Business Process Management (BPM) is a subject which has been discussed widely since early 2000s but did not go far during the early years after its debut. Like many other technologies this too was shrouded in mystery till it attained maturity over time. It is perhaps necessary to demystify the concept and explain it in simple terms.
BPM can be defined as a holistic management approach to aligning an organization’s business processes with the wants and needs of business. It is a systematic approach to continuously improve business effectiveness and efficiency while striving for innovation, flexibility and integration with technology. In effect it is about attaining a certain level of operational excellence through business processes which run seamlessly across functions facilitated by technology. It is argued that BPM makes organizations more capable in handling change than functionally focused, traditional hierarchical management entities. As a managerial approach I would say that BPM sees processes as strategic assets of an organization that must be understood, managed and improved to deliver value-added products and services to customers.
BPM is often compared with TQM and continuous process improvement methodologies. In my opinion all these approaches have a lot in common though BPM goes a step further by taking support of or getting enabled through technology. In fact BPM offers an approach to integrate an organizational change capability that is both human and technological.
The need for BPM
Companies in the past developed pockets of automated systems over time which many cases were not integrated. The difficulty got further accentuated due to use of different platforms that were not compatible. Business processes therefore experienced disconnect, as users had to wade through difficult interfaces to complete their transactions. In some cases customers needed special integration tools and other generic tools but found it difficult to manage. BPM then came as a suite of tools that could help provide integration across applications in a way that business processes could proceed without break or interruption. They also offered various value-added features that could help organizations perform better.
Operational excellence can be achieved either through the use of a BPM software suite or with use of other integration tools like SOA, web services, RFC, content management, business intelligence or other proprietary tools like BAPI etc. The purpose would be to work out a wholesome solution which addresses business concerns and enables the organization to tackle competitive forces better.
A BPM initiative should be run as a formal project with essential steps like developing a vision, working out a design, doing data and information modeling, execution with tight project monitoring, and process optimization using business reengineering principles. The effectiveness of the BPM can be known by measuring specific parameters or KPIs and comparing it with status that existed at the start of the project.
Features of BPM suites
BPM suites are rich in features and can be very helpful. The four critical components of BPM include the process engine, business analytics, content management and collaborative tools. Listed below are a few features that enable business to get better:
- Allows process composing and simulation. Provides flexibility and agility to business through process orchestration.
- Allows specifying business rules which can then automatically control business processes.
- Enables integration across applications on different platforms so long as they conform to industry standards.
- Facilitates collaboration among business users and improves efficiency
- Can define metrics and key performance indicators and helps the business monitor performance and provides data for continuous process improvements.
- The Business Activity Monitoring (BAM) sub-module which can provide real-time information about the status and results of various operations, processes and transactions. Can generate alerts when any crosses a defined threshold.
It is important to optimize and improve business processes in order to get better and be operationally excellent. When automating, it is essential to choose the right technology to enable good process management. While many organizations use different tools to achieve the purpose, adopting BPM package has a distinct advantage. Given the importance of this approach, the term is nowadays even referred to as Business Performance Management. BPM is now also available as a SaaS model and for those who have not yet got initiated in this process, can consider the cloud option as a possible solution.