Business Process Management

Homework 1
Performed by Dmitri Nikulin (A81933)

Exercise 1.7 1. What type of process is the above one: order-to-cash, procure-to-pay or issue-toresolution? I suppose this is a procure-to-pay process. It starts when someone in an organization (employee) determines that a certain product needs to be purchased and it ends with the product delivery and payment. In current organization employee is creating a request (quotes and purchase request), that needs to be approved by supervisors. Then checking, paying and receiving the goods is performed. All this tasks are done in procure-to-pay process.

2. Who are the actors in this process? Who is/are the customer(s)? The actors are: a) Employee (Organization) b) Supervisor 1 (financial approval) c) Supervisor 2 (approve the necessity of the purchase) d) Purchase Department e) Account Payable Office (part of Financial Department) f) Goods Receipt Department g) Vendor

The customer is: Employee (Organization)

3. What are the tasks of this process? Tasks: a) Employee fills in and signs a request b) Request is checked and approved by two supervisors c) Employee forwards the form to Purchasing Department d) Purchasing Department enters request into company's Enterprise System

e) Purchasing Department selects the vendor f) Purchase order is send to vendor g) Copy of purchase order is sent to Account Payable Office h) Clerk at Goods Receipt Department selects the corresponding purchase order in Enterprise System i) The goods are forwarded to the employee j) Printout of the goods is sent to the Accounts Payable Office k) Clerk in Accounts Payable Office is doing "three-way matching" l) Payment notice is sent to the vendor

4. What value does the process delivery to its customer(s)? With the help of this process the customer (in our case organization) can receive the product, which will help to improve the productivity of the company.

5. What are the possible outcomes of this process? Outcomes: a) Employee request is approved or rejected by two supervisors b) If it is approved, then the form forwarded to Purchasing Department If it is rejected, the request is returned back and maybe employee try a second attempts.

6. Taking the perspective of the customer, what performance measures can be attached to this process? Performance measures: a) Count the length of each part of a process. Make sure that you answer the question: How many hours/minutes takes each activity? b) The probability of a mistake performed in the process (three -way matching)

7. What potential issues do you foresee this process might have? What information would you need to collect in order to analyze these issues? Issues: a) Enterprise System unreliability leads to delays (time spent on waiting) b) errors (the possibility of a mistake in performed check) c) workers' incompetence

d) time waisting Information to collect: a) time measures b) dependencies of activities in the process c) frequencies of errors d) statistics

8. What possible changes do you think could be made to this process in order to address the above issues? Possible changes could be: a) Make a database including up to date information about vendors b) Request check by two supervisors can be done by one c) Automate "three-way matching". There can be a machine that receives a purchase order, the good receipt, the invoice and compares them. It will safe workers' time, decrease the possibility of inserted data errors