BPM for Business Transformation and Optimisation

Business process management (BPM) is gaining attention as a growing segment of the software industry. But BPM is more than just a set of technologies. According to Gartner analyst David Cappuccio, it is also a management discipline for improving operational processes that impacts how well your company makes money. In this sense, it’s a perfect match for Service-Oriented Architecture (SOA), which enables disparate enterprise systems to be linked and leveraged in a more coherent, standards-based fashion. BPM lays down the tracks, while SOA provides the engine.

BPM Helps you ask the right questions

What steps are initiated when a customer makes a purchase on your Web site? How does a loan application make its way through a bank? How does an insurance firm go about underwriting new policies? A carefully crafted BPM strategy focuses on these sets of activities with an eye toward executing them more efficiently. That attention to detail can result in shorter cycle times, improved operational control, better visibility into the business, improved customer service, and more consistent performance metrics. Listed below are the top 5 reasons to embark on BPM.

1. Shorter cycle times
   Because BPM aims to eliminate many (but not all) manual steps and executes previously serial activities in parallel, processes can be completed faster. That’s key for activities that result in revenue, such as delivering merchandise to Web customers, or giving a homebuyer the green light on a loan.
2. Improved management control
   Dashboards included in BPM software suites let executives keep an eye on business processes, making sure operations are proceeding smoothly. Is a shipment stalled waiting for a supplier? What about going with an alternative source? By spotting trouble early, BPM can help eliminate small problems that can accumulate and become large ones.
3. More consistent performance metrics
   Because BPM enables real-time views on how the business is performing, metrics are more consistent and accurate. Traditional reports are often out of date by the time they arrive on the boss’s desk, and usually after unexpected problems have already cropped up.
4. Better visibility into the business
   BPM gives you the ability to view performance in real-time, but the power lies in its ability to uncover inefficiencies and provide insight. Creative leaders armed with this information can see how to innovate for better performance. Since BPM lets you simulate scenarios, you can tinker with the virtual company before you implement in the real one. That can give you an unprecedented ability to improve your business.
5. Faster customer service
   Real-time visibility in business process also translates into better customer service. When customers call or log onto the Web to check on orders or payments, for example, BPM helps make the information easily accessible and more coherent for the customer. Over the long term, this can translate into customer self-help opportunities that can lift the bottom line.

As business leaders begin to reap these benefits, they are also discovering that BPM initiatives have moved well beyond their roots as IT projects. “[BPM] is an ongoing way of looking at the [company] to deliver enhanced business performance,” says Cappuccio.

Model the business, then execute

BPM lets you model interactions among employees and information to accomplish work. What happens when a purchase order lands on the CFO’s desk? Has inventory been checked to make sure the merchandise is available? Is the customer’s credit rating intact? Has delivery been scheduled? BPM strategies map out the sequence in which these steps occur, flag the ones that happen simultaneously, and help determine the steps that must be taken when a process deviates from the norm.

Virtually all processes (such as checking inventory) rely on both information from the data centre, as well as tasks that must be completed by employees, such as authorising large expenditures. Business processes aren’t typically bound by company walls, instead they rely on data—such as customer credit scores—gathered from outside sources, as well as information from business partners, including service providers and parts suppliers. BPM can help to make those processes more efficient, while an SOA makes it simpler to harness internal and external information streams. SOA enables rapid coupling of systems, while BPM guides what those systems need to accomplish.

Driven from the top down

IT professionals don’t drive BPM strategies. Business leaders do. “But business processes and functions are intimately linked to technology solutions,” says Gartner’s Cappuccio. IT plays a pivotal, behind-the-scenes role. Activities within a single business process span multiple people and data sources, relying on information contained in components that are part of SOAs, as well as data that resides in traditional applications.

Working with BPM software suites, IT professionals implement the technical underpinnings necessary to connect that information. They also work with line-of-business managers to map business processes to software suites. And they facilitate the back-office connections that enable executives to tailor their dashboards to display real-time metrics as how business processes are taking place.

SOA and BPM synergies

SOA and BPM are distinct, but the two work hand-in-glove. SOA is essentially an architectural approach to creating a more flexible enterprise infrastructure, while BPM is a set of coordinated business activities. You can implement one without the other, but synergies can be gained when both are adopted. SOA eases the task of connecting business processes to underlying systems, saving time and IT resources, compared with linking processes to traditional applications, typically based on a host of different, proprietary technologies. What’s more, adopting BPM, while also moving to SOA, encourages the reuse of SOA components, minimising the complexity of the business process itself.
The key to BPM success is not creating a perfect process, but one that’s good enough to solve the business needs, says Cappuccio. Over time, enables reuse of business processes, generating real ROI and corporate wide efficiencies.