Basser Seminar Series

Business Process Design: A Risk Management Approach

Rema Padman
ISM, The Heinz School,
Carnegie Mellon University

Tuesday August 28, 2007, 4-5 pm ** Note different day

School of IT Building, Lecture Theatre 123, Level 1


With the development of technologies such as Business Process Execution Language, a business-process-centric approach to the design of information systems has emerged. This approach calls for the modeling and design of the business process, both to document it and to analyze its risk characteristics. Specifically, it is used to analyze the risk of errors in the data produced by the process. This focus on risk has been driven by recent legislative mandates such as the Sarbanes Oxley Act on the integrity and reliability of the data reported in the financial statements, as well as the reliability and documentation of the information systems that produced those data. Using a graph-theoretic model of business processes, we develop a decision-theoretic methodology to characterize the risk exposure of a business process that is associated with errors in the information flow in the process. This methodology considers the structural aspects of a process with respect to error generation, propagation, and mitigation. It finds cost-effective ways of embedding control procedures in the process that mitigate such risk exposure to meet desired risk thresholds. These procedures adapt and employ objective functions derived from financial risk management literature such as Expected Loss and Conditional Value at Risk.

Our methodology lends itself to implementation within process modeling workbenches that are offered by leading software vendors. We illustrate our work through a case study involving an order fulfillment process in a functioning online pharmacy.

Speaker's biography

Rema Padman is Professor of Management Science and Healthcare Informatics in the H. John Heinz III School of Public Policy and Management at Carnegie Mellon University. Professor Padman received her B.Tech. in Chemical Engineering from the IndianInstitute of Technology at Kanpur, India, a Master of Science degree in Operations Research from the University of Texas at Dallas, and a Ph.D. in Operations Research from the University of Texas at Austin. She is also a National Library of Medicine Senior Fellow in Applied Informatics, with postdoctoral training at the Center for Biomedical Informatics at the University of Pittsburgh School of Medicine. Professor Padman's research interests include healthcare information systems, operational planning and management, and data mining and decision support methods. Her current research is at the interface of information technology, healthcare, and management science, investigating data mining and visualization methods for healthcare decision support; evaluating the use and impact of information technology and systems in healthcare environments, particularly for point-of-care disease management; and, examining tradeoffs between access and confidentiality in large multidimensional publicuse and healthcare databases. Her research has appeared in many scholarly journals, including Communications of the ACM, Management Science, Operations Research, Naval Research Logistics, INFORMS Journal on Computing, and European Journal of Operational Research, among others. She is a member of the American Medical Informatics Association, The Institute for Operations Research and Management Science, and the INFORMS Computing Society. She is Associate Editor with INFORMS Journal on Computing and past Associate Editor for Operations Research. Her research has been funded by the National Science Foundation, National Library of Medicine, DARPA, and the Army Research Office.