Chapter 1 Flashcards
Process?
Systematic and co-ordinated flow of activities, performed by people or machines, for the attainment of organisation’s objectives
Business Process Management?
BPM is defined as the achievement of an organization’s objectives through the improvement, management and control of essential business processes.
Primary benefits of using technology for BPM
Distribution of tasks to process participants and amalgamation of applicants
The effectiveness gains for enterprise through au0tomated coordination of activities
BPM Principles
Principles:
a) “Processes are assets” that create value for customers.
b) A managed process produces “consistent value to customers.”
c) Continuous improvement of process. Business processes are central to an organisation’s value creation.
BPM Practices
Practices:
a) Process-oriented organizational structure
- Process org
- Case management org
- Horizontal process mgmt org
b) Appoint process owners
c) Top down commitment, Bottom-Up Execution
d) Use of information technology systems to monitor, control, analyze, and improve processes
f) Continuously train the personnel.
h) Utilize both incremental (e.g., Six Sigma) and more radical (e.g., BPR) to process improvement
Accounting processes Cycle in BPM
Accounting or Book keeping life cycle covers the business processes involved in recording and processing accounting events of a company
It begins when a transaction or financial event occurs and ends with its inclusion in the financial statements.
Accounts/Book keeping Life cycle
Life cycle:
a) Source Document: Document the capture data from transactions.
b) Journal: Transactions are recorded into journals from the source document.
c) Ledger: Entries are posted to the ledger from the journal.
d) Trial Balance: Unadjusted trial balance containing totals from all account heads is prepared.
e) Adjustments: Appropriate adjustment entries are passed.
f) Adjusted Trial balance: Trial balance is finalized post adjustments.
g) Closing entries: Appropriate entries are passed to transfer accounts to financial statements.
h) Financial statement: The accounts are organized into the financial statements.
Short note on Finances
- Most important and limited resource available with government
- Proper use can help target areas of need, bring efficiency and improve services
Financial planning –> Resource allocation –> Operation and monitoring –> Evaluation, Analysis and Reporting
Key factors and related consideration in implementing BPM
Scope goals Skills required Sponsorship needed Methods to be used Tools to be used
Benefits of BPM
- determines right person for the right task at the right time
- Managing large amounts of documents and data
- The business can be re-arrange process steps and add in manual steps quickly ( Less Errors)
- Reduced process cost due to increased quality/less errors
- Reduced training time, expenses and internal support request
- Intangible benefits i.e. better information quality
Need for BPM Implementation
a) Create the long-term future positioning,Enhance future capability of the business
b) Create short-term cost effectiveness,Improvement to current customer service;
c) Initiate continuous improvement, from base of current but improved processes
d) Re-engineer the business radically
e) Introduce leadership and a role for managers and empowered staff.
f) Introduce a knowledge of product and customer profitability;
Challenges in Implementing BPM/BPA/BPMS
- The no. of interfaces with the customers are growing (e.g. phone, fax, SMS, PDA,email etc..)
- The product, service and price options have increased the complexity of business
- Budgets are being cut.
BPM Technology
BPM Technology can
-complement existing and future investments
and give organisation the ability to
- implement a real-time process improvement
- without the extensive process conversion efforts
Value Chain Automation
It refers to separate activities which are necessary to strengthen an organization’s strategies and are linked together both inside and outside the organisation
Value Chain Analysis is a useful tool for working out how we can create the greatest possible value for customers.
The Benefits & Risks of Business Process Automation (BPA)?
Benefits:
» Saving on costs: Automation leads to saving in time and labour costs.
» Staying ahead in competition: Businesses need to adopt automation to survive
» Fast service to customers: Automation helps to serve customers faster and better.
Risks:
» Risk to jobs: Automation may leads to posing a threat to jobs.
» False sense of security: Automating poor processes will not gain better business practices.
Explain Processing Cycles of an Accounts BPM?
- Financing Cycle: The cycle consists of a set of transactions leading to the recognition of a major economic event on the financial statements.
- Revenue Cycle: It includes transactions relating to recognition of revenue involving accounts like Sales, Accounts Receivable, Inventory and General Ledger.
- Expenditure Cycle: It includes transactions relating to the recognition of expenditures involving accounts like Purchases, Accounts Payable,Inventory and General Ledger.
4.Human Resource Cycle: It describes the stages of an employee’s time with the organization.
(source document ~ Functions)
- General Ledger & Reporting System: Helps to understand profitability and growth of the organisation
- Data Processing Cycle
Explain “Data Processing Cycle”
In this cycle, the processes of business activities about which data must be collected and processed are identified.
The controls on these data are maintained using AUDIT TRAILS, by capturing snapshots or by tracing the flow of data
Basic steps:
- Data input - capturing data, recording in journal, posting to ledgers, preparation of journals
- Data storage - Master files and reference files
3.Data processing - Periodic - Batch processing
Immediate - Online/Real-time
4.Information Output -
Generation of documents and managerial reports in printable or electronic form. Analyzing and controlling activities for decision making.
Impact of IT on BPM? (not very imp)
a) These are a new class of software that allows enterprises to devise process centric IT solutions.
b) ‘Process-centric’ means BPM solutions are able to integrate people, systems and data.
c) Organizations that utilize BPM systems to accomplish IT enabled business process change, gain from the following capabilities:
» Closer business involvement in designing IT enabled business processes,
» Ability to integrate people and systems that participate in business processes,
» Ability to monitor, control, and improve business processes in real time.
» Ability to effect change on existing business processes in real time without an elaborate process conversion effort
Benefits of “BPMS”
BORA-F
- Automating repetitive business processes
- Freeing up of employee time
- Operational savings
- Reduction in administration involved in compliance and ISO Activities
- BPMS works by “loosely coupling’ with the existing applications
Explain Business Risks of failure of IT.
Or, Reasons for failure of BPMS?
a) Superficial or deficient executive involvement.
b) Limited options for customization.
c) Not flexible enough to be customized to meet the specific business needs
d) Failure to identify “future” business needs
e) Inadequate assessment of the need for change management
f) Resources not available when desirable
g) Software fails to meet business needs
h) Technological obsolescence.
Information as Business Asset
-Info becomes asset for an org. if it is:
Useful, digital, accessible, relevant, accurate, understandable and trust-worthy
-Treated as valuable commodity only if it can be used effectively
