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What Is BPM? A Guide to Business Process Management

What Is BPM? A Guide to Business Process Management

posted June 28th, 2017 by Brian Neese

What Is BPM? A Guide to Business Process Management

Business process management (BPM) is a way to improve processes in an organizational context. The discipline entails a systematic approach to improving a company’s workflow. BPM also increases efficiency, reduces error and limits miscommunication.

The following sections expand on what BPM is and how it can impact organizations.

 

What Is Business Process Management?

Business process management is “a discipline involving any combination of modeling, automation, execution, control, measurement and optimization of business activity flows, in support of enterprise goals, spanning systems, employees, customers and partners within and beyond the enterprise boundaries,” according to BPM expert Nathaniel Palmer. Palmer also explains:

  • Modeling refers to identifying, defining and making a representation of the complete process to support communication about the process. There is no single standard way to model.
  • Automation refers to the work done in advance to assure the smooth execution of the process instances. Often, this means writing software, but it can include building machinery or even creating signage for clarity.
  • Execution means that instances of a process are performed or enacted, which may include automated aspects.
  • Control means that there is some aspect of ensuring that the process follows the designed course. This can be strict control and enforcement or loose control in the form of guidelines, training and manual practices.
  • Measurement means that effort is taken to determine quantitatively how well the process is working for serving the needs of customers.
  • Optimization means that the discipline of BPM is an ongoing activity that builds over time to steadily improve the measures of the process. Improvement is relative to the goals of the organization and ultimately for meeting the needs of customers.
  • Enterprise refers to a business organization. This can be any organization where people are working together to meet common goals; it does not need to be a large or for-profit organization.

Consider this example from business consultants Mark Cooper and Paul Patterson in CIO magazine. A large retailer purchased an HR application to improve human resource management capabilities. The HR department was located at corporate headquarters and used the new application to improve processes, which then allowed the day-to-day activities of hiring, firing, pay changes and the like to occur at the store level. Through web and integration technologies, BPM provided the store managers a defined process and user interface for performing each of their HR transactions. The application enforced the business rules that HR needed and submitted transactions to the HR and related applications automatically.

 

Benefits of Business Process Management

Forrest Breyfogle, founder and CEO of enterprise solutions firm Smarter Solutions, details five specific benefits of BPM.

  1. Improved Business Agility: Making changes to an organization’s best practices is necessary to keep up with changing conditions in the market. BPM allows organizations to pause business processes, implement changes and re-execute them. The changed process “will have the unique ability to stay on track and implement changes or redefine the tasks of its process users,” according to Breyfogle. “The end result is a higher level of adaptability to unstable situations.” Altering workflows, as well as reusing and customizing them, allows business processes to become more responsive and gives the organization more knowledge of the effects that process modifications have.
  2. Reduced Costs and Higher Revenues: A BPM solution may not deliver immediate reductions in operational costs. However, the solution eradicates bottlenecks, which significantly reduces costs over time. The solution can also reduce lead times for product sales, giving customers quicker access to services and products. This leads to higher sales and improved revenue. BPM solutions can also allocate and track resources to reduce waste, which can also reduce costs and lead to higher revenues.
  3. Higher Efficiency: The potential for higher efficiency is brought by the integration of organizational processes from start to finish. If a BPM automatically alerts process owners of a project’s status, this leads to more proficient monitoring of delays or reallocating tasks among employees. Efficiencies are also created when the BPM allows automation and removal of redundant tasks.
  4. Better Visibility: BPM allows software programs to make process automation possible, informing organizations of performance and real-time indicators of business process function. This happens without extensive labor or monitoring techniques. Enhanced transparency leads to better management and the ability to modify structures and processes efficiently while tracking outcomes.
  5. Compliance, Safety and Security: According to Breyfogle, reliable BPM practices assist organizations by keeping them informed of their duties with financial reports, labor law compliance and a wide range of government rules that organizations should follow. A comprehensive BPM guarantees that organizations comply with standards and stay up to date with the law. BPM can also promote safety and security measures by properly documenting procedures and facilitating compliance. As a result, organizations can encourage their staff to safeguard organization assets, such as private information and physical resources from misuse, loss or theft.

 

When Should Organizations Implement BPM?

Organizations should not necessarily implement BPM for all types of business processes. According to Cooper and Patterson, the following processes can yield a high return on investment if BPM is used.

  • Dynamic processes that must be adapted to regulatory compliance changes, such as retailers modifying how customer information is managed due to changes in federal privacy law and credit card company mandates.
  • Processes that cross business units, divisions, departments, workgroups or other groups.
  • Complex processes such as order-to-payment processes that require orchestration from different functional departments.
  • Measurable mission-critical processes that directly improve a performance metric.
  • Processes that cannot be completed without calling on more than one legacy application.
  • Processes with exceptions that are handled manually and/or require quick turnarounds.

Conversely, BPM is not advisable for the following instances and processes.

  • When organizations need legacy application replacement.
  • Scenarios with high-volume transaction processing, such as point-of-sale application.
  • Processes with little or no user interaction.
  • Processes that can be simply automated with other, more cost-effective tools.

 

Pursuing a Career in Business Analysis

Business process management is a competency area for business analysts. Business analysts typically facilitate these types of projects, given their knowledge of BPM methodology and related skill sets.

 

Southeastern University’s online Bachelor of Business Administration: Business Analysis Major builds on the degree’s core and focuses on information systems, data analysis and project management. Graduates are prepared for roles as business analysts. Also, they receive all the required content areas and required hours of study to sit for the following industry certifications:

  • Microsoft Office Excel Basic and Advanced
  • International Institute of Business Analysis (IIBA) Level I
  • Project Management Institute Body of Knowledge (PMBOK) for Certified Associate in Project Management (CAPM)

The program takes place in a fully online learning environment.


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