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How can I reduce my operating costs? How can I reduce inefficiencies and increase leverage
on our human and physical capital investments? How can I improve the quality of my
products, services, and information? How can I be more flexible with today’s changing
business environment? How can I enforce business process excellence across the organisation?
How can I be more responsive to my partners, customers, and employees?
U
nfor tunately, in most ing money, saving time and adding value. It are integrated with systems/technology that
organisations, people, pro- also spans the business and technological supports business activities. BPM does this
cesses, and systems are di- gap to create synergy, with proven results.” by separating the process logic from the ap-
vided and isolated. This BPM eliminates the silos within an plications that run them, managing relation-
makes it difficult to change, as quickly as organisation, bridges the gaps among people ships among process participants, integrat-
necessar y in order to react to changing and systems, allowing organisations to auto- ing internal and external process resources,
market conditions. mate, deploy, and modify business processes and monitoring process performance.
Most business executives remember busi- across the organisation, align people and re- In this ideal setting, when a worker or
ness-process reengineering efforts during the sources to achieve organisational goals, and customer initiates a business process, it be-
1990s, the attempt to overhaul and automate connect the organisation with customers and gins a sequence of co-ordinated activities
processes by using information technology, partners. that include the people, information, and
such as workflow software. In some cases, The growing interest in BPM is driven by supporting systems at each step. Just as
productivity and efficiency were improved. In economics and business results rather than important, the data or business application
many cases, companies just automated bad a compulsion to add another layer of software needed to complete the work is presented
processes rather than really taking the time to an already burdened IT environment. along with the work, so that the person do-
to plan what they wanted to accomplish up ing the work does not have to guess which
front, and how best to use information tech- Defining BPM tools or information are needed to com-
nology/ systems to accomplish it. Business process management has plete the task. Wherever possible, these ac-
Departments and subsidiaries are divided evolved from roots in workflow, group-ware, tivities are automated according to the busi-
from one another, which are themselves and enterprise application integration (EAI). ness rules of the process, to increase the
separated from customers and suppliers. In efficiency of the process and to minimise
spite of efforts at automating work and inte- From Workflow … errors such as sending a work item to the
grating applications, today’s organisations wrong person.
Step 1 Step 2 Step 3
often labour with islands of technology/ sys-
tems that work in isolation from one another, Early workflow software solutions were Benefits of BPM
defeating collaboration and keeping employ- linear sequences of events, routing elec- By capturing and enforcing a business
ees from ready access to the information they tronic documents from person to person, process in this way, the BPM platform al-
need and the work they are supposed to do perhaps allowing for some parallel work on lows process owners and decision-makers
to achieve corporate objectives. a particular task. Most systems could per- to model their processes, automate the
Companies are under pressure to perform form only simple, repetitive work due to tasks of the process, monitor and measure
better and faster — to do more with less, and strictly defined work processes. its performance, archive valuable informa-
to be super-pleasing to customers. This tion about each instance of the process, and
means changing the way companies manage … to Enterprise Application then adapt the process as needed.
their business processes so they can inno- Integration (EAI)… Contrary to the hype, BPM is not going
vate, collaborate with trading partners, and to completely revolutionise the way a busi-
System 1 System 2 System 3
bring compelling new value to customers. ness operates. It will, however, help to gain
It is therefore more important than ever Next came enterprise application integra- a level of management and control over
for executives to gain control of their opera- tion (EAI). It is integration without the ben- processes and, over time, simplify the task
tions and their resources, to gain a top-down efit of human interaction. Businesses had of adapting processes in line with business
view into their entire organisation, and to be to make their rules and models conform to strategy.
able to manage their activities in order to in- the limits of their proprietary EAI platform. BPM gives the business a framework for
crease productivity and profitability. Further, EAI solutions did not allow for the managing complex processes, and ensures
The solution that can deliver the control human factor. If a problem occurred and that process changes can be made in-line
and visibility that executives need to man- someone needed to make a judgement call with regulations. Without some form of
age their organisations for success, the so- on how to handle it, the systems were not process control, the cost and risk associ-
lution for connecting isolated gears into a set up to accommodate human intervention. ated with compliance and governance in
single, unified machine that supports produc- general could spiral.
tivity across the organisation is business pro- … to Business Process Management The benefits of business process man-
cess management, or BPM. It is the aligning (BPM). agement are more than just theory. In his
and co-ordinating of people, activities and re- sur vey of thousands of organisations,
Step 1 System 2 if System 3
sources to achieve organisational goals. Michael Hammer discovered that business
The practical and strategic value of busi- Step 3 process management:
Step 2
ness process management is captured in an 䡲 Reduced order fulfilment cycle times by
observation by Gartner: “Business process When business process management is ma- 60 to 90 per cent.
management wins the ‘triple crown’ of sav- ture, people and tasks in a business process 䡲 Slashed the cost of procurement trans-
actions by more than 80 per cent, while or to handle complex transactions. tomers, employees, partners, and others
shrinking procurement times by 90 per 䡲 Balanced workloads — A related ben- in a collaborative environment expect
cent. efit is balancing workloads and getting near-instantaneous handling of their or-
the right work to the right people. For ders, issues, and problems. BPM en-
䡲 Boosted the percentage of successful
example, if the process involves the pro- ables organisations to handle transac-
product launches by 30 to 50 per cent,
cessing of claim forms by a team of tions faster and with fewer errors, and
while cutting the time needed to bring
clerks, the system can sense which to take action when problems do arise.
new products to market by 50 to 75 per
clerks are ready to take on new items in Manual processes are prone to human
cent.
their electronic in-basket. It can also error.
Applying BPM route a particular work item to specific 䡲 Increased productivity — In an environ-
Organisations are looking to BPM to personnel who are qualified to handle ment where we are all asked to do more
help overcome some of the following kinds that kind of work. with less, the best method to achieve the
of challenges: 䡲 Consistent process handling — Consis- desired result will give companies a com-
Financial tency comes from having an established petitive advantage.
䡲 Expense report processing. procedure and ensuring this procedure 䡲 Increased profits, reduced cost — By
䡲 Travel expense reimbursement. is followed every time. automating many of the processes that
䡲 Invoice processing and exceptions. 䡲 Eliminate paper-based operations — A we are currently completing manually,
䡲 Credit processes. major advantage to an automated busi- we will allow these same individuals to
䡲 Enhanced accuracy of forecasts. ness process is the reduction or elimi- work more efficiently and take on new
Internal/administrative —
purchasing requests/procurement
Table 1 Benefits of Implementing an Automated BPM Solution
䡲 Contracts management. Touches Time Cost Quality Impact
䡲 Equipment management
Currently 100 6 mos. $10x 5%
䡲 Facilities management
䡲 Customer complaints After Application
80 6 mos. $8x 4%
Rationalisation