ISU MODULE TEMPLATE

Subject: IT BPO 3
Fundamentals of Business Process Outsourcing 101

1. Title of the Module

Chapter V: IT-BPM Operations Management

2. Introduction
This chapter deals with discussions on the operations management
wherein it is chiefly concerned with planning, organizing and supervising in the contexts
of production, manufacturing or the provision of services. In addition, components on
operations management be discussed in detail including process mapping.
3. Learning Outcome
At the end of this chapter the students are expected to:
 Define what is operations management.
 Explain the value or importance of operations management.
 Enumerate and discuss the components of operations management.
 Identify process mapping and notation shapes.
 Explain the value or importance of process mapping.
 Be able to satisfactorily map processes.

4. Learning Content
Operations management focuses on carefully managing the processes
to produce and distribute products and services. A great deal of focus is on efficiency
and effectiveness of processes. Therefore, operations management often includes
substantial measurement and analysis of internal processes.
Ultimately, the nature of how operations management is carried out in an
organization depends very much on the nature of the products or services in the
organization, for example, agriculture, mining, construction or general services. Here
are some additional perspectives on the field. Operations management is chiefly
concerned with planning, organizing and supervising in the contexts of production,
manufacturing or the provision of services. Also; is an area of management
concerned with designing and controlling the process of production and redesigning
business operations in the production of goods or services.
 Today’s businesses are rapidly undergoing digital transformation, resulting in
the need for business models that align data and enable acceleration. Business
process management (BPM) is a form of operations management that analyzes,
models, executes, and monitors improvements. According to Gartner, BPM solutions
have evolved to include intelligent business process management (iBPM) suites.
iBPM uses actionable, real-time insights from operations intelligence in order to
augment the orchestration and automation of adaptive business processes.

The need for BPM solutions with added intelligence results in iBPM
technology. iBPM enables business processes to continuously improve and
experimentation with new business models. It also allows business users to be
involved in frequent or ad hoc process exchange, while allowing IT to own technical
assets such as integration with external systems and security administration. To
intelligently coordinate and manage process participants’ interactions, iBPM delivers
advanced analytics, real-time activity monitoring, and decision management. It also
enables citizen developers to partner with IT throughout the entire process lifecycle,
which Kostereva believes creates rapid experimentation by reducing the time to
facilitate and realize business process changes.

4.1 Components of IT-BPM Operations Management

The Philippines’ Information Technology and Business Process Management
(IT-BPM) sector is one of the best performing and employment generating activities
in the past four years. Its global leadership in voice-based services as well as
continuing improvements in non-voice and complex process outsourcing show the
promising growth trajectory of the IT-BPM sector. To be able to cement its position in
the global IT-BPM sector, the Information Technology and Business Process
Association of the Philippines (IBPAP) has advocated for deeper policy reforms
which will support employees’ skills development and maintain a competitive
business environment for the industry.
The industry’s initiatives focus on four areas: (1) widening and deepening
human capital by scaling up industry public-private partnerships; (2) strengthening
Philippine attractiveness as an investment destination through advocacy activities;
(3) achieving Roadmap 2016 goals by leading cross-sectoral efforts; (4) building
Philippine IT-BPM brand globally through marketing programs.

The main strategy that the IT-BPM sector applies is called “End-to-End
Service Level Management”. The Theoretical and practical aspects of designing and
implementing an End-to-End Service Level Management (SLM) in any IT-BPM
relationship is through a formal agreement – a contract with the client. SLM is a
regular and systematic review of service provider’s performance against the
agreements. The Service Level Agreement (SLA), is a formal agreement between
the client and service provider for a common understanding on aspects including
service quality, responsibilities, performance metrics, penalties and commitments.

4.1a Six Components

1) Performance Management
An ongoing process of communication between a supervisor and an
employee that occurs throughout the year, in support of accomplishing the strategic
objectives of the organization. The communication process includes clarifying
expectations, setting objectives, identifying goals, providing feedback, and reviewing
results.
An effective performance management process sets the foundation aligning the
individual's efforts with the university's goals.

 By linking individual employee work efforts with the organization’s mission and
objectives, the employee and the organization understand how that job
contributes to the organization.
 By focusing attention on setting clear performance expectations (results + actions
& behaviors), it helps the employee know what needs to be done to be successful
on the job. 
 Through the use of objectives, standards, performance dimensions, and other
measures it focuses effort. This helps the department get done what needs to be
done and provides a solid rationale for eliminating work that is no longer useful.
 Through regular check-in discussions, which include status updates, coaching,
and feedback, it promotes flexibility, allowing you and the employee to identify
problems early and change the course of a project or work assignment.
 By emphasizing that an annual review should simply be a summary of the
conversations held between you and the employee during the entire cycle, it
shifts the focus away from performance as an “annual event” to performance as
an on-going process.

An effective performance management process, while requiring time to plan and

implement, can save you and the employee time and energy. Most importantly, it can be
a very effective motivator, since it can help you and the employee achieve organizational
success.
Performance Management
A systematic process by which an organization involves its employees, as
individuals and as members of a group, in improving the organizational effectiveness
through the accomplishment of mission and goals.
Employee Performance Management includes:
 Planning work and setting expectations,
 Continually monitoring performance,
 Developing the capacity to perform,
 Periodically rating performance in a summary fashion
 Rewarding good performance

2) Metrics and Reporting

A Business Metric is a quantifiable measure that is used to track and

assess the status of a specific business process. It's important to note that
business metrics should be employed to address key audiences surrounding
a business, such as investors, customers, and different types of employees,
such as executives and middle managers. Every area of business has specific
performance metrics that should be monitored – marketers track marketing
and social media metrics, such as campaign and program statistics, sales
teams monitor sales performance metrics such as new opportunities and
leads, and executives look at big picture financial metrics.

3) Professional Development

Achieving success in your career requires ongoing training and

education, which is where professional development comes into play.
Also known as continuing education and professional learning,
professional development is designed to teach workers the skills
needed to succeed in their respective line of work. Professional
learning is more than just training, however, and it's important for
employers and employees alike to familiarize themselves with the
nuances between these two terms. 
Professional development refers to all training, certification and
education that a worker needs to succeed in his or her career. It's no
secret that different jobs require different skills. Even if a worker
currently has the necessary skills, he or she may need additional
skills in the future. Through professional development, workers can
learn these skills to become better, more efficient workers.
While job training is an essential part of professional development,
this concept covers all forms of education and learning that's
intended to help a worker succeed. Other examples of professional
development include college studies, online training programs,
industry certifications, coaching, mentoring and consultation.

4) Quality, Monitoring and Analyzing

 Your company should continuously be trying to improve its efficiency
and effectiveness. The best way to do this is to use evidence and base your
decisions on this. For this to be successful however, your must have enough
evidence to properly assess a product or a process and the evidence must be
accurate. This means that you have to analyze the data from your QMS
system in such a way that it becomes useful and meaningful for those within
the company that will use it to make decisions. Deciding on which data should
be analyzed is as important as deciding which data should be collected.

Quality Specifications:
 Total Quality Management (TQM)
 Total Quality Circles (TQC)
 ISO 9001
 Six Sigma

Total Quality Management (TQM)

A core definition of total quality management (TQM) describes a management

approach to long-term success through customer satisfaction. In a TQM effort, all
members of an organization participate in improving processes, products, services,
and the culture in which they work.

PRIMARY ELEMENTS OF TQM

TQM can be summarized as a management system for a customer-focused

organization that involves all employees in continual improvement. It uses strategy,
data, and effective communications to integrate the quality discipline into the culture
and activities of the organization. Many of these concepts are present in
modern quality management systems, the successor to TQM. Here are the 8
principles of total quality management:

1. Customer-focused: The customer ultimately determines the level of quality.

No matter what an organization does to foster quality improvement—
training employees, integrating quality into the design process, or upgrading
computers or software—the customer determines whether the efforts were
worthwhile.
2. Total employee involvement: All employees participate in working toward
common goals. Total employee commitment can only be obtained after fear has
been driven from the workplace, when empowerment has occurred, and when
management has provided the proper environment. High-performance work
systems integrate continuous improvement efforts with normal business
operations. Self-managed work teams are one form of empowerment.
3. Process-centered: A fundamental part of TQM is a focus on process
thinking. A process is a series of steps that take inputs from suppliers (internal or
external) and transforms them into outputs that are delivered to customers
(internal or external). The steps required to carry out the process are defined, and
 performance measures are continuously monitored in order to detect unexpected
variation.
4. Integrated system: Although an organization may consist of many different
functional specialties often organized into vertically structured departments, it is
the horizontal processes interconnecting these functions that are the focus of
TQM.
 Micro-processes add up to larger processes, and all processes
aggregate into the business processes required for defining and implementing
strategy. Everyone must understand the vision, mission, and guiding principles as
well as the quality policies, objectives, and critical processes of the organization.
Business performance must be monitored and communicated continuously.
 An integrated business system may be modeled after
the Baldrige Award criteria and/or incorporate the ISO 9000 standards. Every
organization has a unique work culture, and it is virtually impossible to achieve
excellence in its products and services unless a good quality culture has been
fostered. Thus, an integrated system connects business improvement elements in
an attempt to continually improve and exceed the expectations of customers,
employees, and other stakeholders.
5. Strategic and systematic approach: A critical part of the management of
quality is the strategic and systematic approach to achieving an organization’s
vision, mission, and goals. This process, called strategic planning or strategic
management, includes the formulation of a strategic plan that integrates quality as
a core component.
6. Continual improvement: A large aspect of TQM is continual process
improvement. Continual improvement drives an organization to be both analytical
and creative in finding ways to become more competitive and more effective at
meeting stakeholder expectations.
7. Fact-based decision making: In order to know how well an organization is
performing, data on performance measures are necessary. TQM requires that an
organization continually collect and analyze data in order to improve decision
making accuracy, achieve consensus, and allow prediction based on past history.
8. Communications: During times of organizational change, as well as part of
day-to-day operation, effective communications plays a large part in maintaining
morale and in motivating employees at all levels. Communications involve
strategies, method, and timeliness.

Total Quality Circles (TQC)

Quality Circle (QC) is a small, voluntary group of employees and their

supervisor(s), comprising a team of about 8 to 10 members from the same work
area or department group of staff that meets regularly to solve problems relating to
their job scope or workplace. QC works on the basis of continuous and on-going
process in an organization. Normally members of a particular QC come from the
same workshop who face and share similar problems in their daily work for life.
Ideally the group size should be seven or eight to give enough time to each
member to actively participate and contribute to each meeting.
 ISO 9001

ISO 9001 is defined as the international standard that specifies requirements

for a quality management system (QMS). Organizations use the standard to
demonstrate the ability to consistently provide products and services that meet
customer and regulatory requirements. It is the most popular standard in the ISO
9000 series and the only standard in the series to which organizations can certify.

ISO 9001 was first published in 1987 by the International Organization for

Standardization (ISO), an international agency composed of the national standards
bodies of more than 160 countries. The current version of ISO 9001 was released in
September 2015.

Six Sigma

Six Sigma is a set of techniques and tools for process improvement. It was
introduced by American engineer Bill Smith while working at Motorola in 1986. 

Six Sigma is a disciplined, data-driven approach or methodology to project

management that eliminates defects in any process. It drives towards six standard
deviations between the mean and the nearest specification limitation. Six Sigma
mostly measures quality of manufacturing output, but also quality of products and
services. 

5) Productivity, Monitoring and Control

Employee productivity is a metric that is calculated based on the amount of

output on a project versus the amount of time it takes. It can also be measured
against a standard or “base” of productivity for a group of workers doing similar work.
Measure employee productivity will show how efficient the employees are for a task
or project. This metric itself can be used to determine if a project needs more or less
workers. So, if the quality of work outputted is justified by the number of hours being
put in and, as a numeric measurement. There is an optimal level of productivity for
each task or project where productivity is the main driver of progress.
Guidelines for Monitoring Employee Productivity
 Measuring
 Comparison
 Identification
 Feedback

6) Continuous Improvement Initiatives

A continuous improvement strategy is any policy or process within a

workplace that helps keep the focus on improving the way things are done on
a regular basis. This could be through regular incremental improvements or
by focusing on achieving larger process improvements. Facilities that focus on
improving continuously become more competitive over time and can maintain
their advantages in their industry, but only if the improvement efforts are done
correctly. Taking good baseline measurements and taking ongoing
measurements will help identify the effectiveness of the efforts being made.

Benefits
1. Improve Safety
2. Decrease down time
3. Raise employee morale
4. Identify problems more quickly
5. Develop control through visibility
 The 5S system is a lean manufacturing tool that improves workplace
efficiency and eliminates waste. There are five steps in the system, each starting
with the letter S:

1. Sort 2. Set In Order 3. Shine 4. Standardize 5. Sustain

By providing a systematic framework for organization and cleanliness, 5S

helps facilities avoid lost productivity from delayed work or unplanned downtime.

The Steps of 5S

5S was created in Japan, and the original “S” terms were in Japanese, so
English translations for each of the five steps may vary. The basic ideas and the
connections between them are easy to understand, though.

Step Name Japanese term Explanation

1. Sort Seiri (tidiness) Remove unnecessary items from each area
Organize and identify storage for efficient
2.Set In Order Seiton (orderliness)
use
3. Shine Seiso (cleanliness) Clean and inspect each area regularly
Seiketsu Incorporate 5S into standard operating
4. Standardize
(standardization) procedures
Assign responsibility, track progress, and
5. Sustain Shitsuke (discipline)
continue the cycle
 
These steps feed into each other, so the sequence is important.

Clearing out unnecessary materials in step 1 (Sort) will provide the space
needed to organize the important items in step 2 (Set In Order). Then, once the work
space is de-cluttered and organized, dirt and grime can be removed in step 3
(Shine). These changes to workers’ job duties and work environment should be
reflected in updated procedures through step 4 (Standardize). Finally, those new
procedures won’t amount to much unless responsibility is assigned and progress is
tracked — as required for step 5 (Sustain). And with responsibility and tracking,
workers will continue to apply the steps, returning to step 1.

Kaizen
 Kaizen is a term that refers to on-going or continuous improvement. The definition
of kaizen comes from two Japanese words: ‘kai’ meaning ‘change’ and ‘zen’ meaning
‘good’. The Japanese philosophy was first introduced by Toyota back in the 1980s and
has since been adopted by thousands of companies around the globe. This lean
transformation encourages an improvement culture that gradually increases quality,
efficiency, and profitability.

Key Elements of Kaizen

 Quality

 Effort

 Involvement of Employees

 Willingness to Change

 Communication

Lean

The main purpose of Lean management is creating value to the customer by

optimizing resources. Lean management principles aim to create a stable workflow
based on actual customer's demand. Continuous improvement is a major part
of Lean management, ensuring that every employee is involved in the process of
improving.

Eight (8) Deadly Wastes:

1. Overproduction

2. Transportation

3. Motion

4. Correction

5. Over-processing

6. Inventory

7. Waiting

8. Unused employee ideas and talent

4.2. Business Process Mapping and Notation

Business Process Model and Notation (BPMN) is a graphical representation
for specifying business processes in a business process model. Originally
developed by the Business Process Management Initiative (BPMI), BPMN has
been maintained by the Object Management Group (OMG) since the two
organizations merged in 2005.

Business Process Modeling Notation (BPMN) is a flow chart method that

models the steps of a planned business process from end to end. A key to Business
Process Management, it visually depicts a detailed sequence of business activities
and information flows needed to complete a process.

4.2a Purpose and benefits

At a high level, BPMN is targeted at participants and other stakeholders in a

business process to gain understanding through an easy-to-understand visual
representation of the steps. At a more involved level, it’s targeted at the people who
will implement the process, giving sufficient detail to enable precise implementation.
It provides a standard, common language for all stakeholders, whether technical or
non-technical: business analysts, process participants, managers and technical
developers, as well as external teams and consultants. Ideally, it bridges the gap
between process intention and implementation by providing sufficient detail and
clarity into the sequence of business activities.

4.2b Sub-models within a BPMN diagram

The diagrams are used to communicate with diverse audiences, both non-
technical and technical. Sub-models allow the diverse viewers to easily differentiate
between sections of the diagram, finding what’s most applicable to them. The types
of sub-models are:

 Private business processes. These are internal to a specific organization and

don’t cross pools, or organizational boundaries.
 Abstract business processes. These occur between a private/internal
process and another participant or process. The abstract process shows the
outside world the sequence of messages needed to interact with the private
process. It doesn’t show the private/internal process itself.
 Collaboration business processes. These show the interactions between two
or more business entities.

4.2c Key tips for business process modeling

1. Clearly define the scope of the process with a beginning and end.
2. You might first map the current business process to highlight inefficiencies
before modeling a better way with BPMN.
3. Aim for BPMN diagrams that fit on one page, even if the page is poster-sized,
as some are.
4. Lay out sequence flows horizontally. Show associations and data flows
vertically.
5. You can create different versions of the diagram for different stakeholders,
depending on the level of detail needed for their role.
6. BPMN is not appropriate for modeling organizational structures, functional
breakdowns, or data flow models. Although BPMN depicts some information flows
in business processes, it’s not a Data Flow Diagram (DFD.)

5. Teaching and Learning Activities

1. Present a business plan comprising of needed hardware, software and
peopleware. Discuss the relationship of each components as to its
contribution in the productivity of the company/organization.
2. Out of the business plan you have presented, conduct an evaluation
and analysis as to its whole flow – a program/business evaluation.
Note: Prepare a presentation via online for these activities and an e-copy of
presentation be submitted through google drive.

6. Recommended learning materials and resources for supplementary reading.

https://managementhelp.org/operationsmanagement/

https://networks.upou.edu.ph/907/module-5-managing-it-bpm-operations-bpm-101-fundamentals-
of-business-processing/

https://www.ahaworldcampus.com/b/what-is-professional-development

https://asq.org/quality-resources/total-quality-management

http://www.iibmindialms.com/library/management-basic-subjects/total-quality-
management/quality-circle/

https://www.creativesafetysupply.com/articles/continuous-improvement/

https://www.graphicproducts.com/articles/what-is-5s/

https://kanbanize.com/lean-management/value-waste/7-wastes-of-lean

7. Flexible Teaching Learning Modality (FTLM) adopted

Example:
Online (synchronous)
//google classroom, OBS studio, Podcast etc..
Remote (asynchronous)
//module, case study analysis and investigation, exercises on
writing business proposals, etc…
8. Assessment Task
1. Discuss in detail the concept of operations management.
 2. What is the value or importance of operations management? Explain.
3. Enumerate and explain the components of operations management.
4. What are the process mapping and notation shapes? Enumerate and explain.
5. What is the value or importance of process mapping and notation?

Note: Answer be submitted on the designated places which will be announced later.
9. References
The Certified Manager of Quality/Organizational Excellence Handbook

From Quality to Business Excellence: A Systems Approach to Management

Juran, Quality, and a Century of Improvement

Insights to Performance Excellence 2019-2020 

https://www.ahaworldcampus.com/b/what-is-professional-development

https://asq.org/quality-resources/total-quality-management

http://www.iibmindialms.com/library/management-basic-subjects/total-quality-
management/quality-circle/

https://www.creativesafetysupply.com/articles/continuous-improvement/

https://www.graphicproducts.com/articles/what-is-5s/

https://kanbanize.com/lean-management/value-waste/7-wastes-of-lean