Business Process Management

Business Process Management philosophy

Business process management (BPM) is an Information Technology enabled management discipline, which makes organizations to shift towards process-centric thinking while reducing their dependence on conventional and rigid departmental boundaries. With the advent of BPM technologies, Business managers can now automate workflows, process and rules from their underlying software infrastructure and change them to achieve business efficiency. BPM brings out key benefits in the way business processes are carried out today by facilitating organizational change yet maintaining business agility. It is estimated that about half of the Global 5000 companies are using BPM technology mainly because of the fact that they result in rapid ROI. With BPM, it is possible to start small, deploy the solution in a certain area or systems and then depending on the payoff, it can be gradually extended to cover other systems. BPM solutions have become a critical success factor for the overall business by centralizing business data through integrating with existing systems and providing a unified view of disparate data. BPM can deliver high return on this investment by reducing the time needed to make changes to processes. BPM Software serves as a powerful too with which business managers can assimilate information on operational metrics and use this information to implement process optimization. Optimization leads to many benefits such as cost reduction, increased productivity and efficiency through better resource allocation, compliance with industry regulations, policies and standards.

What is a Business Process? In broad terms, a business process is a set of related activities, which adds value to the end user or client. In other words, they represent a service or product, which aims to satisfy the needs of a client. Business processes are critical to any organizations since they generate revenue and account for costs.

What is a Business-modeling tool? In BPM terminology modeling refers to a process of generating a visual representation of the process. A modeling tool combines both the visual and textual aspects of the process in one single entity: the model document. The main advantage of a modeling tool is a standard set of items available to represent various business processes. Subsequently this also results in reusability because one does not need to recreate these representations thereby, saving time and ensuring accuracy. Modeling tools allows the users to simulate the business scenarios and create a dynamic model of the organization. It accounts for business parameters such as “time”, “costs”, and “resources” and also helps identify bottlenecks. Based on these factors one can redesign the entire process to achieve optimal performance. Modeling tools offer a plethora of possibilities from as-is (current state) process to the to-be (future state) process. Many organizations now consider business-modeling tools as a viable alternative for hiring external consultants for cost effectiveness.

Business Modeling tools or Technical tools? Technical modeling tools are constrained by the fact that they cannot simulate the level of efficiency of a process before it is deployed. A business-modeling tool is necessary because it can avoid miscommunication and bridge the IT and business needs of an organization. Too much dependency only on a technical modeling tool results in development of models from scratch. Therefore, it is best to do modeling with a business-modeling tool before a technical modeling tool.

What is Process driven organization? Any organization that has zeal to achieve optimal business performance through process innovation and has resources dedicated to continuous process improvements can be termed as a Process-driven organization. These organizations realize that they could get ahead of their competition by leveraging technology, process driven methodologies and business practices while adopting necessary resources to change the way they operate. The prime motive driving these organizations is the need to achieve a right balance between their IT and Business practices boosting revenue and cutting costs.

Manage composite processes
A typical business process is like a chain of beads. It consists of several subprocesses. Each subprocess may represent a different workflow or a system or a department. The end-to-end process management distributed across dozens of functional departments and systems with several subflows is a challenge easily addressed by a BPMS. A single process layer manages and streamlines the various processes across the organization reducing costs and improving bottom line costs while providing real-time visibility.

Be more agile
Business agility refers to the ability to change business processes as competitive situations change. Flexibility and agility are key success factors in every business today. Packaged applications and custom ‘hard-coded’ applications act as deterrents to agility because they were developed internally and typically requires consultants to redesign them. Modifying these applications is problematic and risky. On the contrary, a BPMS allows business analysts and IT to work together to monitor and analyze their processes while making changes through dragging and dropping new steps into a process and also validate them in real time. It also supports reusability by ensuring that a process once modeled can be saved in a process repository and reused as and when need arises.

Innovation
Innovation is a result of reorganizing business process to achieve competitive advantage. Innovation can occur in every department and every functional area of a business. Most companies face challenges integrating novel business ideas with establishes business structures and legacy applications. This is the problem area most easily addressed by a BPMS. BPMS empowers managers and business decision makers with greater visibility through drilldown capabilities into ongoing business operations. A BPMS supports complete process lifecycle management by allowing an organization to model, execute and then deploy the new business processes while seamlessly integrating them with the existing applications within the organization.

Consistency in process execution
It is a known fact in most companies that the critical processes are dependent on the people and the systems used by the people and sometimes it so happens that the employees bypass or use short cuts to accomplish certain tasks in an attempt to execute them faster. Processes are considered as intellectual property because they most commonly reside in the head of employee who performs them. In case of an employee change or role reversal it becomes necessary to document and manage these processes as a corporate asset. In order to ensure that all processes are performing consistently at an optimal level it is utmost important to assign some structure for better management. A genuine BPMS provides a standard framework for people and systems to work together. In addition to assigning a structure it also ensures flexibility such that the performance of these processes should not come down even if the people and systems change. It should consistently address the ever-changing needs of the organization.

Analysts feel that BPM will be a key enabler for IT organizations that want to provide reusable process, application or infrastructure ‘services’ that provide efficiency and flexibility to business process managers. In 2005, the approximate size of the BPM market was $1.2 billion dollars, which was expected to reach upwards of $4 billion by 2010. The demand will come from both the business and IT side of the organization.

There are several factors are driving the growth of the BPM industry such as.

• BPM enables Agility and policy management requirements. Market demands necessitate organizations to be agile with their business processes.
• Availability of process representation standards such as WS-BPEL, BPML, BPMN, BPQL, etc.
• Process standardization initiatives from industry initiatives – ETOM, ITIL. Industry initiatives are creating processes for specific verticals. For instance, ETOM has built a process library for the Telecommunication industry. ITIL has focused on building processes for Service Management. These processes are well accepted in the relevant industry segments.
• Integration of several systems through a process layer. Organizations like to integrate their different IT systems in a seamless manner. BPM brings in the process flow perspective to this integration along with the data integration.
• Transition from building software systems with traditional data centric or interface centric approach to process centric approach.
• IT majors such as IBM, Oracle, Microsoft, making huge investments and being committed to the BPM standards.
• Process mergers and alignment can be done quickly and with minimal impact on the organization and the people involved.
• BPM based business facilitates outsourcing. A process or a part of a process can be outsourced to service companies.
• BPN enables automation of manual processes. Process segments that require manual involvement need to be tracked and monitored.

1. What is a business process?
A business process is a set of related activities, which add value to the end user or client. They represent service or product, which satisfies the needs of a client.

2. What is business process management (BPM)?
Business process management (BPM) is an Information Technology driven management discipline, which makes organizations to shift towards process-centric thinking while reducing their dependence on conventional and rigid departmental boundaries. With the advent of BPM technologies, Business managers can now automate workflows, process and rules from their underlying software infrastructure and change them to achieve business efficiency. BPM brings out key benefits in the way business processes are carried out today by facilitating organizational change yet maintaining business agility.

3. What are the implications of BPM?
BPM enables Agility and policy management requirements. Market demands necessitate organizations to be agile with their business processes. Process mergers and alignment can be done quickly and with minimal impact on the organization and the people involved. BPM based business facilitates outsourcing. A process or a part of a process can be outsourced to service companies. Transition from building software systems with traditional data centric or interface centric approach to process centric approach. Integration of several systems through a process layer. Availability of process representation standards such as WS-BPEL, BPML, BPMN, BPQL, etc. Process standardization initiatives from industry initiatives – ETOM, ITIL.

4. How does BPM provide my organization competitive advantage?
BPM applications enable companies to optimize the relationship of various activities to strategic goals through greater control, analysis, and better collaboration between people across various departments. The competitive advantage is derived through better management of such links because of complexity involved and in resolving trade-offs across the organization.

5. What’s the impact of BPM on business strategy planning?
BPM links everyday business activities with overall corporate strategy thereby facilitating better decision-making. By adopting BPM, they are empowered to make decisions that drive success, improve company performance and meet strategic goals.

6. What is the current industry focus on BPM?
According to Gartner’s BPM Survey 2008, 95% of the participants said their BPM projects had been successful. It is estimated that about half of the Global 5000 companies are using BPM technology, as it results in rapid ROI, lower TCO, business efficiency, agility, BAM, Continuous process improvements etc.

7. How does BPM help an organization undergo process change and sustain on a continuous basis?
BPM is an IT driven management discipline that makes organizations adopt process centric approach as opposed to traditional departmental centric one. It can help organizations model and optimize processes to align well overall business objectives.BPM enables business to adapt to dynamic market conditions and take strategic decisions on the fly. Therefore, it is safe to say that BPM can help organizations become more agile and sustain emergent changes on an ongoing basis.

8. What is the difference between BPM & BPR (BPR- Business Process Re-engineering)?
BPR results in evaluation of processes in an enterprise from grass root level and thoroughly redesigns them, enabling enterprises to achieve strategic impetus in cost, service, and speed. BPR can create a new organization structure. Therefore, BPR is for the whole enterprise and may even include basic organization structures in its large modifications. BPMS is a tool, which continues to manage business processes within an enterprise. It starts from a group of tasks that describes, understands, and manages the whole process. BPMS system can automatically make decisions based on rules and processes. Hence, BPMS need not be predicated on the assumption of a BPR. Rather, BPMS can be deployed in a specific business unit to achieve process improvements and then gradually extended to other units. In this way, if BPMS is deployed in an enterprise wide scenario addressing all process and activities, then it can eventually lead to significant business process re-engineering.

9. How is BPM & BAM related (BAM- Business Activity Monitoring)?
BAM provides real-time summary of business activities to operations managers. BPM necessarily includes BAM insofar as BAM relates to business processes, comprising activities and decisions that can be monitored and measured. A BPMS without BAM is merely process automation or process integration. BAM with BPM is a complete sense-and-respond platform with adaptive potential.

10. what is an alternative way to do BPM without using a BPMS?
We can use Model Driven Architecture to execute business processes via SOA. The process models can be modeled with any notation as long as it can generate executable code. The code can then be connected to Services via WSDL. BPMS facilitates executable visual models and provides visual monitoring of the execution of various process activities. Value of BPMS is the tight integration of modeling to execution and hence it is a method.

11. what is the relationship between BPM & ERP?
BPMS goes beyond ERP. BPM can be used to create a platform that can even involve anyone associated with organization’s value chain. The demanding requirements of an organization can be easily met by integrating with other industry leading back-end solutions. BPMS facilitated greater centralization of business information for real-time decision making, enabling companies to reduce operational costs, increase accuracy and respond to market dynamics.

12. What are the primary benefits of BPM?
Many organizations have successfully adopted BPM suites to establish a platform for continuous business process improvement. BPM provides the lowest risk, highest return investment for driving process improvement. BPM is a technology that you should evaluate to manage the key end-to-end interactions of your business. The processes that provide key business differentiation and/or biggest returns should be targeted for BPM implementations BPM assists organizations in staying competitive BPM does not replace your existing IT Assets, but complements them. There are many different vendor offerings emerging in the marketplace and standards are still being developed, so use an architectural approach to evaluate the vendors’ products Definition of business processes consumes the majority of the time and not implementing the software Cross-departmental/divisional alignment of processes is key

13. What are the factors influencing the first BPM project?
The factors influencing the first BPM project could be:

• Processes involving various disparate, stove- piped IT systems in addition to human tasks
• Lack of visibility in process initiatives and projects
• Lack of quantitative feedback
• Identification of reasons for impending processes
• Process inefficiency due to lack of accountability and clear understanding of responsibilities
• Employees inconsistently carrying out assignments throughout the organization
• Process not adapting to changing business requirements
• Process crossing departmental and organizational boundaries, making assignment hand-off’s and ownership responsibilities less clear
• Lack of clear measurable metrics for gauging employee performance
• Process involving documents and forms as well other structured and unstructured content