Five Reasons To Invest In Process ManagementFive Reasons To Invest In Process Management
If you're unsure of what it is or how it can benefit your organization, here's BPM in a nutshell.
February 7, 2006
I'm continually surprised by the number of people I meet who have heard of business process management but are unsure of what it is and how it can benefit their organization. If this describes you, here's BPM in a nutshell.
BPM is both a management philosophy and a software tool. As a philosophy, it calls for firms to document, analyze and measure activities not in terms of discrete functions, such as marketing, sales and customer service, but in terms of end-to-end processes that cross functional boundaries. BPM runs counter to conventional organizational structure and enterprise apps, which focus on integration within functions.
As a software tool, BPM suites model end-to-end processes from a business perspective, then create automated implementations of the flow based on the model. Once the process is deployed, BPM components monitor performance based on actual process data. Instead of treating business modeling, IT implementation and performance management as independent endeavors, BPM unites them with an integrated set of tools and an overarching management philosophy of continual incremental improvement.
So what can that do for your organization? Here are five reasons to invest in BPM:
1. Simplification. When Windows and LANs invaded the workplace in the early 1990s, business process reengineering gurus warned, "Don't pave the cowpaths!" Automating outmoded processes made no sense when the nature of office work itself had changed. That warning is equally valid today, with the Internet and mobile devices transforming the way we work once again. BPM projects begin with documenting how current processes work but then focus on how they could be made simpler, faster, more efficient and more effective. Flip charts and stickies get turned into process models that are simulated to quantify projected performance improvements.
2. Efficiency. Process models describe sequences of business activities linked by rules. BPM turns those models into automated implementations that deliver work to the appropriate people and systems, enforcing rules and tracking completion against set deadlines. The resulting automation noticeably cuts cycle times — from weeks to one or two days is common — and allows significant expansion in daily work volume without adding staff. Efficiency improvements are the No. 1 source of ROI from business process management.
3. Compliance and control. Globalization, mergers and acquisitions, and regulatory burdens have created new demands for process consistency and transparency. By taking control of processes and enforcing business rules, BPM ensures compliance not only with policies and regulatory requirements but with best practices tuned to performance objectives. BPM fosters reuse of process fragments enterprisewide while allowing variations where needed.
4. Agility. The new IT revolution is service-oriented architecture. SOA exposes IT assets, both new and existing, for reuse and interconnection as component services. By standardizing the interfaces between components, SOA dramatically lowers the cost and effort of integrating business systems. BPM provides the business logic, called orchestration, to interconnect those services and allow them to be modified quickly in response to changing demands.
5. Continuous improvement. The ultimate goal of BPM is optimization of business performance. The same metrics and key performance indicators mapped out and simulated in a process model can be aggregated and displayed in real time in performance management dashboards and reports. Like corporate performance management systems, BPM supports high-level strategic metrics, drill-down analytics and alerts when results deviate from performance targets. By providing a platform for rule-triggered actions, BPM can turn alerts into automated escalation and remediation procedures, providing zero-latency response to business conditions. Parameters distilled from actual operations can be fed back into the process model to begin the next cycle of performance improvement.
BPM suites combine process modeling, execution and performance management in a coherent set of software tools linked by a coherent management philosophy. Because it's neither IT infrastructure nor an enterprise application, BPM is still not well-understood by IT. But the benefits are real, and you can't afford to ignore BPM.
Bruce Silver is an independent industry analyst. His "2006 BPMS Report" is available for free through BPM Institute.
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