of the modeller is to under-stand, external to the real-world business process, the complex set of interactions by mim-icking its dynamic behaviour in order to propose a design alternative that meets the objec-tives of effectiveness and efficiency.

Unlike the other perspectives, the social construction view regards the nature of businessprocesses as problematic, subjective and non-material. The modeller, more a facilitator thana technical expert, cannot appreciate real-world business processes neutrally and needs towork with the perceptions and meanings of the people involved in the process. The ontologi-cal and epistemological positions of the feedback loop viewpoint are more difficult to discernbecause of its hybrid nature. However, there may be a heavier inclination towards the posi-tivistic stance as a result of its roots in control theory. Finally, it must be pointed out that thephilosophical stances suggested here should not be regarded as rigid. For example, there isno reason why the dynamic complex systems perspective should not be applied in an inter-pretive way, although this may be uncommon.

Implications for practice

What are the practical implications of these four perspectives on business processes andBPM? One practical problem with contingent frameworks is that what seems beguilingly simpleon paper turns out to be rather difficult in practice, and a framework based on these four per-



spectives is no exception. Nevertheless, it would be wrong to regard it as useless, just becauseit may be hard, at this stage, to prescribe how it may be used by practitioners. There is a par-allel with the approach to problem structuring in management science suggested by Pidd(1996), using the ideas of Goffman (1974) and Schn (1982). Problem structuring is anattempt to define the issues to be tackled in the modelling process. Pidd suggests that prob-lems should be viewed as social constructs which, like beauty, . . . are defined in the eyes ofthe beholder (p. 72). Problem structuring, then, is a process in which different frames areapplied and various problems are named, in order to provide a handle for their resolution.Thus, problem structuring is a process of exploration in which multiple perspectives are useful,and it may be that the same ideas apply in the early stages of business process investiga-tion. It is unlikely that many management science practitioners will gladly dive into the detailof Goffmans sociology; nevertheless, it does provide useful insights that can be used to guidethoughtful practice.

Perhaps the same is true of the four perspectives presented here? Few BPM and IS pro-fessionals will bother to delve into the detailed assumptions that underlie the development ofthe perspectives. Nevertheless, the multifaceted view does provide useful insights for prac-tice. For example, if the BPM project focuses on the analysis and improvement of technical,well-defined processes, then the techniques and tools underlying the mechanistic perspectivemay well be appropriate. If the business process being analysed displays unpredictable,complex interactions, then discrete event simulation techniques may be suitable. A businessprocess with a feedback loop structure would seem to call for systems dynamic approaches.On the other hand, if the focus is on human, problematic processes, then the methodologiesunder the social construction umbrella would seem to deliver a useful contribution.

To aid practitioners further in selecting the methodologies, tools and techniques appropri-ate to the process under study, this paper also discussed the strengths and limitations ofdifferent BPM approaches. In general, static approaches are useful for understanding andcommunicating the structure of business process, but they lack a time dimension and, ifused in isolation, may ignore sociopolitical issues. Discrete event simulation approaches areinvaluable for understanding complex process interactions, yet they are resource consumingand, used blindly, may neglect sociopolitical considerations. System dynamic approaches arehelpful for modelling business processes with feedback loop structure; however, they may be rather mechanistic. Soft approaches are useful for addressing sociocultural issues, but they lack the ability to provide an objective, quantitative assessment of business processchanges.

In addition, the results of this study stress the importance of pluralistic and multidisciplinarymodelling approaches. Willcocks & Smith (1995) suggested that many process improvementprogrammes end in failure because the methodologies adopted are partial in their approach.Commenting on the re-engineering fiasco, Davenport & Perez-Guardado (1999) argued thatprocess change programmes are better approached from different fronts in a multifaceted wayand illustrated this using an ecology metaphor. Hence, IS professionals can use these view-points to construct more powerful modelling approaches. By thinking about alternative viewson business processes and using different BPM approaches, the modeller should be in a better

124 N Melo & M Pidd


position to capture the full richness and complexity of the situation, avoiding the limitations ofpartial analysis.

Thus, any practical methodology should include provision for more than one viewpoint. Forexample, the complex dynamic systems view could be strengthened by the social construc-tion view, with simulation to provide a quantitative assessment of process changes and with SSM to ensure social and cultural feasibility. Wastell et al. (1994), Wood et al. (1995),Ackermann et al. (1999) and Warboys et al. (1999) proposed a number of approaches aiming tolink hard and soft modelling tools. Although their pertinence to a business process context needsto be established, these examples do provide evidence of interest in such a methodology.

Implications for research

The findings of this study also have important implications for research. This paper contributesto the BPM literature by proposing a conceptual framework aiming to classify alternative busi-ness process views and to discuss different approaches to BPM. Of course, more viewpointscould be considered, but these seemed to us the most relevant ones emerging from the lit-erature at the time of writing. It extends the conceptual framework of Curtis et al. (1992) bygiving a place to soft modelling and by considering BPM from an holistic and multidisciplinaryperspective. It also relates to Checkland & Holwells (1998) investigation by providing the theoretical underpinnings of the different schools of thought within BPM.

It is interesting to note the significant similarities between BPM and the discussion of IS byCheckland & Holwell (1998). First, serious research in both fields is in an early stage, BPMbeing younger than IS. Second, in both fields, theory lags behind practice. This is undoubt-edly true for BPM, as the field has seen the introduction of many methodologies and tools(often from consultancies), while serious research is only now emerging. Third, differentassumptions made about the nature of organizational life lead to different approaches in bothBPM and IS. Finally, the dichotomy between hard (the dominant) and soft (the emerging)approaches seems to characterize most of the research in both fields.

The objective of this paper has been to derive a taxonomy of business process viewpointsand to provide an account of the different streams of thought on BPM. It has argued that sucha framework will contribute to a clarification of the nature of business processes as well asto an integrated discussion of a fragmented field. It has brought together a wide and diverseliterature, including OR/MS, IS/IT, software engineering, operations management, industrialengineering and organizational research. Our conclusion is that business processes have amultifaceted nature and, consequently, many BPM projects would be better off if they incor-porated pluralistic and multidisciplinary approaches. An interesting avenue for further researchis to extend and develop fully the practical aspects of this framework.

ACKNOWLEDGEMENTS

N. Melo is supported by the Portuguese Foundation for Science and Technology underPRAXIS XXI.



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Biographies

Nuno Melo is a PhD student in the Department of

Management Science at Lancaster University. His re-

search interests include business process modelling and

simulation.

Mike Pidd is Professor and Head of the Department of

Management Science at Lancaster University. He is well-

known for his work in computer simulation and is also the

author of Tools for Thinking: Modelling in Management

Science, which discusses the links between hard and soft

approaches in management science.

business process modeling

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