Epc description of business processes. EPC and EPC-M contracts - what they are and their standards. ARIS EPC Event Naming Rules
MOSCOW STATE TECHNOLOGICAL UNIVERSITY "STANKIN"
LABORATORY WORKS
ON
DISCIPLINE "TOOLS OF CALS TECHNOLOGIES"
Moscow 2009
LABORATORY WORK No. 1
Purpose of work: Formation of skills in developing a business process model using an EPC diagram.
Work tasks:
1. Studying the rules for constructing an EPC diagram;
2. Development of an EPC diagram of a business process in accordance with the assignment.
Rules for constructing an EPC diagram
Chart objects:
| An object | Description |
| Functions are elementary actions aimed at carrying out a business process. | |
| Department or separate staff unit performing the function | |
| Position (including multiple) in organizational structure performing the function | |
| Information carriers, both in material form (paper documents, etc.), and electronic presentation of information: files, emails, Internet resources, etc. | |
| A product or service resulting from the performance of a business function or required to perform a function | |
| Information flows that provide input and output data to a process | |
| Qualitative or quantitative situation (state), the achievement of which is important for the company | |
| Regulations |
Chart Object Relationships:
|
1. To build a diagram of an event-driven process, the objects specified in the "Objects" section and the relationships between them specified in the "Object relations" section are used.
2. The diagram defines the sequence of actions and events required to complete the process. Each EPC model must begin with at least one start triggering event (state) and end with at least one resultant event (state). Events and functions in the course of the process should alternate (replace each other) (Fig. 1).
Rice. 1. Functional-event sequence of the business process
- All functions must be in the correct sequence. It is necessary to consider whether they are parallel or sequential.
- Events and functions should have only one inbound and one outbound relationship each showing the progress of the business process.
If there are branches, then it is necessary to use the branching operator, while showing all possible options for the flow of the process and the results of performing functions. Forking always starts after the function.
On the eEPC diagram, the following use cases for branch / merge rules are valid:
1) Conditional branching of the process using the "exclusive OR" operator (when the function is executed, only one of the possible events occurs) (Fig. 2).
Rice. 2. Branching with the "exclusive OR" operator
2) Conditional branching of the process using the "OR" operator (when the function is executed, either one event occurs, or another, or both at once) (Fig. 3).
Rice. 3. Forking with the "OR" operator
3) Conditional branching of the process using the "AND" operator (when the function is executed, both events occur) (Fig. 4).
Rice. 4. Forking with the "AND" operator
4) The function will be executed if both events have occurred (Fig. 5).
Rice. 5. Connection with the "AND" operator
5) The function will be executed if either one event occurs, or another, but not both at once (Fig. 6).
Rice. 6. Connection with the operator "exclusive OR"
6) The function will be executed when at least one of the events occurs (Fig. 7).
Rice. 7. Connection with the "OR" operator
- The same operators must be used at the inlet and outlet of the branch (Fig. 8).
Rice. 8. Using operators on entry and exit
- The upstream and downstream processes are identified and displayed in the interfaces (Fig. 9). If there are no upstream and downstream processes within the company, then the "Process Boundary" object ("Process start", "Process termination") is used.
Rice. 9. Functional-event sequence of a business process with interfaces, indicating the process boundary
- All necessary information and resources required to perform the function, as well as the results of the function, are identified and displayed. It is necessary to display the incoming and outgoing information as accurately as possible. For documents such as: Order, Memo, Application, etc., it is necessary to indicate their purpose. Information that is transmitted orally, as well as unstructured information on any media, is displayed with an information icon (Fig. 10).
Rice. 10. Functional-event sequence of a business process with interfaces, incoming and outgoing information
- The executor of each function is determined and displayed (Fig. 11).
Rice. 11. Functional-event sequence of a business process with interfaces, incoming and outgoing information, regulatory documents and performers
- The possibility and necessity of function decomposition is determined. If necessary, the functions are described in more detail on the EPC diagram and a link is made to it.
EPC standard
EPC (Event-Driven Process Chain) - notation for displaying the progress of a process, key elements which are Events and Functions. EPC notation was developed in the 90s of the XX century. The EPC was invented by the German professor Wilhelm-August Scheer within the framework of the ARIS methodology.
A business process diagram in an EPC must start and end with an Event. The Function must always be followed by an Event, that is, the execution of the Function creates some event (state). Documents, organizational links, information and material flows, elements information system (software, databases) have their own graphic designation. For branching a process, the operators AND, OR, exclusive OR are used.
EPC is used at the lower levels of the description of a business model when the task is to describe the detailed flow of a business process. EPC functions can be decomposed (broken down into detailed business processes in EPC notation only).
The disadvantages of EPC include the fact that this notation has a very wide range of graphical elements, which can be difficult to understand compared to other notations. The development of processes in this notation and their reading requires preliminary training of employees.
The advantages of EPC include the ability to describe in great detail and accurately the execution of a business process, to show on a diagram in a graphical form all performers, all objects used. Another advantage of EPC diagrams is the fact that, as in IDEF0 diagrams, you can specify the input and output data of each function, trace the logic of movement of input and output data from block to block. In addition, unlike all the same IDEF0, it became possible to parallelize the process, directing it only along one of the alternative branches (in IDEF0, if we add parallelism in execution, then all parallel functions will be executed simultaneously). It also seemed like an advantage to me that it was possible to specify the executor for each stage (read: functions). But, in IDEF0, the executor is specified at each decomposition level once, and on behalf of him, arrows stretch to all the blocks executed by him. In the EPC, in order to calculate how many actions the performer is performing, you need to go through all the action blocks and check if the performer we need is indicated by it.
This notation turned out to be very attractive from the standpoint of monitoring the execution of the process - each function invariably transfers the system to a new state, from which it follows that after the execution of each function, the system can be checked whether the transition to the desired state was actually carried out.
In general, the EPC notation is recognized worldwide as one of the best notations for building business processes and modeling the operation of an enterprise.
Choosing a Modeling Method
For modeling required business process the BPMN methodology was chosen. This choice is due to the fact that BPMN notation allows you to most accurately display the logical processes that occur when performing tasks that require a high-precision description of the sequence of actions, demonstrate the interaction of employees and the client, and also allows you to show the time gap between the execution of some tasks.
Abazhur Group of Companies specializes in the implementation of various construction projects based on EPC / EPCM contracts ... But for those who are looking for and do not yet know what EPC and EPCM are, we offer a collection of materials that, we hope, will help our Partners and clients with work with such instruments, which are relatively new for domestic practice, such as EPC-, EPC (M) -contracts.
Structuring, conclusion and execution of EPC and EPC (M) contracts
GK Abazhur specializes in the implementation of diverse construction projects based on EPC / EPCM contracts, as well as other construction contracts with individual conditions. , applies system solutions in construction using BIM modeling, creates building projects that achieve low capital intensity.
EPC / EPCM contracts are the most common type of contracts in the construction industry.
When choosing one form or another, it is important to remember that the type of contract can lead to a significant change in the level of costs and risks associated with the construction of large and large structures. The level of costs is not proportional to the risks assumed by the customer. With the decrease in the commercial risks assumed by the owner, the cost of building the facility and its management increases. In any business, this is logically confirmed by the “risk-reward” link.
The obligations assumed by the general contractor most often include the provision of four types of services:
- Engineering- survey work, project creation, documentation approval;
- Procurement- selection, purchase and supply of equipment and materials necessary for the performance of all work;
- Construction- construction, assembly and commissioning works;
- Management of all construction processes (Construction Management).
Contract strategy for the implementation of large construction projects
Reducing the construction time is often possible due to the fact that the EPC contractor, being the only person responsible to the customer, can develop and issue design and working documentation in parallel with the procurement of materials and equipment, as well as the implementation of construction and installation work.
For example, The EPC contractor may not have to wait for the development and approval of the entire project documentation in order to start contracting equipment with a long manufacturing cycle.
Effective use of parallel design allows, in some cases, to seriously reduce the overall construction time. This is especially true for some gas projects, especially projects for the processing / treatment of associated petroleum gas, where there may be a peak in production, by the time of which it is imperative to build a gas treatment unit, otherwise the overall profitability of the project will seriously deteriorate. In such cases, it is justified to use the EPC model of project implementation, which, despite the higher cost, allows the construction to be completed in a shorter time frame.
Each contract strategy is a “traditional” model of managing the customer's forces and the EPC model has its own strengths and weaknesses. For comparison, we present tables that systematize the negative and positive aspects of each strategy.
EPC (M) -contract
EPC (M) - the structure is a contractual solution, which, in terms of risk distribution, lies in the middle between the multilot and EPC models. It should be immediately noted that there is no single and unambiguous understanding of what is considered an EPC (M) -contract. Such a contract can mean, for example, a situation when an EPCM contractor acts solely as a consultant, not concluding any subcontracting agreements on its own behalf.
Likewise, an EPC (M) -contract can be called a general contract of a full cycle, but in which the price is determined according to the principle of “open book” or “reimbursement” (cost + fee, reimbursable) *. The complexity of the terminology is also introduced by the fact that none of the leading international organizations (FIDIC, ICC Orgalime) has issued a pro forma EPC agreement (M).
* In our opinion, it is more correct to name such contracts
EPC open book and EPC reimbursable or cost plus fee, respectively
EPC (M) is the English abbreviation for Engineering Procurement Construction Management. At the same time, the correct translation of this abbreviation into Russian is "Design, Supply, Construction Management". In the EPC (M) model, the word management most often refers to construction in the narrow sense of the word, i.e. to perform construction and installation and other works on the site.
Subject to earlier terminology uncertainties:
An EPCM contract is most often understood as such a structure when the EPC (M) -contractor with its own resources or subsidiary carries out design, independently carries out the contracting of equipment and materials, but in terms of construction and installation work, it only carries out management, i.e. does not hire construction and installation contractors on its own behalf, but only on behalf of the customer manages the contractors hired by the customer.
The fundamental difference between the EPC (M) contract and the EPC contract is that the EPC contract is an agreement on "taking responsibility and risks"
By concluding an EPC contract, the customer largely shifts the risks and responsibility to the EPC contractor, which should provide this responsibility with liquid property. EPC (M) -contract is an agreement on professional services, the customer "buys" the competencies, the responsibility of the EPC (M) -contractor for the timing and budget of the project is absent or negligible in comparison with the cost of the project and is thus extremely stimulating.
There are various options for structuring the price in the EPC (M) -contract, but it is never firm. Often the price is a combination of time rates (in relation to those functions that the EPCM contractor performs personally - design, procurement management, construction management) and the “open book” principle.
This principle means that
- subcontracting is carried out in a transparent way for the customer and with the participation of his representatives;
- the contractor discloses the structure of his own overhead costs, as well as the size of the estimated profit and such overhead / profit, or is recorded in a certain amount or added as a percentage markup to the value of each supply contract.
As already noted, the responsibility of the EPC (M) - contractor is very limited and looks more like the responsibility of the consulting engineer (who is only responsible for the dishonest or incompetent provision of his own services) than the responsibility of the general contractor.
At the same time, quite often in the EPC (M) contracts there are mechanisms for incentivizing the contractor using the principles bonus / malus (so-called gain sharing / pain sharing).
For example, the contract may provide that the commissioning of the facility at an earlier date, the contractor receives additional remuneration, in case of delay, the contractor, on the contrary, loses part of the profit.
In a similar way, incentives can be built in relation to the general: the parties can set a certain target budget and if, by effectively managing the construction, the contractor achieves savings, then such savings are divided between the parties in an agreed proportion. However, EPC (M) - the contractor, when negotiating a bonus / malus, is usually not ready to risk all the remuneration and therefore this mechanism does not give the customer complete comfort in relation to the cost and timing of construction, but only aims to create a material interest in the contractor in successful implementation project.
One of the advantages of the EPCM contract compared to the EPC model is the important fact that a tender for the selection of an EPCM contractor can be prepared and carried out much faster than a tender for the award of an EPC lumpsum contract. The fact is that in the first case, the customer is required to have a lower level of certainty regarding the scope of work, delivery boundaries and risks; and the contractor only needs to prepare a quotation for time rates, overhead costs and his own profit - he does not need to prepare a solid price offer relating to the total cost of the project.
On the other hand, in the case of a tender for the EPC lumpsum model, the customer needs to prepare detailed technical task and requirements (if the level of development is insufficient, contractors can either refuse to submit bids with a fixed price altogether or assess the risks at a very high value); likewise, the contractor takes an order of magnitude longer to prepare a fixed price proposal that takes all risks into account.
Modern methods construction, high quality materials and technologies, functions of construction control and general contractor, industrial and commercial buildings, installation of prefabricated structures. Construction of objects of any complexity!
Terms:
EPC contractor is one that carries out the bulk of the work of an investment project for a fixed price and assumes all the risks of its implementation from the moment of design until the moment the finished object is handed over to the customer (including the implementation of warranty obligations), for which he is financially responsible to the Customer.
It is used, as a rule, in those projects where it can estimate the amount of its expenses, as well as the degree of risks, with a sufficient degree of accuracy.
The EPC contract implies that the EPC contractor performs the bulk of the work on its own, therefore no special remuneration is provided for organizing and managing the work of the attracted lower-level counterparties.
EPCM contractor can enter into contracts with subcontractors on its own behalf, or manage contracts concluded by the customer with specific work performers.
The EPCM contract provides and the total cost of the project, taking into account the remuneration of the EPCM contractor, and a fixed date for the commissioning of the facility, the achievement of the basic technical parameters of the facility. Method (approach) EPCM allows you to manage the project, and not specific work. Specific work is performed by professionals. The task of EPCM is to assess the required properties (capabilities, professionalism, resources, etc.) of the selected contractors / suppliers, distribute work and areas of responsibility correctly between them. Further - to coordinate their actions, resolve controversial issues, plan general scheme of the project, change plans in case of critical changes with minimal consequences, and then with all stops.
The world practice in the implementation of investment projects distinguishes EPC and EPCM contracts as the most promising strategies for the implementation of complex industrial projects, which account for about 80% of projects being implemented.
Read the publication prepared in more detail.
If you have any questions or comments, you can - all of them will be gratefully considered.
1. An EPC function diagram must begin with at least one start event (a start event can follow a process interface) and end with at least one end event (an end event can precede a process interface).
2. Events and functions during the execution of the process should alternate. Decisions about the further course of the process are made by functions.
3. The recommended number of functions on the diagram is no more than 20. If the number of diagram functions significantly exceeds 20, then there is a possibility that the processes at the top level are incorrectly highlighted and it is necessary to correct the model.
4. Events and functions must contain strictly one incoming and one outgoing communication, reflecting the progress of the process.
5. Events and operators surrounding the function in the above diagram ( Fig. 16) must be the start / result events and operators in the function decomposition diagram ( Fig. 17).
| Figure 16. Process diagram where Function 1 occurs | Figure 17. Decomposition diagram Function 1 |
6. The diagram should not contain objects without a single connection.
7. Each merge operator must have at least two incoming links and only one outgoing one, the branching operator must have only one incoming link and at least two outgoing ones. Operators cannot have multiple incoming and outgoing connections at the same time.
8. If the operator has an inbound link from the "event" element, then he must have an outbound link to the "function" element and vice versa.
9. A single event must not be followed by an "OR" or "XOR" operator.
10. Operators can merge or fork functions only or events only. Simultaneous merging / branching of function and event is not possible.
11. The operator forking branches and the operator for merging these branches must be the same. The situation is also allowed when the branching operator is "AND", the operator of union is "OR".
Examples of acceptable situations ( Fig. 18, Fig. 19, Fig. 20, Fig. 21):
 |  |  |  |
| Figure 18 | Figure 19 | Figure 20 | Figure 21 |
An example of an illegal situation ( Fig. 22).
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