Businesses are comprised of a myriad of manual and automated processes, applications, systems and computer assets. The success or failure of an organisation is largely charted by how well core business processes are executed, both by people and computers.
Business Process Management (BPM) is the name given to the methodology and class of software that can manage the way in which core business processes are orchestrated.
The Business Process
To understand Business Process Management fully, the core element – the business process – must first be explored.
Business processes are a defining characteristic of a particular organisation: they control and describe precisely how business is conducted internally and externally in terms of data and information flow, and the interactions between individuals and the organisation.
BPM Methodology and Software
BPM is a methodology and technology that can connect all the elements, interactions and assets involved in executing a business process – including people, documents, workflows and IT applications, internally and across the extended supply chain.
BPM software is the enabling tool. It works by separating and abstracting the control of a business process to a free-standing layer that enables processes to be remodelled and deployed independently, without requiring changes to existing applications.
The four main elements of a BPM implementation are:
Modelling – analysing and capturing the business process in a
repository
Managing – administering the means by which the process relates
to the people and systems involved
Execution – executing the defined process flow via the execution
engine
Reporting – providing a feedback loop to enable a process of
continual process improvement to become best practice
These elements form a continual cycle of optimisation and improvement – they are not one-time-only activities.
Key BPM Benefits
The key benefits of BPM are:
- Reduced cycle times
- Resource optimisation
- Reduced errors
- Workflow automation
- Assured compliance
- Operational visibility and agility
- Improved risk management
According to Gartner Group Research, 78% of enterprises that have deployed BPM generated an internal rate of return greater than 15%. 67% of BPM projects were completed in less than six months. 55% of BPM projects experienced returns of between $100,000 to $500,000. (2004 BPM Survey, Gartner Group)
Market Trends
With returns of this measure, it is easy to see why BPM has become one of the most important enterprise software market segments, and why there has been a rush by a broad community of established vendors and new entrants to brand their offerings under this coveted acronym.
Newer entrants to the BPM market typically are backed by venture capital investment that buys brand exposure, but many are in reality offering immature and incomplete BPM products that are simply connectors for applications like Microsoft BizTalk Server.
Of the more established suppliers, many have come from the workflow, case management and document routing arenas, others from the enterprise applications integration and business activity monitoring backgrounds. Often what they are selling is a simple re-badge application that contains major gaps in functionality when tasked with delivering a comprehensive BPM solution.
The ‘True’ BPM Application
A true BPM application is a system that encapsulates all of these areas of functionality within the one framework. It should provide an organisation with the ability to collectively define processes, deploy those processes as applications available via the web that are integrated with existing systems, and enable manager to monitor, analyse, control and improve the execution of those processes in real time without reliance on programming.
Comprehensive BPM solutions enable organisations to:
- Integrate with existing operational systems, such as ERP, Practice/Financial Management systems and databases
- Integrate business processes with those of a company’s suppliers and partners
- Incorporate the business rules that guide a business
- Provide managers with the visibility into those automated processes to monitor operations in real time
- Offer managers the ability to deal with exceptions when they occur by changing business rules or entire processes to respond to business conditions in real time
When you see beyond the marketing blurb and really put the range of BPM products to the test, many fall short.
The Right Team
It is not all just about technology, however. At the heart of any BPM project’s success is a clear understanding of the business and of the role of the processes within it. There are powerful cause-and-effect relationships that exist between different processes – even those that may appear on the surface not to be related.
To deliver a successful BPM project, understanding must therefore accompany the right technology choice. Selecting the right implementation team is therefore as important as the technology selection itself.