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Anyone who was around the business world in the 1990s couldn’t escape the two big topics of the decade – the Y2K bug and Business Process Reengineering (BPR). The fear of the unknown drove huge investments to address Y2K and the result was…well, nothing really came of it. On the other side of the coin, the promise of efficiency and cost reduction drove many companies to undertake huge BPR efforts. Michael Hammer and James Champy’s 1993 book “Reengineering the Corporation: A Manifesto for Business Revolution” was the BPR Bible. It was a NYT Best Seller for 41 weeks. Numerous firms embraced BPR and responded to Hammer’s motto: “Don’t Automate, Obliterate!”

Unfortunately, many BPR projects suffered failures, costing companies millions without showing any measurable ROI. As a result, many business and IT people remain skeptical a decade later of the promises of Business Process Management. To many, it appears that BPM is just another version of the failed ideas of the past. They fear spending tons of money with no return. They fear losing their jobs as a result. While understandable, these fears are unfounded for a number of reasons. Consider the following:

• BPR failures were not due to inherent problems with BPR. BPR projects failed for any number of reasons. Many of these are the same reasons any large IT/Business program fails:
  • Misalignment of business and IT
  • Poor Change Management
  • Lack of Executive sponsorship, business ownership or accountability
  • Inability to overcome internal resistance
  • Over-sold expectations and under-sold investment requirements
  • Poor definition and management of scope
  • Lack of appropriate technical skills
  • Budgetary cut backs
  • Analysis paralysis

The list is endless. But the fact remains that many BPR projects avoided these obstacles and were completed successfully, providing significant positive impact on the organizations they changed. As with any IT project, BPM projects are susceptible to these same risk factors. But when properly executed, they can overcome these risks and show value; there is nothing inherently broken about BPM.

• BPM is not BPR. Sure, they sound similar, but the main philosophy with BPR is to radically change the way a company does business. While one can take this approach with BPM, it is not the only way. In fact, in my last blog post, I explored how BPM can show benefit without any process change at all. So don’t let BPR horror stories or even an organizational aversion to change taint the possibilities of BPM benefitting your organization.
• BPM embraces a more deliberate, iterative approach. Remember the BPR mantra: “Don’t Automate, Obliterate!” BPR eschewed small process change in favor of major change. The philosophy was that BPR was revolutionary, not evolutionary. While this approach can yield much greater impact, it also comes with greater risk. BPM embraces an iterative, evolutionary approach that requires less investment before seeing positive ROI.
• Today’s technology landscape is different. In the mid-1990s, the technology focus was on client/server technologies. The web was just beginning to take root and grow. Windows95 was the first usable GUI on a mainstream operating system (bringing it almost on par with Macintosh System 7 from 1991). Graphical modeling environments were rare. Most major processing still required Mainframe computing power.

Contrast this with the technological capabilities of today. Internet technology is ubiquitous. Web Services standards, Enterprise Application Integration and Services Oriented Architectures enable the exchange of data and choreography of processes like never before. Numerous platforms exist to enable Business Intelligence, Data Analysis, Business Activity Monitoring, etc. Visual process modeling tools are commonplace. Graphical dashboards allow complicated data to be communicated and understood quickly and easily. The bottom line is that today’s technology enables so much more than that of 10 years ago. BPM efforts can capitalize upon these technology advancements.

• BPM places more importance on the “B”. While the “B” in BPR stands for Business, many BPR projects were IT-driven projects. As a result, many projects were not aligned well enough with the business to succeed. When done right, BPM projects are business-focused and business-driven.
• BPM Suites. When BPR at its peak, there were few tools available to assist with the process. In fact, I was personally involved deeply with the development of an early BPR tool (called Apache – later renamed Process Vision) at Electronic Data Systems. Ironically, although I witnessed significant successes brought about by use of Apache, I also recognize that the effort was conducted out of EDS’ R&D organization. Thus, it had a bit of that “IT-driven” nature mentioned in the previous bullet. We were one of a very small set of sophisticated BPR tools available at the time; business units seeking to take on a BPR project did not have very many places to turn nor much of a “services economy” to support those efforts.

Today, there are many viable Business Process Management Suites (BPMS) that can be leveraged. These products robust provide out-of-the-box functionality to jump start your BPM efforts. But they offer much more than that. Most BPMS’s provide the capability for: business process modeling/analysis, process simulation/optimization, monitoring/reporting/notification, business rule integration, lifecycle management and much more. In addition to the solid offerings from pure-play BPM vendors such as Global 360 (an Avalon Partner), Lombardi and Pegasystems, enterprise application vendors like IBM and Oracle have BPM solutions as part of their product suites.

Conclusion: Busted!

While there is a similarity between the excitement around BPR in the ‘90s and that of BPM today, there are also significant and structural differences. Thus, there is no need to fear BPM because of failed past attempts to address BPR. To do so would ignore all of the potential benefits that are absolutely critical to remaining competitive in today’s rapidly changing business world.

What are some of the excuses that you hear against pursuing BPM – justified or not? Let me know what barriers you encounter and I’ll try to address them in future posts.

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.