The art and science behind business process management

Granted, there may be no “killer apps” on the horizon, but there is an emerging technology that offers a killer ideology: Business Process Management (BPM).

BPM – half art, half science – measures a business’s success in terms of how it affects its shareholders, its

employees, and its customers, by optimizing and segmenting an organization’s business processes to meet its overall goals. Essentially, BPM enables the design, analysis, optimization, and automation of specific business functions. It does this by managing the relationships between people and technology, integrating internal and external resources, and through monitoring overall process performance.

The Channel

Of particular interest to the very strong Canadian channel is the fact that the customer relationship is long-term. This is because the customer uses BPM to find more and more ways to improve process efficiency throughout the organization. By definition, this is long-term. Process efficiency often leads to automation, and automation leads to system integration. Long term, this is where the VAR involved wants to be.

Equally compelling to the channel is that BPM is perhaps the single most important emerging technology for medium- and large enterprises to consider today, applicable to any number of business verticals. Also noteworthy in these tight economic times, BPM software runs on an open platform that supports Java — and it takes advantage of all other existing enterprise infrastructure.

However, there does appear to be some misconceptions over what BPM specifically does.

BPM – A definition

Many think BPM is a workflow solution. It’s not. Workflow is certainly a part of BPM, but a bigger part is monitoring business processes and providing insight on how to improve overall performance. Another common misconception is that BPM is the same as enterprise resource planning (ERP). It’s not.

BPM is different from ERP in that it stores business rules outside of the business process. Thus, if a service level agreement changes, a BPM rule will be changed, but no customization of the software is necessary. BPM will allow an organization to change its processes however, such as adding or removing a step from a particular business process, that’s locked within an ERP system. Also, BPM doesn’t act as a central data storage repository, but it is a repository for business processes. Consider the BPM database as a snapshot of how a company’s processes are performing to meet a corporate strategy at any point in time.

To fully appreciate BPM, one must understand that it spawned from other technologies including customer relationship management (CRM), business intelligence (BI), and ERP. BPM takes existing applications and ties them together but it also considers the human factor involved in the equation, as this technology is targeted at the average business user and not solely, or merely the IT-savvy. BPM digitizes a business and provides the required tools for an organization to ensure its underlying applications and people are supporting the process optimally.

BPM looks at a business as a set of processes, tying together key performance indicators that are stakeholder-based. If a process is not performing optimally it will alert the user to that particular problem, giving them the option to either automate the under-performing function or to resolve the problem manually.

BPM is business process centric, taking the view that one can map and understand the entire business process, determine how to measure its performance, then tie the underlying applications and people together to ensure the business process is working to support the business. It can improve and automate a company’s complex business processes at departmental levels as well as throughout the whole enterprise and supply chain.

EAI (Enterprise Application Integration), another part of BPM, ties a wide range of applications together and it provides a central repository for business rules. BPM goes further by looking at the whole business processes and identifying where an enterprise’s biggest pain points are. After all, customer retention in a down economy is critical, and BPM gives the astute company the ability to address their customer’s concerns by ensuring service level agreements are met and alerting the user to potential future problems.

BPM – Its functions

There are a number of key functions BPM performs. Among them: Process Modeling – the ability for business users to visually draw a process without needing programming skills. Process Monitoring and Intelligence is a critical function, as it propels continuous business process improvements through its reporting and analysis capabilities. Application integration, does as it suggests; it integrates data among disparate systems. Process Automation is the workflow component. It automates the movement of information and instructions between computers and people.

BPM also offers a project management and scheduling component, while the simulation function allows a user to run “what if?” scenarios. For instance, imagine your company is combining its payroll management process with another’s system subsequent to a corporate merger. In this instance, the simulation feature is instrumental in helping prevent an organizational nightmare by allowing the user to predict and prevent potential bottlenecks and breakdowns in the payroll process.

There’s little doubt BPM provides many competitive advantages. For example, consider the logistics industry where business processes extend beyond the implementing company and involves different organizations, partners, and technologies, dispersed across the globe. If you, as a freight transportation company can’t enable your customers to see the status of their orders online in real-time and your competitors do — you are in real trouble.

Or consider the financial sector – another process-intensive industry. A bank’s decision whether or not to make a secured loan might go through more than 120 steps before being approved. Using BPM effectively, one can easily view what’s happening with that particular loan application on a step-by-step basis. Furthermore, it also takes an overall view of the entire process through the software’s monitoring and measuring capability and in doing so it can pinpoint bottlenecks or breakdowns in the system.

Key Considerations

Most enterprises today are frugal when it comes to spending money on IT. BPM caters to that logic as it can reap cost savings on multiple levels in an organization. But before you dive head-first into the BPM pool, here’s a few points to bear in mind as you investigate which software suite is best suited to your business’s needs:

For starters, your BPM suite of choice should be Web-based to allow your business to maintain its investment in its existing software. This way, your staff can access the system through any of the latest wireless devices or through an Internet browser.

Moreover, BPM is interoperable with, and it enhances, Web Services. While it too is an emerging technology, enterprises, to integrate processes with content and applications are using Web Services today. However, certain processes are missing from Web Services that BPM can remedy, like process management standards, performance metrics and monitoring. Adding further to the unsettled Web Services landscape is the fact that many companies either are inexperienced at building service-oriented architectures, they’re concerned about multiple standards, and/or are worried about the impacts the technology will have on corporate culture. Despite this, Web Services will become common ground for industry over time, and BPM is the people-first enterprise application that can dissolve much of the confusion.

Second, look for a vendor that focuses on business process intelligence and one that will help you answer the question, “Is this process working or not?” A lot of IT companies will ensure your company’s IT infrastructure works, but there have been thousands of cases where companies that have integrated their services end up spending millions on top of the initial investment because the whole process is difficult to manage — proving to be nightmarish over time.

Third, different vendors approach BPM technology differently. For instance, some vendors are experienced in managing document-centric or transaction-centric processes, while others come from a workflow-centric perspective. Choose a vendor that suits your company’s industry.

Finally, a BPM vendor should be able to address your business’s biggest pain points, map out your organization’s processes and help automate certain parts. Your vendor of choice ought to be able to understand your business’s key performance indicators and business performance overall.

Don’t make the mistake of regarding BPM for some trendy new business theory, for it is a foundation as important and as dependable as database management. Rather than considering re-engineering processes and then solidifying those new processes in code, enterprises should be designing modules that can be altered quickly using a BPM software suite that’s flexible enough to perform those tasks. Regardless of which vendor you choose, the time is ripe for enterprises to consider BPM as a part of their overall IT strategy.