Process approach in the management of modern business entity activities opens a wide range of opportunities, ways and methods of activity reorganization, improving the quality of customer interaction, optimization of internal and external business processes. An effective tool in analyzing business processes as a central category of the process approach is modeling that increases their adaptability and mobility. We propose approach to improve and adjust business process to time and profit increasing by the means of autoregressive model using BPMN 2.0 in contrast existing approaches without econometrics analysis of experimental data for BPMN.
When we construct a business process by means of BPMN 2.0 we will set the initial conditions of the operation, such as execution time and the cost of resources (e.g., human resources in cost per hour or piece wage). During operating of a business process such timing and costs of the resources are chosen as would satisfy the restrictions of a customer or designer of the business process. To support decision-making in which direction should change the initial parameters of the business process, it is proposed to use dynamic distributive-lag and autoregressive econometric models. These models allow to take into account the impact of previous indices’ values of business process on its succeeding values to assess short-run and long-run impact on the efficiency of a business process as a whole according to specific criteria.
The goal of the paper is to develop a procedure of business processes adaptation according to cost and profitability criteria by means of autoregressive model using BPMN 2.0.
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Paper has following structure: section 2 is devoted to related works, section 3 demonstrates designing and adjustment of business processes, section 4 concludes. 2 2.1
The paradigm of the functional approach, which has long been used for organization and management of companies, appeared to be unable flexibly and effectively to address current challenges faced by each business entity. Focus on the functional approach has led to the isolation of the top management from the current economic situation that caused information asymmetries, bureaucratization of companies, leveling of the system of incentives and reward schemes for human capital assets, excessive localization of functions within individual units, distortion of control and analysis system. The next stage of the management concept evolution was marked by the emergence of process management approach that provides for a high degree of mobility and adaptability in highly turbulent current market conditions (table 1). .iengDUm ...trJhoSE .treavnpoTD .rIeovodF .lkoovVO ,..iepnRVV lifreeovY :-I00200109SO .lraovoFL .irednZY tirJanM .iirsevkyuBNm .ieeyknkoovdYV .reaknoonoPVm
This approach allows a company to easily integrate into the concept of the clientoriented market that meets the actual needs of society and economy (fig. 1).
Finally, the analysis of the previous scientific researches demonstrated that the process approach is the mainstream of the “business process” definition which is considered as the logic range of interfacing in the field of customization of the company activity for the purpose of convergence customers and producers targets. 2.2
The object of the process management concept is a “process” in which the activity of a company is a combination of business processes, management of which allows to significantly increase the transparency and manageability of business and to improve its effectiveness as per specified criteria. The process is described by the parameters
- 520 taking into account the structural features of business processes customer-oriented strategy continuous optimization of cross business processes delegation of authority and responsibility high qualification required specialization of administrative personnel in the strategies development simplification of multilevel hierarchical organizational structures simplified exchange of information time saving reduction of overhead costs simplified coordination, organization and control systems vertical integration of resource flows high flexibility and adaptability of the management system high degree of transparency in relations priority of processes with a high degree of added value risks leveling
Opportunities change of organization functioning logic and mechanism of its control competitive growth comprehensive effectiveness evaluation of functioning possibility to create systems to monitor the quality of company activities preparing for benchmarking process approach as a reserve for enhancement of efficiency resources optimization high staff motivation the possibility of team-working possibility of integrated automation strict social requirements
complex design of management system for the account of detailing and formalization
delegation of authority and responsibility
serious requirements for qualification of contractors of time, sequence, transformation of object states during its movement to the final state [2], which helps the company to flexibly respond to the dynamic changes, to switch from one process to another, to comprehensively analyze the entire operational cycle. Business process, as a part of the process approach, has its “input” and “output” in the form of production of resources and products (goods, services or works), respectively (fig. 2).
Indexes: Productivity Cost + Efficienc=y Stages of measurement: measuring current values; compare current values with desired; measuring deviations.
measuring
Technology, mechanism of interaction between functions and control system are additional components of the process approach (fig. 3) [6].
Controlling :creation of a system for analysis of the current performance of BP based on the reporting; use of information systems for results measurement and evaluation; implementation of organizational changes the object of management
The mechanism of leveling the differences between “AS-IS” and “AS-TO-BE” models is the “Road map” that sets benchmarks for optimization of business processes. “Input” resources during the process of transformation into goods, services and works at the “output” form “AS-IS” model, the main purpose of which, according to L. Dryuchenko, is aimed at identifying of “bottlenecks” in business process: current problems, differences, inconsistencies, threats that can be overcome subject to radical modernization of existing organizational and administrative decisions and procedures. Instead, the “AS-TO-BE” model is aimed at improving the existing practice of business process implementation [6]. Improving the effectiveness of business processes and transition of “AS-IS” model to “AS-TO-BE” model are achieved by correlation of current business processes with strategic installations and objectives of the business entity, that leads to a radical rethinking of business philosophy. The theoretical basis for the implementation of this process involves multiple possible scenarios: reengineering, X-engineering, FAST technique, benchmarking and synergistic combination of process and target-oriented approaches. Simulation modeling and economic analysis are technical tools to achieve this objective.
The most popular of these scenarios is the concept of reengineering, which, according to the definition of the founders of the concept, namely M. Hammer and J. Champy, is treated as a fundamental rethinking and radical reconstruction of business processes. Reengineering should not be identified only with the processes of reorganization or automation. It shall be considered in the context of a component of a larger category – Total Quality Management (TQM) since its main function is the fundamental transformation of the essence of processes implementation and performance of operations at the stages of “input” and direct process, but not only increase in efficiency or profitability of the “output”. However, in our opinion, X-engineering theory of J. Champy is a more progressive one. This theory, unlike reengineering, provides for a comprehensive restructuring of not only internal operations and relations between internal staff, but also the transformation of external relations, including not only consumers, but also other stakeholders – competitors, contact groups, state, global economy entities [10], that will make it possible to adequately meet the urgent needs of the economic system as a whole. 2.4
In the context of complicating of the forms and types interfacing between counterparties and market indeterminacy economic systems are able to selforganization and reach the temporary equilibrium, which transforms the system from the chaotic state to the equilibrium within the sphere of evolutionary economics, which identifies stochastic development script.
Given the actualization of the key tenets of the evolutionary economics of J. Schumpeter, the analysis of business processes through the prism of the theory of jokers is an interesting one. According to this analysis, some parallels can be drawn between a business process and economic and physical method of “channels” and “jokers” that simplifies the model, highlighting the main parameters and discarding irrelevant ones [11]. “Input” of a business process can be compared with the “source” from jokers theory, similarly, “Output” – the “mouth”. Conditional distinction of parameters and processes in this area is performed for the account of determining the degree of dynamism: the system in “sources” and “mouths” is slow, which can be explained by the relatively stable partnership relations that are often built on longterm cooperative basis; while the “jokers” are characterized by high dynamism and unpredictability as production operations and actions tend to increasing volatility because of strengthening of scientific and technical progress development (fig. 4).
Riverbeds are the methods of simplification the complicates systems or processes. Riverbeds separate the unite to the various parts and also, determine the possibility of development process forecasting. Diverse fields of the space which are characterized by the high level of the time rate of change and unpredictability are called jokers ( specific bifurcations ) in which the system is tested for sustainability.
The mechanism of decision-making in the process approach can be represented by the following algorithm (fig. 5).
Despite the benefits of process management, empirical implementation of this approach is characterized by a number of difficulties, including those identified by J. Rilley: fragmentarity of processes that adversely affects the flexibility and adaptability of business; low level of automation of processes resulting in increased operating costs; the basis of enterprise motivation is maximization of its own profits, but not satisfaction of customers' needs; lack of evidence-based research on the advantages and disadvantages of modeling and optimization of business processes; rejection of modeling and optimization through formal introduction of process management [12].
Technical leveling tool for these shortcomings and limitations of the process approach is a mechanism for predicting and adapting business processes through modeling.
Mouth slow dynamics; high degree predictability.
of logically related operations or processes to improve the quality of business processes through improving their forecasting, optimization, and adaptation (fig. 6).
Goal knowledge systematization; receipt of
objective management information. description and study; optimization and automation; monitoring and control.
Objectives
Advantages improving the quality and speed of production; reducing costs; growth of staff professionalism; improving competitiveness.
Drawbacks increase of staff exploitation;
changing of the corporate culture.
BP MODELING S T A G E S Fig. 6. Essence of the “Business Process Modeling” category, [4, 11, 13 - 16] Strategic model Functional + Organizational Financial model Simulation of BP
Information model
Types of simulation: analytical; simulation (dynamic): discrete event; system dynamics; agent simulation
Practical steps simulation: analysis of the economic system, its identification; synthesis and formation of a model in view of its peculiarities and mathematical specifications; verification of the model and specification of its parameters; clarification of all system parameters.
Types of models: functional model – “What to do?” process model – “How to do the work?”
We should note that under the optimization of business processes, the interpretation of J. Harrington, a pioneer in the field, is meant. Under the specified category J. Harrington understands improvements aimed at increasing productivity, efficiency and adaptability of business processes [3].
According to D. Kozenkov, the modern management concept reduces the formalization of business process modeling to the process of building of enterprise architecture with a three-level structure (fig. 7) [2].
system (Information Technology Architecture)
Tactical Strategic architecture applications architecture data; technical architecture. institutional model - defines the legal form, external positioning, formalized management systems (motivations, control). process model - defines organizational (form, structure) and economic model (costs and revenues model) forms social-oriented strategic business model; corporate mission and strategy; long-term goals and objectives Consider the business process, which describes the manufacture of soft drink (Fig. 8).
Positions of workers performing all business process operations and in-payment forms are described in Table 2.
In the menu Resources in tab Availability a maximum number of employees available to perform business process is determined (fig. 9), and in tab Costs – piece (fixed cost) or hourly (cost per hour) wage (fig.10). In BPM notation business process will look like (fig. 11)
Standard activity time, the number of performers and activity cost are defined for each business process operation (Fig. 12). The number of actually executed orders that are shipped to the end customer; average time of each operation; delay time in operations; a share of time during which the employee performs his work (on a scale from 0 to 100%) (fig. 13) is obtained as a result of the business process (fig.13).
Export of experimental data concerning staff costs (Fig. 14) provides an econometric estimation of payroll costs on cost per unit (average cost) of soft drink parties.
Export of business process activity costs (Fig. 15) from Bizagi Modeler in MS
Excel makes it possible to build an econometric model for estimating the impact of total
time of work performed on the profit of business process owner.
We estimate the impact of timing on the efficiency of business processes in the
shortrun and long-run periods. To assess the effectiveness of business processes consider
the following distributive-lagged model where current cost ( yt ) depends on the
payroll of the current and all prior periods ( xt ,..., xtn ):
(
yt c b0 xt yt1 .
To determine the regression parameters b0 and conduct a series of experiments for different numbers of orders. The task of the company is to analyze the effectiveness of the wage fund on the average cost of production. For that firm’s budget (TC) is determined as sum of payroll and activity costs for each order (q), then we calculate cost per unit of production (AC). After 10 experiments we obtained the following data (table 3):
After construction of regression model using experimental data from table 3 we have:
yt 14.5 0.0007 xt 0.888 yt1 ( R2 0.71 ). (
The next task of the company is to analyze the impact of the business process duration on the company profits from soft drink production via the model of partial adjustments. It is assumed that profit depends on the expected duration of business process. This profit yt is observable, and the time duration of employees ( xt* ) is unobservable value; ut is residual term of the model:
yt b0 b1 xt* ut .
xt* xt (1 ) xt*1 , where the expected time of performing the operations at time t is a weighted average of its actual value in the current period and its expected value in the previous period with weights and 1 respectively.
After the substitution of (
Software BPMN allows to simulate the time and resources required to perform business process, but require additional analysis of statistical data for its adaptation by the criterion of profitability. Procedure of determining an adaptive time performance for operations is carried out by the econometric model of partial adjustment. We introduce the hypothesis of adaptive expectations for the leader of the business process, seeking to define the time of operations within which the profit for entire business process reaches its maximum:
xt* xt*1 (xt xt*1 ) , 0 1 ,
where shows the speed of adjustment (corrections) of leader’s expectations to
differences between the actual time of performing the operations and previously
expected time. Expression xt* xt*1 shows how expectations are formed and the
expression xt xt*1 explains how expectations are corrected. Rewrite equation (
Then multiply by 1 both sides of equation (
In BPMN environment for simulation data in each experiment we will change the duration of all the company's operations at a fixed time. Then calculate the profit of the company as the difference between its revenue and cost of resources for each time period (t). After 10 experiments we obtain the following data (table 4):
Regression (
Thus, the process approach in the management of modern business entity activities opens a wide range of opportunities, ways and methods of activity reorganization, improving the quality of customer interaction, optimization of internal and external business processes. An effective tool in analyzing business processes as a central category of the process approach is modeling that increases their adaptability and mobility.
Analysis of business process modeling has an analogy with evolutionary economics in the theory of jokers and neurosystem theory. Among the future prospects of business process modeling is the use of ontologies, which, according to T. Gruber's opinion, in business modeling sphere is reduced to a formal specification of conceptualization [16] that involves the use of OWL (Web Ontology Language).
Another promising research vector is the use of neurosystems involving the use of neural networks that can be effectively used in the study and analysis of dynamic processes.
It is demonstrated how we can improve and adjust business process to time and profit increasing by the means of autoregressive model using BPMN 2.0 in contrast existing approaches without econometrics analysis of experimental data for BPMN.