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Value-Orientation in Business Process Management

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Handbook on Business Process Management 2

Part of the book series: International Handbooks on Information Systems ((INFOSYS))

Abstract

The purpose of business processes is to create value, and the purpose of business process management is to support this value creation. However, the concept of value is little understood in BPM, and a number of BPM initiatives have missed the opportunity to demonstrate value creation in practice. In fact, there is little understanding in the BPM discipline concerning how business processes become valuable and what kinds of value may arise from specific BPM initiatives. This chapter structures the value discussion in BPM by elaborating on the general notion of (economic) value and providing a frame of reference. Against this background we review extant contributions on value considerations in BPM and characterize the emerging field of value-oriented BPM. As an example, we present the Return on Process Transformation (ROPT) as a measure for evaluating the monetary effects of decisions on process (re-)design.

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Notes

  1. 1.

    When formulating a value assertion, the uniquely valuational element in what is asserted is that something ought to exist (Compton 1958).

  2. 2.

    An economic good “exists as such by virtue of putative features that an individual attaches to a thing in relation to an end the individual has in mind. […] [T]he thing is either the mediate or immediate means” (Zúñiga 1998, p. 302).

  3. 3.

    The exchange value of goods or commodities is expressed in terms of a price that denotes a quantity of money asked for a good or commodity in an exchange. More precisely, money is defined as “a universal medium of exchange as well as a commodity for storing exchangeable wealth” (Zúñiga 1998, p. 304). The price of an economic good “is merely an objective magnitude of numerical value” (Zúñiga 1998, p. 308). The price attached to a commodity is not equivalent to its putative value as an economic good (cf. Zúñiga 1998).

  4. 4.

    That a process fulfills a minimum correctness criterion is the soundness of the process (cf. van Dongen et al. 2006).

  5. 5.

    In our terminology it could not be that a process is optimal regarding its ability to instantiate economic value.

  6. 6.

    Figure 6 (Sect. 5) illustrates how costs can be calculated on the function/activity level of a business process.

  7. 7.

    The ROPT does not report a payoff period but a net present value measure. In fact, payoff periods are not a useful criterion for evaluating financial investments, since an investment can be unprofitable even if it has a payoff period. Consider, for example, the case of a long-term (20–30 years) investment. In the first 10 years the investment could generate excess cash flows, so that the investment initially pays off after 10 years. However, then the investment could create only negative cash flows, leading to a negative terminal value. Although it has a payoff period, the investment would still be unprofitable.

  8. 8.

    The example is taken from vom Brocke et al. (2009).

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Authors and Affiliations

  1. Institute of Information Systems, University of Liechtenstein, Vaduz, Liechtenstein

    Jan vom Brocke (Hilti Chair of Business Process Management) & Christian Sonnenberg

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  1. Jan vom Brocke
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  2. Christian Sonnenberg
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Correspondence to Christian Sonnenberg .

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Editors and Affiliations

  1. Institute of Information Systems, University of Liechtenstein, Vaduz, Liechtenstein

    Jan vom Brocke

  2. School of Information Systems, Queensland University of Technology, Brisbane, Queensland, Australia

    Michael Rosemann

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vom Brocke, J., Sonnenberg, C. (2015). Value-Orientation in Business Process Management. In: vom Brocke, J., Rosemann, M. (eds) Handbook on Business Process Management 2. International Handbooks on Information Systems. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-45103-4_4

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