Background of the Business
The report is prepared for Reliable Finance Company, RFC that was established in 1990. The company lends money to the farmers and the business organizations. The organization is based in Australia and currently there are 178 branches of RFC in Australia. The senior management of the organization has taken a decision to expand the organization. It has been decided that the number of branches will be increased to 400 in the next three years and these will go up to 1000 branches in the next five years. It will be necessary for RFC to have an advanced information system implemented to make sure that the expansion is done properly.
Fig I: Activity diagram of Current payment processing system
The current business process that is followed in RFC has a defined set of steps and there are certain areas in the current process that can be improved. Currently, the customers associated with RFC can pay their respective debts to the particular RFC branch in three different forms. These include cash, check, or money order as per the customer preferences. As soon as the payment is done, there is a verification process that begins and the voucher copy is updated with the PAID status once the verification is successful. The money that is deposited in the RFC branches is batched and the details are mailed to the home office via APR every afternoon. In the cases wherein the direct payments to the home office are made, the voucher copy and its status is determined to make sure that the payment is complete. In the scenarios wherein the voucher copy is missing or the payment status is not paid, the checking of the loan id with the outstanding loan file is done by the clerk (Barjis, 2015). The details in the file are then updated. There is a central batch processing job that runs evert evening to update the outstanding loan files. There is a batching process that also runs with the payment report as the outcome of the process.
The automated system that will be implemented in RFC will introduce the automated measures and mechanisms in the organization. There will be changes and improvements that will be made in the above set of processes. The voucher copy will be made permanent if the payments will be made directly to the home office and it will be done over the mails to bring down the clerical jobs and the related errors. The automated reminders will be sent after the delinquency analysis to the customers that may have the payments due in seven days and the overdue reminders will be sent after 15 days. The categorization of the information will be done using the spreadsheets. The adjustments will be made in the financial statements using the automated jobs and the high potential for delinquency will also be determined in the initial analysis process (Bouchbout et al., 2016).
Activities of the Current Payment Processing System
Enterprise Architecture, EA is defined as the process by which the standardization of the business processes is carried out so that the IT procedures and processes can be streamlined and fall in line with the business goals and procedures.
There is a close link between EA and BPM which will be applicable in the RFC case study that has been provided. The combination of EA and BPM makes sure that the alignment of IT systems and applications is done properly with the business goals. This assists in the development of an agile enterprise so that the gaps between the business procedures and the IT functions are reduced. In the case of RFC, there are several processes and jobs that are carried out by the organization. Currently, most of these are manually operated and these will be converted to their automated counterparts with the implementation of the information systems (Hussein et al., 2017). The combination of EA and BPM will ensure that the smooth transition from the existing to the new system is made. Also, the handling of the changes will be done effectively. For example, there is a severe concern of clerical overheads that can be seen in the current system. With the implementation of the automated information system, it will be possible to bring down the overhead and the automated procedures will be implemented.
The BPM activity in the clerical checks and verifications will have a positive implication on the overall EA as the existing loopholes will be avoided and covered with the automated systems and processes. The gaps in the existing process will be determined using the BPM and the intended changes will also be modelled. The EA will make sure that the workflow is not disturbed with the automation of the process and the overall integrity of the business flow will be maintained at all times.
The incremental changes in the EA blueprints have an impact on the portfolio of the BPM processes. This is because the two are implemented and utilized in combination. For instance, in the case of RFC, the delinquency analysis has a step by step process that is followed. The incremental changes in the entire process are sure to bring in the changes in the BPM processes (Masuda et al., 2018). It is, therefore, essential that the EA practitioner and the BPM portfolio Manager and team shall work in collaboration.
RFC can also make use of the value stream mapping and modelling to ensure that the continual benefits are made. It provides the visualization of the process and the data sets and also highlights the improvements that may be made. The improvements in the RFC processes will be made with the aid of the visualizations included in the values stream maps. There can be a few bottlenecks that may emerge during the expansion of RFC and the implementation of the information system. The value stream maps will assist in the identification of these gaps and bottlenecks. There is a great degree of collaboration that automatically gets associated with the value stream mapping processes. This will make sure that all the resources of RFC are involved in the processes.
Delinquency Analysis System
There are different process segments that are determined from the BPM. These can be classified in three major categories. The first is the process that is associated with the customer. The second is the branch office process which is further classified as front office process and back office process. The third is the home office process which is again classified as front and back office process. All of these process segments are closely synced with each other as the outcomes of one process is used by the other and likewise. The business entities are also determined on the basis of these process segments and models as customers, branch office, and head office.
There are numerous entities that are involved and the status of these entities will change with the execution of the critical processes. For example, as soon as the customer makes a payment using any of the modes, there is a verification process that begins and the voucher copy is updated with the PAID status once the verification is successful. The status of the voucher copy changes with the verification process (Illibauer, 2018).
The customer is also sent the reminders in the case of the pending payments and the status of the customer changes with the same. There are certain attributes that are associated with each of these entities. The details are represented in the ER diagram as shown below.
There are a few limitations that may be associated with the collaborative business for RFC:
- There may be excessive resistance to change that may be witnessed among the existing employees and stakeholders. In the case of the inability to adopt the changes, it is possible that the business flow is negatively impacted.
- The collaborative environment and business processes will lead to the enhanced information sharing and it would become essential to distribute the access to the information sets and applications to all the concerned parties. This may lead to the increased probability of the information security and privacy attacks (Merchant, 2016). RFC deals with the information sets that are mostly critical and highly sensitive pieces of information. For example, the financial details of the customers have a high degree of sensitivity associated with them. The occurrence of the security issues and attacks may lead to severe impacts on these data sets.
- There may be issues around ownership and inconsistencies that may also be witnessed in the case of RFC.
Business Intelligence, BI can have numerous applications and benefits for the case that has been given. There are a number of techniques that are included under BI and these may be applied to the RFC processes for the overall improvement.
The use of data analytics and data warehousing can be done as the two BI concepts and RFC can benefit from the same. There are several customers that repeatedly fail to make the payments on time. In spite of sending these customers with the reminders, there are several measures that need to be taken to ensure that the payment is received. The use of BI-based automated data analytics can be carried out to make sure that the identification of such customers is appropriately done. Also, there are some of the branch offices that witness the similar errors in the loan processing jobs or delinquency analysis. The application of data analytics can make it possible to determine the common errors and implement the improvement measures (McBride, 2015).
Collaborative Intelligence can also be applied in RFC in the areas as the primary jobs at the branch offices. The systems and the human resources can collaborate to determine the data and the business flow and the similar approach can be followed for the head office.
The quality assurance is extremely necessary for the RFC as it is for every business organization. It is essential that the quality of the business processes is managed and improved at all times. In the case of RFC, the customers make the payments through any of the three mediums. The voucher copy is then verified to confirm the payment and it is updated with the paid status. The manual process which is used to carry out this process has several loopholes. The quality assurance of the same is determined with the automation of the process along with the maintenance of the information security and integrity in the same.
Conclusion & Recommendations
The business process modelling carried out for RFC shows that existing gaps in the current process and the improvements that may be made. There are numerous others techniques and methods that can be used to introduce these improvements. The use of Enterprise Architecture in combination with BPM is one of the measures. The utilization of BI can also be done to ensure that the advanced analytics is conducted.
There are some of the additional recommendations that are provided for RFC.
- The improvements in quality shall always be made and the use of the DMAIC process shall be done for the overall improvements in quality.
- The information security and privacy must not suffer during the transitional from the manual to the automated processes. There shall be audits and reviews that must be done in the information security and privacy aspects.
- It is recommended that the transition of the business processes shall be done using the phased implementation approach. This will make sure that the continuity of the existing processes is not disturbed.
References
Barjis, J. (2015). Enterprise process modelling complemented with business rules. International Journal of Business Process Integration and Management, 5(4), 276. https://doi.org/10.1504/ijbpim.2011.043388
Bouchbout, K., Akoka, J., & Alimazighi, Z. (2016). An MDA?based framework for collaborative business process modelling. Business Process Management Journal, 18(6), 919–948. https://doi.org/10.1108/14637151211283357
Hussein, S., Mahrin, M., & Maarop, N. (2017). Sustainability through Innovations Of Enterprise Architecture (EA) in Public Sector’s Management: Issues & Challenges. Journal of Southeast Asian Research, 1–13. https://doi.org/10.5171/2017.722027
Illibauer, F. (2018). Hagenberg business process modelling method.
Masuda, Y., Shirasaka, S., Yamamoto, S., & Hardjono, T. (2018). Architecture Board Practices in Adaptive Enterprise Architecture with Digital Platform. International Journal of Enterprise Information Systems, 14(1), 1–20. https://doi.org/10.4018/ijeis.2018010101
McBride, N. (2015). Virtuous Business Intelligence. International Journal of Business Intelligence Research, 6(2), 1–17. https://doi.org/10.4018/ijbir.2015070101
Merchant, N. (2016). The new how?: creating business solutions through collaborative strategy. O’reilly Media, Inc.
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