Normative Attributes in Business Process Management Performance. Av. Prof. Luciano Gualberto, 908 Cidade Universitária Sala E110 - PDF

Normative Attributes in Business Process Management Performance Maria Aparecida Gouvêa University of São Paulo, Brazil Av. Prof. Luciano Gualberto, 908 Cidade Universitária Sala E110 ZIP CODE

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Normative Attributes in Business Process Management Performance Maria Aparecida Gouvêa University of São Paulo, Brazil Av. Prof. Luciano Gualberto, 908 Cidade Universitária Sala E110 ZIP CODE SP Phone: Francisco Sobreira Netto University of São Paulo, Brazil Av. Prof. Luciano Gualberto, 908 Cidade Universitária Sala E110 ZIP CODE SP Phone: João Eduardo Ferreira University of São Paulo, Brazil Av. Prof. Luciano Gualberto, 908 Cidade Universitária Sala E110 ZIP CODE SP Phone: POMS 18th Annual Conference Dallas, Texas, U.S.A. May 4 to May 7, 2007 2 ABSTRACT The concept of process management, which has been known since the beginning of the last century with the scientific administration movement, has echoed more intensely in the business world in the last two decades. It is noticed that there is a gap in the academic literature when it comes to mechanisms for measuring the business process management (BPM) performance considering the process end-to-end, which contribute for the organizations to reach their strategic goals. This study adapted the theoretical model of evaluation of BPMs that is available in the bibliographic revision in the context of business process for National Support Program to the State Exchequer (PNAFE). Through the application of bivariate and multivariate statistical techniques, the adapted model was validated. It was also possible identifying the normative attributes that present the higher correlations with the general evaluation of the business process management. Keywords: Business process management, Normative attributes, Statistical techniques INTRODUCTION Operations in organizations always rely on one or more processes, be they formalized or not, that utilize technology, often that of information. Formalizing of processes takes place by development of models that take into account: business objectives, exchanges, data, integration and relationships between areas. 3 For Hammer and Stanton (1995) processes continue to be fragmented and isolated in different sectors of the traditional organizations. Therefore, they remain difficult to be viewed as part of a gear train hindering their management and control. The decade of the nineties was prodigal in academic and entrepreneurial reports on the development and use of workflow systems and somewhat less prolific with regard to their management. To overcome deficiencies pointed out by specialists, the model of Business Process Management BPM appeared using Information Technology - IT resources. For control of business processes in the Brazilian Public Exchequer Management, the National Support Program for the State Exchequer - PNAFE was instated in 1997 relying on a solid basis of managerial and technological knowledge and human and financial resources. Thereby, the Brazilian states have been promoting major advances in the control and collection of taxes, combat of tax evasion and optimization of public services. PNAFE reports cover management of these new business processes only for the operational attributes, without including those of a managerial nature. Furthermore there is no model for the evaluation of BPM and a theoretical reference or a successful benchmark in the scope of the PNAFE is lacking. A review of the literature on work and reports of successful experiences in the use of Systems for Evaluation of Organization Management (SEOM) as well as the architectural solution RiverFish (RF) for control of the BPM brought about studies of the normative attributes for SEOM, under the RF concept for the creation of a conceptual model for specific evaluation of the Business Process Management in the context of PNAFE. This study intends to: 4 Adapt the theoretical model for the evaluation of management processes in the context of business processes for the PNAFE; Validate the model adjusted for business process management for PNAFE; Identify association between pair of normative attributes in business process management performance THEORETICAL FOUNDATION The principal Systems for Evaluation of Organizational Performance reported in recent academic studies, the main concepts of BPM Business Process Management, the architectural model for control of RiverFish business process and the concepts of the Navigation Plan will be addressed in this section. Systems for Evaluation of Organizational Performance Systems for Evaluation of Organization Management (SEOM) are understood as an array of people, processes, methods, tools and indicators structured to collect, describe and represent data to generate information about multiple dimensions of performance for users at different levels of hierarchy. Based upon the information generated, users are able do evaluate performance of teams, activities, processes and the Organizational System itself, for making decision and carrying out actions for performance improvement (CLARK, 1995; BITITCI et al, 2000; NEELY et al., 2002; FIGUEIREDO, 2003, pg. 58). Figueiredo (2003, pgs ) divides the systems for measurement of organizational development into three distinct stages. The first stage, between the 14 th and the 19 th 5 Centuries includes the emergence of the first accounting practices for the control of production processes and development of the first administrative systems and control of production. In the second stage, from the beginning of the 20 th Century to the decade of the 1980, performance measurement became an explicit part of the planning and control cycle of organizations, a time when the main model was that of the Du Pont Pyramid. The third stage, from the mid eighties until today, is the result of criticism of the former model and similar ones. The literature surveyed identified other attributes based upon intangible and non-financial assets, nevertheless necessary for the efficacy of new models designed for performance measurement. In 1999, KPMG LLP (2001, pg. 13) carried out a survey with leaders representing global organizations at a meeting with members of the MIT Massachusetts Institute of Technology, which pointed to the need of a new generation of performance measurement systems and tools. This may be one of the main explanations for the fact that Figueiredo (2003, pgs 23-25), in a careful review of literature, identified about 33 (thirty three) new models of SEOM. According to relevance criteria, number of citations in literature consulted and dissemination among the organizations, Figueiredo (2003, pgs ) defined the nine principal SEOM that served as a theoretical point of reference for the development of a conceptual model to support self-evaluation of systems for measurement of organizational performance, as follows: PMQ Performance Measure Questionnaire 1990; SMART Strategic Measurement and Reporting Technique 1991; QMPM Quantum Model for Performance 6 Measurement 1994; SPC Seven Performance Criteria 1993; BSC Balanced Scorecard 1992, 1993, 1996 and 2001; IDPMSa Integrated and Dynamic Performance Measurement System 1997, 1998 and 2000; IDPMSb Integrated and Dynamic Performance Measurement System 1996 and 1997; PP Performance Prism 2001 and 2002; MSGP Measurement System of Global Performance Some efforts seeking to identify the attributes needed for the efficacy of these systems can be found in academic literature. Among them are the doctorate surveys by Clark (1995) and Martins (1998) and the masters by Ratton (1998) and by Hourneaux Jr (2005), as well as the works by Ghalayini et al (1997), Neely et al (1997), Bititci et al (2000), Bourne et al (2000), De Toni and Tonchia (2001), Kennerly and Neely (2002) and Figueiredo (2003). The latter author identified 128 attributes and ranked them according to criteria of affinity and correspondence into nine so-called normative attributes: alignment, critical analysis, organizational learning, balance, clearness, dynamism, integration, participation and causal relationship. Business Process Management - BPM Aalst et al (2003, pg. 4), defined BPM as the support for the business process using methods, techniques and information system software to design, carry out, control and analyze operational processes involving people, organizations, applications, documents and other information sources. Currently many workflow system vendors are portraying their offerings as BPM systems. The Gartner (2002) group believes that the BPM market will grow and that BPA Business Process Analysis will be acknowledged. 7 BAM - Business Activity Monitoring is one of the emerging BPA areas. The objective of the BAM tools is to use historical data stored by the information system to diagnose operational processes. Two trends may be identified in the redesign of operational processes: STP Straight Through Process and the CH - Case Handling. The STP refers to the complete automation of a business process. For Aalst and Berens (2001, pgs 43-44), STP focuses on greater automation and CH deals with different processes that diverge greatly or are very complex for confinement in a process diagram. To summarize, according to Aalst et al (2003), BPM extends the traditional endeavor of WFM (Workflow management) while supporting the diagnosis stage (BPA and BAM software) and allows for new ways of supporting operational processes (CH and STP). Creation of a model for BPM performance measurement, containing normative attributes already known and academically settled of the systems for measurement of organizations performance was complemented by the fundamental concepts of a recently developed architectural model to control business processes, the RiverFish. This model was a welcome resource for research in the domain of ITC - Information Technology and Communication management, when it proposed a solution for the continuing gap found in this stage of diagnosis of the BPM, (BPA and BAM software) and in the support of redesign for operational processes (CH and STP). RiverFish Architecture and the concept of Navigation Plan The architectural model for process control RF RiverFish according to Ferreira et al (2005) has a modeling language described by the NP Navigation Plan, which utilizes 8 Process Algebra to represent the cycle of a process (BERGSTRA et al, 2001; BERGSTRA and MIDDELBURG, 2003; FORKKINK, 2000). The RiverFish architecture, state Ferreira et al (2005) is a new approach for the integration of data in autonomous systems by a unified handling of the requisitions. In BPM, an electronic service requisition, for instance, requisition for the opening of a company in the taxpayers register of a public body, navigates through various levels of consistency until it is stored in a specific database of a given autonomous system. The concepts of Navigation Plan simplify representation and management of complex business processes. RF presupposes the concept of datum quality, that is to say, at each time, when the performance monitor has successfully carried out a step, on instance of the NP, the quality of the datum in question is improved. The RiverFish architecture considers as quality of a datum, that a minimum set of rules and consistencies is complied with. A quality verifier controls the requisition until it attains the desired quality. In the search for a BPM assessment model, the normative attributes found in literature will be analyzed from the point of view of the main attributes of the Navigation Plan contained in the RF architecture to compose a new collection of specific normative attributes for performance measurement of the BPM. NATIONAL SUPPORT PROGRAM FOR THE STATE EXCHEQUER IN BRAZIL - PNAFE According to the document Brasil (2005, pg.1) the PNAFE National Support Program for the State Exchequers, funded by the IDB- Inter-American Development Bank, and by 9 local participation (50% for each) intends to improve the managerial efficiency, the rationalization and the transparency in the management of state public resources. In most Units of the Federation, in order to warrant that the PNAFE objectives will be met, agreements were signed between the State Treasury Offices and other state bodies, essential to the process of fiscal modernization: General Attorney offices, Audit Courts, Planning or Administration Offices, Prosecuting Counsels. For PNAFE some Units of the Federation, for instance, São Paulo (, Bahia ( and Paraná (, established the Internet as the principal means of service supplied to the taxpayers, by means of the so-called Electronic Fiscal Stations. In view of the number of public services at the different levels of public administration that still require an efficient remodeling of business processes and their computerization, in a large number of countries, the exchequer administrations have been pioneers in the introduction of new technologies in the government. In internal documents for program assessment, the lack of a model to measure management performance in the majority of business processes, mainly in those that involve solutions such as the use of Information and Communication Technology, is identified by PNAFE as a gap to be filled for the strengthening of the progress achieved. Many of these processes have accurate controls that do require broader multidisciplinary knowledge integrated with the other organizational business processes. 10 METHODOLOGICAL ASPECTS OF THE STUDY The methodological procedure for the creation of a model for measurement of business process management of the PNAFE will be described in this section. Surveys accomplished In the 1 st stage a review was made of literature to obtain subsidies for development of an Initial Conceptual Model (ICM-BPM Initial Model of a System for Performance Measurement for BPM). In the 2 nd stage a quantitative survey was carried out for evaluation of reliability and validation of constructs of the proposed Conceptual Model for Performance Measurement of the BPM of PNAFE. Population The quantitative survey was undertaken in the ambit of the Central State Units (CSU) of PNAFE coordination and State Finance Offices of the Brazilian states. The population characterized by: (1) Coordinators, sub-coordinators and managers of the CSU macro-projects, and (2) Leaders and managers of modernization projects subordinated to the CSU in most Brazilian states participating in the PNAFE. Sampling and data collection instrument Probabilistic sampling was utilized to meet the need of generalization of results. One hundred and thirty interviews were made. Data was obtained by means of personal 11 interviews (survey) and also by Internet. For the latter, questionnaires were forwarded to those randomly selected who agreed to take part in the survey. Initial Conceptual Model ICM BPM There are nine preliminarily identified normative attributes of the ICM BPM starting from the theoretical basis of the SEOM, of the BPM and of the RF-NP architectural model: learning, clearness, dynamism, integration, alignment, participation, causal relationship, balance, critical analysis. These dimensions were compounded of several aspects. In the total of the nine dimensions, 101 attributes were analyzed. They are presented in table 1. Insert Table 1 about here Macro processes belong to the following relationship: access control, legislation, register, statements, APFD - Authorization for Printing of Fiscal Documents, fiscal account, Vehicle Taxes IPVA, different services in the tax area and different services in the financial area. For each aspect and within each of the nine dimensions, participants in the survey ranked the intensity of the presence of the aspect in the process management on a scale of 0 to 10. Example: Factor: learning; Aspect: knowledge of the process as a whole by the users. The closer to 0, the less this knowledge is confirmed. As an analogy, the nearer to 10 the more this knowledge is confirmed. 12 ANALYSIS OF THE RESULTS Analyses of the collected data presented four stages: preliminary analysis; reliability, validity of the construct and descriptive statistics, including association between pair of normative attributes. Table 2 presents the analysis plan developed in this study. Insert Table 2 about here Preliminary Analysis Data were analyzed for presence of outliers using the Mahalanobis Distance calculus, and removed if the test of significance of the values of this distance so recommended. Tests were carried out for each one of the nine dimensions. The following hypotheses were enunciated H 0 : The Mahalanobis distance for the dimension learning is not statistically significant, that is, the dimension does not have an outlier according to the Mahalanobis distance. H 1 : The Mahalanobis distance for the dimension learning is statistically significant, that is to say, the dimension has an outlier according to the Mahalanobis distance, and so forth for the remaining dimensions. There are 9 hypotheses tests in the total. For each dimensions the t-student test was performed with a significance level of 0.2% and a number of degrees of freedom (df) equal to the number of aspects of each dimension. Table 3 presents the results in each dimension. 13 Insert Table 3 about here Four outliers were identified and removed from the sample. Therefore, the H 0 hypothesis was rejected for the dimensions alignment, participation and balance. Next, the cases when the interviewee missed answering more than 10% of the requested information were investigated. Six cases were identified in this situation. Therefore, considering the Outliers and Missing, 10 questionnaires were discarded. Reliability Reliability of a measuring instrument is the extent to which such measurements are exempt of a random error (Peter, 1979). In other words, it is an instrument able to produce consistent results, whenever repeated measurements are carried out. For the score to reflect the underlying construct there must be high reliability (GULLIKSEN, 1950). The Cronbach s Alpha coefficient was used to analyze reliability of the dimensions of the conceptual model of process management. This coefficient is capable of disclosing how strongly items of a score are interrelated (TULL & HAWKINS, 1990). The coefficient was calculated for each of the nine dimensions of the survey s data collection instrument. This analysis also allowed for an evaluation of the sensitivity of the Cronbach coefficient for each dimension, calculating it sequentially with the exclusion of each aspect of the dimension and comparing results. The following hypotheses were enunciated: 14 H 0.10 : There is no reliability in the measurement of the dimension learning for process management BPM. H 1.10 : There is reliability in the measurement of the dimension learning for process management BPM and so forth for the remaining dimensions. At this stage of the analysis, additional 9 hypotheses were enunciated. Table 4 shows the Cronbach coefficients obtained. Insert Table 4 about here The lower limit, usually accepted for the Cronbach coefficient is 0.70, although it can be reduced to 0.60 in an exploratory survey. In all dimensions, values were acceptable taking as reference It is concluded that the reliability of the score utilized for process management is good with all of the 94 variables, with the higher and lower value of the Cronbach Alpha Coefficient being verified respectively in the dimensions clearness and dynamism (0.9668) and integration (0.8958). A typical recourse for improvement of reliability would be removal of the items without which, eventually, reliability of a score would be high. Table 4 shows that four dimensions would have a small improvement with the removal of some variables, that is: Learning: the coefficient would go from to with the removal of V14; Dynamism: the coefficient would go from to , with the removal of V31; Balance: the coefficient would go from to with the removal of V78; 15 Critical analysis: the coefficient would go from to , with the removal o
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