Many businesses view Business Process Management as an un-needed luxury. Our natural tendency is to think, “BPM is yet another business fad that doesn’t really mean anything to my business. After all, I’ve managed to efficiently run and grow my business for years. I operate my business processes every day and do it well.”
It is an undeniable fact that businesses of all sizes find ways to conduct business effectively. We fulfill orders, provide services, manufacture products, handle inventory, and manage compliance – in many cases in a very efficient, automated fashion. So why invest scarce time and money implementing BPM to improve processes that already work?
The central misperception behind this view is that BPM is only focused on automating and optimizing processes. This, therefore, leads to the incorrect conclusion that if existing processes are sufficiently automated and fill the needs of the business, then there is no point to BPM.
Set aside for now the stance that if you are not improving your processes, you are falling behind. The reality is that BPM provides significant value even if there is no change to the existing processes. A complete BPM solution automates, executes and monitors the business. While it is true that the first of these 3 – automation – derives most of its value from process optimization, there is real benefit behind execution and monitoring without major (or even any) process change.
In the keynote address of June’s “Process Management and the Bottom Line” virtual conference presented by eBizQ, Forrester referenced the results of a survey of 142 IT architects in which they were asked to name the primary benefit of BPM. As expected, the majority of the responses (55%) were related to increased productivity or process change/improvement. However, it may come as a surprise that 43% of the primary benefits identified were derived solely from the ability to model, understand and surface key information about the business. These were broken down into 3 categories:
- The ability to model business processes (13%)
- Consistent process execution across business units or geographics (12%)
Let’s take a closer look at these three categories that drive 43% of the primary benefits of BPM.
Visibility. Visibility into the day-to-day execution of our business can provide tremendous value to all of those involved in the process – from the front-line worker to the executive. This aspect of BPM is also known as Business Activity Monitoring (BAM). The visibility provided by BAM enables a business to:
- View the entire business process in action and monitor key performance indicators
- Identify problems in the process quickly and highlight the source of the problem
- Recognize trends so that the processes can be pro-actively managed and adapted to changing conditions
- Identify opportunities for process improvement
- Much more…
Modeling the Process. The simple act of modeling a process can provide surprising results beyond the ability to identify simple improvements and provide the necessary catalyst for change. Having a well-modeled process can provide the documentation and rigor needed to support compliance requirements. It can also give those involved in executing the process additional context and input needed to do their job better.
Perhaps more significantly, it can provide the metrics needed to quantify ROI for key projects and initiatives. Many quality projects never see the light of day because they cannot document a quantified ROI. Their business cases rely on “soft” benefits like improved customer satisfaction or better service quality. Having a well modeled business process that captures key process metrics can provide a basis for building these business cases. We’ll explore an example of using BPM to justify e-Learning training initiatives in a future post.
Consistent Execution. An increasing challenge businesses face today is finding ways to effectively provide centralized management oversight over business execution in a world where decision-making is becoming ever more decentralized. BPM provides a tool to aid in this challenge along multiple dimensions:
- Day-to-day execution: Documenting and codifying business rules within the process ensures that every “decentralized” worker follows the same procedures. This ensures consistency in quality of service and execution
- Knowledge capture & retention: By capturing knowledge within the process, BPM ensures that key process knowledge is retained even when subject matter experts retire or move on
- Reporting: Without BPM in place to provide guidance and measurability, consistent execution across business units is difficult if not impossible to manage at an executive level. Consider what happens when we, as managers, ask for status of various projects that are, while similar, being conducted within different organizations? Each report might tell us “We’re 50% of the way there, boss!” But what does that mean? BPM provides the consistency in measurement and reporting that is essential to manage the overall business.
Conclusion: Busted!
BPM projects consistently show significant positive ROI from process automation and optimization. But that does not mean that an organization with well run, functioning process has nothing to gain from BPM. The visibility, measure-ability, and consistency of process execution that come from a successful BPM effort can drive real business value in the short and long term.
In future posts, I will examine other popular excuses for not addressing BPM.