 Hello and welcome to this session in which we will discuss business process management BPM which is a management methodology that involves the design Implementation execution and monitoring of business processes. Simply put BPM orchestrate the function of a business from the design the implementation to execution to monitoring What is the purpose of it? Why do we have this? Well, we want to improve efficiency and what is efficiency? Efficiency is a streamlining the process to reduce waste to reduce cost Decrease cycle time. How long it takes us to perform a certain task to produce a product to produce a service to deliver a service eliminate any unnecessary or costly activities and as a result deliver faster Faster product or service. Also another another goal of this is increase agility Now, what is agility? What is that word? Well, simply put improving the ability to respond quickly to changes in the market So if the change if the market changes if customers have a new need We have to meet that need if the if the customer Taste changes we have to change quickly Whether those customers are internal or external then how do we do that? How do we do that again reducing not again, but reducing bureaucracy Empowering employees employees are on the front line Let them do make the decision Implementing processes that are flexible and adaptable that they can change so we can Respond to changes in the market quickly and the third Goal of this business process management is to enhance customer satisfaction And that's the most important and the reason is simple because this is where we generate revenues Basically improving the customer experience by providing high quality product and services And responding quickly to customers inquiries or concern and most importantly Anticipating that's the most important thing. You want to anticipate customers request customer Demand and meet that demand before your competitors before we proceed any further I have a public announcement about my company farhat lectures.com Farhat accounting lectures is a supplemental educational tool That's going to help you with your CPA exam preparation as well as your accounting courses My CPA material is aligned with your CPA review course such as Becker, Roger, Wiley, Gleam, Miles My accounting courses are aligned with your accounting courses broken down by chapter and topics My resources consist of lectures multiple choice questions through false questions as well as exercises Go ahead start your free trial today. No obligation. No credit card required Now in BPM we have activities in the business process management and I'm going to list the following activities Which are process discovery process analysis process design process modeling process implementation process monitoring and process optimization now in your textbook and your CPA review course They might have five or four or six. I believe those steps are a little bit more comprehensive Which is fine. The key is to understand the big picture If you know anything about farhat once I have a series of steps I'm going to go through each step separately explain it and give an example So you understand what does it mean in the context of the big picture starting with process discovery and the wording of each step in these process or each activity is It describes itself. What is discovery learning the activity involved identifying and documenting the current business processes It includes activities such as process mapping mapping the process process mining looking for stuff And it could include process analysis, but this will be I'm going to cover this in a separate step process analysis So this step, which is the first step provide a foundation for understanding. Remember in this process we are learning How work is currently being performed and maybe We could figure out some inefficiencies or bottleneck bottleneck means Issues that that's not allowing us to be Functioning at an optimize in an optimized fashion So process discovery is important because it's going to provide a baseline for process improvement initiative because once we know What we are then we can move forward and some examples in this step will be interviewing employees to understand their current workflow Mapping out the steps of a current process on a whiteboard or on a software Or or mapping the whole process to understand the big picture In this step, we might analyze data from existing system to understand how the process is currently executed So think of this as a learning Learning step once we learn we might want to process this information a little bit further This involves analyzing now after we learn we kind of know what's going on We have the picture now we analyze the current business processes to now to identify a little bit more What's going on in the efficient inefficiencies bottlenecks and area for improvement now? We're analyzing this process now. We could have what's called root cause Analysis, which is a systematic method for identifying and underlying causes of problem within a process now after we learn Now what we do is we do what we? Underline we underlining and identifying the causes now. We are looking for the exact cause. What's happening here root cause analysis This can help us identify the reason why the process is inefficient and ineffective We learn about it now. We need to do to do more now here We measure the cycle time or the lead time of a process to identify bottlenecks a little bit more specific Conducting the root cause to understand the underlying causes Surveying employees to understand the main points now. We're not asking them How the process work? We're trying to figure out more information from it The third step is process design here what we're doing. We're gonna create now We learn about the process. We did some analysis now We're gonna create try to create a new system this involved the creation of a new And the key improved process based on the result of the process analysis This would include defining the new process process identifying the roles and responsibilities of those involved And mapping out the flow of activities required to complete the process now We're kind of designing the new process this this involved designing creating a new process flow diagram That reduce the number of steps maybe sometime you might increase the steps But usually you want to be more efficient you want to reduce the step to complete a to The steps required to complete a task redefining the roles and responsibilities Some people may not be happy about this And or some people could be very happy and designing a new process that automate a manual task to improve efficiencies now we we're designing we're basically Drawing the new map for the business process now once we do that We're gonna model it this involved creating a visual representation of the new process Which can be used what for because we want to communicate this process when we're when we're working with the business process We want to communicate this process Maybe to hire management executives Stakeholders and to identify potential issues because sometimes once you put something on a paper you might see problems in it here to improve So you you you do process modeling to improve your understanding provide the visual representation Can help stakeholders understand the flow of activities Decision points and handoffs point between different roles and department This is also help with communication Why because you want to communicate this to stakeholders the stakeholders could be employees themselves using the system Could be customers could be vendors could be high High-level executives It could also be used this process modeling to train new employees on how to execute the process So specifically the step will involve creating flow charts to visualize the steps Using what's called business process modeling a notation will have a quick recording about this concept BPMN Tool to create a visual representation of the process develops a simulation of a process Basically pilot piloting the process to understand the impact of changes on process performance then we're gonna Implement process implementation this involved in deploying the new process or making any necessary changes Sometimes we have a new process sometimes we're going to take the existing one and tweak it a little bit The goal of this step, which is process implementation is to make sure the new step is executed as intended because okay You studied the old process you analyze it you design a new process You design it You put it on a map You you model it now you want to implement it to see if it's working as expected Expected outcome are achieved here. You'll do what's called pilot testing in this step The new the new step should be piloted and Preferably in a control environment if that's if that's if that's feasible control means not life environment To ensure that it operates as intended sometime you have to do it in a life environment This involved a small scale test with a limited number of employees Or a more extensive test with a larger group the best example of pilot testing now that's going on is google Google is launching this artificial intelligence, which is called barred in response to microsoft And what they're doing they're allowing the employees Limit all the employees at google to test this artificial intelligence versus open ai. That's basically partially owned by by a by microsoft updating an existing system to support the The new process flow chart. This is when you Implementation steps or rolling a new software tool to automate a process This is again part of the implementation or developing a new training material to teach employees how to execute the new process So those are actual examples of process implementation Then we have to do what we call process monitoring to see if everything's working as expected Tracking the performance of the new process to ensure its meeting What we designed it to do the desired goals and objective here We can track key performance indicators kpi's which we'll talk about those slaters For example, if we are looking at the cycle time or error rate to understand the process Analyze feedback from customers or employee what for to identify areas of improvement Conducting periodic processes on it to ensure that the process is being followed correctly This is part of the monitoring reporting on it report should be generated on a regular basis to communicate the performance To stakeholders. However, those stakeholders are they might include dashboards chart other visualization that provide the clear picture Of what's happening in that new process of the performance process And at the end we want to kind of go back and optimize make it even better This involves continuous improvement over time to increase efficiency reduce costs and improve overall performance and as a result Improve customer satisfaction. That's the whole purpose of business process. This will be conducting continuous process management like kaizen or lean events to eliminate waste and improvement and improve efficiencies We'll talk about those later on those are management techniques collect and analyzing data to identify pattern And the trend that could lead to process improvement again You want to keep on improving here process optimization means making it better and better and better Developing and executing a plan that implement a major process change that will deliver significant benefit again do more Now bear in mind We could do process management in a totally different way So another business management and business process management methodology Is something called pdca which is plan do check and act very similar It has four stages It's a framework that is widely used in the business process management and quality management And it has four stages plan do act and check once again We have four steps and what the far had doing each step We're going to go through each step separately given an example starting with the plan stage the plan stage as it's You know the step it's planned We in this stage the problem or opportunities for improvement is identified You're looking for it and plan is developed to address it This should include clear objective. What are we doing a timeline and list of resources needed to complete this objective? So identify the problem Maybe the cycle time for processing customers order is too long. That's the problem objective Reduce the cycle time by 50 percent in the next three months the timeline Well an example of it implement the new process within four weeks and measure performance in the next eight weeks Resources that we need we need two full-time employees to work on the project And provide funding for the new software. This is the planning stage For once we plan we're going to do the do stage in this stage The plan is executed according to the established timeline in step one and with necessary resources This process is closely monitored to ensure that it's being followed correctly to identify and analyze any issues that arise Here the two new employees they work together to redesign the process and implement the new process flow Training is provided here to employees involved in the process to ensure they understand how they execute the process Now we're going to check we plan. We do we check in this stage The result of the executed plan and the prior step are evaluated against What would we plan? What did we plan to do now here data is collected? Analyzed and compared to the original plan to determine whether the project was successful This is what we're checking or not because this is the checking stage Here we could be review on kpi's. We'll talk about kpi's later Basically ratios or steps whatever we whatever we plan to do to determine whether the performance has improved degraded or remain constant Examples Performance is measured daily during the first two weeks of the new process and then weekly for the remaining six weeks Those are you know specific steps in check stage Data is collected on the cycle time error rate and customer satisfaction Analysis reveals that cycle time has reduced by has been reduced by 35. That's great But the error rate has increased slightly. So So now the check stage we wanted to reduce the time Yes, that happened but the error rate went up. So this is what we do We're checking to see whether what whether what we plan to do and did is actually working as Expected so analysis reveals not as we thought it will happen Then after we check we act again based on the result of the check stage We take Taking to adjust the process to improve it if the results met or exceeds the expectation of the original objective Well, then we standardize the process and we'll roll it out across the whole organization If the process did not meet the objectives Means it was not as good. The process has modified and the cycle is repeated. Basically, we'll go back to the drawing Map and we do what start again plan do Check and act again. This is how it works Based on the analysis the employee modified the new process to address the causes of the increase Error and an error rate because we find this as a problem. We need to do something Training materials are updated to reflect the changes of the process Performance is monitored for another eight weeks to ensure that the modification has the desired effect And here the problem is it seems as we reduce the Speed reduce the of the of the order. We are making more mistakes. So we're saying let let's do something to reduce The errors what should you do now go to far hat lectures? That's the way to do it is to look at multiple choice questions. That's going to help you Understand this concept better and as a result you will be able to do better on your CPA exam In your courses or any professional certification accounting Is a lucrative is a prestigious career take it seriously invest in yourself. Good luck and stay safe