




































AGORA International Journal of Economical Sciences, http://univagora.ro/jour/index.php/aijes 

ISSN 2067-3310, E-ISSN 2067-7669 

Vol. 17, No. 2 (2023), pp. 187-204 

 

187 
 

INNOVATION MANAGEMENT ON THE WAY TO BUSINESS EXCELLENCE 

 

S. ŽIVANOVIĆ, N. ABRAMOVIĆ, M. ŽIVANOVIĆ, S. SMOLOVIĆ 

 

Slađana Živanović1, Nikola Abramović2, Miodrag Živanović3, Sanja Smolović4 

1 2 3 Faculty of Business Economics and Law, University Adriatic Bar, Montenegro 
1 https://orcid.org/0000-0002-6001-3685, E-mail: sladja.nautilus@gmail.com 
2 https://orcid.org/0000-0002-7865-3592, E-mail: nikola.abramovic.fpe@gmail.com 
3 https://orcid.org/0000-0003-3612-6230, E-mail: mico.zivanovic@gmail.com  
4 Faculty of Maritime Affairs and Tourism, University Adriatic Bar, Montenegro  
4 https://orcid.org/0000-0002-9893-0593, E-mail: sanjasmolovic83@gmail.com 

 

Abstract. The current conditions of the global economy have caused innovative changes to be 

the main condition for a good, sustainable, competitive business of the organization. The solution to 

the problem can be seen in innovation management, of course with information technology. The goal 

of this work is the development of innovation with practical software solutions through the innovation 

management process, i.e. increasing business excellence in the organization. Researchers in 

organizations use original experience in the implementation of developed software solutions in the 

field of document management and business innovation. In recent times with globalization and the 

technological revolution, knowledge has become a key resource for the economic growth and 

development of nations. Accordingly, the improvement of innovation has become a key condition for 

the sustainable development and competitiveness of organizations on the local and international 

market. The results of the conducted research are presented through author-developed programs for 

statistical data processing and for assessing economic sustainability and achieved business 

excellence (based on the EFQM 2013 methodology).   

Keywords: Management system, quality, innovation, document management 

 

1. Introduction 

In order for the economy to progress, strategic investments for the development of 

technology that lead us to innovation must be increased. Knowledge and innovation have the 

greatest importance in the development of society, since the very beginnings of human 

civilization. The assessment of economic sustainability is a special form that expresses the 

overall performance of the business. Only with a fundamental concept can the company achieve 

good results and show business excellence with the maximum involvement of all interested 

parties, with knowledge management.  

Globalization and the technological revolution with knowledge represent a key resource 

for the economic growth and development of nations. Accordingly, the improvement of 

innovation has become a key condition for the sustainability and competitiveness of 

organizations on the local and international market. In the modern economy, small and medium-

sized organizations play a significant role in creating the gross domestic product of individual 

countries. Changes in the business environment have reduced the structural disadvantages of 

small and medium-sized enterprises, due to the small business volume.  

The end of the last century and the beginning of this century are marked by general 

globalization around the world. The increase in industrial production and the devastation of the 

human environment created an obligation for numerous national and international institutions t o 

https://orcid.org/0000-0002-6001-3685
mailto:sladja.nautilus@gmail.com
https://orcid.org/0000-0002-7865-3592
mailto:nikola.abramovic.fpe@gmail.com
https://orcid.org/0000-0003-3612-6230
mailto:mico.zivanovic@gmail.com
https://orcid.org/0000-0002-9893-0593
mailto:sanjasmolovic83@gmail.com


INNOVATION MANAGEMENT ON THE WAY TO BUSINESS EXCELLENCE 

188 
 

introduce new approaches for restructuring economic flows. The need to organize sustainable 

development with intergenerational solidarity, which implies the responsible use of natural 

resource potential, is increasingly emerging.  

Skilled managers transform their knowledge through ideas into a new product and service 

with added value as part of research activities. The innovation process must be well planned and 

clearly oriented towards obtaining a positive final result.  Large investments in research and 

development as well as other elements of the innovation process do not necessarily result in 

successful innovations. Innovation efforts and activities can be misdirected. There is a 

possibility that good ideas will not be implemented due to the creation of  a bottleneck in some 

part of the innovation process.  

The innovation process first requires an idea, with a focus on the conceptual solution, 

innovation modeling (invention), evaluation of alternatives, decision-making and innovation 

implementation. Rapid changes, great competitive advantages, increasing expenditures for 

research work, influence the small economy to search for new, more open types of innovation,  as 

well as to cooperate with external partners and develop new products or services on the mark et 

before its competitors. The main concern of this economy is to make the best use of the internal 

possibilities of research and development in order to maximize the advantage through the model 

of open innovation.  

A successful open innovation strategy for small and medium-sized enterprises must use 

the internal innovation potential for good development innovation solutions.  On the other hand, 

there are also problems that limit the use of the open investment model in small and medium -

sized enterprises. This often does not allow an aggressive market presence at the right time and 

with the right product.  

 

1.2 Methodological approach  

Research objective. One of the possible approaches to solving the problem of determining 

and activating the innovative potential of small and medium-sized enterprises assumes the 

development of a model for the management of quality system documentation.  However, this 

model requires expansion to a level that will represent a prototype platform for initiating, 

modeling and testing business process innovations. Therefore, the model must provide data on 

the success of the tested processes, as well as a methodology for their transition from a successful 

prototype to an operational version.  

The work shows, through the author's conceptual model and a practical software solution 

in the food industry, the process of modeling, making and implementing a possible solution to 

this problem. Also, the conceived model provides a solution for efficient, effective and 

sustainable implementation in a real business environment:  

 tools for training staff and management to get involved as bearers of business system 

redesign according to the new Service Oriented Architecture (SOA)/Business Activity 

Monitoring (BAM)/Complenx Event Processing (CEP) paradigm, with the help of 

benefits obtained from the implementation of ISO 9000 + Business Excellence (BE);   

 the logic of the new paradigm into existing business solutions and its prototype testing 

by staff and management, with the support of Information Technology (IT) staff and 

consultants;  

 new and changed IT solutions that are designed according to the new paradigm, but also 

logically tested through prototype application.  



Slađana ŽIVANOVIĆ, Nikola ABRAMOVIĆ, Miodrag ŽIVANOVIĆ, Sanja SMOLOVIĆ 

 

189 
 

This would test the potential of a synergistic innovative effect for the creation of benefits 

obtained by the complementary application of Quality Management System (QMS) and 

Information Technology (IT) to the business system (enterprise).  and with the help of 

Documentation of Quality Management System (DQMS) as a catalyst for innovat ing business 

processes.  

Theoretical foundations of research. Innovations, knowledge and entrepreneurship 

represent a key determinant of economic growth and improving the competitiveness of 

companies and countries [1]. Enterprise innovation means the ability to produce and 

commercially valorize goods and services based on the use of new knowledge and skills 

[2]. Improving innovation is a key condition for the economic progress of countries, while 

innovation policy is the most important instrument of long-term economic development 

strategies and improving the competitiveness of countries in the knowledge-driven global 

economy [3]. In today's conditions, it is possible to ensure a satisfactory development 

performance of the company, as well as the respectable competitive position of the country on 

the world market, only under the assumption of satisfactory innovativeness of its economy.   

A good example of BAM/CEP implementation for HACCP purposes is the AliFarm dairy 

farm management software solution of the Israeli company AfiMilk [4]. Although it is not 

structured as SOA architecture, the program creates in real time a cloud of events, compares it 

with historical data and, based on predefined scenarios, predicts complex events (such as the 

occurrence of mastitis in the throat) and automatically initiates corrective action to treat the 

throat and informs the farm manager.  

Business excellence is a creative framework that naturally follows the implementation of 

the ISO 9000 series quality standards [5]. Business excellence is a term that implies the 

systematic use of the basic principles and tools of quality management with the aim of improving 

organizational performance. The concretization of this concept in practice is the European 

Foundation For Quality Management (EFQM) model of business excellence as the most popular 

quality tool in Europe. The model is based on nine basic elements, which at the first level are 

divided into two groups: a) criteria that enable the realization of results and b) results.   

a) The criteria that enable the realization of results are:  

K1. Leadership,  

K2. Strategy  

K3. People (directly or indirectly involved in the functioning of the organization) 

K4. Partnership and resources  

K5. processes, products and services  

b) The group of results includes results related to:  

R1. Customers  

R2. People (directly or indirectly involved in the functioning of the organization)  

R3. Social community  

R4. Business  

The model is dynamic in nature and is based on learning, creativity and innovation that 

improve the first five criteria, which automatically affects the improvement of results.  By 

implementing this model in practice, companies achieve the following goals:  

 Permanent creation of added value for their customers and clients by understanding, 

predicting and satisfying their needs and expectations.  

 Constantly improving their own performance, thereby positively influencing their 



INNOVATION MANAGEMENT ON THE WAY TO BUSINESS EXCELLENCE 

190 
 

environment, creating a sustainable future for the environment by improving its 

economic, ecological and social conditions.  

 Improvement of organizational potential and timely response to changes within or outside 

the boundaries of the business system.  

 Market growth using the creativity and innovation of all employees.   

 Creating leadership with a vision that shapes the future of the organization and guides it 

towards the realization of that vision.  

 Ability to identify and respond efficiently and effectively to both opportunities and 

threats.  

 Valuing employees and aligning individual progress with organizational growth.  

 Effectiveness in achieving long-term and short-term plans with maximum efficiency in 

the use of own resources.  

From the above, it can be concluded that innovation is one of the key assumptions for the 

realization of the model of business excellence [6]. This is the reason that the central topic 

addressed in this paper belongs to the innovation management process. In this paper, an original 

methodology, a new model and a software solution for expanding the Quality Document 

Management System (QDMS) domain are proposed in order to increase the innovative capacity 

of SMEs with the aim of reaching a higher level of business excellence.   

Basic hypotheses. The development of the approach to designing a permanent model 

integrated into the process with the support of the innovation management process proposed in 

this paper is based on theoretical assumptions and practical achievements of modern cybernetics, 

decision theory, production management, industrial, information and software 

engineering. Based on that, the following hypotheses are defined in the paper based on modern 

paradigms in the field of management and information technologies:  

 H1: By applying the proposed model, it is possible to reduce the time that passes from 

the idea to the implementation of the innovation (incubation period).  

 H2: By applying the proposed model, it is possible to increase the number of initiated, 

and therefore implemented, innovations and thus increase the efficiency of the innovation 

process.  

 H3: By applying the proposed model, it is possible to raise the level of business 

excellence (measured according to the EFQM methodology), which shows the growth of 

the effectiveness of the innovation process.  

Methods, models, techniques, approaches and tools applied in research. In the 

research, which precedes the implementation of the proposed approach to designing an original 

model for dynamic evaluation and support for the innovation management process, the theories 

of system-oriented scientific disciplines of knowledge management will be used. The scientific 

basis should be provided by the methods on which the model will be developed.  In addition to 

the general scientific methods that will be applied, including: the method of analysis and 

synthesis, the method of abstraction and concretization, the method of generalization and 

specialization, the method of description, etc., certain models, techniques, approaches, concepts 

and tools will be applied within the framework of individual methodology.   

Expected results. In accordance with the objectives of the research and the basic 

scientific hypotheses set in this work, relevant theoretical, methodological and, above all, 

practical results are expected.  

 



Slađana ŽIVANOVIĆ, Nikola ABRAMOVIĆ, Miodrag ŽIVANOVIĆ, Sanja SMOLOVIĆ 

 

191 
 

2. The Function of the Quality Concept Leads To Business Excellence  

Quality is the result of a carefully constructed environmental culture. It must be the fabric 

from which the organization is sewn, not a button sewn onto the fabric.  Philip B. Crosby [7]. In 

modern business conditions, quality is considered a factor in the survival and development of 

every company, which significantly determines competitive ability,  success and vitality of the 

economy as a whole. The vision of the future consists in the implementation of quality. But there 

are certain changes taking place that arise from the shift from the concept of product quality to 

quality management. Innovation is a key assumption for the functioning of organizations in the 

21st century. But in order to know how to build an innovative organization, companies must first  

"climb on the shoulders of the great" [8]. The ISO 9000 series of standards defines the 

requirements of quality management as fundamental conditions for achieving the best practices 

of successful companies while continuously approaching the goals of business excellence [5].  

Evolution of the quality management system.  Quality management includes measures 

for organization, planning, control and monitoring of numerous aspects relevant to quality.  The 

evolution of the quality management system is continuously controlled by stages: controlling 

and determining quality control, quality assurance, quality management (ISO 9000), Total 

Quality Management (TQM) and, in modern conditions, the Business Excellence (BE) phase, 

which at the highest level strives for the concept of quality-of-life management (QoL) [9]. The 

QoL phase is the most comprehensive and consistent approach to quality management and 

represents the last instance in the evolution of quality management.   

The first phase, the phase of control and testing, has its roots already at the end of the 

19th century thanks primarily to the affirmation of mass production. The first forms of industrial 

quality control appear in the sense of articulated, primarily production activity.   

Phase II – Quality Control. The result was an orientation towards meeting the required 

quantities of goods on the market. At this stage, the primary activity within quality management 

was product control.  

Phase III - Quality Assurance. The increase in production capacity and produced 

quantities due to technological progress has led to a balance between supply and demand in 

terms of quantities. At the moment of equilibrium, the customer gets the opportunity to choose 

the goods, that is, to choose the producer. The customer's ability to choose also initiates the 

possibility to set certain requirements to the manufacturer. The requirements are defined in the 

form of statistical indicators of the quality of deliveries Acceptable Quality Level (AQL).  The 

practical application of this new approach to quality comes to full expression with the 

introduction of the ISO 9000 series standard in the next phase.  

Phase IV - Quality Management. The tightening of competition among suppliers 

positions the customer to be able to demand the product without error. The customer determines 

what the quality of the product is, and requires that it be ensured by statistical methods (testing 

batches, etc.). Furthermore, the customer insists on the supplier's quality system, so that there 

are no errors in production and delivery. Large users (automotive industry, manufacturers of 

electronic parts, etc.) in this period began to introduce predefined quality assurance systems of 

suppliers, which ensured their verification in a certain way [10].   

Phase V - Total Quality Management (TQM) phase. As product quality becomes the 

default condition of competitiveness, the market differentiation of companies shifts towards 

services [11]. Almost every production activity is accompanied by services. In the perception of 

product quality by users, service has a very important place.  



INNOVATION MANAGEMENT ON THE WAY TO BUSINESS EXCELLENCE 

192 
 

Phase VI - Phase of QoL and Business Excellence. The phase of QoL (quality of life) 

and business excellence as a creative framework represents the social aspect of quality.  That is, 

that the process activities of each company produce products that are healthy for people, as well 

as the environment, suitable for customers and saving natural resources.  Business excellence is 

based on the concept of sustainable competitiveness that combines the economic, environmental 

and social sustainability of the system in a global context [12].   

Also, the globalization of the market leads to an increasing role of achieved business 

excellence and its verification by comparing business processes and performance indicators with 

the best business practices at the global level (Benchmarking).   

 

3. Development of a Quality Model for the Evaluation of Innovations 

This part explains the methodological and practical application of the idea of possible 

synergistic effect through the interaction of Quality Assurance (QA) and Information 

Technology (IT) systems in small and medium-sized enterprises that do not have significant, 

first of all, human resources such as large organizations. The backbone is the potential role of 

QMS documentation as a catalyst for the interaction of QA and IT systems in the process of 

modeling and applying new information paradigms.  

The ultimate goal is to increase the innovative capacity of the business system as a 

determinant of business excellence. The methodology is accompanied by the analysis of a case 

study based on practical application in the food industry, in the concrete process of collecting, 

analyzing and receiving raw milk in the dairy.  

3.1 Service Oriented Architecture (SOA)  

Event Driven (ED), which already has a great influence in the business environment, but 

the problem of continuous recognition and analysis of important data, and that in real time, 

prevents sufficient agility and ability of companies to make timely and correct business 

decisions. Therefore, it is vital that Business Process Management (BPM)/Enterprise Resource 

Planning (ERP)/Customer Relationship Management (CRM) solutions based on SOA 

architecture continuously and in real time monitor the flow of events in the process [13], perform 

their processing (transformation , filtering and, according to pre-defined patterns of events, 

noticing the occurrence of scenarios of importance. Based on this, it provides: a) automatic 

reaction and/or notification of actors in the system, b) initiates adjustment of business 

activities/processes, and c) initiates timely preventive/corrective actions. In order to make this 

possible, it is necessary to implement BAM/CEP within the organization's IT system, which is 

based on the Event Driven Architecture (EDA) paradigm.  

Service Oriented Architecture (SOA) represents an effective technology for the 

integration of distributed information systems in complex business environments.  SOA is based 

on web service technology where, by adapting the request/response mechanism, the user's 

request is forwarded to one of the services provided by the distributed service provider, which 

after processing the request returns the response to the user.  However, in business systems with 

a high level of distribution of functions, such pulling services based on request/response 

mechanisms do not provide a sufficiently efficient and flexible solution, because the business 

system (enterprise) changes at a high speed in order to adapt to the diverse requirements of the 

environment. Such a dynamic imposes an event-driven (ED) approach as an additional 

complement to the SOA paradigm, as it enables a more natural distributed application of services 

through the Publish/Subscribe mechanism.  



Slađana ŽIVANOVIĆ, Nikola ABRAMOVIĆ, Miodrag ŽIVANOVIĆ, Sanja SMOLOVIĆ 

 

193 
 

The main advantage of the ED paradigm is that it formalizes a cloud of business events 

with different levels of semantic capacity, which represent a very important resource in the 

process of managing knowledge flows and developing the innovative character of the entire 

organization.  

QDMS as a prototype platform and catalyst for the ED paradigm.  Application 

services, available from providers, map business services in a process-modeled business 

environment, which is described in detail by the QMS documentation [14].  In order for the 

mapping to be effective, it is necessary for the documentation to faithfully reflect the business 

system and all its changes, as well as for it to have a mechanism for prototypical testing of 

changes through the records of the documentation system. This raises the quality of the 

documentation system to the level of a mechanism for iterative innovation of the system's 

business performance. 

All this implies strong requirements for the implementation of a QDMS based on a 

process approach. QDMS traditionally has to provide QMS documentation management. The 

dominant paradigm of the culture of education and work is based on rewarding success and 

punishing mistakes (obedience is valued more than curiosity).  This encourages the monitoring 

of routine algorithms during the execution of activities, which is the essence of standardization 

culture [15].  

However, innovation requires imagination, curiosity, invention, learning through trial, 

error, failure and retry. There must be a space where new ideas can be tested through prototype 

application and people must be motivated to use that space and feel comfortable in it.   

Hazard Analysis And Critical Control Points (HACCP) and ED/BAM/CEP 

principles. In a concrete practical example, the methodology focuses on a case study from the 

food industry (specifically the industry of production and processing of milk and dairy products) 

where the mandatory complement of the QA system is ISO 22000/HACCP (in addition to the 

generic ISO 9001 complement of the QA system which is basic and universal),  but the 

methodology is fully applicable to organizations from any other field of business.   

In that case, as a natural solution to the IT paradigm that would successfully map the QA 

paradigm in the food industry (eg ISO 9000 + HACCP) the application of event-driven 

architectures (BPM/SOA/ED/BAM/CEP). The basic principles of HACCP and ED systems are 

given and mapped in the following table 1. 

The case study that will be presented in the next part deals with the situation when 

HACCP is the dominant component of the QA system, but the mapping of ED principles is also 

applicable with the QA system (ISO 9001:2008).  

 

Table 1. Mapping of HACCP and ED principles 

HACCP principles 

Source: Mortimore, S., & Wallace, C. 

(2013). HACCP: A practical approach. Springer 

ED/BAM/CEP principles 

Source: Luckham, D. (2008). A Brief Overview of 

the Concepts of CEP1. 

Hazard analysis (flow diagram for each step, 

recognize the hazard, make an inventory and 

determine control measures) 

Event identification (an event is an object that 

represents or records an activity that occurs, or 

abstracted as an event) 

Identifying critical control points – CPP 

(decision tree) 

Observing event scenarios (an event scenario can 

be a time schedule or a causal relationship between 

patterns of events) 

Determining critical limits (ensuring Event scenario constraints (scenarios that are not 



INNOVATION MANAGEMENT ON THE WAY TO BUSINESS EXCELLENCE 

194 
 

control of each critical control point)  realistically expected in the organization's operations)  

Establishing a monitoring system - 

monitoring 
Activating measures by the occurrence of event 

scenarios (using event scenarios to initiate reactive 

measures, then when these scenarios occur)  

 

Establishing corrective measures that 

should be taken when monitoring indicates that 

an individual CCP is not under control  

Establishing verification procedures to 

confirm that the HACCP system is effective 

(critical audit and tests)  

Event cloud formation (monitoring of historical 

event data and establishment of a hierarchical map of 

abstractions) 

Event scenario abstraction (an event is an event 

scenario abstraction if it summarizes, represents, or 

denotes an observed set of events)  

Hierarchy of events (the hierarchy of events 

defines a set of activity levels and a set of rules for 

calculating events at each level of abstraction of the 

event scenario from its subordinate levels) 

Establishing documentation related to all 

procedures and records in accordance with these 

principles and their application (documentation 

management). 

Event cloud formation (monitoring of historical 

event data and establishment of a hierarchical map of 

abstractions) 

 

 

A good example of the application of BAM/CEP implementation for the needs of HACCP 

is the software solution for managing the dairy cow farm AfiFarm of the Israeli company AfiMilk 

[4]. Although it is not structured as a SOA architecture, the program creates all events in real 

time, compares them with historical data and, based on predefined scenarios, predicts complex 

events (such as the occurrence of mastitis in the throat) and automatically initiates corrective 

action to treat the throat and informs the farm manager.  

The problems pointed to by previous research, implementation of BAM/CEP in 

environments with a HACCP system, refer to the technical side such as:  the capacity of events 

that the CEP system can process, the number of lost events, the system's agility to changes in 

real time, the system's ability to quickly react to a problem and return to stable state (resilient), 

capacities for event processing and analysis, and optimization of the event processing 

process. This approach would activate the potential of the synergistic effect of the 

complementary application of QA and IT systems to the business system (enterprise), and with 

the help of QDMS as a catalyst for the interaction of these two systems.  

Approach methodology. During the completion of the organization's business processes, 

it is necessary that there is a continuous cycle of adaptation and innovation of the business 

system, which is formally defined through policy and quality goals. The implementation of 

BAM/CEP/ED architecture should be seen as infrastructural innovation and not as the ultimate 

replacement of the existing IT system. The proposed methodological cycle of process adaptation 

and innovation is structurally divided into five phases that take place in parallel with the 

previously explained cycle of managing knowledge flows, as well as the cycle of managing 

documentation as the physical carrier of that knowledge. In order to apply the developed 

methodology for business process innovation, it is necessary for the organization to apply or 

during process innovation implement IT components (extended domain QDMS, ED/BAM/CEP 

components and business applications that support the process being innovated).  

Defining the focus of process innovation. Before starting to implement process 

innovation into the existing IT system, it is necessary to define a procedure and provide tools 



Slađana ŽIVANOVIĆ, Nikola ABRAMOVIĆ, Miodrag ŽIVANOVIĆ, Sanja SMOLOVIĆ 

 

195 
 

for scanning and analyzing existing event data as a valuable corporate resource from which, 

colloquially speaking, we read the history of the business system. This phase can be divided into 

three steps: 

1. selection of key process parameters and sub-processes (separating the significant 

minority from the insignificant majority - overcoming IT blindness [16], and connecting 

them with the events that emit them and the events that consume them ( events in 

processes and their interactions in the system);  

2. iterative abstraction of low-semantic events into high-semantic events (data filtering, 

discovery of patterns of event scenarios - patterns of events, as well as data derivation 

represents iterative drill-down cycles in which the capacity of abstraction increases and 

thereby raises the semantic value of complex events that are detected after each cycle); 

3. defining priorities for implementation and measurable parameters for determining the 

success of the process in accordance with the set business goals.   

The abstraction process is iterative. Its mathematical description is given in Table 2. 

 

Table 2. Display of event processing function from lower to higher semantic level  

 

 

 

Where are: 

n 

level of abstraction (levels of abstraction are not unambiguously determined but  

depend on the availability and level of accuracy of data on events at a given time and in a 

given environment, i.e. on the context in which the events are located) 

Dn event data of the n-th level of abstraction (does not have semantics at that level)  

In information about events of the n-th level of abstraction (have semantics at that level) 

 aggregate event data processing function 

 function of filtering data about to events at the n-th level of abstraction,  

 
the function of detecting the scheme (pattern) of event data at the n-th level of 

abstraction 

 

the function of deriving a new event based on the event data at the n-th level of 

abstraction 

 

Modeling of process innovation prototypes. As the QA system (in our example 

ISO9000+HACCP) implies complete documentation of the system, the modeling of acquisition, 

monitoring and event processing can be carried out through the processes of: 1) documentation 

management and 2) record management of this system, adhering to all the intended activities of 

these two processes. Table 3. shows the documentation layers of the management system and 

the ED-based system that indicate a certain degree of parallelism and give a recommendation 

for mapping the documentation and the ED-based application in a conceptual sense.  

Additional problems in this stage of process innovation modeling are different languages 

of communication, i.e. vocabularies, syntax and semantics of IT and QA systems, as well as the 

absence of standard definitions and building blocks for Event Driven Based System 

(EDBS). Therefore, in the entire methodological process, it is recommended to adopt and apply 

the standard ISO 9000 dictionary as universal for all systems.  



INNOVATION MANAGEMENT ON THE WAY TO BUSINESS EXCELLENCE 

196 
 

Table 3. Parallel view of EDB application layers and QMS documentation 
L

a
y

e
r 

Business solution as an application 

based on event management (EDB systems 

aplication) 

Documentation system 

supported by QDMS 

1 Language layer 
Standard operating procedures 

layer 

2 Execution layer Specific work instructions layer 

3 Communication layer 
Forms layer (forms) with a 

defined time and functional schedule 

4 Data download and creation layer 
Records layer (filled forms, 

drawings, databases, etc.) 

Source: Voisard, A., & Ziekow, H. (2011). Architect: A layered framework for classifying technologies of 

event-based systems. Information Systems, 36(6), 937-957.  

 

Implementation and application of process innovation.  As it is not realistic to expect 

a sudden transition of the company's IT system to BAM/CEP/SOA solutions, after prototype 

testing, Successfully validated scenarios would be implemented in existing IT solutions 

(applications, modules), coming as close as possible (as much as the adaptation of existing 

modules allows in terms of expediency) to the BAM/CEP paradigm, including the information 

push approach (solving the question: Where and when is information needed? ; How to get 

information at the place and time when it is needed?; How to prioritize information in accordance 

with its importance?); Users get the possibility of subscribing to available and desired data about 

events (the source of the event can be automatic, for example, laboratory software, business 

module, hardware sensor, but also a person) that happen according to interesting scenarios for 

them, and the system would send them data when the given scenario happens (here the scenario 

is actually a prediction of a complex event).  

The implementation of the BAM/CEP paradigm should be seen as a way to expand the 

scope of existing applications in a flexible and non-invasive way. Instead of comprehensive 

interventions on existing applications, we should strive to add functionality that enables the 

broadcasting and consumption of events. In this way, the intermediate ED layer for event 

processing can be separated and thereby enable the rapid adaptation of existing solutions to the 

new business requirements of the system (the aspiration is that the application users themselves 

perform iterative adaptation during use).  

Monitoring, analysis and optimization of process innovation.  During the exploitation 

of the ED module, it is necessary to enable continuous monitoring and analysis of the set process 

parameters and thereby monitor the success and expediency of the implementation in practice. In 

accordance with the ED paradigm, process parameters are event data to which different business 

functions subscribe and, based on the analysis of that data, change, cancel or define new business 

scenarios.  

This phase includes the intensive use of software tools for monitoring, statistical 

processing (pareto diagrams, histograms, control charts, correlation diagrams) as well as 

predefined and ad-hoc (custom) data analysis of events in the system. On the basis of these 

analyses, the semantic capacity is raised to the level required to start a new cycle of adaptation 

of business processes with the aim of their continuous improvement and innovation.   



Slađana ŽIVANOVIĆ, Nikola ABRAMOVIĆ, Miodrag ŽIVANOVIĆ, Sanja SMOLOVIĆ 

 

197 
 

3.2 An example of the application of process innovation in practice - a case study  

The authors applied process innovation using the previously described methodology in a 

company engaged in the production of dairy products, and its structure belongs to small and 

medium enterprises.  

The practical application of the methodology is focused on the example of the innovation 

of the business process of collecting, analyzing and receiving raw milk as one of the key 

processes/sub-processes of processing and production of milk and dairy products.  Dairy 

production belongs to the food industry sector where there is a trend of implementing integrated 

management systems (eg ISO 9000 + HACCP), which makes it a good candidate for ED 

remodeling of IT systems. The dairy that is the subject of the case study had already 

implemented:  

1. Integrated quality management system - QMS.  

2. IT system in the segment of composite applications with a low level of interoperability 

and a high level of data redundancy, which included:  

 ssQDMS for quality management system documentation management – QDoc, 

which was implemented in parallel with the QA system, but was subsequently 

partially extended to the domain of design management. During the project, an 

additional module was developed in QDoc for managing QMS records, which 

included: a) pseudo-application layer and b) ED layer.  

 data mining module for the analysis of existing data in the IT system – the 

QProMng application module adapted to the specific needs of a large number of 

dairies for which it was originally designed and developed,  

 an application for managing the collection business process, analysis and 

reception of raw milk - QLabMlek as a business application which, in the process 

of innovating the process, is functionally expanded by applying the ED/BAM/CEP 

paradigm (the ED layer of the application is implemented).  

The software programs listed above are intended for general support to employees and 

consultants during QMS implementation, but are modified during process innovation based on 

the analysis of user requirements.  

In the first phase of defining the focus of process innovation and key parameters, the 

QMS documentation for the selected process - Collection, analysis and reception of raw milk 

was used as a starting resource: 1) Procedure, 2) Quality plan, 3) HACCP process plan, 4) 

Process list and 5) Accompanying forms. As HACCP requirements are naturally mapped into 

the ED paradigm, from the documentation, we came to the initial model of the event processing 

network which shows. During the project, the model was corrected and optimized through an 

iterative drill-down process of historical data from the existing IT system.  

After defining the framework in which the modeling of the BAM/CEP paradigm moves, 

the above-mentioned two author's application solutions (QDoc and QProMng) provided a system 

that enabled employees in the organization to implement process innovations and their dynamic 

evaluation according to the previously defined methodology.  

1) The first step. In order to define the focus of process innovation, a tool for monitoring, 

scanning and analyzing data from the event cloud (drill down/data mining) was used, which 

iteratively abstracts low-semantic event data into high-semantic information. In this way, users 

get the opportunity to: a) choose databases, b) combine a number of heterogeneous databases 

through queries, and c) analyze focused data. Thus, they detect patterns of events of interest for 



INNOVATION MANAGEMENT ON THE WAY TO BUSINESS EXCELLENCE 

198 
 

the performance of business processes and define the focus of innovation.   

2) Second step. In the innovation modeling phase, it is possible to create and propose draft 

forms that employees recognize as occasionally recurring scenarios of events important for 

making business decisions. Users define these scenarios as suitable candidates for process 

innovation.  

The implemented QDMS supports employee collaboration in focusing innovation in order 

to further optimize proposed design patterns through teamwork. This provides a channel that 

promotes the flow of exchange and codification of employees' knowledge and reviews the 

innovation. By applying the basic functionalities of the implemented QDMS, the draft form 

becomes a system document and is approved for use by the authorized function.  Collaboration 

on the application of the form in practice finalizes the process innovation modeling phase.   

3) The third step. The phase of the zero implementation of the innovation requires the 

definition of the chronology hodogram and the functions that participate in the application of the 

form with different roles in the scenario in which the application of the form takes place (launch, 

filling, approval, distribution, use, initiation of action, etc.).  This defines the application rules of 

process innovation in the pseudo-application layer of QDMS.  

Defining the functions but also specific persons who have certain roles in the application 

of records is (according to the author's experience) of key importance for zero implementation 

of process innovation. For this reason, it is possible to define the priorities of employees with 

the same functions. Priorities are determined by analyzing the files of employees in terms of 

their formal and informal competencies as well as the position of the evaluation of individual 

persons (according to the set criteria defined by the human resources management process) in 

relation to the average of the organization.  

The application of forms, records and accompanying documentation through the pseudo-

application and ED layer enables the acquisition, monitoring and processing of generated events, 

which results in the initiation of previously defined triggers for initiating business decisions. In 

this way, records management through QDMS forms a prototype platform for zero realization, 

verification and validation of process innovation.  

4) The fourth step. The implementation phase of the process innovation is done after its 

validation in QDMS. The implementation of the process innovation in the specific case study 

was carried out as an infrastructural superstructure (ED layer of the QlabMlek business 

application) which includes: 

 event registration services (event service notifications) with parameters for publishing 

event data,  

 a mechanism for subscribing business functions to selected event data according to the 

given scenario (pattern) for the problems of receiving raw milk in the dairy,  

 defining the event trigger as a reaction to the occurrence of the given scenarios (pattern).   

From a technological point of view, the solution was realized with VBA/JetDB/SMTP 

technologies and protocols, in the pilot phase of the implementation of process innovation, in 

the existing IT infrastructure. It is a non-scalable technology, but it proved to be very applicable 

in the specific case with 20 or less, competitive users (which is the case with most 

SMEs). Also, the solution is fully applicable to organizations with a very limited IT 

infrastructure. The implementation of process innovation is possible without a dedicated server 

or on a server with an open source operating system, which is a common characteristic of 

SMEs. G 



Slađana ŽIVANOVIĆ, Nikola ABRAMOVIĆ, Miodrag ŽIVANOVIĆ, Sanja SMOLOVIĆ 

 

199 
 

5) Fifth step. The phase of monitoring, analysis and optimization of the process innovation 

was realized with author's software tools for: a) statistical processing and data analysis (QStat) 

and b) predefined data analysis. In the specific case study, tools for predefined data analysis are 

specially specialized for the innovative process of analysis, collection and reception of raw 

milk. These tools are implemented as a module within the business application QProMng, with 

sufficient flexibility to enable access and analysis of all existing databases, which are available 

as a resource to the specific dairy.  

Therefore, the mentioned tools for analysis in cooperation with the applied ED paradigm, 

enable management and employees to, based on the data on the events to which they are 

subscribed:  

 monitor the innovated process,  

 react in a timely manner to potential problems in the process and  

 undertake activities aimed at further optimization, improvement and process innovation.   

3.3 Analysis of the impact of the implementation of QDMS  

In this part of the paper, an overview of the results achieved by applying the author's 

developed methodology in concretely realized case studies of process innovation is given.   

Bearing in mind that the target group of the research is manufacturing SMEs, in the 

analysis of the impact of QDMS implementation on process innovation and improving the level 

of business excellence, experience gained during the implementation of originally developed 

software solutions was used both in the area of document management and in the area of business 

process innovation.  

More specifically, the analysis used data from 4 projects (4 case studies) of the 

introduction of specially developed software solutions to support process innovation in four 

production organizations that belong to small and medium-sized enterprises (SMEs). The 

aforementioned innovation projects engaged approximately the same resources during 

implementation. The observed companies have introduced the ISO 9001 system, and accordingly 

some form of documentation management. The companies were chosen so that the impact of the 

implementation and exploitation of the developed QDMS on the management of the innovation 

process can be seen.  

The results of the conducted research are presented through originally developed 

programs for statistical data processing as well as for the assessment of achieved business 

excellence. In this way, the practical application of the developed methodology was shown, as 

well as its impact on the change in innovation potential and business excellence of SMEs.  

Multi-criteria analysis using the SAW method. SAW (Simple Additive Weighting) is 

a relatively simple and the most used method of multi-criteria analysis [17]. The method is based 

on a weighted average. The advantage of this method is that it performs a proportional linear 

transformation of the raw data, which means that the relative order of magnitude of the total 

normalized result is equal and directly comparable even after the transformation.   

Using the SAW method, the analysis results are determined by adding weight values for 

each selected criterion. The method consists of three steps: a) rating normalization in order to 

achieve mutual comparability; b) application of criteria weight values to normalized ratings; and 

c)  summing up the values of indicators for alternatives. The following formula gives the general 

form of the multi-criteria analysis model in a matrix display:  



INNOVATION MANAGEMENT ON THE WAY TO BUSINESS EXCELLENCE 

200 
 

 
Where:  

 R – the achieved result of an individual alternative,  

 An – alternative, i.e. the observed aspects,  

 Cm – criteria, indicators of the value of the dimensions of individual aspects,  

 wm – weighting coefficients for each selected criterion,  

 xij – values of the corresponding criterion, for each aspect of observation. 

 

Figure 1. Graphic representation of the multi-criteria analysis of the impact of QDMS on 

process innovation  

 
 

The obtained results (Figure 1) show that the implementation of some form of software-

supported QDMS in the observed companies has positive effects on the implementation of 

process innovation. The most pronounced positive effects are experienced by companies that 

implement the most extensive extensions of the QDMS domain (in this case it is company P4, 

that is, in this analysis, alternative A4).  

3.4 Analysis of self-assessment of excellence according to the EFQM 2013 

methodology  

Self-assessment is a systematic and regular review of the company's activities and the 

results achieved according to the model of excellence. Self-assessment is a positive way of 

recording the current situation and allocating constructive efforts for priority solutions with the 

aim of continuous improvement as well as innovation, their way of measurement to determine 

positive changes with long-term results.  

The fact is that the self-assessment method requires a multidisciplinary approach with 

constant and systematic reviews of process activities, constant improvements and innovations:  

 Determining the state of what we have done?  

 Determining the current state that leads us to new changes with innovative activities  

 Determining the relationship between what we do and what we want to do.   

In order to carry out self-assessment according to the EFQM 2013 methodology, an 

analysis of current questionnaires (EFQM Model in Action, n.d.) was performed according to all 

nine criteria, and based on that, the author's database model and application solution for self -

assessment were modified and developed. The application solution enables the installation of 



Slađana ŽIVANOVIĆ, Nikola ABRAMOVIĆ, Miodrag ŽIVANOVIĆ, Sanja SMOLOVIĆ 

 

201 
 

the program on the company's computers and thus the continuous process of self-assessment 

according to this methodology. In this way, the conditions for assessing the current position of 

the company and identifying its key strengths and areas of improvement are created.  The 

following formula gives the mathematical form of the model for self-assessment:  

 
Where are:  

 K - main criteria of the method (from K1 to K9),  

 SK - sub-criteria of each of the main criteria (from S1 to minimum S7 and maximum S9)  

 WK - weighting coefficients for each of the main criteria (from W1 to W9 with values 

of 0.1 or 0.15),  

 G - score of the subcriteria (from 0 to 4 where 0 brings 0%; 1 brings 25%; 2 brings 50%; 

3 brings 75%; and 4 brings 100% of the points carried by the sub-criterion in accordance 

with the weight coefficient and the number of associated sub-criteria within the criteria).  

 The database of the application solution was initially filled according to the requirements 

of EFQM 2013, but the users are left with the possibility of adapting and expanding the 

defined criteria, sub-criteria as well as the way of evaluation.  

In addition to the numerical evaluation, each criterion also has descriptive comments 

related to a) existing advantages and b) areas of improvement of the company for the business 

segment to which the observed criterion refers. The program also supports the entry of these 

descriptive comments, but they were not taken into consideration during the analysis.   

According to the defined EFQM 2013 model, evaluation is done according to each sub-

criterion within each of the nine criteria. The review of results was realized with reports showing 

comparative results for two selected self-assessments. In this way, the progress of achieved 

business excellence is shown descriptively and numerically. For the purposes of analyzing the 

impact of QDMS on the process innovation process, the observed companies conducted a self -

assessment before and after the implementation of innovative software solutions.  The results are 

presented in graphic form a) individually by company and b) in summary.  

In the case of individual radar diagrams, a comparative result before and after process 

innovation is given in percentage for each EFQM criterion.  In the interpretation of the summary 

result, the value of points obtained according to the business excellence model EFQM 2013 is 

shown a) before the introduction of the process innovation, b) after the introduction of the 

process innovation and c) the achieved difference.  

 

Figure 2. Summary results of self-evaluation according to EFQM 

 



INNOVATION MANAGEMENT ON THE WAY TO BUSINESS EXCELLENCE 

202 
 

From the graphical interpretation of the obtained results, it is shown that the greatest 

relative progress of business excellence after the implementation of process innovation is shown 

by company P4, where QDMS was applied with the most extensive domain extension. The most 

even progress of business excellence was achieved at the company P2, which applies QDMS in 

its basic domain (QMS documentation management).  

 

4. CONCLUSIONS  

Innovations represent an important prerequisite for improving the competitiveness of 

small and medium-sized enterprises. It is difficult to imagine the growth and development of all, 

including SMEs in that context, without developed innovation activities, based on a firmly 

defined innovation process.  

By presenting and considering the concept of TQM and business excellence, innovation 

was detected as the "fuel" of SME business excellence. In order for innovations to be realized, 

it is necessary that innovation, as a key attribute of SMEs, be woven into their business culture, 

vision, mission and strategies. This part of the work also initiated the creation of an original 

author's solution for the self-assessment of business excellence of SMEs according to the original 

EFQM 2013 methodology (the solution also allows the modification of metrics according to the 

specific needs of the organization that uses it).  

In the continuation of the work, a) knowledge as a necessary resource for creating 

innovations, b) management of knowledge flows and c) the innovation process itself were 

discussed. The general conclusion is that SMEs must strive for an innovative approach to 

organizing, which assumes that the organization's innovative effort must encompass the entire 

process structure. Therefore, the organization's innovative culture and policy, as well as the ways 

in which they are implemented, represent the responsibility and obligation of all employees and 

assume their commitment to it. In order to realize this, IT infrastructure is needed as a carrier of 

codification, dispersion and concretization of knowledge and its focus on an efficient and 

effective innovation management process. QDMS (but now additionally extended to the domain 

of QMS draft management and functionally enriched with the paradigm of event-based 

management) is emerging as a sustainable and expedient solution for SMEs.  

The proposed and developed model, methodology and specific proprietary software 

application solutions are presented in more detail in the paper through development steps, 

functional review and case studies of manufacturing companies.  

The model was verified through analyzes conducted in four companies as four case 

studies of process innovation development. All the analyzed production organizations have 

introduced QMS according to the requirements of the ISO 9001 standard, which guarantees 

business according to the process approach and the existence of systematically organized 

business processes. One of the observed companies did not apply software-supported 

documentation management of QMS, while the other three companies used QDMS in basic or 

one of its extended forms.  

At the beginning of the research of the problem, the basic hypotheses were defined and 

proved during the research.  

Based on the defined methodology and metrics of EFQM 2013, a model for self -

assessment of business excellence was developed. Based on the model, the application solution 

QSA (Quality Self Assessment) was developed. The solution enables the measurement of the 

achieved level of business excellence of the organization using the self-assessment method, 



Slađana ŽIVANOVIĆ, Nikola ABRAMOVIĆ, Miodrag ŽIVANOVIĆ, Sanja SMOLOVIĆ 

 

203 
 

while also having flexibility; the originally applied EFQM 2013 metric can be adapted to the 

specific needs of an individual organization in order to apply it more effectively.   

The obtained results of the analysis showed: The greatest relative progress of business 

excellence after the implementation of process innovation was achieved by the company where 

the proposed new QDMS solution was implemented with the most extensive domain 

extension. The company that implemented the proposed QDMS solution in its core domain 

(QMS documentation management) achieved the most consistent progress in business excellence 

after the implementation of process innovation.  

The presented methodology, implementation and configuration of the proposed and 

developed new application solutions for managing the innovation process are flexible;  practice 

shows that they can be successfully applied within the existing QMS and IT systems of 

manufacturing small and medium enterprises. In any case, the developed methodology, model 

and application solution, due to their topicality, provide a great opportunity for further 

improvements in a large number of different directions.  

 

REFERENCES 

1. Guertler, MR, & Sick, N. (2021). Exploring the enabling effects of project management 

for SMEs in adopting open innovation–A framework for partner search and selection in 

open innovation projects. International Journal of Project Management, 39(2), 102-114.  

2. Turner, R., & Ledwith, A. (2018). Project management in small to medium‐sized 

enterprises: fitting the practices to the needs of the firm to deliver benefits. Journal of 

Small Business Management, 56(3), 475-493.  

3. Jacobs, A. M. (2020). Project Management Maturity: A Framework for Success in Sub-

Saharan Centres of Excellence? The International School of Management (ISM).  

4. Berger, R., & Hovav, A. (2013). Using a Dairy Management Information System to 

Facilitate Precision Agriculture: The Case of the AfiMilk® System.Information Systems 

Management, 30. 

5. Fonseca, L. (2015). Relationship between ISO 9001 certification and EFQM Business 

Excellence Model results. Quality Innovation Prosperity, 19, 85-102  

6. Fajsi, A., Morača, S., Milosavljević, M., & Medić, N. (2022). Project Management 

Maturity and Business Excellence in the Context of Industry 4.0. Processes, 10(6), 1155.  

7. Crosby, P. B. (1979). Quality is free: The art of making quality certain (Vol. 94). New 

York: McGraw-Hill.  

8. Ehlers, U. D. (2013). The Foundations for Quality of Open-Learning Cultures. In Open 

Learning Cultures ( 123-146). Springer Berlin Heidelberg.  

9. Hussain, T., Edgeman, R., & Eskildsen, J. (2020). Knowledge-based intellectual structure 

of research in business excellence (1995–2015). Total quality management and business 

excellence.  

10. Love, C. E., Guo, R., & Irwin, K. H. (1995). Acceptable quality level versus zero- defects: 

some empirical evidence. Computers & operations research,22(4), 403-417.  

11. Ali, K., & Johl, S. K. (2021). Soft and hard TQM practices: Future research agenda for 

industry 4.0. Total Quality Management & Business Excellence, 1-31.  

12. Peng, M. Y., & Lin, K. H. (2021). International networking in dynamic 

internationalization capability: the moderating role of absorptive capacity. Total Quality 

Management & Business Excellence, 32(9-10), 1065-1084.  



INNOVATION MANAGEMENT ON THE WAY TO BUSINESS EXCELLENCE 

204 
 

13. Etzion, O., & Niblett, P. (2010). Event processing in action. Manning Publications Co.  

14. Stefanovic, M. Matijević, M. Erić, M. & Simic, V. (2009). Method of design and 

specification of web services based on quality system documentation.Information 

Systems Frontiers, 11(1), 75.  

15. Robinson, K. (2010). Changing education paradigms. RSA Animate, The Royal Society 

of Arts, London, http://www. youtube. com/watch.  

16. Luckham, D. (2004). The beginnings of IT insight: business activity monitoring.2004- 

06-21). http://www. ebizq. net/topics/cep/features/4689. html.  

17. Afshari, A., Mojahed, M., & Yusuff, R. M. (2010). Simple additive weighting approach 

to personnel selection problem. International Journal of Innovation, Management and 

Technology. 


