Risks and benefits of business process outsourcing: A study of transaction services in the German banking industry

We developed a model of the adoption of business process outsourcing (BPO) based on risk–benefit analysis. The model was tested in the German banking industry in four areas of transaction processing. Our results showed that, in general, perceived BPO benefits have a substantially stronger impact on intention to increase the level of BPO than perceived risks. However, the experience that banks have with the BPO process, [whether already decided on BPO (Pro), still in the pre-decision phase (Neutral), or opted against BPO (Contra)], moderated the impact of factors affecting the perceived risks and benefits of BPO. Banks that opted for BPO were mostly driven by a desire to focus on their core business while considering financial risks. Banks in the neutral position had the most balanced view of risks and benefits, mainly financial and performance ones, and also focusing on the core business and increased business process performance. Those banks that decided against BPO mostly focused on benefits while the perceived risks were mostly formed by strategic and performance risks rather than financial ones. The results point out the path dependencies of the BPO decision.     

Developing a decision model for business process outsourcing

Information technology (IT) outsourcing has been one of the critical issues in organization management. Business process outsourcing (BPO) is an advanced type of IT outsourcing, which will be the next big wave in information technology services. Nevertheless, since prior studies have only examined issues related to traditional IS outsourcing, there have been few researches that introduce and discuss the important factors that should be considered in the decision of BPO adoption. This paper identifies factors affecting the BPO decision and structures a decision model using the analytic hierarchy process (AHP) method.By proposing a quantitative decision model, this paper will not only assist management in making better decisions in outsourcing their business processes, but also help them to obtain the most benefits from BPO.     

Investigating the effects of business process orientation on organizational innovation performance

Business process orientation (BPO) supports business process management by reorienting employees’ focus from functional performance to customer value adding. While it is generally believed that BPO improves various aspects of organizational performance, there has been a lack of empirical evidence. The results of this study showed that BPO significantly influences organizational innovation performance and identified the underlying mechanism for the effect. Interestingly, it is found that a process view is not sufficient to enhance organizational innovation performance. Cross-functional integration may also need to be carefully managed for innovation. These findings improve the current understanding of BPO and offer managerial suggestions for enhancing innovation.     

Version management for business process schema evolution

The current business environment changes rapidly, dictated by user requirements and market opportunities. Organisations are therefore driven to continuously adapt their business processes to new conditions. Thus, management of business process schema evolution, particularly process version control, is in great demand to capture the dynamics of business process schema changes. This paper aims to facilitate version control for business process schema evolution, with an emphasis on version compatibility, co-existence of multiple versions and dynamic version shifts. A multi-level versioning approach is established to specify dependency between business process schema evolutions, and a novel version preserving graph model is proposed to record business process schema evolutions. A set of business process schema updating operations is devised to support the entire set of process change patterns. By maintaining sufficient and necessary schema and version information, our approach provides comprehensive support for navigating process instance executions of different and changing versions, and deriving the process schema of a certain version. A prototype is also implemented for the proof-of-concept purpose.     

Modelling families of business process variants: A decomposition driven method

Business processes usually do not exist as singular entities that can be managed in isolation, but rather as families of business process variants. When modelling such families of variants, analysts are confronted with the choice between modelling each variant separately, or modelling multiple or all variants in a single model. Modelling each variant separately leads to a proliferation of models that share common parts, resulting in redundancies and inconsistencies. Meanwhile, modelling all variants together leads to less but more complex models, thus hindering on comprehensibility. This paper introduces a method for modelling families of process variants that addresses this trade-off. The key tenet of the method is to alternate between steps of decomposition (breaking down processes into sub-processes) and deciding which parts should be modelled together and which ones should be modelled separately. We have applied the method to two case studies: one concerning the consolidation of existing process models, and another dealing with green-field process discovery. In both cases, the method produced fewer models with respect to the baseline and reduced duplicity by up to 50% without significant impact on complexity.     

Mining version histories for change impact analysis in business process model repositories

In order to remain competitive and sustainable in today's ever-changing business environments, organizations need to frequently make changes to their business activities and the corresponding business process models. One of the critical issues that an organization faces is change impact analysis: estimating the potential effects of changing a business process to other processes in the organization's business process repository. In this paper, we propose an approach to change impact analysis which mines a version history of a business process model repository. Our approach then identifies business process models that have been co-changed in the past and uses this knowledge to predict the impact of future changes. An empirical validation on a real business process model repository has showed the effectiveness of our approach in predicting impact of a change.     

Business process management—the third wave: business process modelling language (bpml) and its pi-calculus foundations

This paper introduces the ideas behind BPML, the business process modelling language published by BPMI. BPML provides a process-centric (as opposed to a datacentric) metalanguage and execution model for business systems. It is underpinned by a strong mathematical foundation, the pi-calculus. The current paper is derived from supplementary appendices to a book which describes a ‘third wave’ approach to business process management [Business Process Management: The Third Wave, 2003]. The aim is to model business processes directly in an executable form, so that the mobility and mutability inherent in business behaviour is reflected and supported in the corresponding IT systems, erasing the present IT-business divide.     

Analysis and improvement of business process models using spreadsheets

Software in general is thoroughly analyzed before it is released to its users. Business processes often are not – at least not as thoroughly as it could be – before they are released to their users, e.g., employees or software agents. This paper ascribes this practice to the lack of suitable instruments for business process analysts, who design the processes, and aims to provide them with the necessary instruments to allow them to also analyze their processes. We use the spreadsheet paradigm to represent business process analysis tasks, such as writing metrics and assertions, running performance analysis and verification tasks, and reporting on the outcomes, and implement a spreadsheet-based tool for business process analysis. The results of two independent user studies demonstrate the viability of the approach.     

Business process management success framework for transition economies

This article presents business process management (BPM) framework, which considers the specific circumstances in transition economies. The analysis of 47 papers shows that in addition to common critical success factors, BPM adoption in transition economies should also consider factors such as environment, external stakeholders impact, ownership, and implementation context. The proposed framework contributes to the theory by offering a solid foundation for future research and to the practice by indicating essential constructs for effective BPM.     

A systematic literature review of studies on business process modeling quality

ContextBusiness process modeling is an essential part of understanding and redesigning the activities that a typical enterprise uses to achieve its business goals. The quality of a business process model has a significant impact on the development of any enterprise and IT support for that process.ObjectiveSince the insights on what constitutes modeling quality are constantly evolving, it is unclear whether research on business process modeling quality already covers all major aspects of modeling quality. Therefore, the objective of this research is to determine the state of the art on business process modeling quality: What aspects of process modeling quality have been addressed until now and which gaps remain to be covered?MethodWe performed a systematic literature review of peer reviewed articles as published between 2000 and August 2013 on business process modeling quality. To analyze the contributions of the papers we use the Formal Concept Analysis technique.ResultsWe found 72 studies addressing quality aspects of business process models. These studies were classified into different dimensions: addressed model quality type, research goal, research method, and type of research result. Our findings suggest that there is no generally accepted framework of model quality types. Most research focuses on empirical and pragmatic quality aspects, specifically with respect to improving the understandability or readability of models. Among the various research methods, experimentation is the most popular one. The results from published research most often take the form of intangible knowledge.ConclusionWe believe there is a lack of an encompassing and generally accepted definition of business process modeling quality. This evidences the need for the development of a broader quality framework capable of dealing with the different aspects of business process modeling quality. Different dimensions of business process quality and of the process of modeling still require further research.     

Configurable multi-perspective business process models

A configurable process model provides a consolidated view of a family of business processes. It promotes the reuse of proven practices by providing analysts with a generic modeling artifact from which to derive individual process models. Unfortunately, the scope of existing notations for configurable process modeling is restricted, thus hindering their applicability. Specifically, these notations focus on capturing tasks and control-flow dependencies, neglecting equally important ingredients of business processes such as data and resources. This research fills this gap by proposing a configurable process modeling notation incorporating features for capturing resources, data and physical objects involved in the performance of tasks. The proposal has been implemented in a toolset that assists analysts during the configuration phase and guarantees the correctness of the resulting process models. The approach has been validated by means of a case study from the film industry.     

Assessing flexibility in event-driven process adaptation

Business process management (BPM) has emerged as a prominent information management approach focusing on the design, execution and governance of organizational business processes. The ability to deal with both foreseen and unforeseen changes in business processes is considered critical for contemporary business process management systems. This paper proposes an approach that couples an event-driven framework for detecting and reasoning in situations that pose the need for process adaptations with MCDM methods for selecting adaptations. The proposed approach has been implemented in an aspect-oriented extension of a BPMN2.0 engine in order to enact adaptations of business processes in real-time.     

Der Einfluss der Komplexit?t auf die Standardisierung von Gesch?ftsprozessen

Today??s organizations are struggling with increasing business process complexity and face serious problems when standardizing business processes. A possible strategy seems to be to enhance standardization efforts in order to ensure standardization success. In this paper, we analyze the triangle relationship between standardization effort, business process complexity, and business process standardization. We test the hypotheses that higher business process complexity is related to higher standardization effort and lower business process standardization as well as that higher standardization effort is related to higher business process standardization. We report on the development and testing of a conceptual model that allows to understand the impact of business process complexity on business process standardization and standardization effort. Findings from a survey among 255 business process management experts are used to evaluate our hypotheses. Our results suggest that business process complexity has to be considered as an important driver of standardization effort and constrains business process standardization. Moreover, we show that higher standardization effort cannot compensate for higher business process complexity to ensure business process standardization.     

Establishing a systems integration process intrastructure

With the steady fall of prices and margins of computer hardware, back in the 1980s, many hardware manufacturers have tried to diversify their range of offerings. Bull Information Systems has chosen to change its major business direction to become a systems integrator and solution supplier. It has been a real challenge and a big success for Bull to succeed in changing its business direction from being a hardware/software mannfacturer to becoming a leading systems integration (SI) company. For a business to be successful in making such a change it needs to work more efficiently and to react faster, while preserving its stability. Although there are many ways for achieving such change, the experience highlighted in this paper describes how a process focus played a critical part in realizing such change. Creating a systems integration business process and a process-focused organization have been critical factors in achieving the change of business direction. A process focus has an impact on the organizational structure; management practices; employees' skills and training; and on measurements of business performance. This paper describes the experiences at Bull Information systems in creating a systems integration business process-focused organization and it outlines the mechanms which are in place to ensure ownership and improvement of the process. It summarizes the main lessons earnt as a result of creating systems integration business processes.     

Workflow simulation for operational decision support using event graph through process mining

It is increasingly common to see computer-based simulation being used as a vehicle to model and analyze business processes in relation to process management and improvement. While there are a number of business process management (BPM) and business process simulation (BPS) methodologies, approaches and tools available, it is more desirable to have a systemic BPS approach for operational decision support, from constructing process models based on historical data to simulating processes for typical and common problems. In this paper, we have proposed a generic approach of BPS for operational decision support which includes business processes modeling and workflow simulation with the models generated. Processes are modeled with event graphs through process mining from workflow logs that have integrated comprehensive information about the control-flow, data and resource aspects of a business process. A case study of a credit card application is presented to illustrate the steps involved in constructing an event graph. The evaluation detail is also given in terms of precision, generalization and robustness. Based on the event graph model constructed, we simulate the process under different scenarios and analyze the simulation logs for three generic problems in the case study: 1) suitable resource allocation plan for different case arrival rates; 2) teamwork performance under different case arrival rates; and 3) evaluation and prediction for personal performances. Our experimental results show that the proposed approach is able to model business processes using event graphs and simulate the processes for common operational decision support which collectively play an important role in process management and improvement.     

Business Process Outsourcing: an event study on the nature of processes and firm valuation

Business Process Outsourcing (BPO) is a phenomenon that is rapidly increasing in both incidence and importance. This study empirically examines the value proposition of BPO with respect to the nature of the processes being outsourced. Using the event study methodology, we employ the value chain (VC) position and existing ownership of a business process as our primary independent variables, and the stock abnormal return in response to the BPO announcement as the dependent performance variable in our research model. The study was conducted on 298 BPO announcements from 1998 to 2005. Results support the argument that outsourcing is valuable for both primary and supportive business processes. However, we found that BPO announcements on primary processes yield higher abnormal returns than supportive processes. Although existing process ownership was not found to be a powerful differentiator for BPO performance, its interaction with VC position provides important insights into the timing of outsourcing. The evidence suggests that internal cultivation of processes is important for BPO success, particularly when BPO is applied to primary processes.     

Towards a framework for business process re-engineering in small and medium-sized enterprises

Business process re-engineering (BPR) is the vogue, although somewhat discredited, change management method. It is as an information technology (IT)-based and customer-driven approach to organizational change, undertaken to enable superior performance, such as cost reduction, shorter cycle time, higher product quality and increased customer satisfaction. Although the literature on re-engineering principles and prospects is large, there is little empirical research evaluating the success or failure of BPR initiatives. This is especially so in small- and medium-sized enterprises (SMEs) in which the potential for BPR benefits may differ significantly from that in their larger counterparts. SMEs are the fastest growing segment of most economies and are perceived to be more flexible and adaptable in terms of structure and speed of response than larger organizations. The literature speculates that SMEs have as good a chance of re-engineering successfully as their larger counterparts, although this is untested. Yet, with limited resources, such as IT and BPR expertise, and financial constraints, SMEs may find it difficult to re-engineer. This paper addresses the role of BPR in SMEs and develops a framework to assess its implementation potential. Factors that facilitate and inhibit BPR performance are identified and analysed as the basis for empirical testing. A set of propositions is developed that allows operationalization of the framework. The ultimate goal is to develop a process and tool set to assist SMEs wishing to undertake business process re-engineering.     

Resource behavior measure and application in business process management

Efficient resource behavior measure in business process management is a real and challenging problem. It reflects the actual situations in business process execution from resource perspective and is highly relevant for the business process performance. This paper presents an approach of measuring resource behavior from four important perspectives, i.e., preference, availability, competence and cooperation, based on process mining. Furthermore, this paper shows how business process management can benefit from resource behavior measure. In particular, four applications are addressed to demonstrate the applicability of resource behavior measure in business process management. The presented approach is evaluated based on a proof-of-concept implementation and its application to a real case form health-care. The results show that the proposed approach is possible to improve current state of business process management.     

From fine-grained to abstract process models: A semantic approach

Organizations actively managing their business processes face a rapid growth of the number of process models that they maintain. Business process model abstraction has proven to be an effective means to generate readable, high-level views on business process models by showing coarse-grained activities and leaving out irrelevant details. In this way, abstraction facilitates a more efficient management of process models, as a single model can provide for many relevant views. Yet, it is an open question how to perform abstraction in the same skillful way as experienced modelers combine activities into more abstract tasks. This paper presents an approach that uses semantic information of a process model to decide on which activities belong together, which extends beyond existing approaches that merely exploit model structural characteristics. The contribution of this paper is twofold: we propose a novel activity aggregation method and suggest how to discover the activity aggregation habits of human modelers. In an experimental validation, we use an industrial process model repository to compare the developed activity aggregation method with actual modeling decisions, and observe a strong correlation between the two. The presented work is expected to contribute to the development of modeling support for the effective process model abstraction.