DECSC 133 A

Fundamentals of Process Mining

Week 1: Introduction to BPM and Process Mining
Gerald G. Divinagracia, MBPM
(gdivinagracia@ateneo.edu)

1
About this subject

Objective
• To recommend a process-based solution to a real-world or simulated
business problem through the use of Process Mining techniques and tools

Learning Outcomes
1. Articulate the frameworks and methods used in the area of process mining
2. Go through the business process lifecycle by Analyzing, modeling,
executing, measuring and managing processes in a business organization
3. Apply different forms of process analysis approaches.
4. Identify opportunities for data-driven decision-making using insights gained
from applying various techniques on practical BPM-related problems
5. Use process verification, simulation and process mining tools
6. Work efficiently in a group and individually

5
Structure of the course

7 modules + practical sessions

1. Overview of BPM lifecycle and process mining
2. Process Modeling using petri nets and workflow nets
3. Process mining and event log analysis
4. Process discovery
5. Performance analysis
6. Conformance & enhancement
7. Business process re-design techniques

Group Mini-Project
6
Course Requirements

Class Participations and Quizzes

• 25% - short quizzes , papers, etc.

➢ Short quizzes – 15%
➢ Reaction papers – 5%
No final
➢ Assignments – 5%
exam!
Mini-Project Presentation

• Group/Individual presentations = 15%

Group Mini-Project

• Mini-Project = 60% (analyze a given event log using ProM and Disco
process mining tools)

7
Schedule of Classes

8
Schedule of Classes

9
Schedule of Classes

10
13
 Load Serve
dish- meal
washer
Bring
menu
Take
order
Collect
payment
Collect
laundry Unload
dish-
Brush washer
grills
Collect
laundry
Clean
kitchen
surfaces
Sweep Greet &
Present seat
& mop
bill
14
Source: Wikimedia
 Room Reservation

What processes do we
Check availability

have in school?
Receive form

Block off schedule

Inform
stakeholders

Approve form

Reject form

Photo: Torre, 2017

 Food order/ inventory

What processes do we
Receive order

have in school?
Gather ingredients Tally order

Give receipt
Count unused
ingredients
Cook ingredients

Plate meal Check if

ingredients are
Inform cook within threshold

Present bill Order ingredients

Serve meal Send current

inventory
Photo: Torre, 2017
 Receive ACET application

What processes do we
application

Schedule for

have in school?
examination
Check
Read through examination
application results

Approve for Send acceptance

examination email

Reject for Send rejection

examination email

Check if payment
Send waitlist email
was made
Photo: Torre, 2017
How Business Processes play a part?
services
ASSETS +
PARTNERS
ATENEO - LS
Materials

(JGSOM Student Enterprise Center)

Room Reservation

(Office of Facilities and Services)

CUSTOMERS
(Office of Admission and Aid)

(Office of Student Activities)

Text
Human Resources Food order/ inventory

OAA

JSEC

OSA

OFS
Technology ACET Application

Other processes
Financial

core departments
 states or events

tasks or activities

Customer Greet & Take Bring Serve Present Issue Customer

arrived seat order menu meal bill invoice paid

Load Clean Unload

Kitchen Brush Collect Sweep Kitchen
dish- kitchen dish-
is dirty grills laundry & mop is clean
washer surfaces washer

19
Source: Wikimedia
 there is a
Food order/ inventory
sequence

What processes do we
Receive order

have in school?
Inform cook
Tally order
Gather ingredients
Count unused
Cook ingredients ingredients

Plate meal Check if

ingredients are
Serve meal within threshold

Present bill Order ingredients

Give receipt Send current

inventory
Photo: Torre, 2017
 Food order/ inventory

What processes do we
Customer arrives

have in school?
Receive
Inform
Gather
Cook
Plate
Serve
Present
Give

Customer paid
Photo: Torre, 2017
A business process is…
“Chain of events, activities and decisions that involve a number
of actors and objects, and that collectively lead to an outcome
that is of value to an organization or its customers.”
Dumas, La Rosa, Mendling, Reijers, 2018

Typical Examples:
• Order-to-Cash
• Quote-to-Order
• Procure-to-Pay
• Application-to-Approval
• Fault-to-Resolution
• Claim-to-Settlement
• Birth-to-Death
“My washing machine doesn’t work…”
Negative outcomes (value-reducing):
• Fault not repaired in a timely manner
• Fault repaired but customer pays more than expected

Positive outcomes (value-adding):

• Fault repaired immediately with minor intervention
• Fault repaired, covered by warranty
Insurance
Call Centre Company
Technician

Customer Customer
Parts
Service Store
Dispatch
Centre

VALUE
fault-to-resolution process
23
 Processes and Outcomes

Every process leads to one or several outcomes, positive or negative

• Positive outcomes deliver value
• Negative outcomes reduce value

Fault-to-resolution process’ outcomes:

1. Fault repaired without technician intervention
2. Fault repaired with minor technician intervention
3. Fault repaired and fully covered by warranty
4. Fault repaired and partly covered by warranty
5. Fault repaired but not covered by warranty
6. Fault not repaired
 The Process Environment need to the be rewarded
based on their participations
Business Environment on the whole business process

Economy Regulatory Culture

Suppliers & Organisation System

Partners
Performance Planning Performance Management Stakeholders
Financial
each function work on their own but the business process cuts across these
functions. need to interface with all these functions
Human Function A Function B Function C
Resources

Technology

Material Business Processes Customers

Competitors
After Rummler
 What is Business
Process Management?

And why should I care

about it?

26
Where does BPM come in the picture?
managing all those processes and improving it so that you can provide the best service to the
customers
provides or sells its course
how admu markets its degree and regulations it needs to statisfy
Business Environment
ASSETS +
PARTNERS
ATENEO - LS
Materials

(JGSOM Student Enterprise Center)

Room Reservation

(Office of Facilities and Services)

CUSTOMERS
(Office of Admission and Aid)

(Office of Student Activities)

Human Resources Food order/ inventory

OAA

JSEC

OSA

OFS
Technology ACET Application

Other processes
Financial

Competitors
The goal of process performance

Would you rather order from...

How about from a business standpoint?

The goal of process performance

Would you rather order from...

Most likely, you’ll choose

the new approach for it’s:
● Faster → Time
● Better → Quality
● Cheaper → Cost
 Improving process performance => “Innovating
business processes”

Customer Greet & Take Bring Serve Present Issue Customer

arrived seat order menu meal bill invoice paid

30Source: Wikimedia
 How would you improve this
traditional dining process?
Standardize
Outsource to Customer
Eliminate Cooking

Automate

Invest and Build

Re-sequence

Eliminate Waiters

….however, let’s go back to basics!

 What is Business Process Management?
…modelling,
a discipline that combines different techniqiues and tools to manage your processes with the people
…enterprise goals, spanning
organizational and system
boundaries, and… “A discipline involving any combinations of…

…automation,

…execution,
Organizations
…of business activity flows in
applicable combination
to support…

…control, measurement,
…involving employees, customers, and optimization… Von Rosing, M., Von
Scheel, H., & Scheer, A.
and partners within and beyond W. (2014)
the enterprise boundaries!” 32
Why BPM? The Technology Perspective

ensure that process is efficient first before automating it

“The first rule of any technology used in a business is

that automation applied to an efficient operation will
magnify the efficiency.

The second is that automation applied to an inefficient

operation will magnify the inefficiency.” 33
Bill Gates
BPM responding to change

Information Business
Technology Value

Process
Change
BPM responding to change: Examples

John Young
Related Disciplines
• Total Quality Management (TQM)
• Focus on continuously improving and sustaining the quality of products and
services.
• TQM puts emphasis on products and services themselves, while BPM focuses on
improvement of processes.
• Applications of TQM are primarily in manufacturing while BPM more in service
organizations.

• Operations Management
• Concerned with managing physical and technical functions of organization,
particularly those relating to production and manufacturing.
• Using probability theory, queuing theory, decision analysis, mathematical
modeling, and simulation for optimizing efficiency of operations.
• Often concerned with controlling an existing process, while BPM making changes
to an existing process in order to improve it.

https://d2myx53yhj7u4b.cloudfront.net/sites/default/files/IC-OG-OperationsManagement.jpg

36
Related Disciplines

• Lean
• Originates from manufacturing, in particular Toyota Production System.
• Eliminates waste, i.e., activities that do not add value to the customer.
• BPM puts more emphasis on use of information technology as a tool to improve
business processes and to make them more consistent and repeatable.

• Six Sigma
• Originates from manufacturing, in particular from production practices at
Motorola.
• Focuses on minimization of defects (errors).
• Strong emphasis on measuring output of processes, especially in terms of quality.
• Popular approach to blend Lean with Six Sigma, leading to Lean Six Sigma.

37
Origins and History of BPM

How process moved out of focus through ages

38
 Adam Smith: Processes and Division of Labour
“To take an example, the trade of a pin-maker: But in the way in which this
business is now carried on, it is divided into a number of branches:
• One man draws out the wire; another straights it;
• a third cuts it; a fourth points it; a fifth grinds it at the
• top for receiving the head; to make the head requires
• three operations; to put it on is a peculiar business;
• to whiten the pins is another; to put them into the paper;
and the important business of making a pin is, in this
manner, divided into about eighteen distinct operations.”

Source: Smith 1776

Picture:
http://www.library.hbs.edu/hc/collecti
ons/kress/kress_img/adam_smith2.htm

39
Frederick W. Taylor: Scientific Management

• Meticulously studying labor activities

• Work instructions for workers
• Managers oversee the productivity of groups of
workers
• Units and their managers were structured
hierarchically
• Functional organization remains dominant until
the end of 1980s.

Source: Wikimedia Commons

40
Concepts that shaped BPM
• Adam Smith (end of 1700)
• Scientific Management (end of 1800)
• Lean Management (1950-1990)
• Total Quality Management (1970-80) and Six Sigma (1986)
• Business Process Reengineering (1990s)
• Workflow Management (1990s)
•…
Concepts that shaped BPM
• Adam Smith (end of 1700)
• Scientific Management (end of 1800)
• Lean Management (1950-1990)
• Total Quality Management (1970-80) and Six Sigma (1986)
• Business Process Reengineering (1990s) take out old process and make a new one or revise it
• Workflow Management (1990s)
•…
BPM: the new way to an old target

Six Lean
Sigma
TQM
BPR
WfM
…

BPM

BPM is about managing and improving processes.

Whatever method it takes to do so, is welcome!
How to go about BPM?

44
The BPM lifecycle

creating a process archi

Process
identification

Process
Process architecture
architecture

Conformance
Conformance and
and Process As-is
As-is process
process
performance
performance insights
insights discovery model
model

Process
monitoring and Process
controlling analysis

Executable
Executable Insights
Insights on
on
process
process weaknesses
weaknesses and
and
model
model their
their impact
impact

Process Process
implementation To-be
To-be process
process redesign
model
model
 Process
identification

Process
Process architecture
architecture

Conformance
Conformance and
and Process As-is
As-is process
process
performance
performance insights
insights discovery model
model

Process
monitoring and Process
analysis
controlling BPM lifecycle
Executable
Executable Insights
Insights on
on
process
process weaknesses
weaknesses and
and
model
model their
their impact
impact

Process Process
implementation To-be
To-be process
process redesign
model
model
A process architecture is similar to a blueprint of a house
Porter: Components of a process architecture

Management
Processes

Customers / Stakeholders
Suppliers / Partners

Core Processes

Support Processes

After Michael Porter (1985)

 Process Architecture Example
A typical production company
Management Processes

Implement
Define Vision Develop Strategy Manage Risk
Strategy

provides Core Processes

Manage
Procure Procure Market Deliver
Customer
Materials Products Products Products
Service

lifts
Support Processes

Manage Personnel Manage Information Manage Assets

Process architecture of a mining company

Strategic Risk and

Management Opportunity
Plan Management

Mine Business Portfolio and Compliance

Unit Planning Project Management
Management

Management Processes

Mine Geology

Drill & Blast Design and

Mine Planning Mine Survey Mine Production
Implementation

Mine Development & Geotechnical &

Mine Training Tailings Dam
Mine Services Production Systems Hydrological
& Road Works Engineering
Management Engineering

Core Processes

Safety, Health Environment

Mining Mobile Resource IT Service
& Loss & Community
Administration Maintenance Management Delivery
Prevention Relations

Supply & Infrastructure

Finance Procurement Operations Training &
Logistics & Road
Operations Management Improvement Development
Operations Maintenance

Support Processes
Process architecture of a bank in Australia

Management Processes

Core Processes

Support Processes
The BPM lifecycle – Process Discovery

Process
identification

Process
Process architecture
architecture

Conformance
Conformance and
and Process As-is
As-is process
process
performance
performance insights
insights discovery model
model

Process
monitoring and Process
controlling analysis

Executable
Executable Insights
Insights on
on
process
process weaknesses
weaknesses and
and
model
model their
their impact
impact

Process Process
implementation To-be
To-be process
process redesign
model
model
Who are involved?

Process Analyst :

IT professional who specializes in

business processes and workflows.
Job is to find improvements and/or
automation

Domain Expert
(aka Subject Matter Expert )

Ex. Healthcare, Education, Legal,

Banking, Geologist - Volcanologist, etc.
In Processes - Marketing, Sales, Call
Center Expert etc.

Process Analyst
Process Models – The Understanding of Processes
1. What needs to be done and when? - Control flow
2. What do we need to work on? – Objects (physical & electronic)
3. Who’s doing the work? - Resources (human & systems)

Finance ERP Invoice Report Invoice

Department
Enter Check
no
Invoice Invoice Post Invoice
mismatches
Invoice Details Mismatches
Invoice
received posted

Invoice DB Invoice
Senior Finance Officer
mismatch Block
exists Invoice
Invoice
blocked
 Process Models in BPMN2.0*

Identified
resources within
the organization

Model extended
beyond the main
organization
*Business Process Model and Notation 2.0
 Process Models in Petri Nets and Workflow Nets
p4
place

t34 t43 transition

p3

Sample t23 t32

processes p2

in Petri token

Nets
t12 t21

p1

t01 t10

p0
 Process Models in Petri Nets and Workflow Nets

begin

AND_split c2 c5 AND_join
register phone_garage

simple c8

c3 c6
c1 check_insurance
classify
Sample process in
Workflow Nets
complex
check_insurance c4 check_history c7 phone_garage

OK c9
pay
decide
end

not_OK send_letter
The BPM lifecycle – Process Analysis

Process
identification

Process
Process architecture
architecture

Conformance
Conformance and
and Process As-is
As-is process
process
performance
performance insights
insights discovery model
model

Process
monitoring and Process
controlling analysis

Executable
Executable Insights
Insights on
on
process
process weaknesses
weaknesses and
and
model
model their
their impact
impact

Process Process
implementation To-be
To-be process
process redesign
model
model
 Typical Process Analysis Methods

Qualitative process analysis

• Value-added analysis
- Value classification
- Waste Elimination
• Root cause analysis
- Cause-Effect Diagrams
- Why-Why Diagrams
• Issue documentation and Impact assessment
- Issue Register
- Pareto Analysis and PICK Charts

Quantitative process analysis

• Flow analysis
• Simulation
Qualitative Analysis - cause and effect diagram
(ishikawa)
Quantitative Analysis – “time and motion” analysis
Quantitative process analysis (we may not cover this in class)
Process simulation example

62
The BPM lifecycle – Process Redesign

Process
identification

Process
Process architecture
architecture

Conformance
Conformance and
and Process As-is
As-is process
process
performance
performance insights
insights discovery model
model

Process
monitoring and Process
controlling analysis

Executable
Executable Insights
Insights on
on
process
process weaknesses
weaknesses and
and
model
model their
their impact
impact

Process Process
implementation To-be
To-be process
process redesign
model
model
Process Redesign

Identify possibilities for improving the design of a process

AS-IS: Descriprive modelling TO-BE: Prescriptive modelling

of the real world of the real world

• No silver-bullet: requires innovative creativity

• Redesign heuristics can be used to generate ideas
Redesign - enhancement patterns
 Four Thinking Styles of Process Improvement

Learn from
better practices Others!

Derive

Co-ideate
with Your
Think in Customer!
Patterns!

Enhance Ideation Design

current practices new practices

Utilize

Tap Into Under-

potential practices Utilized Assets!
66
Example Process Innovation: My Ways

https://www.youtube.com/watch?v=B-1Kfe3K2YI

67
The BPM lifecycle – Process Implementation

Process
identification

Process
Process architecture
architecture

Conformance
Conformance and
and Process As-is
As-is process
process
performance
performance insights
insights discovery model
model

Process
monitoring and Process
controlling analysis

Executable
Executable Insights
Insights on
on
process
process weaknesses
weaknesses and
and
model
model their
their impact
impact

Process Process
implementation To-be
To-be process
process redesign
model
model
Process implementation

Process Process change

automation management

Executable
Job redesign
process design

IT development
Training
& configuration

Performance
Testing management
plan

... ….

69
Business Process Management Systems (BPMS)
An example how business
processes connect to
information systems

CRM System SCM System

Business Process
ERP System

Data
Warehouse

HR Application Inventory
Manager
Workflow Reference Model

Source: Workflow Management Coalition (WfMC)

The BPM lifecycle – Monitor and Control

Process
identification

Process
Process architecture
architecture

Conformance
Conformance and
and Process As-is
As-is process
process
performance
performance insights
insights discovery model
model

Process
monitoring and Process
controlling analysis

Executable
Executable Insights
Insights on
on
process
process weaknesses
weaknesses and
and
model
model their
their impact
impact

Process Process
implementation To-be
To-be process
process redesign
model
model
 Process Monitoring & Controlling
Data mining
Statistics-based Techniques
(Performance Dashboards)

Model-based Techniques
Event (process mining)
stream
DB logs
 Types of process dashboards

Process
Dashboards

Operational Tactical Strategic

dashboards dashboards dashboards
(runtime) (historical) (historical)
 Operational process dashboards
Aimed at process workers & operational managers
Emphasis on monitoring (detect-and-respond), e.g.:
- Work-in-progress
- Problematic cases – e.g. overdue/at-risk cases
- Resource load
 Tactical dashboards
Aimed at process owners / managers
Emphasis on analysis and management
• E.g. detecting bottlenecks
Typical process performance indicators
• Cycle times
• Error rates
• Resource utilization
Tactical Performance Dashboard
@ Australian Insurer
 Strategic dashboards

Aimed at executives & managers

Emphasis on linking process performance to strategic objectives

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
 Process: Manage Procurement 0.67
Process: Manage Emergencies & Disasters 0.58
Process: Manage Unplanned Outages

Overall Process Performance

0.54

1st Layer Customer Operational Risk Health

Financial People
Key Result Excellence Excellence Management & Safety
Area 0.5 0.4 0.65 0.5 0.8 0.4

2nd Layer Customer Customer

Key Performance Complaint Satisfaction
0.6 0.7

Customer Customer Average Time

Rating (%) Loyalty Index Spent on Plan
3rd & 4th Layer
Process Performance 0.7 0.6 0.8
Measures
Satisfied Market
Customer Index Share (%)
0.4 0.8
 Process Monitoring & Controlling
Statistics-based Techniques
(Performance Dashboards)

Process
mining

Model-based Techniques
Event (process mining)
stream
DB logs

80
 Process Mining – an emergent BPM technology

A branch of data science that provides tools and techniques for process
modelling and analysis using event logs collected from an organization’s
information systems.

HIS Db

Health Information System

Database

Source: Design Change

From the Mining

Process event logs, Process Mining
is applied can answer
in various key questions about the process:
industries:
• What happened? (e.g. what is the typical outpatient process flow?)
•• Banking
Why did it&happen?
Finance(e.g. what caused the long waiting list?)
Event Logs
•• Hardware & Manufacturing
What will happen? (e.g. is it possible to handle ten new cases in time?)
•• Government Agencies
What is the best that can happen? (e.g. does it help to do these tests 81
• Healthcare
concurrently?)
 Process Mining – in a gist

https://www.youtube.com/watch?v=7oat7MatU_U

Source: Bressler Group

82
Process Mining – framework

83
 Case Study: Suncorp Group

• General & life insurance, banking, superannuation and

investments management
• 9M customers
• 16K employees
• $85 billion in assets
Suncorp Insurance

End to end insurance process

Product
500
Sales Service Claims tasks
Dev

Source: Guidewire reference models

Each process is varied by product & brand…

Home 30
Motor
variations
Commercial
Liability
CTP / WC

Total process variants: 3,000+

Processing Problem
Expected
Bad Performance
Line

OK

OK Good
 Deviance & Variance Mining
Discover and analyse actual organisational processes from data

Simple Claim and Quick Simple Claim and Slow

MOD
EL

Main result
Key patterns that explain lower performance identified
Process Mining Case Study– Government
• Constitutional Commission of the Philippines
• Founded in 1900 with 16 regional offices throughout
• In 2010, received low rating for HR operations…
• …embarked a transformation program called PRIME-HRM!

88
 7 End-to-End Phases Covering PRIME-HRM

✓ PRIME-HRM 2.0 - created in 2017 and covering 3,500 government agencies

✓ To understand and effectively manage the process, Process Mining was leveraged
✓ Insights gained will help CSC-HRPSO delivers the objective of PRIME-HRM seamlessly

89
Enabling CSC-HRPSO for evidence-based process
analytics

PRIME-HRM v2.0

DB

90
PRIME-HRM in action – preliminary analysis
Case
CasePerformance Analysis
Frequency Analysis

Heavy transaction
area and warrants
Possible cause due
in-depth analysis!
to “rework”!
PRIME-HRM in action – preliminary analysis
Case
CasePerformance Analysis
Frequency Analysis

Heavy transaction
area and warrants
Possible cause due
in-depth analysis!
to “rework”!
 Recap

• A process is a collection of events, activities, and decisions that collectively lead to

an outcome that brings value to an organization’s customers.
• Every organization has processes.
• Managing processes ensures that they produce value.
• BPM is a body of principles, methods, and tools to design, analyze, execute, and
monitor business processes.
• Process models and performance measures are pillars for managing processes.
• Various related disciplines complement BPM, such as Lean, Six Sigma, and Total
Quality Management.
• BPM has six phases: identification, discovery, analysis, re-design, implementation,
and monitoring & controlling
• The focus of this course is in Process Monitoring & Controlling, specifically, Process
Mining
93
Next Session

Introduction to Process Modeling with Petri Nets and Workflow Nets

begin

AND_split c2 c5 AND_join
register phone_garage

simple c8

c3 c6
c1 check_insurance
classify

complex
check_insurance c4 check_history c7 phone_garage

OK c9
pay
decide
end

not_OK send_letter

94
Readings and resources

• BPM Textbook
• Process Mining Textbook
1. Van, D. (2011). Process mining discovery, conformance and
enhancement of business processes. Springer Heidelberg
Dordrecht London New York. ISBN.
2. Van Der Aalst, W. (2016). Data science in action. In Process
mining (pp. 3-23). Springer, Berlin, Heidelberg.
• First edition can be used as a viable reference.
• Check the syllabus for required and additional
references
• Course materials and references will be posted soon
Gerald G. Divinagracia, MBPM
BPM Consultant

E-mail: gdivinagracia@ateneo.edu
Phone:+63 9999975338