Business Process Mining

Lecture 2: Process Performance

Measurement and Dashboards
Course Outline
Introduction

Process performance measurement & dashboards

Process mining
• Automated process discovery
• Conformance checking
• Performance mining
• Variant analysis

Simulation and “what-if” process mining

Data extraction & preparation for process mining

Predictive process monitoring

Business case analysis & project management for process mining

Trends: prescriptive monitoring, causal process mining, robotic process mining

2
Process performance

If you had to choose between two services, you would

typically choose the one that is:

•Faster
•Cheaper
•Better
Process performance

Time

Process
performance

Quality Cost
Time measures Time taken by Time between start
value-adding and completion of a
• Often the first performance dimension that activities process instance
comes to mind when analyzing processes is
time.
• Cycle time (also called throughput time), is Processing
the time that it takes to handle one case from time
start to end.
• The components of cycle time: Cycle
o Processing time (also called service
time):the time that resources,” such as
process participants or software
time
applications invoked by the process”,
Waiting
spend on actually handling the case. time
o Waiting time: the time that a case spends Time taken by non-
in idle mode. Waiting time includes value-adding
activities
queueing time ” waiting time due to the
fact that no resources are available to 5
handle the case”
 Cost measures
Cost of value-
adding activities Cost of a process
instance

Processing
• Another common performance cost
dimension when analyzing and Per-
redesigning a business process has a
financial nature. Instance
• Process redesign is more often
Cost
associated with reducing cost.
Cost of
waste
Cost of non-value-
adding activities
7
Typical components of cost
Material cost
• Fixed costs are overhead costs which are (nearly) not affected by the
intensity of processing.
• The use of infrastructure and the maintenance of software systems.

• Cost of tangible or intangible resources used per process instance.

Resource cost
• Variable costs are positively correlated with some variable quantity, such as
the level of sales, the number of purchased goods, the number of new hires.

• Cost of person-hours employed per process instance 8

Resource utilization

Time
Time spent
available
per Resource
per
resource on resource for utilization
process process
work work

Resource utilization = 60%

➔ on average resources are idle 40% of their
allocated time

9
• The quality of a business process can be viewed from at least two
different angles: from the client’s side and from the process
participant’s perspective.

• This is also known as the distinction between external quality and

internal quality.
➢ The external quality:
▪ It can be measured as the client’s satisfaction with either the product or the process.
Satisfaction with the product can be expressed as the extent to which a client feels that the
specifications or expectations are met by the delivered product.
▪ Service level agreements (SLAs) precisely specify what is to be expected.

▪ Various specific measures are used to capture customer satisfaction:

o Churn rate: In particular for processes that interface with the customer over the
Internet, it is important to know how many customers do not complete their interaction
successfully. Such processes with customer interactions are also called customer
journeys.
o Net promoter score: This measure is often defined in a range from 1 to 10, and
captures how far customers would be willing to recommend a product or service.
“external quality measure”
Other process performance measures
➢ Cycle time is directly related to two measures that play an important
role when analyzing a process, namely arrival rate(demand) and
Work-In-Process (WIP) (workload).

• Measuring demand (for the process)

• arrival rate of a process (written λ): number of new cases created per time
unit.
• For example:
o in a credit application process, the arrival rate is the number of credit
applications received per day .

o in an order-to-cash process, the arrival rate is the average number of new

orders that arrive per day. 12
•Measuring workload
• Work-in-Process: is the average number of instances of a process that are
active at a given point in time, meaning the average number of instances that
have not yet completed.

• For example:
o in a credit application process, the WIP is the average number of credit
applications that have been submitted and not yet granted or rejected.

o in an order-to-cash process, the WIP is the average number of orders that

have been received, but not yet delivered and paid for.

➢Cycle time (CT), arrival rate (λ), and WIP are related by a
fundamental law known as Little’s law, which states that:
WIP = λ × CT
Little’s law
•Little’s law is a fundamental law of systems that involve jobs
waiting for resources (like business processes).
•It relates demand, workload and cycle time
WIP =  x CT
•WIP = work in process
• = arrival rate (number of new cases per time unit)
•CT = cycle time

13
Balanced scorecard
• A tool to define organizational strategy and performance measures.
Cost Quality & time
measures measures

Financial Customer

Internal
Innovation
business
process & learning Technology
Quality & time leadership,
measures Staff satisfaction

15
Business Process Monitoring
Performance Dashboards

Event stream
Enterprise
System

Process Mining
Database
Event log
Types of process dashboards
A process performance dashboard is a graphical representation of one or more performance
measures or other characteristics of a business process. Depending on their purpose and targeted
users, process performance dashboards can be classified into three categories: operational,
tactical, and strategic.

Process
Dashboards

Operational Tactical Strategic

dashboards dashboards dashboards
(runtime) (historical) (historical)
Operational process dashboards
▪ Operational process dashboards target process participants ( process workers) and their operational managers
(including the process owner).
▪ Their purpose is to display the performance of ongoing or recently completed cases in a way that allows process
participants and their managers to plan their short-term work.
▪ For example, in the context of an order-to- cash process, an operational dashboard might target a financial officer
involved in the business process or a dispatcher at a warehouse.
▪ Emphasis on monitoring (detect-and-respond):
o The number of ongoing cases (work-in-process) classified by type of cases. For example, a dashboard may
display the number of cases that are on time, overdue, and at risk of being overdue.
o Problematic cases – e.g. overdue/at-risk cases
o Resource load
Tactical dashboards
• It gives a picture of the performance of a process over a relatively long period of time (e.g., a
month or quarter or even a year) in order to put into evidence undesirable performance
variations and their possible causes, long-term bottlenecks and deviations, or frequent sources
of defects.
• Aimed at process owners / managers
• Emphasis on analysis and management
o e.g. detecting bottlenecks
• Include number of:
o completed cases,
o cycle time,
o waiting times,
o processing times,
o resource utilization,
o cost per case,
o defect rate.
• Tactical process dashboards also used to comparatively analyze the
performance of different teams.
• For example, if a lead-to-order process is performed by multiple sales
teams in different geographical locations, a tactical dashboard may
display the amount of time that each team spends in each stage of this
lead-to-order process. Such a comparative dashboard allows analysts
and managers to understand why some teams perform better than
others.
Tactical Performance Dashboard
@ Australian Insurer
Strategic dashboards
• Strategic process dashboards target executive managers.

• Their purpose is to provide a high-level picture of the performance of groups of processes along
multiple performance dimensions.

• Emphasis on linking process performance to strategic objectives.

• This dashboard can then be used by executives to get a bird’s-eye view of the performance of a
given business area over a period of time (a month, a quarter, or a year), and to compare it with
the performance in previous periods, or in other business areas.
Strategic Performance Dashboard
@ Australian Utilities Provider

Process Manage Manage Manage Work Manage

Unplanned Emergencies & Programming & Procurement
Outages Disasters Resourcing
Key Performance
Customer 0.5 0.55 - 0.2
Satisfaction
Customer 0.6 - - 0.5
Complaint
Customer 0.4 - - 0.8
Feedback
Connection Less 0.3 0.6 0.7 -
Than Agreed Time
Designing Process Performance Dashboard
Identify a user or users and define a clear
question or set of questions that users will answer
with this question

Identify the type of dashboard elements based on

the insights required to answer the question

Identify a type of visualization (e.g. type of chart)

for the element

Determine x-axis (independent variable):

longitudinal time), cross-sectional (attribute)

Determine y-axis (dependent variable):

performance measure or attribute and the
aggregation function 25
Tools for performance dashboarding
Operational-Tactical – Business Activity Monitoring (BAM)
• Axway AMPLIFY
• VITRIA Operational Process Intelligence
• Oracle BAM
• SAP Operational Process Intelligence (OPI)
• webMethods Optimize for Process
Tactical
• Business Intelligence (BI) tools: PowerBI, Qlikview, Tableau…
• Process Mining (dashboard modules): Apromore, Celonis, QPR, …
Strategic Level – Balanced Scorecard tools
• BSC Designer Online, Quickscore, Sisense, etc.