Putting your processes to work

With organisations being forced to work smarter and more cost effectively in this economic slump, we ask a panel of industry experts how Business Process Management (BPM) is playing a vital role.

How can BPM help companies to respond to and survive the economic downturn?

Hans Hantson. Working in this economic situation means you need an agile or flexible organisation, be able to adapt to new opportunities and deliver end-to-end services to your clients or prospects. They only certainty you have is that everything is changing continuously. This creates new opportunities and can make your company even stronger than before, at least if you're able to organise yourselves to react to this situation. A lot of companies are using very rigid and inflexible ERP systems or custom developed application to support their business. But, as processes are not longer static, they will need solutions to handle dynamic processes and even unpredictable situations. Dynamic BPM solutions will allow you to adapt easier to certain situations or make exception on running processes without need of technical IT people to handle a business case.

Peter Gérard. Almost every company is facing challenging market conditions. Partners turn into competitors and vice versa. Customer demands are changing dramatically while mergers totally change the competitive landscape. Processes that have been proven in the past must be reassembled to adjust to the dynamic environment. How do you cope with this situation? Of course, you need to save costs. But how do you ensure that your cost savings do no not affect your customers? Successful companies know their core processes and how they distinguish them from their competitors. They invest in these processes to stay ahead of the competition in difficult market conditions. They also know their context processes that can be outsourced to save costs. These companies document, analyse and control their processes, manage their business processes and with this, their business success. 

Dr Torsten Schmale. BPM for an enterprise has an effect similar to adrenaline for the human body. It helps to sharpen the senses for important information and to (re)act in the most efficient way when under stress. While adrenaline is dangerous for the body outside short-term critical situations, BPM is not for the enterprise, even if it is applied for a longer period. Nowadays, more and more companies have recognised the role BPM can play for them to survive the economic downturn. They use it to generate fast improvements regarding cost and efficiency in their core processes. Once realised in small projects, companies quickly understand the value of BPM also on a wider scale and start strategic BPM initiatives.

Herbert Kindermann. The current motto is: save money strategically, not recklessly. BPM provides the best, indispensable and expeditious support possible, but only if the methodology involves all employees in creating the process description from the start. At jCOM1, we achieve this objective through our subject-oriented approach. Subject orientation means the focus is on the 'subjects', such as the people who are actively engaged in the process. In other words, the employees manage their own processes and are responsible for making sure those processes run in the proper sequence according to defined business objectives. Based on the process models, the software needed to handle the processes is then created automatically. An intelligent BPM solution of this type helps to eliminate the communication gap between business and IT departments. This solution guarantees that corporate strategies can be put into practice realistically and in compliance with rules while generating savings into the millions. The result is an excellent chance to come through the economic downturn stronger than ever.

BPM software can be costly. How fast will companies realise a return on investment in this technology?

HK. Using the jCOM1 BPM SUITE very fast. This software allows you to introduce a new process in three steps:

• Employees in affected departments perform the modelling themselves

• Participants use automatically generated dialogue software to interactively test and validate the process

• Employees implement processes which have been adapted to their requirements (exactly as modelled)

• Our approach avoids useless interviews, countless individual and overall adjustments, and corrections during implementation and initial operation. The time and monetary investments needed to make changes decrease significantly, helping companies to obtain a very high level of agility.

TS. We recommend introducing BPM step-by-step. Every step should demonstrate a clear improvement and a fast, predictable ROI of three to 12 months, depending on the current situation. This approach has to be strongly supported by the BPMS vendor.

Four issues are critical success factors:

• The BPMS must support all BPM phases from modelling to supervision in a homogenous and holistic manner and must provide the opportunity to quickly integrate legacy systems. If the BPMS appears large, complex, like a bundle or not intuitive, then it is the wrong one for this quick-win approach

• You should look out for the availability of best practice solutions on top of the BPMS. Such composite applications can be introduced within a few weeks while delivering very fast results

• The licence model has to be modular and flexible to address exactly what you need in your incremental approach

• The implementation and consulting experience of the BPMS vendor is decisive for a successful BPM initiative. The best product could result in a failed project when it is introduced without suitable skills or sufficient experience

PG. Our customers achieve an ROI through improvements in several areas of business.

Increased quality and reduced throughput times lead to higher customer satisfaction:

"Reduced wait time for customers by half, increased the number of contracts
that can be concluded without further inquiries by 28%, and reduced the number
of complaints by 60%." CosmosDirect

The identification of cost drivers leads to reduced process costs which directly impacts the profitability of the company:

"More than 30% cost reduction in order-to-cash process and order confirmation
twice as fast as before project start." Aleris

A business process is not just something your business is doing. A business process is your business. By optimizing your processes you optimize your overall business performance:

"Total BPM project investment (including all external and internal costs) represents less than 20 per cent of the identified and validated savings potential." Cargolux

HH. We strongly encourage companies to work in a baby-step approach when adapting BPM technology. Firstly, don't look at BPM as a pure software package to solve all your problems. Handle this project as a business project, for which you will need IT support on some levels. A baby-step approach means not trying to go for a 'big bang' or too quickly. Start by automating one or two processes you clearly know and are well understood by everybody. This will help you to learn in-depth how the BPM Solution is working and how it can help you even more then you expected at first stage. You need to see the big picture and adapt step by step so you can easily correct when needed and move on forwards. A modern BPM solution will help you to establish the first processes in a couple of days, giving you the advantage to learn and fine-tune the solution. Solutions that take weeks or months before you see any result will probably give you a very low ROI.

What pitfalls must companies avoid when introducing BPM to their organisations?

PG. BPM is not just a project. It must be a continuous approach to improve the processes of a company. When considering the current market conditions it is important to continuously measure the performance of your processes. If you find out that the processes are not successful anymore you need to adapt to the new conditions. BPM is not a technology. It must be a management discipline. If you just stick to the technology layer you will only optimise your IT. But the purpose of technology is to serve the business. Because of this, you should start to optimise the business and then design your IT to support your business. Often, BPM starts in separated guerrilla projects. At a certain maturity level they must be integrated and professionalised. If you miss this part you will not be able to leverage the full power of BPM. For this, you need to establish BPM governance. The process of process management must be designed and implemented in the organisation.

HH. The main pitfall in almost all companies today is the discovery of the business processes themselves. Companies in business for maybe 20 or 30 years are still having no exact idea what their business processes are today. Go inside a department and ask 10 people to describe their core businesses process and you probably will have 11 different answers. The second pitfall is the adoption by people of a new processes or new systems. Human beings are by nature not very open to dealing easily with changes. They are used to work in a certain way, which is working for them, so don't want to change this.  Make sure that people are involved in the process from an early stage, explain and show the benefits of the BPM. Adoption will come automatically if they see the benefit and how it can help them in doing their daily job better and faster.

HK. BPM is supposed to help process participants to work more effectively and generate added value. The objective is to significantly boost productivity and agility while drastically reducing costs. During the introduction of BPM, we proceed according to a fixed pattern. First, the basic conditions need to be defined. In essence, we work together with the customer to specify the objectives, the starting situation and the risks. Furthermore, we divide the structure of the overall process roughly into sub-processes, define which of these processes can be standardised and determine process owners. This strategic approach reduces the complexity and is necessary in order to avoid various 'BPM stumbling blocks'. We need decision makers who are responsible for the active processes and determine how these processes should evolve in the future. Using our subject-oriented methodology, we are able, to a certain extent, to make everyone accountable. This approach works because each of the employees has the knowledge of where potential exists for improvement of processes.  These days, a common issue, which has become increasingly critical, is the absence of governance in business processes. Particularly in this context, it is important that all employees receive support through a personalised process portal as they perform their daily work and adhere to applicable governance and compliance specifications.

TS. BPM is not just another IT system to be introduced. BPM affects the IT architecture, the way business and IT people work together and changes the organisation up to the management level in the long run. Hence, there are many pitfalls that can only be avoided if the BPM initiative has the right backing from the management, the due awareness by all involved stakeholders and necessary experience of the people in charge of this initiative. Fortunately, BPM can be introduced step-by-step in small projects, thus reducing the risk to fail on a large scale. Nevertheless, companies must realise that BPM divides the staff and often also the management into friends and foes. While friends approve of the changes BPM brings, foes don't. They try to keep everything as it is for fear of reduced responsibility, more transparency about their work and a machine taking control of their daily work. Therefore, introducing BPM successfully always requires some kind of active change management and buy-in activities in parallel.

There is a wide variety of BPM vendors in the market. How should companies go about choosing the right one?

TS. Yes, but in the meantime BPM can be found on a lot of marketing brochures. Most of the vendors have some BPM functionality in some form or another. However, companies should have a close look at these offerings. Some vendors talk of BPM but offer only BPA - process modelling but no automation, integration and supervision. Other vendors have complex heterogeneous BPM suites acquired out of several stand-alone components. These BPMS puzzles are far from helping to optimise and automate business processes quickly, and in an agile and cost effective way.

With that in mind, you should write down your requirements and go for a short list of BPMS vendors. Additionally, you should think about your priorities regarding the processes that should be the first to benefit. Pick out one small process with significant visibility in your company. Before making your decision on a BPMS vendor, you should go for a first pilot project that proves that the system of choice is really working as expected.

HK. First, it is important to figure things out and develop a structured plan. The following questions need to be dealt with:

• Which processes should be automated?
• How many changes are required annually?
• How extensive is human interaction?
• Is a service-oriented architecture (SOA) already in place or should one be established?
• How many companies must be involved in a data exchange to carry out these tasks?
• How prevalent is shadow IT?

Our solution is oriented toward giving employees a significant amount of creative freedom. Nevertheless, it is imperative to comply with all company specifications and legal regulations. To this end, the BPM tool must be easy to use, other existing applications should be easy to integrate, and process participants should be able to execute their processes in the manner they themselves defined initially. Governance and compliance requirements must provide the foundation. Ideally, the BPM solution should enable employees to make improvements to their processes in a fast, effective and cost-efficient way without having to go through the IT department. The result: motivated employees, coordination between IT and non-IT departments, and a fast ROI.

HH. Companies should first define what they want to achieve and what effort they want to take for this. Mainly they can take two different directions for this: looking from a purely technical angle or from a business point of view. Do they want more business control and flexibility, adapt processes changes on the fly or adapt them quickly to exceptional needs? Or are you looking for one-shot automation for very static processes? We recommend to use always the 80/20 rule, as you will not find the 'golden key' solution on the market. If a solution is delivering you 80 percent of your requirements out of the box, make sure you can achieve the 20 percent by extending the solution. So it's important to look for a flexible and open solution within your main angle, being business or mainly technical.

PG. Under the current market conditions companies are following different strategies to ensure business success. If you don't know your processes you can't control your business. Based on a company's market situation and its BPM maturity level different BPM approaches can be leveraged. ARIS provides integrated software tools for each BPM maturity level. This means ARIS can be used from the very start for process documentation, process cost and weak point analysis, quality assurance, software implementation and many other use cases. ARIS Platform provides integrated software products that help enterprises to continuously improve their business processes. These products cover every phase of a continuous BPM lifecycle - from strategy definition, process analysis and design to transferring the models into your IT systems and monitoring process execution. Based on this, companies can easily and quickly respond to new market demands with its products and services. Key for both strategies is business flexibility. With ARIS, companies can be sure to get the right BPM product for all requirements from the BPM market leading software vendor. With ARIS Platform you can prove the success of your BPM initiative based on process key performance indicators. This enables you to turn your organisation into a process- and success-driven company.

The panel

Hans Hantson is Business Development Manager at Ascentn EMEA.  Hantson works in close coloration with the Ascentn customers and partners and has more than 19 years of IT and business development experience. He worked previously for global companies like Toyota Motor Marketing Europe and EMEA-based companies.

Peter Gérard is CEO and President of IDS Scheer AG since September 2008. Gérard started his career at IBM in 1966. This was followed by appointments to the executive boards of Deutsche Bank (1996), Mannesmann AG (1999) and Karstadt Quelle AG (2000).

As one of the founders of inubit AG, Dr Torsten Schmale is now CEO. In this role he is responsible for company strategy as well as for the departments sales and marketing, finance, and development.

Herbert Kindermann is a member of the executive board at jCOM1 AG, responsible for sales and services. Prior to joining jCOM1 he was a Member of the executive board at IDS Scheer AG and has more than 30 years of experience in IT business, with 10 years focused on BPM and SOA.