What is business process management

BPM Definition:

BPM (Business Process Management) is a field of management that acts as a systematic approach for making organizations Workflow more effective, more efficient and hence improving the corporate performance by managing the organization's business process. Or we can say business process management is a systematic approach to improving a company's business processes which cover how we think, change, and monitor business processes so they run easily and can be enhanced after some time. 

Here are the examples of how BPM helps in the extended business process:

1. Account opening process

2. Procurement

3. Data management

4. Automate evolving business process

5. Compliance management

6. Healthcare and Insurance

7. Manufacturing

Business process coordinates the behavior of people, systems, information, and things to produce business outcomes in support of a business strategy.

Business Processes can be structured or unstructured. To understand why Business Process Management (BPM) is important to any business, you first have to understand what it is. Since BPM means different things to different people, this is not as easy as one might expect,

Every participant in a business process has a different perspective and definition of BPM that is influenced by their role.

Business Process Management – What does it convey?

A Well-designed Business processes and execution enables organizations to align their business abilities to customer needs and helps executives determine how to deploy, monitor and measure organization assets.

When properly executed, BPM has the ability to enhance efficiency and productivity, reduce costs, and minimize errors and risk – thereby optimizing results.BPM approach can help a business innovate and transform its way to achieving more business value.

BPM helps its clients in the following aspects:

1. Lead Time (Cycle Time)

2. Productivity increase

3. Work-In-Process Inventory

4. Improved Quality

5. Space Utilization

6. Revenue increase

A particular BPM implementation usually starts by defining the steps involved in a work process so you can determine what can be improved, what can be automated, and how it can be tracked.

With the right BPM software solution, BPM can be completely customized, which is critical because no two organizations operate exactly the same, and differentiators are keys to competitiveness.

Keys to a successful implementation of BPM:

1. Select your BPM software carefully

2. Monitor and measure implementation

3. Don't think BPM as a project

BPM is designed to help your organization gain business value and reach its competitive edge. This requires hard work and planning. Selecting the right BPM software that allows your team to define processes intuitively with your goals in mind has become should be the top priority for organizations.

What is Business Process?

A business process refers to the process of undertaking a task/activity or set of activities in order to achieve a specific business objective of an organization. And, Business Process Management is the process of observing and controlling the business processes in an organization to create a more efficient and cost-effective business. BPM is a systematic approach that aligns an organization's business processes, or functions, to the needs of the client or customer. It enhances quality, compliance, innovation, and integration with technology.

Business processes exist at all levels of an organization. For instance, in management, these may be corporate governance and strategic management. For the operational processes of a business include purchasing or manufacturing. Supporting processes will include accounting and recruitment. BPM’s holistic and structured approach to business processes creates a more streamlined business and with appropriate BP consultants and training, an organization’s entire culture and functioning can be successfully changed for the better. An NGO, the Business Process Management Initiative (BPMI), established in 2000, promotes the standardization of common business processes, to support e-business and business-to-business (B2B) development.

Goal of BPM

BPM is a subdivision of infrastructure management, which is concerned with the optimization and maintenance of an enterprise’s tools/equipment and core processes. An organization’s ability to adapt to evolving aspects of the environment (including clients, competitors, and resources), while increasing efficiency and effectiveness of workflow can be systematically enhanced by BPM. In simple terms the goal of BPM is the reduction or elimination of miscommunication and human error alongside encouragement of business stakeholders’ focus on their roles in, or obligations towards the business.

Business stakeholders include owners (shareholders), employees, suppliers, creditors, directors, government bodies, unions, and also the community from which the business acquires its resources. Each stakeholder contributes to the business process or fulfillment of a business objective. For instance, in a particular business, owners may provide leadership, employees provide manpower/labor, creditors provide the capital, suppliers contribute to the sales, government bodies regulate the business processes, and so on.

How is BPM linked to BPEL and BPMN?

The languages of Business Process Execution Language (BPEL) and Business Process Management Notation (BPMN) were developed to bring forth communication between a business’ or an organization’s IT department and line-of-business (LOB). And, it is BPM that often links these two domains. Easy to comprehend and learn, individuals can utilize BPEL and BPMN to design processes required by the business, quickly. These programming languages follow the fundamental laws of programming that enable developers to translate processes designed in BPEL or BPMN, into hard code without difficulty.

A framework for BPM oversees the execution, administration, and enhancement of process-based organizations. A BPM Framework is a management framework with a process-centric approach that may include regulations applicable to an organization’s industry, policies, quality standards, and sector frameworks. This process necessitates a change in business roadmaps, with evaluation and management of knowledge and performance.

Currently, there are three different kinds of BPM frameworks available in the market, which are as follows:

• Horizontal BPM frameworks that focus on the design and development of business processes and generally deal with technology and reuse.

• Vertical BPM frameworks that focus on a specific set of coordinated activities and have pre-built templates, fit for configuration and deployment.

• Full-service BPM suites that have five basic components of Process discovery and project scoping, Process modeling and design, Business rules engine, Workflow engine, and Simulation and testing.

A Business Process Management Framework starts with a philosophy on how you want to manage your organization. Some common business management philosophies are:

• Manage by Department or Cost Center (such as HR and accounting): Though logical, this traditional way of managing organizations may not consider how other parties in the organization can harm a call center or department.

• Quality overriding philosophy: This philosophy requires discipline and the belief that increasing the quality of every process is important. But, it may not address cost issues very well.

• Managing by Cross-Functional Business Processes involves each functional area or department having a specific role to perform according to its specialization within the business process. Core Competencies techniques identify core processes for the organization’s success and then help consider outsourcing all non-core processes. The organization’s effectiveness and efficiency efforts are focused on its core processes.

• Quality techniques like Total Quality Management or Six Sigma focus on processes, Lean Management deals with value streams processes

• Reengineering refers to cross-functional processes being redesigned.

• Researchers emphasize maintaining competitive advantage by connecting a series of interrelated processes

The basic BPM framework includes:

• Defining 8-12 high-level MACRO business processes comprising Sales and Marketing, Providing Financial Information, Manufacture of Product or Service, Providing Trained Employee

• Defining Sub-Parts that back Macro Processes that includes sales and marketing in Research Market and Creating Marketing Campaigns, proposals, sales call paperwork, and purchasing Advertisement.

• Defining MICRO-Processes that support Sub- Processes that comprise making sales calls to Make sales appointments, sales presentation to current/potential customer, and Travelling to a customer.

• Developing Cross Function Business Process Reports by Determination of frequency, types, details, and software for reports.

• Creating Capital and Operational Budgets by Relating cross-functional business process budgets to strategy and Relating capital budgets to strategy and cross-functional business processes.

• Assigning Process Managers and Executives for the daily responsibility of process and for funding and overall responsibility, respectively.

The process is an important part of methodologies such as Lean, Six Sigma, and ISO standards and BPM ensure processes are favorable for the whole organization. The practice can reduce waste and/or duplication, and help reap the benefits of each individual methodology. For instance, Lean aspires to increase customer value and decrease waste. Six Sigma aims to enhance the quality of process outputs by eliminating defect sources and minimizing variability in business processes. ISO Standards seek to ensure the safety, reliability, and quality of products and services. Owing to their beneficial roles, one or more of these methods are employed as important parts of many organizations. BPM relates to and improves these methodologies to further benefit the organization employing BPM.

Limitations of BPM

• May require outside expertise
• Can get costly
• Employees may not follow the processes or use the system at all
• Limited or no stakeholder support

Also, the BPM system requires the full support of senior stakeholders from the start and needs to be utilized with consistency and continuity by everyone in the organization.