Abstract
In the 1990s, companies focused on the design and implementation of
their internal business processes to overcome functional barriers. The
2000s are about the integration between enterprises and inter-enterprise
processes, particularly the improvement of supply chain management and
customer relationship processes, The major enabler is the Internet,
which has resulted in entire networks of e-business processes across
various organizations. To design and implement those processes
efficiently and effectively, more and more organizations use available
industry standards in the form of reference models, e.g. the supply
chain reference model (SCOR), the RosettaNet Standards, or software
reference models. Unclear for many enterprises is how to use those
standards. This article describes a comprehensive methodology for the
use of reference models, to design and implement inter-enterprise
collaborations within value chain networks. The methodology leads to
fast and reliable results in value chain improvement. It increases the
performance of the implementation procedure and the resulting business
processes.
Electronic access
The Emerald Research Register for this journal is available at www.emeraldinsight.com/researchregister
The current issue and full text archive of this journal is available at www.emeraldinsight.com/1741-0398.htm
E-business processes and industry standards
While companies in the 1990s focused on the design and implementation
of their internal business processes to overcome functional barriers,
the 2000s are about the integration between enterprises, about
inter-enterprise processes. These changing management paradigms are
reflected in a changing information technology focus: the focus moves
from integrated intra-enterprise application packages to Internet-based
"e-enabled" and inter-enterprise focused application software.
The improvement of supply chain management (SCM) and customer
relationship management (CRM) processes are key to enable the enterprise
value chains. The major enabler is the Internet. That is why the
resulting processes are called e-business processes, connected to entire
networks of processes across various organizations.
In order
to design and implement inter-enterprise e-business processes
efficiently and effectively, more and more organizations use available
industry standards in the form of reference models like the supply chain
operations reference (SCOR) model, developed by the Supply Chain
Council (SCC), the RosettaNet Standards, or software reference models.
It increases the performance of the implementation procedure as well as
of the resulting business processes. Standardization organizations like,
e.g. the SCC consist of hundreds of member companies, developing
reference models that reflect industry best practices. Other reference
models are developed by solution providers, e.g. application software
vendors or consulting companies. What is unclear for many enterprises is
HOW to use those standards. Therefore, the following article describes a
methodology for design, implementation and continuous improvement of
inter-enterprise e-business processes, leading to successful value
chains based on industry standards.
The methodology has been
developed within a joint initiative between Intel, Siemens AG SBS, IDS
Scheer and various technology partners (Kirchmer et al., 2002).
Available industry standards for e-business processes
Key areas of inter-enterprise value chains are covered by the supply
chain operations reference (SCOR) model. Therefore SCOR is an excellent
basis for the design of such e-business processes. Using this industry
standard facilitates a broad use of the later developed approach. Many
organizations to be integrated through e-business processes may already
be familiar with SCOR and can use it as a joint communication platform.
In order to specify the detailed interactions between involved
companies, the RosettaNet models were chosen. These standards are very
common, especially for the high-tech industry. However, alternative
models like the OAGI standards, can be used in the same way.
SCOR
The SCOR model (Supply Chain Council, 2001) has been developed and
endorsed by the SCC, an independent non-for-profit organization. The SCC
was founded in 1996, in the USA, and has now branches all over the
world. SCOR is a business process reference model that contains all
supply chain activities from a supplier's supplier to a customer's
customer. This includes:
* all customer interactions from order entry through paid invoice;
* all product (physical goods, services, ...) transactions including
equipment, supplies, spare parts, bulk product, software, etc.; and
* all market interaction from the understanding of the aggregate demand to the fulfillment of each order.
SCOR contains three levels of process detail. The top level (process
types) defines the scope and content. It consists of the five top level
processes:
(1) plan;
(2) source;
(3) make;
(4) deliver; and
(5) return.
The second level of SCOR, the configuration level (process categories), contains 30 process categories, like:
* "make-to-stock";
* "make-to-order";
* "engineer-to order"; or
* "production execution".
These process categories can be used to "configure" a company's supply
chain. Companies implement their operations strategy through the
configuration they choose for their supply chain.
The third
SCOR level, the process element level (decomposed processes) is used to
fine-tune the operations of a company. It consists of:
* process element definitions;
* process element information inputs and outputs;
* process performance metrics;
* best practices;
* system capabilities necessary to support best practices; and
* systems/tools to be used.
Companies implement their supply chain solution on Level 4 (or even
more levels of detail). Level 4, called implementation level (decomposed
process elements), defines practices to achieve competitive advantage
and to adapt to changing business conditions. This level is company
specific and therefore not in scope of SCOR. The structure of SCOR is
shown in Figure 1.
SCOR also includes a methodology that
enables companies to analyze and improve their supply chain operations
by helping them communicate supply chain information across the
enterprise, measure performance objectively, identify supply chain
performance gaps and improvement objectives. The SCOR methodology has
essentially four steps:
(1) Analyze the basis of competition.
(2) Configure the supply chain.
(3) Align performance levels, practices and systems.
(4) Produce a plan for supply chain improvement backed up with projected ROI.
The methodology is applied to produce supply chain improvement project
proposals backed up with sound business cases and high-level
specifications of proposed solutions.
RosettaNet
The
RosettaNet group is an industry organization that drives collaborative
development and rapid deployment of Internet-based business standards,
creating a common language and open e-business processes that provide
measurable benefits and are vital to the evolution of the global,
high-tech trading network (RosettaNet, 2000). RosettaNet has been
founded in 1998, in the USA, and has now also achieved a global
presence. The RosettaNet standards consist of a three-level business
process architecture that supports inter-enterprise e-business
interactions:
(1) partner interface processes (PIPs);
(2) RosettaNet dictionaries; and
(3) RosettaNet implementation framework (RNIF).
Relevant for the context of the initiative described in this article
is, first of all, the business view described in the PIPs. However, it
is an important aspect that the use of the PIP standards also ensures
the technical implementation of the defined solutions.
A PIP
describes activities, decisions and interactions necessary to fulfill an
entire inter-enterprise business transaction. They also define
structure and format of business documents. An example of a PIP process
definition is shown in Figure 2. It is an excerpt of an event-driven
process chain (Scheer, 1998).
The Open Applications Group
(2002) or the Business Process Management Initiative (2002) offer
similar standards that can be used as an alternative to, or in
combination with, the RosettaNet standards.
Others
In order to identify the relevant inter-enterprise supply chain
interactions between companies the Y model developed by Scheer (Scheer,
1994a, b) can be used. It includes all relevant business processes of a
company, the planning as well as the execution activities. Each involved
company can be represented by one Y model based on which the
interactions can be easily defined. Since it also includes activities
that are not in the scope of SCOR, e.g. research and development, the Y
model can, on one hand, be used complementary to the SCOR model, on the
other hand, to identify the areas that will be specified using SCOR. The
use of the Y model is especially important to create a high-level entry
point into inter-enterprise process definition activities. An example
for the use of the Y model to describe the collaboration areas between a
manufacturer of locomotive engines and a supplier is shown in Figure 3.
On the implementation level, software reference models can be
added to the mentioned reference models as, for example offered by SAP
(Kirchmer, 1999; Gulledge et al, 2002).
Procedure for the efficient and effective use of standards
After selecting the reference models to be used, a procedural model has
to be developed, describing HOW the business reference models for the
design of inter-enterprise e-business process networks can be used. The
ARIS architecture provides the basis for process description and the
eBPI approach provides the framework within which the presented
reference models are used.
ARIS architecture as basis for process description
The "architecture of integrated information systems" (ARIS), developed
by Scheer (Scheer, 1998a, b; 2002), can be used as a framework to
describe business processes efficiently, but nonetheless completely,
thus manage the knowledge about business processes. Using ARIS, a
process can be examined from five different points of view ( see Figure
4):
(1) Organization view (Who takes part in the process, which companies, departments or people?).
(2) Function view (What is done in this process?).
(3) Data view (What information is produced or needed?).
(4) Output (result) view (Which outputs/ results/deliverables are produced?).
(5) Control view (How do the four other views interact? Who works on
which functions using which data and in which operational logic to
produce which deliverables?).
If it is possible to answer the questions concerning the various views,
then a business process is adequately described. All the knowledge
necessary for an efficient and effective business process life-cycle
management is gathered. The control view, in particular, plays a central
role, as it brings together the individual views and thus forms the
foundation for successfully functioning business processes. The
different views can be described on a pure business concept level, an
information technology (IT) specification level (defining IT solution
types, e.g. SCM) and an implementation level (defining concrete IT
solutions, e.g. a specific SCM system).
Every view of the ARIS
architecture can be described by various modeling methods. They can be
used to answer and communicate the mentioned questions. The ARIS
architecture can be used as structure for information modeling methods. A
big advantage for the practical use of the ARIS architecture is the
availability of a software tool based on this architecture, the ARIS
Toolset.
The ARIS architecture is especially suited for the use in inter-enterprise environments (Kirchmer, 2002):
* The use of the Internet allows companies to change and extend their
offerings. Instead of selling CDs, music files can be downloaded
directly from the Web, for example. Or packages in transit can be
tracked through the Internet - as additional customer service. Therefore
the examination of a specific "output (product) view" of business
processes, as suggested by the ARIS architecture, is extremely important
in an e-business inter-enterprise environment.
* E-business
processes enable the efficient and effective collaboration between
enterprises, directly or through so-called "e-marketplaces". This means
that responsibilities are shared between organizational units of the
collaborating enterprises. As a consequence, the examination and maybe
change of organizational structures becomes key for design and
implementation of e-business processes; again, an aspect handled in a
specific view of the ARIS architecture.
* The collaboration of
different organizations leads to a "process-to-process" integration, to
e-business process networks. The coordination of all aspects necessary
to achieve this integration is handled as a key aspect in the control
view of the ARIS architecture.
eBPI approach as basis for the procedural model
The eBPI approach is a general procedure to use the ARIS architecture
in an inter-enterprise e-business environment (Kirchmer, 2002). The
objective of eBPI is to deliver, on one hand, a structure for managing
the life-cycle of e-business processes successfully; on the other hand,
to leave enough flexibility to adapt procedures continuously to changing
environments, typical of an e-business initiative. eBPI is an
information model-based approach to e-business, combining aspects of
efficiency and effectiveness.
The eBPI approach is structured into four major phases:
(1) development of the e-business process vision;
(2) specification of the resulting e-business processes;
(3) realization of the e-business processes; and
(4) continuous improvement of the e-business processes.
The starting point eBPI is the elaboration of an e-business process
vision. Core deliverables are e-business process scenarios, a high-level
description of the envisioned collaboration of organizations. These
scenarios are further specified in the following phase of eBPI. This
specification phase includes the definition of inter-enterprise and
intra-enterprise processes, necessary to realize the defined scenarios,
and the selection of the required e-enablers, such as application
software products. The selected e-enablers are used to realize the
e-business processes in the following phase of eBPI, which combines
software implementation and e-integration activities. The realization
phase triggers a continuous improvement of the implemented e-business
processes (CPI). Key is here the definition of an effective business
process performance management. The CPI can then restart the whole eBPI
procedure in order to reflect customer, new market and technology
developments.
While the e-business process vision focuses on
complete e-business scenarios consisting of one or more processes, the
specification phase focuses on individual e-business processes, and the
realization phase on sub-processes or functions to ensure rapid results.
Those sub-processes or functions are reassembled to complete business
processes, which lay the basis for the continuous process improvement
The phases of eBPI are not just in a "process sequence" with a defined
beginning and a defined end. The continuous improvement will trigger -
sooner or later - another visioning phase. Also, the different phases
influence each other, which may cause changes in preliminary eBPI phases
triggered by activities in the current phase.
The structure of eBPI is shown in Figure 5.
Procedure for the integrated use of reference models
The selected reference models reflect all ARIS views of the relevant
inter-enterprise business processes. Focus of the procedure to be
developed is on the Vision and Specification phases of the eBPI
approach.
Starting point of the eBPI procedure is the elaboration of an
e-business process vision, which equates to the results of the SCOR
methodology as used to identify and prioritize supply chain improvement
projects. Core deliverables from the SCOR analysis within the Vision
phase are e-business process scenarios in the form of a high-level
description of the envisioned collaboration between organizations of the
extended supply network.
Therefore, a first modeling step is
the identification of scope, both for the relevant process and chosen
products (goods, services, others) (Kirchmer, 2002). The relevant
activities of each company can be either identified using SCOR, or on a
broader base, using the Y model.
The standard elements of the
top level of the SCOR definition (the process types "plan", "source",
"make", "deliver", and "return") have been found being too general.
Therefore, one usually starts the supply chain configuration by defining
the roles within each tier of the supply network (e.g. manufacturer at
facility X, distributor, customer, etc.) and the major activities using a
value added chain diagram (VACD) as method. An example for a level 1
supply chain definition using the VACD structure is shown in Figure 6.
This representation is actually one level above the configuration model
of SCOR, which would reveal the process categories (e.g. source to
stock, make to order, deliver to order, etc.) for each role. This means,
the SCOR reference model is used as the basis for the process
definition, but it is adapted to the specific use by specifying the
high-level activities through the roles of the executing organizational
units.
As a result of applying a SCOR analysis to the supply
chain, an inter-enterprise e-business scenario can be identified and
prioritized based on best practices and specific patterns of the supply
chain definition.
The "model object" encapsulating the scenario
model is positioned on the supply chain VACD as shown in Figure 6,
which refers to an example scenario: "demand response with collaborative
reset/replan". It can then be specified using SCOR Level II and III
elements as a guideline. This means the scenarios are defined using the
SCOR structure, but the process elements are specified according to the
specific situation. The scenarios are role-based, so that they can be
used in all similar situations. The scenario models define how business
processes are distributed between the various roles and which business
documents are exchanged. They cover all ARIS process views. An example
of an e-business scenario model is shown in Figure 7.
In order to get a handle on an e-business scenario, we determine the
information flow between SCOR Level III process elements on either side
of the partner boundary in a particular community of business partners
for some segment of a supply chain. The information flow, as defined by
the SCOR in/ out data elements, defines the interactions of the
scenario.
The process parts of the e-scenarios exchanging documents between roles
and therefore between enterprises can now, as mentioned, be further
specified using elements of SCOR Level III and the RosettaNet PIP
specifications. Again, all ARTS views are covered. Figure 8 shows an
example of such a process specification.
Further RosettaNet PIP
elements, especially the detailed process models, can be used on the
Levels IV and further, in conjunction with software reference models.
The use of SAP and RosettaNet reference models has been positively
tested. This highest process specification can now be implemented, based
on identified application software packages and the technical
components of the RosettaNet standards in the Realization phase of eBPI.
The Realization phase triggers a continuous improvement phase for the
implemented e-business processes. Figure 9 shows the described approach
in an overview, using the "Intel-Siemens" initiative as an example.
Application of the defined procedure
The developed methodology has been tested within the joint project with
Intel, Siemens and IDS Scheer. Workshops were organized to provide
realistic examples of the SCOR to RosettaNet mapping methodology, using
the ARIS Toolset as the enabling software tool.
Key tool functionality
Since the ARIS architecture had been chosen as the basis for the
process description, the ARIS Toolset (ATS), a set of software tools
based on ARIS, was a natural fit for this initiative (IDS Scheer AG,
2000). However, several characteristics were especially important for
the final selection of the tool.
Key is, of course, that the
described methods are supported. But it is also important that the ATS
allows UML modeling and interfaces to software development tools.
Therefore, developed requirement definitions can be used as a basis for
necessary software development very efficiently, without any double
work.
Important was also the integration of ARIS to EAI and
business process execution environments. This again allows an easy and
effective transfer of the developed process models into the process
execution. This reusability of process models increases the value of
this structured design tremendously.
The next advantage is the
availability of all required reference models in the tool: SCOR3
RosettaNet PIP definitions and SAP reference models are available in the
ATS. This allows a straightforward use of the business content of those
industry standards.
Possibilities to publish models over the Internet and even to support
an Internet-based model development were crucial for this
inter-enterprise initiative. People of various locations, even of
different continents, were involved. Therefore, communication and model
exchange over the Web is key.
Also, the availability of ARIS
Process Performance Manager, a tool to support the business process
controlling, was an interesting aspect. It allows the measurement of the
implemented processes.
Overall, the ease-to-use of the tool
and the fact that all involved organizations had already been using the
ATS is another decision factor. Just as the used reference models are
industry standard, the selected tool had also to be widely used to be
able to duplicate the developed approach easily.
Lessons learned
The following benefits have been achieved:
* A single integrated repository of SCOR models, standard e-business
scenarios, and RosettaNet PIP information enables the support of future
Value Chain Projects dealing with inter-enterprise processes.
* The project teams will be able to easily access the business documentation of standards like RosettaNet.
* Once a solid meta-architecture is developed for the SCOR to
RosettaNet mapping effort, other standards can be incorporated easier.
* Based on these standard models, project teams then will be able to
model their specific processes as necessary. Selecting complete
reference models or just specific parts and elements of those will
expedite their efforts and lead to a much higher standardization across
project teams working off the same reference database.
* The outcome of new projects based on this approach will be additional templates.
All in all, a "business process warehouse" of reference models has been
built which creates, together with the defined procedures and the
enabling ARIS tool, a "business process factory". This combined software
and tool environment enables an efficient and effective design and
implementation of e-business process networks.
References
References
Business Process Management Initiative (2002), The Business Process Management Initiative - BPMI, available at: www.bpmi.org
Gulledge, G., Simon, G. and Sommer, R. (2002), "Using ARIS to manage
SAP Interoperability", in Scheer, A.-W., Abolhassan, F., Jost, W. and
Kirchmer, M. (Eds), Business Process Excellence - ARIS in Practice,
Springer, Berlin, New York, NY.
IDS Scheer AG (2000), Bus/ness Process Management - ARIS Too/set Products, White paper, February, IDS Scheer AG, Saarbrucken.
Kirchmer, M. (1999), Business Process Oriented Implementation of
Standard Software - How to Achieve Competitive Advantage Efficiently and
Effectively, 2nd éd.. Springer, Berlin, New York, NY.
Kirchmer,
M. (2002), e-Business Process Improvement (eBPI) - Building and
Managing Collaborative e-Business Scenarios, White Paper, Berwyn, PA.
Kirchmer, M., Brown, G. and Heinzel, H. (2002), "Using SCOR and other
reference models for e-business process networks", in Scheer, A.-W.,
Abolhassan, F., Jost, W. and Kirchmer, M. (Eds), Business Process
Excellence - ARIS in Practice, Springer, Berlin, New York, NY.
Kirchmer, M. (1999), "Market- and product-oriented definition of
business processes", in Elzinga, D.J., Gulledge, T.R. and Lee, C.-Y.
(Eds), Business Process Engineering, Kluwer Academic, Norwell, MA, pp.
131-44.
Open Applications Group (2002), Best Practices and XML
Content for eBusiness and Application Integration, available at:
www.openapplications.org
RosettaNet (2000), RoseftaWet Overview, available at: rosettanet.org (accessed May 2000).
Scheer, A.-W. (1994a), CIM - Computer Integrated Manufacturing, 3rd ed., Berlin, New York, and others.
Scheer, A.-W. (1994b), Business Process Engineering, 2nd ed., Berlin, New York, and others.
Scheer, A.-W. (1998a), ARIS - Business Process Frameworks, 2nd ed., Berlin, New York and others.
Scheer, A.-W. (1998b), ARIS - Business Process Modeling, 2nd ed, Berlin, New York and others.
Scheer, A.-W., Abolhassan, F., Jost, W. and Kirchmer, M. (Eds) (2002),
Business Process Excellence - ARIS in Practice, Springer-Verlag, Berlin,
New York, NY.
Supply Chain Council (2001), Supply-Chain
Operations Reference-model - Overview of SCOR Version 5.0, Supply Chain
Council, Pittsburgh, PA.
AuthorAffiliation
The author
Mathias Kirchmer is President and CEO of IDS Scheer, Inc. and a member
of the Extended Executive Board of IDS Scheer AG, IDS Scheer, Inc.,
Berwyn, PA, USA.
Reference
Anonymous, Kirchmer, 2004. E-business process networks. E-business process networks - successful value chains through standards, [Online]. vol. 17. 1 , pp. 20-30. . Available at: http://search.proquest.com.ezproxy.uws.edu.au/docview/220044419?accountid=36155 [Accessed 25 May 2012].
36. 10
