Management (BPM) systems [37]. .... Business Process Management (BPM) includes methods, ..... Since the green and red zone cases are dealt by software.
Measuring Process Flexibility and Agility Yiwei Gong and Marijn Janssen Delft University of Technology Jaffalaan 5, 2628 BX Delft, the Netherlands +31 (0) 15 27 83287, +31 (0) 15 27 81140
{Y.Gong, M.F.W.H.A.Janssen}@tudelft.nl ABSTRACT
1. INTRODUCTION
In their attempt to improve their systems and architectures, organizations need to be aware of the types of flexibility and agility and the current level of each type of flexibility and agility. Flexibility is the general ability to react to changes, whilst agility is the speed in responding to variety and changes Both flexibility and agility are diverse concepts that are hard to grasp. In this paper the types of flexibility and agility of business processes is discussed on a foundation level and an approach to measure the level of flexibility and agility is proposed. A case study of the flexibility and agility measurement is used to demonstrate the approach. The illustration is used to discuss the difficulties and limitations of the measurement approach.
Organizations increasingly pay attention to the creation of flexible and agile business processes. This will help them to comply to ever changing regulation, to satisfy customer’s wishes, to adapt new technologies and to be able to react to the environment,. A business process is the time-dependent sequence of activities and the coordination of these activities is often supported by Workflow Management (WFM) [7] or Business Process Management (BPM) systems [37]. Flexibility is the general ability to react to changes [20], whilst agility is the speed in responding to variety and changes [22]. Both flexibility and agility are multidimensional concepts that are hard to grasp. As such, there does not exist a single measure for determining the level of flexibility and agility. The main difficulty is caused by the complexity in implementing the business processes and their dependence on the environment. Although a single system or element might be adaptable on its own, the inter-dependencies with other systems can significantly hamper adaptation. Despite the complexity, insight into the existing and needed level of flexibility and agility is important as this determines the ability and speed to react to changes.
There is no uniform definition of or view on flexibility and agility. This makes it hard to develop a measurement approach. Furthermore, as business processes can be different, this might result in different metrics for measuring the level of flexibility and agility. There is no single measure and for each type of business process and flexibility and agility should always measure by a combination of metrics. In addition, both qualitative and quantitative metrics should be used to measure the level of flexibility and agility.
In e-governance there are at least two types of business processes that need flexibility and agility [2]. On the one hand, operational or horizontal processes are necessary for service provisions. There is a mounting pressure to improve these types of processes. On the other hand, law implementation could be viewed as vertical process and a type of direction-setting processes (c.f. [2] page 97), as these type of processes are “concerning with strategy formulation and policy deployment”. Both have their own complexities and characteristics.
Categories and Subject Descriptors H.1.1. [General System Theory]: Models and Principles –Systems and Information Theory; J.1 [Administrative Data Processing]: Administrative Data Processing – Government; H.4 [Information Systems Applications]: Miscellaneous; J.1 [Administrative Data Processing]: Government
Horizontal business processes are influenced by the changing demand and expectations of customers and their partner organizations. Organizations will initiatively adapt their business processes to improve services, increase the value to customers and facilitate cooperation with partner organizations. An example is integrated service delivery [25], where multiple services (functions, tasks, decisions) are provided by multiple organizations (service providers) that run many parallel processes with complex and long-term interactions with other service providers to achieve an integrated result. Cross-organizational business processes are created to ensure integrated service delivery. The flexibility and agility is dependent on the ability of all cooperating organizations to adapt.
General Terms Measurement, Performance, Design, Experimentation
Keywords Flexibility, Agility, Business Process Management
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Governmental and commercial organizations are required to keep their operational business processes compliant with high amounts of legislation and have vertical, law-making processes for ensuring this. Compliance refers to the legal requirements that laws and regulations pose on the tasks that are performed by
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it is unclear whether flexibility and agility are synonyms or distinct concepts [4]. However, as what Upton [35] (page 205) indicated, “the confusion and ambiguity about a concept that often represents a critical competitive capability seriously inhibits its effective management.” Therefore, a more in-depth understanding of those concepts is extremely important for being able to measure them, as conceptualization defines the terms used when describing and thinking about tasks [21].
organizations and to what extent these requirements are actually met. New or altered legislation might influence a number of business processes and might also go beyond the border of a single organization. These two types of implementation of business processes are schematically presented in Figure 1 (the blue part shows the vertical process to implement law, and the red part shows the horizontal process to deliver services). Law implementation
The word ‘flexibility’ can be defined in several different ways depending on the discipline and the nature of the research [1]. The definitions of flexibility is plentifully cumulated in the domain of management study, especially in operations management (c.f. [4]) and supply chains (c.f. [34]). Although many researches have addressed flexibility on organization management involving Information Technology (IT) view point [26], yet only a few of them are specified for the IT domain (c.f. [6, 10]).
Law making
Legislation Service Delivery Network Policy deployment Customers
Operational processes
Wadhwa and Rao [41] (page 112) induce a series scholarly work of this concept into a fundamental requirement for flexibility namely “delivery of flexibility requires ability to change from an optimum state in a reversible manner”. These authors consider flexibility as an expedience to the efforts in dealing with change. Although their research is based on manufacturing systems, such a fundamental discussion can be extended to a broader domain and applicable to other systems like e-government systems and business process management systems. They distinguish change into two types: stochastic (uncertainty related) and deterministic (certainty related). This finally leads to their conclusion of the difference between the concepts of flexibility and agility as the former responses to predictable changes, while the later responses to unpredictable changes.
Organization B
Implementation of operation Organization A
Figure 1. The implementation of business processes The research presented in this paper is carried out within a project called AGILE, which is an acronym for Advanced Governance of Information services through Legal Engineering. Within this project we aim at developing a design method, distributed service architecture and supporting tools that enable organizations administrative and otherwise - to orchestrate their legal information services in a networked environment. The Dutch Immigration and Naturalisation Service (Immigratie en Naturalisatiedienst, IND) is the partner that provides the empirical setting for our experiments, which is subject to continuously changes in the legislative environment. This requires them to change their business processes and therefore flexibility is needed. Agility is of importance as the number of persons applying for a permit to stay in the Netherlands fluctuates significantly over the years.
In the BPM domain the need for process flexibility has been recognised for a long time. Most studies focus on a particular notation (e.g., XPDL, BPEL, BPMN, etc.) and these notations typically abstract from specific flexibility issues [32]. Recent definitions of flexibility in BPM domain are the following.
In this paper, an approach for measuring the level of flexibility and agility of both law-making and operational business processes is proposed. We will start with the discussion of the concepts of flexibility and agility in business processes. Thereafter, an approach of measuring flexibility and agility will be presented. In the section thereafter, we will demonstrate the approach using an illustrative example. Finally, conclusions are draw and our future research plans are discussed.
o
“Process flexibility can be seen as the ability to deal with both foreseen and unforeseen changes, by varying or adapting those parts of the business process that are affected by them, whilst retaining the essential format of those parts that are not impacted by the variations” [32] (page 17).
o
“Flexibility is the capacity of making a compromise between, first, satisfying, rapidly and easily, the business requirements in terms of adaptability when organizational, functional and/or operational changes occur; and, second, keeping effectiveness” [24] (page 1).
o
“Flexibility can be defined as change that may be made to a norm in a given amount of time, without affecting other norms, whenever change is perceived as needed” [29] (page 37).
2. BACKGROUND In this chapter, the literature study of flexibility, agility and business process evaluation is presented.
2.1 Flexibility and Agility The literature shows that the content of the terms ‘flexibility’ and ‘agility’ have overlapping notions, which implies the interchangeable use of these terms. For example, Gerwin [8] defined flexibility as the ability to respond effectively to changing circumstances. While McGaughey [22] defined agility as the ability of an enterprise to respond quickly and successfully to change. These two definitions look almost identical, except that agility emphasizes quickness. Some scholars even concluded that
Those definitions address various aspect of flexibility. A tendency to integrate a variety of elements from other definitions is also observed. It seems that some authors attempt to involve more aspects which relate to changes and the reaction to changes that impact business processes. Their definitions encompass not only a general definition, but also include explanations with multi-types of the concepts (c.f. [32]).
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The concepts of ‘agility’ is also widely collected and discussed in the literature. In a similar vein to flexibility, there is no consensus on this definition either [4, 39, 41]. The concept of agility builds from the literature on flexibility in economics and was developed further in the context of agile manufacturing [36]. The concept of agility was first coined in 1991 to describe the practices observed and considered as important aspects of manufacturing [39].
within an existing configuration (of pre-established parameters), and agility is the ability of systems to rapidly reconfigure (with a new parameter set). From the discussion above, we conclude that the conceptualization of flexibility and agility in the BPM domain draws on the concepts of flexibility and agility in business and operations management domain. The former lags behind the later, especially in the use of the concept of agility. Generally, there is a lack of consensus about definitions of flexibility and agility. Despite the diversity in definitions, the IT academia can learn from research finding in the management domain by adopting widely accepted and less context dependent concepts. Flexibility and agility are overlapping concepts. Both present the ability of organizations to respond to changes in the environment. The most obvious difference between the two is that agility has a strong emphasis on the speed aspect.
In operations management literature, agility is considered to lag the conceptual progression found in the conceptualization of flexibility [4]. This results in a phenomenon that many definitions of agility are built on the definitions of flexibility [16]. For example, some authors consider one of the important perception of agility is that it can be regarded as a combination of flexibility and speed [27, 41]. It is well established notion that agility can be studied through two complementary perspectives: the business perspective and IT perspective [16]. In terms of the attitude to the concept of speed, the understanding of agility in business domain (business agility) is quite consistent with the one in operation management. Oosterhout et al. [39] argued that the concept of quickness and therefore speed is at the heart of agility. In various areas, speed can be required. For instance, the lead time to market of new products, the time to process an order or service request, the time to align a virtual business network for collaboration, the time to reconfigure organizational processes and systems to react to certain changes, and so on. Therefore Oosterhout defined business agility as “the ability to sense highly uncertain external and internal changes, and respond to them reactively or proactively, based on innovation of the internal operational processes, involving the customer in exploration and exploitation activities, while leveraging the capabilities of partners in the business network” [39] (page 53). Such a definition actually adopts a process view in describing business. Hence, it can be used for understanding business process agility.
2.2 Business Process Evaluation Business Process Management (BPM) includes methods, techniques, and tools to support the design, enactment, management, and analysis of business processes [37]. BPM is influenced by concepts and technologies from business administration and computer science. It has its roots in the process orientation trend of the 1990s, where a new way of organizing companies on the basis of business processes was proposed [42]. BPM has involved flexibility and agility issues for a long time in the discussion on architecture level. Gong et al. [11] provided an extensive study on different business process architectures which enable various levels of flexibility. Many studies in process flexibility and agility focus on qualitative evaluation. For example, Reijers and Mansar [30] identify the impacts of best practice in business process redesign as cost, time quality and flexibility, by using the “Devil’s quadrangle” [5]. In their study, flexibility is regarded as a general terms. They consider that the translation of the general concepts to a more precise meaning is context sensitive, and keep the discussion on a general level to avoid difficulty. Avoiding being precise has the drawback that that the level of flexibility cannot be determined. Ambiguity allows different interpretations. As such it is difficult to measure and see changes in the level of flexibility and agility. For the organizations who attempt to improve their business process architectures to enhance flexibility and agility, the way to evaluate flexibility and agility is quite essential in order to understand what type and level of flexibility is necessary and how it can be accomplished.
Similar to the conceptualizations of flexibility, more precise definitions of agility can be found in the BPM domain, although the number of definitions that can be found in literature is limited. Seethamraju [33] (page 53) defined business process agility as “the ability to dynamically modify, reconfigure and/or deploy a business process (and its various components) to accommodate required and potential needs of the firm”. Raschke and David [28] (page 356) regarded agility as “the ability to dynamically modify and/or reconfigure a business process selecting from a set of business process capabilities to accommodate required and potential needs of the firm”. Comparing with the development on the concept of flexibility, the definitions of agility within the context of a business process receive much less attention.
Both flexibility and agility are dealing with change in the environment, and change affects performance in time [41]. Hence the performance of certain business process can be used as a surrogate to measure the level of flexibility and agility. Business process performance includes hard measures such as response time and throughput [13, 31]. Cost of operation or process building is another important factor reflecting the flexibility and agility [23]. Gebauer argues that the cost efficiency of a given business process reflects the effects of information system flexibility and agility [6]. There are several types of cost and many directions can be focused on when discussing cost of business processes. Cost can be discussed in a general way, the total cost, or the cost of changing major components, as humans capabilities are often involved in creating flexibility and agility, human resource costs form an important component, especially in
The conceptualization of agility in operations management is more advanced than in BPM, as the differences between flexibility and agility are broadly discussed in the literature. For example Goranson [12] considers flexibility as scheduled or planned adaption to unforeseen yet expected external circumstances, while agility is unplanned and unscheduled adaption to unforeseen and unexpected external circumstances. Wadhwa and Rao [41] regards flexibility as a predetermined response to predictable changes, while agility entails an innovative response to unpredictable changes. The same understanding is also taken by Bernardes and Hanna [4] who conclude that flexibility is the ability of a system to change status 175
knowledge intensive business processes. It is worth to mention that the concepts of performance, quality and cost are interwoven. For example, some scholars consider performance as ‘quality’ [9, 14]. Some others conclude time cost quality and flexibility as the dimensions of performance [17]. We are not going to distinguish the interconnection of those terms, but use the result of qualitative research as direction setting. We can conclude that performance, time, cost, and quality measure can be used as surrogates to reflect the level of flexibility and agility.
3.1 Factors Reflecting Flexibility and Agility In the previous subsection, we argued that performance and cost can reflect flexibility and agility. Since we consider both law implementation and operation implementation as business processes, the performance and cost therefore can be divided into law implementation performance and operational performance, as well as law implementation cost and operational cost. How to detail those aspects and measure them is context dependent. The factors presented in this section is based on the context of organizations which are under both the demand of law enforcement and customer requests as the one we discussed in the introduction chapter. This enables us to customize the indicators and make them content dependent.
Both operational processes and implementation of law can be regarded as business processes. We can also analyze the business process flexibility and agility by separating them into law implementation and operation implementation paradigms. This separation is confirmed by Weske [42] who concludes that the request for flexibility and agility can be regarded as the main driving force behind business process management, both at an strategic level and operational level. By analysing flexibility and agility, by distinguishing different types of business processes and by reflecting them with performance and cost, their levels can be measured. In addition to qualitative measures as used in literature, a number of quantitative measures will be introduced in next section
An e-government system is a typical system that has both law implementation and operation implementation in its business processes. Most of these kinds of organizations are knowledge intensive and have their business process automation based on case handling paradigm [38, 40]. For instance, the IND treats each application from the client as a case. Each case has its own life cycle from the creation to finalization. Taking this as the context, detailing the aspects that reflect the system’s flexibility and agility becomes feasible. The measurement of those aspects under the given context is listed below.
3. AN APPROACH FOR MEASURING FLEXIBILITY AND AGILITY
Throughput refers to the workload of the system. It relates to the ability of the system to execute a given number of businesses or system-related processes within a given unit of time. In the case handling paradigm, it can be the total number of handling cases per year or per month. The more case workload the system can handle, the higher flexibility it has.
Participants need to have a comprehensive understanding of the factors related to business processes and IT systems that could influence the flexibility and agility of organizations. Qualitative researches mentioned above have revealed that performance and cost are the two aspects to reflect flexibility and agility. Based on this research result, in this chapter the key factors that contribute to our approach on how to measure flexibility and agility by performance and cost will be explained.
Response time is the time needed to interact within the target information system. There can be several different kinds of response time, e.g. for a batch task or individual case. In the case handling paradigm, we focus on end user response time, which associates with a specific user-system interaction. An instance of it can be the period starting from a client submitting an application to the ending point that the result of decision on the application has been returned to the client. The applicable unit can be day or hour, depending on the normal/average processing time. For integrated service delivery cases, if only apart of the application is handled by the organization, then the end user response time might not be applicable in evaluating its own business processes, as the other parts of the application are not under control or monitoring by the organization. Then case handling time might be a better target of measurement.
Taking a typical e-government system as an example, the typical impacts from environment concern the enforcement of law and requests from clients. Form an organization’s point of view, the performance and cost are important. The former means the efficiency of request handling and the workload. The later can be measured by the consumption of resources. Taking the business processes as a ‘black box’, the level of flexibility and agility can be measured by those aspects. This also means that the measurement is more or less technology independent. Furthermore, if any effort to increase flexibility and agility is done effectively, the increment of flexibility and agility is also able to be reflected by comparing the values of criteria of different periods. This can be conceptualized by the following picture.
Case handling time represents the time aspect of the operation performance of a business process. It measures the time from the point that a case is created till the point that the case is finalized. It is quite similar with the end user response time, but taking the partner organization as the ‘client’ instead of the one who actually initiates the whole process. For both end user response time and case handling time, the shorter this time is, the higher agility the system has. Law implementation time is the time spent on implementing a new or a new version of law and regulation. It is similar with the concept of ‘lead time’ in manufacturing industry. Changes in legislation can be quite different from each other. Some might requires only to slightly adapt a certain criteria like income requirement in a step of the process, while others might require a
Figure 2. The conceptualization of measuring flexibility and agility
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huge change on the process, like introducing a new service to the public. Focusing on a certain change of legislation is not sufficient to reflect the agility. We suggest observing this aspect over a prolonged period of time and using statistical data. For instance, a period of two or three years might be long enough to determine the average time spent on law implementation. The shorter this time is, the higher the agility is.
Average law implementation cost Number of complaints per year Number of appeals
Operational cost is the cost spent on daily operation. Case handling paradigm is usually used in knowledge intensive business processes [40]. In knowledge intensive processes, human resources represent usually the main cost. Therefore, in its measurement, we can adopt human resources as an indicator for the cost, if the other cost is not sensitive. The unit of this criterion can be Euro or U.S. dollars, but man hour can also be used as a more straightforward measure. The lower it is, the higher flexibility the system has.
Flexibility
man hour
Law implementation cost
Flexibility /agility
#
Quality
Flexibility /agility
#
Quality
3.2 Evaluation Flexibility and Agility Using the Factors Classical system architecting approaches describe improvement on aspects by comparing the performance differential between the current and desired situations [19]. The improvement of business process architectures to achieve desired flexibility and agility can only be revealed by a comparison between the current situation and the one in the future. In this case, the data of current situation can be collected by investigation, e.g. interviews, measurement, data mining or statistic study. The data about the future situation can be obtained by simulation or expert estimates. In our future research we will use agent-based simulation to evaluate the scenarios quantitatively. The benefit of simulation is that it is possible to experiment with the system prior to implementation to facilitate the selection of proposed solutions [3]. Our focus here is on ‘hard’ measurable data.
Law implementation cost are the costs spent on implementing a new or a new version of law and regulation. Its measurement is similar with the operational cost. The lower it is, the higher flexibility the system has. Quality can be measured from the point of view of client satisfaction [17] with either the product or the service provided by the process. Although quality can be related to many other aspects from operator’s perspective, since the process is regarded as a ‘black box’, we only consider the quality from the customer’s perspective. The measurement of client satisfaction can be different between enterprises and governmental organization. Enterprises might be able to calculate their client satisfaction from marketing research, while governmental organizations might use the number of complaints or the number of appeals in courts against their decisions. This aspect is a general measurement, and can contribute to both flexibility and agility, and it is the less the better.
We employ the problem a problem solving cycle (adapted from Janssen [18] page 2) as the approach of the comparison, which is showed in Figure 3.
All the factors discussed above are listed in Table 1 as metrics. According to the IEEE Standard 610-12 [15](page 47-48), a metric is a “quantitative measure of the degree to which a system, component or process possesses a given attribute”. In this table, only instances of their unit are presented. Some other aspects, like compliance and reliability are also important in business processes, but they are not directly related to performance and cost. Therefore we refrain from discussing them.
Figure 3. Problem solving cycle with comparison between situations In this approach, the current situation is conceptualized from the flexibility and agility perspectives. A number of correspondence checks and diagnosis on the empirical model and data are important to ensure the quality and creditability of the models of the existing situation. As there can be more than one alternative in the future situation that can be proposed to enhance flexibility and agility, simulating them and comparing the result of simulations with the data of current situation will help us to make a selection of appropriate proposal to improve flexibility and agility based on ‘what-if’ analyses. In this way it becomes also possible to review whether the current situation is improved in comparison with previous situations. Then the comparison is still similar, but the data collection of both situations will be done by investigation the empirical situation.
Table 1. Quantitative Metrics for Flexibility and Agility Measurement Metrics Number of handling cases per year Average case handling time Operational cost per year Average law implementation time
Flexibility /Agility
Unit
Category
Flexibility
#
Operational performance
Agility
day
Operational performance
Flexibility
man hour
Operational cost
Agility
day
Law implementation performance
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desire a higher level of flexibility and agility in their business processes. In this chapter, we illustrate the approach described in previous chapter to measure the level flexibility and agility of one of their business processes in an empirical way.
The result of comparison can be presented using a spider diagram which contains the data from both situations. Most of the factors we measured influence flexibility or agility in inverse proportion to their value except ‘the number of handling cases per year”. In order to include all the factors in a single diagram, we use the reciprocal of ‘the number of handling cases per year’. In this way all the values of the factors are in inverse proportion of flexibility or agility. The following diagram (Figure 4) gives an instance of the result comparison. The exterior polygon represents the ‘old’ situation and the inner polygon represents the ‘new’ one. As we can see the smaller the polygon is, the higher flexibility and agility it has.
4.1 The Context A use case dealing with a highly skilled migrant that applies for a residence permit was selected to prove our concepts. One of the reasons for choosing this use case is that it is often subject to changes (initiated at the politician levels) and has a large number of applicants. The highly skilled migrant admission legislation is introduced to enable qualified foreigners to work in the Netherlands. The policy with respect to highly skilled migrants has been changed frequently in the recent years. In 2007, the annual income limitation on an applicant is at least 46,541 EUR, or 34,130 EUR if the applicant is under 30. In 2008 there was a change in legislation in order to retain foreign intelligent graduates and encourage them to work in the Netherlands, The income limitation, for the foreign graduate that obtained a Bachelor or Master Degree at an accredited Dutch educational institution within one year before becoming employed, was changed to 25,000 EUR annually. In 2009 there was another change in legislation. Employees must have a gross annual income of at least 49,087 EUR, or 35,997 EUR if they are under the age of 30. There are two different situations to which the reduced wage criteria applies (in 2009 25,800 EUR gross a year). The first situation is aimed at graduates that obtained a Bachelor or Master Degree at an accredited Dutch educational institution, similar to the 2008 situation. The second situation concerns Master and PhD students who graduated in the Netherlands or at a university listed in the top 150 of two internationally recognized rankings. Over the last years, there were basically three types of changes that needed to implement to ensure compliance to the legislations.
Figure 4. An example of a spider diagram to compare the result of the ‘as is’ and desired situation
1)
Visualization of flexibility and agility with a spider diagram makes the comparison intuitive and easy to understand. Our approach shows a step by step method to evaluate flexibility and agility of business processes. It combines qualitative and quantitative measurements and results a precise comparison to perceive the improvement of flexibility and agility. It has its limitation when the context has to be given. The disadvantage of our approach is that it requires extensive amount of work in investigations/data collection or simulations. In the next chapter, we use a practical case to demonstrate how this approach can be used to help the organization in our case study to understand their levels of business process flexibility and agility.
2)
3)
General income requirements: The general income requirements needed to be changed regularly. This occurs frequently as the wage criterion for highly skilled migrants is indexed annually. Additional check for educational institutions: A check for Bachelor and Master degrees at accredited Dutch educational institutions had to be added to the admission process. Additional check for ranked institutions: A check for Master and Ph.D. degrees at certain ranked educational institutions had to be included to the admission process.
High levels of flexibility and agility are needed to enable the easy and fast compliance with these changes in legislation. The first type of changes requires only a change in income. The second and third kind of changes are more difficult as the business processes needed to be changed. In the changed situation, applicants were required to send in a proof of their educational background, and the IND needed to introduce control activities to verify whether this proof is valid or not. The admission process had to be changed and new tasks and new objects had to be added. All three changes have an impact on the number of admissions requests from foreigners.
4. AN ILLUSTRATIVE CASE STUDY Within the AGILE project, the IND is the partner that provides the empirical setting for our research. The IND is the organization that handles the admission of foreigners in the Netherlands. It is responsible for the execution of a complex set of regulations coming from different sources of law, including international law, national law, case decisions and policy directives. Moreover, the IND makes a large number of decisions, i.e. some 300,000 a year in the areas of asylum, standard objections to decisions, and naturalisation. Under pressure from frequently changing law and regulations, the IND is one of the governmental organizations that 178
4.2 The Measurement
Green Zone
In our approach, ‘throughput’, ‘case handling time’, ‘law implementation time’, ‘operational cost’, ‘law implementation cost’, ‘number of complaints’, and ‘number of appeals’ are the seven metrics that are used to reflect process flexibility and agility. In order to facilitate a quantitative research in the IND, we developed a survey with some questions and organized them in four parts.
Orange Zone
In this case study we measure the performance of highly skilled migrant business process by the throughput and the average time in processing highly skilled migrant applications. The total number of applications per year reflects the throughput in that year. Not every application contains the right and correct information and can be processed in the same way. Some might miss necessary documents; some might miss required information. In such cases, the processing of an application will be delayed due to factors outside the control of the organization. Therefore it should not be viewed as a reduction of performance and there is a need to know the number of applications without delay. Another measurement of performance is the case handling time. We do not use the end user response time, for the delivery of a residence permit is not carried by the IND, but municipalities. The time that spent on it is not controllable for the IND. We formulate our questions for IND as:
Manual workload
Red Zone
Figure 5. The green, orange and red zone Since the green and red zone cases are dealt by software components automatically, the number of the orange case reflects the workload of manual processes. An increase in the number of cases fitting in the orange zone can result in an increase on the (average) case handling time and/or increase on the number of operational involved man hours. Conversely, reducing the number of cases in the orange zone by means of enhancing the capability (the intelligence) of automatic decision-making will improve the performance in case handling and/or reduce the investment on human resource. Therefore it would be more precise if the size of the orange zone is taken into account. According to the discussion above, we have questions part 2:
Part 1: ‘Throughput’
Part 2: ‘Case handling time’ and ‘operational cost’
How many applications for highly skilled migrant permit were submitted each year and how many of them were processed without delay for reasons on the client’s side each year?
In each year, how long did it take in average to process a highly skilled migrant application? How many man hours were spent on highly skilled migrant cases in average? How many cases fall into the orange zone?
The cost can be analysed from two aspects: the daily operational cost spent on application handling processes and the law implementation cost which is a necessary expense to adapt to changes in the highly skilled migrant policy. For both aspects, the amount of Human Resources (HR) is used as the main indicator. Consequently, we have two types of HR cost: those involved in adapting systems and those involved in the operational processes. In the adaption, the time necessary to implement the change will also be considered. We refrain from translating the amount of HR into monetary values. Therefore, we use man hour as the main unit of HR cost and the number of days as the unit of time.
Up to now, the regulation of highly skilled migrant is only changed once a year. Such a frequency is expected to continue in the future. However, we can see that the changes in recent years required more effort in the adaptions to them, comparing with the ones in earlier years. As the intervals between two changes is long, using average value of the metric does not bring additional value. Therefore we have to compare the value of each year directly. Notably, the value of a certain year depends on the required changes. The related question is showed in Part 3:
In measuring the operational processes, we need to differentiate between fully and partly automated processes. For the IND, making a decision on a highly skilled migrant application can either be done by software components or human specialists who are responsible for the decision making in highly skilled migrant admission. Which way a case is handled is depended on the characteristics of the application. In terms of the daily operation, manual processes consume HRs, whereas software-enabled decision-making does not consume human resources. For this purpose, the IND divides decision-making into three zones: green, orange and red (see Figure 5). The green zone refers to the situation in which migrant applications can be automatically accepted without any human involvement. The red zone refers to the situation in which applications can be rejected automatically by software components without human involvement. The applications in the orange zone, however, are more complex and require manual (thus expensive) decision-making processes. The more applications are classified in the orange zone, the more manual work is required.
Part 3: ‘Law implementation time’ and ‘law implementation cost’ How long did it take to adapt IND’s business processes to fit the new highly skilled migrant policy each year and how many man hours were involved? The IND provides residence permit services to foreigners based on the prescription in law and regulation. Not just residence permits for highly skilled migrants, but also other admission services, e.g. for students, are provided by the IND. Law states that a decision concerning the rejecting of granting of residence permit should be made within two months. This is considered as a ‘hard’ requirement of the service. It is unlikely that the IND will exceed the time limitation in processing an application. So, we can assume that all the applications are processed within the law restrictions. The number of complaints and appeals can reflect the process quality, which has no relationship with other aspects, such as the time aspect. The number of complaints relates to the quality of case processing, while the number of appeals relates to the
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due to the ambiguity of these concepts and the many dimensions that play a role. Nevertheless having knowledge of the level of flexibility and agility can help participants in planning organizational adaptation strategies through appropriate investments in IT systems. This is especially important for organizations operating in highly volatile environments. In our case study, the organization had to adapt to changing legislation.
quality of case decisions. According to the discussion above, the questions in Part 4 are given: Part 4: Quality How many complaints related to highly skilled migrant applications are filed each year? How many appeals against highly skilled migrant decision exist each year?
In the literature, the level of flexibility and agility is hardly measured. In this paper quantitative metrics for measuring the level of flexibility and agility are proposed. The use of quantitative measure has the advantages of that these are more precise and interpretation is not ambiguous, although more data is needed as an input.
In summary, the metrics in the measurements of highly skilled migrant performance and cost in the IND and their unit (in brackets) are: 1) 2) 3) 4) 5) 6) 7) 8)
Number of thorough applications each year (number) Average case handling time each year (day) Average case handling man hours (number) Number of orange zone cases (number) Law implementation time each year(day) Number of law implementation involved man hours each year(number) Number of complaints each year (number) Number of appeals each year (number)
We introduced an approach to measure the process flexibility and agility in an e-government context. In our approach, six dimensions are introduced. The identification of those dimensions is a combination of qualitative and quantitative study. The former provides us the direction of measurement, which is the performance and cost aspect. The later makes them more precise by introducing dimensions that can be quantified. Those dimensions are 1) “throughput”, 2) “response time”, 3) “law implementation time”, 4) “operational cost”, 5) “law implementation cost”, and 6) “quality”. Those dimensions can be measured using one or more metrics. Measurement is contextdependent and the measure need to be operationalized for a certain situation. By measuring the performance differential between the current and ‘to be’ situation, the impact on the level of flexibility and agility can be determined.
Those measurement items can be showed in the following object tree (Figure 6), which presents the desired improvement of flexibility and agility of the IND. Higher flexibility and agility
Better law implementation
Better operation implementation
Better operational performance Higher case handling capacity
1
Less operational cost
Quicker case handling Less HR investment on case handling
Higher quality
Less complains
7 3
Less expense on adaption
4
This approach has several limitations. First of all, it is contextdependent. Although the underlying concept and logic can be the same, applying this approach to another situation will likely require different metrics. Secondly, the application of this approach is not completely straightforward. Even under a similar context, every organization might have its own special characteristic that requires customization of the approach. Finally, there is a challenge to collect data in order to have a more precise result. Indeed, having correct and precise enough data is a ‘hard’ condition to measure flexibility and agility.
Less appeals
Less manual processed cases
2
We used a case study to illustrate our approach. This study shows how the approach can be applied in a certain context empirically. By introducing new and reasonable metrics, we will achieve a more precise result.
Quicker adaption for new policy
Less HR investment on adaption
5
6
8
Our future research is aimed at measuring the performance by employing agent-based simulation. In the simulation, dynamic processes of agent interactions will be simulated repeatedly over time. The simulation results can provide a prediction of the level of flexibility and agility given a certain scenario. The improvement on flexibility and agility is thus perceived in a comparison with the current situation.
Figure 6. The model for measuring the level of flexibility and agility at IND In this case study, we have illustrated the measurement approach. The measures are translated to the case specific circumstances. We introduced a special metric, the size of orange zone, in order to have a more precise understanding of the level of flexibility and agility in the process. In this case, even the flexibility and agility of sub-processes, e.g. the automatic process and the manual process, can be measured. The disadvantages of being more precise is that more efforts in collecting the data are required.
The approach can be easily extended beyond flexibility and agility by adding more aspects in measurement. For example, we can also measure the business process with its process variability.
6. ACKNOWLEDGMENTS
5. CONCLUSION AND DISCUSSION
This work is supported by AGILE project (acronym for Advanced Governance of Information services through Legal Engineering, http://www.jacquard.nl/?m=426).
Flexibility and agility are multi-dimensional and overlapping concepts. The level of flexibility and agility is hard to measure
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