Workflow-based Process Controlling. Foundation, Design, and Application of workflow-driven Process Information Systems. (Advances in Information Systems and Management Science, Band 6) - Softcover

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Michael zur Muehlen is Assistant Professor of Information Systems at Stevens Institute of Technology in Hoboken, NJ, USA, where he directs the SAP/IDS Center of Excellence in Business Process Innovation. Michael is an active contributor to several standardization groups in the workflow domain, and a director of the AIS special interest group on Process Automation and Management.

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The process-oriented design of organizations has been subject of the business administration literature for more than 70 years. While numerous approaches for the implementation of process-oriented organizations exist, the methods and instruments of enterprise controlling are mostly aligned with functionally structured organizations. The design of enterprise-wide process controlling systems is hindered by the difficult sourcing of information about the operative execution of business processes.

Workflow management systems offer a solution to this problem. They support process-orientation through the automated coordination of activities, data, and resources. This coordination is based on a formal representation of the process to be automated, a workflow model, which is specified in the build time environment of the system. During the operation of a workflow management system, workflow instances are created from the workflow model and their execution is controlled through workflow enactment services. During the execution of workflow instances, traces of each instance are written to a process protocol, the so-called audit trail, recording the behavior of each instance. This audit trail represents a detailed and precise collection of data about the operative process enactment within a company. The use of audit trail data for process controlling purposes has only been analyzed partially in the literature. Two of the missing pieces are an operational approach to integrate this type of data into an existing controlling infrastructure, and an assessment, which controlling methods and instruments can be applied to the analysis of this data. The success of the emerging fields of Business Intelligence and Business Activity Monitoring relies on a solution to these problems. Michael zur Muehlen addresses several important questions in this context. How can management understand and control automated work processes? How can highly regarded management control techniques such as Activity-based Costing (ABC) and Balanced Scorecard (BSC) be implemented and automated through the information logged by a workflow management system? What is the data and systems architecture for such advanced control systems? Can such systems be implemented in practice? Positioned at the intersection of business administration and information systems, this is an important and original work. Based on an extensive investigation of existing workflow technology and standards, Mr. zur Muehlen's dissertation contains the most thorough and comprehensive investigation of the problem of achieving organizational control through automated work systems. Extensive automation of work is inevitable. The ideas developed by Mr. zur Muehlen should therefore have lasting impact on management theory and practice. Münster, June 2004 Prof. Dr. Jörg Becker

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Organizational structures and their development are studied by a variety of disciplines, such as sociology, psychology, and economics. The goal of organizational research within the field of business administration is the development of viable and efficient structures for enterprises as self-contained economic units. Much of 20th century organizational research is founded on the works of Fayol and Taylor. While Fayol researched the managerial structure of an enterprise, Taylor focused on the operational enactment of tasks as well as the design of organizational structures that support the efficient execution of these tasks. The ideas devised by Taylor have dominated organizational research until the 1970s and can still be found in many enterprises today. Until the 1970s the functional separation of tasks was appropriate for existing market conditions. Since then, increasing market segmentation and shorter product life-cycles, among other factors, have led both businesses and researchers to research organizational structures better suited to adapt to changing market conditions, product portfolios, and enterprise infrastructures. For this purpose, business processes have become a focal point of organizational research.
The alignment of organizational structures with business processes has been discussed in the organizational literature as early as the 1930s. Authors such as Nordsieck and Henning created the distinction between the static structure of the corporate organization (Aufbauorganisation) and the organization s processes (Ablauforganisation). This separation has led to a duality within the field of organizational research, found mainly in the German literature. Among American authors, Chapple and Sayles are the most notable early proponents of process orientation.
Despite this early interest in the topic, the process-oriented structuring of organizations did not gain acceptance in corporate practice until the works of Porter, Davenport, Harrington, and most notably Hammer and Champy led to an increasing interest in process concepts and their implementation. Today, the creation of process-oriented organizational structures is widely seen as a suitable way to overcome coordination problems between functional units, which may result in long cycle times, low product quality, and redundant task fulfillment.
Despite strong interest, implementing process-oriented structures has proven difficult for many companies. Some of the reasons for these difficulties are existing information technology infrastructures, which support functional organizations and hinder the transition toward process-oriented structures.
Workflow management systems (also known as Business Process Management Systems) address this problem. They support the execution of business processes through the automated coordination of activities and resources according to a formally defined model of the business process (the workflow model). The use of workflow technology as a central building block of modern information system architectures illustrates the increasing importance of this type of application. Workflow technology leverages the value of existing information system infrastructures and helps enterprises in the transition toward a process-oriented organization.
Implementing process concepts within organizations is only one step toward achieving a corporate process focus. In order to reap ongoing benefits from a process-oriented organization, continuous maintenance and control of the business processes is required. Process management deals with the efficient and effective execution of business processes. It consists of the planning, implementation, enactment and controlling of processes, and forms a life-cycle that leads to continuous process improvement. Process management addresses the requirement of companies to stay adaptable to environmental and internal changes. Simultaneously it helps companies realize efficiency gains through the exploitation of cost-effective ways to produce goods and perform services.
Using the Deming Cycle for continuous improvement efforts, the necessary steps to align an organization with its processes can be structured along the four phases plan, do, check, and act.

Planning Phase (Plan)

Within the planning phase, organizational processes are identified, modeled and optimized. During this phase, various modeling methods can be employed, such as Petri Net-based approaches or Event-driven Process Chains. Most process engineering approaches focus on this phase. These approaches both align and create modification plans for a company s organizational structures and processes. which then lead to reorganization efforts in the execution phase.

Execution Phase (Do)

Throughout the execution phase, processes are implemented and the organizational structure is realigned to fit these processes. Information systems that support single process steps are implemented, and process participants are trained in the organizational rules and regulations, as well as the use of the supporting infrastructure. Metrics about the process performance are collected during the execution of the new processes.

Evaluation Phase (Check)

Based on the data collected during the execution phase, the effectiveness of the new organization is analyzed in the evaluation phase. Measurements are compared across different processes and organizational units, and relevant results are reported to operative and strategic management units.

Reengineering Phase (Act)

During the reengineering phase, the results of the evaluation phase are reviewed by strategic and operative management units, and the attainment of strategic and operative goals is analyzed. Depending on the performance of the organization, adjustments to the underlying goal structure and measures for the improvement of the current situation are used to create alternative plans. One or more of these plans are chosen for implementation and are handed over to the participants of the planning phase as guidelines for their activities.
The Deming Cycle example illustrates that management of process-oriented organizations requires appropriate measurements in order to verify and ensure the effectiveness of an organization s processes. Process controlling strives to ensure the rationality of the decision making process by supplying relevant process execution information. One of the core tasks of successful process controlling is the installation and maintenance of an infrastructure that validates operational excellence by providing this necessary information. Workflow management systems record events occurring during the execution of process instances and are thus capable of providing detailed information about the performance of operative processes.
Since the implementation and deployment of a workflow-based application systems is a complex and therefore time-consuming endeavor, it can be assumed that once this kind of architecture has been successfully deployed, many companies resist the urge to apply changes. Despite claims by vendors that the introduction of workflow technology will foster a more flexible, adaptable organization, we believe the opposite is true. The complexity of workflow management projects, however, is only one cause for the reluctant attitude observed toward change. The non-transparency of cause-effect relationships that describe the effects of workflow changes on the organizational, technical, or process level, is a more severe cause for this attitude.
This missing transparency can be attributed to the lack of an integrated infrastructure for the gathering and presentation of performance indicators which describe the behavior of a workflow-enabled organization. Such an infrastructure would provide guidance on which parameter adjustments might increase an organization s efficiency. Even though management information systems have been developed since the 1950s, very...