Business Process Management: Understanding and Implementing

If yours is a business with several departments, at one point you start to realize that in order to stay competitive, increase productivity and bring efficiency to your business, you need to optimize and automate some of your business processes. To identify which parts of your business activities are required to be optimized, first you need to have a clear understanding of the processes involved in your particular business.

What is a Business Process?

A business process is a series of specific, measured tasks performed by people and systems and designed to achieve a predetermined outcome. The processes have these important characteristics:

  1. The processes have internal and external users.
  2. They take place across or between organization’s departments or different organizations.
  3. They are based on how work is done in the organization.

The business processes have three key elements – Entity, Object, and Task.

Entities: Where the process occurs.

Objects: The processes are results of handling objects. Objects could be physical or informational.

Tasks: Works done to handle the objects.

The followings are examples of business processes:

Mortgage application processing

Credit verification

Product development

Travel planning

Opening a new account

Answering to a Request for Quote

Shipping a product

Companies are trying to improve their business processes using computer technology starting ever since the computer technology has emerged. Initial emphasize was given to enterprise resource planning. Main areas where automation was adopted were production, accounting, procurement and logistics. The next step was sales and marketing automation. Next came customer relationship management and supplier relationship management. Last couple of years we are seeing implementation of Business Process Management across the board. Companies are adopting BPM in the areas where it could make real differences. Some of these processes involve several departments of the company and some are result of real-time interaction of the company with its suppliers, customers and other business partners.

Interest in BPM is growing really fast, according to a report from Forrester Research, one-third of organizations surveyed by the firm are currently using or piloting BPM, a dramatic increase compared with mid-2002, when just 11% were trying BPM.

What is Business Process Management (BPM)?

BPM automates and streamlines the business processes which are crucial for the organization in order to improve productivity. From hiring a person to processing a purchase order, BPM helps restructuring, controlling and handling workflows involving people and systems to complete a process more efficiently.

To use BPM effectively, companies must focus on the outcome of the process and design workflows based on the expected result from the process. There should not be any difference between a task done by computer systems or people. BPM should be able to map the interaction among the entities, objects and tasks and bring them inline with the process workflow. Business rules used in the process also should be clearly defined. While trying to automate a business process you have to keep in mind that finding a process which should be streamlined is not that difficult! Problem occurs when you try to define which entities are involved and how the evolved method will distribute the previous roles among the new tasks owners.

The benefits of BPM adoption are enormous:

Direct

  • Update processes in real time
  • Reduce overhead expenses
  • Automate key decisions
  • Reduce process maintenance cost
  • Reduce operating cost
  • Improve productivity

Indirect

  • Improve process cycle time
  • Improve forecasting
  • Improve customer service
  • Improve sourcing time cycle

How to figure out which of the business processes you need to automate?

Companies are using BPM systems to automate virtually every aspect of their businesses. A company for example might have priorities to automate their sales activities, requisition process, procurement process, warehousing, call center, etc. However, the focus initially should be given on those areas that meat the following criteria:

  • The business process should be crucial for productivity improvement
  • Savings from automation is clearly visible
  • Return on Investment from implementation is high and preferably immediate

Since your business has unique characteristics which differ from others, you might have business processes that have exceptional business rules. Normally, this type of business processes need maximum attention and substantial resources. Business Process Management tools are great in handling exceptions. Use BPM systems to streamline these processes.

What are BPM Systems?

BPM Systems are applications that help organizations to automate their business processes end to end from a workflow task to process outcome so that they can reduce process costs, improve productivity and bring efficiency to their business.

A successful implementation of BPM systems requires clear understanding of organization’s business processes, business rules, and willingness of the management and workers to embrace new way of doing business.

Your Enterprise Portal can be the BPM platform you need

Your company Portal is the access point for your customers, vendors, business partners and staff to company information and services. A typical company Portal is an integrated website of Intranet, Extranet, Repositories, Procurement and Sales Systems, Customer Relationship Services, etc. Today, advanced Portals are also integrating Business Process Management Systems, which enables automation of workflows that model end-to-end business processes.

In any business process the owners of the process, the users and the objects interact at many levels, such as starting a process, monitoring the process, doing a task, creating new activity, approving a task, etc. In order to reflect the business processes, their progress and interaction with users and owners, a dashboard is used. You can easily integrate any business process into your company Portal and display needed workflows, notifications, charts, performance indicators as a dashboard on it.

Conclusion

Investment in BPM is the same as any other technology related investment. If you plan the project properly, set a clear goal, educate the people those who have to change their mindset once the system is implemented and get necessary support from the management, you can count on a massive return on your investment.

Article: What Is Business Process Management (BPM)?

Business Process Management, also often called BPM, is a systematic approach on how to improve the business processes in a company.

BPM helps a company to get a clear picture of how the company’s processes are today and how to improve them.

BPM is something that is continuous in the organization. By working with the business processes you improve them, test them in the organization and then improve them again. This not only makes the work in an organization more flexible, but also helps companies to become more capable of changes, something that is very important in today’s volatile economy.

When defining the processes in BPM there are a few questions that need to be asked:

* What is performed?
* How is it performed?
* Who is performing it (preferably a role, not a named person)
* In what order are the activities performed and how long time can each activity take?

To visualize this in a good way we have the BPMN (Business Process Model and Notation). BPMN provides graphical notation for specifying the business processes in something called a Business Process Diagram (BPD).

The main purpose of BPMN is to bridge the gap between the business side and the technical side, since a lot of the process models are used to have the technical side help automate processes. However, it is important to understand that the business process models are very powerful for part of the business even though you do not automate the process using technology. Just having the personnel being guided through a visual design of what should be done, in what order and by who in different processes is invaluable.

In BPM you work with different groups of activities.

* Design, where you identify the processes and define them using the questions above.
* Modeling, where you use the BPMN to create a graphical model of the process.
* Execution, where you work according to the defined model. This is often done with an application, or at least involving an application, to help since a lot of processes are automatic.
* Monitoring, where you monitor the result and the way the execution works.
* Optimization, where you take the information from previous steps and identify bottlenecks and potential possibilities for saving money.

Since BPM is continuous, the steps are repeated every now and then. The frequency depends on several things, for example what kind of process and what type of organization.

There are quite a few BPMS (Business Process Management Suite or System) available to support the business process management. These systems not only help you to define and model the processes, but also to automate and improve them.

The amount of functionality available in a Business Process Management System is varying quite a lot. Therefore it is important that you understand what you are looking for before purchasing a system.

Business Process Management is a great way to get control over your business and what is happening during the daily work. It is important to understand that all processes should be connected to the company’s purpose, goal and vision to be able to understand that they are really aligned with what the company is meant to do. During these kind of exercises it is not uncommon that smaller companies start thinking about the purpose, goal and vision of the company since they have not been defined clearly enough before.

SIPOC Diagrams and Other Business Process Mapping Tools

We use the phrase business process to define a particular set of tasks or actions undertaken by an organization, that lead to the production of goods or services for the customer base. It’s a flexible term – one that can be used to describe the most menial or idiosyncratic of assignments, or as a way of describing a company in its entirety.

Critical study of each facet of a process is imperative for maintaining high standards within a company, and to allow management to spot any flaws or inefficiencies in its day-to-day business. The most common way of condensing a process down into an organized format is to use a visual solution – one that allows each point to be represented clearly and succinctly, giving those that are unfamiliar with the process an unambiguous interpretation of events.

To support this visual style of quality management, a number of transferable methodologies have been developed – generic diagramming solutions that act as a framework around which unique and disparate processes can be formed. The collective term for this practice is business process mapping, and here follows a brief description of some of the more popular approaches to it.

SIPOC Diagrams – SIPOC stands for suppliers, inputs, process, outputs, and customers, and it is a style of diagram that has a clear focus on the quality of what is going in, and what is being produced from a business process. It has a simple visual form, a segmented table that produces comprehensive lists for each category. With a SIPOC diagram, the start and end of a process is clearly defined, and the relationship between a company and its external suppliers is easily identified. SIPOC diagrams form a key part of the Six Sigma methodology, which are a set of techniques and tools to help improve quality output and minimize variability within repeated tasks.

Business process flowcharts – A flowchart is the go-to tool for representing any basic process that involves a series of steps or decisions, particularly processes that are repeatable. Also known as a process flow diagram, these charts act as a solution model to a given problem, telling the user exactly which steps can be taken at what time, and the impact of choices made within the workflow. As with SIPOC diagrams, a flowchart can show the input and output of materials and services in terms of the customer, as well as being used to define processes from other areas of a company, such as management or human resources.

Swimlane diagrams – If a business process crosses over multiple departments, in can be easier to define using a flowchart that has been divided into distinct sections, or ‘swimlanes’. These lanes distinguish which persons, groups, or location influence a particular step of the business process. They are useful for explicitly stating each stakeholders responsibility, and the actions each employee is expected to complete, before the process can continue to the next department. Other terms for these type of diagrams include ‘deployment flowchart’ and ‘cross-functional flowchart’.

IDEF3 – The IDEF business process modelling language is used in slightly more specific scenarios than the previous examples. IDEF3 in particular is a scenario-driven description capture method, that has the ability to define the state of the same system or process under a variety of conditions. While flowcharts can allow a certain amount of artistic license in their design, IDEF3 uses standardized process schematic symbols – a more complex and comprehensive set of icons than found in flowcharts, and more precise in their definition.

Value stream mapping – A value stream map takes a wide look at the relationships between manufacturing, production control and shipping processes. They follow the value chain through an organization, from supply until it reaches the market. Like IDEF3, standardized notation is used to facilitate understanding between workers and workforces.

To achieve the professional standards required for these diagramming styles, it’s best to use specialized drawing software, and a supply of the correct graphical notations.