Are we ready for Business Process Management?

Subham Sarkar, Consultant, Technology Advisory Services, PricewaterhouseCoopers, details the factors that led to the birth of BPM and how it can help enterprises

Subham Sarkar

During the re-engineering wave many companies invested heavily in it. In many such cases, what was supposed to be a 90-day initiative took more than two years to complete. Many of these initiatives made the companies that took them up anaemic.

At that time many successful re-engineering efforts improved the concerned business to a better state, but one that was static. In many cases with late adopters of re-engineering, the change in requirements came even before the re-engineering process was through. However, more than 80 percent of BPR (business process re-engineering) efforts failed.

As business requirements changed faster than ever, companies needed to adapt and change before they realised their return on investment (RoI). These changes were triggered by factors such as shrinking business cycles, commoditisation of products and services, cost pressures, knowledge-based services, e-business, globalisation, consolidation, extended value-chains, extended enterprises and external stakeholders.

To cope with these challenges, businesses kept trying every means to optimise processes, implement automation, and run radical management theories as increasing costs put businesses at risk. This led to a tidal wave of change that saw downsizing, rightsizing, outsourcing and restructuring.

The need to move on

Inability to meet these changes can constrain a business. Businesses often miss out on new opportunities because changing business processes are often time-consuming and expensive.

New strategic drivers are difficult to consolidate with existing business processes. Often, small changes required for continuous process improvement which can be incorporated at ease in an agile enterprise are deferred because of the dreaded impact on existing processes. Thus, changes are compounded, resulting in a monstrous change effort.

Organisations often face a crisis where entities and business processes are not all aligned with the company’s goals. In many cases it becomes difficult to minimise time-to-market because of the absence of agile processes.

With lessons learnt, ERP and a lot of other IT systems catering to more or less standardised business needs with little customisation are being implemented. (For example: SCM, SRM, Web-enabled services, e-procurement, and CRM.) Moreover, many business-specific custom IT solutions were developed from scratch and implemented.

The automation trend was mostly driven by business-function owners with an IT requirement going ahead and implementing an IT solution aligned specifically to the process. This led to many disparate systems existing in an organisation under one umbrella. These systems were tightly coupled, and in most cases, people were trained and business processes were aligned as per the existing system.

System owners have been data- as opposed to process-centric. So when the requirement of process change or collaboration came about, most legacy and modern systems failed to deliver. A gap between process and systems surfaced. The traditional approach of system implementation will definitely give a short-term solution with tightly coupled integration, but the perennial problem of change still persists.

This fuelled a shift from a functional mindset to process-oriented thinking. A business process, by nature, is cross-functional, constantly changing, integrated, and interacts with systems and people. This is where BPM comes in.

Advent of BPM

BPM encompasses the entire organisation, integrating critical processes within and outside an organisation. It is often desired that the whole organisation behave as a system. Earlier, there were technical limitations in achieving this. However, powered by a strong mathematical foundation, BPM now promises to deliver a single window from where strategies can be translated into action across business processes.

BPM is not another form of automation or a revolutionary new philosophy. It helps discover what we do, and then manages the lifecycle of improvement and optimisation in a way that directly translates into operations.

Tailored for business

BPM is for business people. Designed top-down in accordance with a company’s strategy, business processes can be loosely coupled with existing IT systems, and the power of existing IT infrastructure can be leveraged.

A business process consists of business functionality with IT and non-IT processes that may be powered by people or otherwise automated. These business processes change dynamically everyday, influenced by internal as well as external factors.

BPM’s capabilities are derived from process modelling, application integration, process analytics, rules management, and collaboration portals. It brings together these elements on a single platform that manages the lifecycle of a process from definition through deployment, execution, measurement, change and re-deployment.

At the heart of BPM lies a strong technology foundation provided by Service Oriented Architecture (SOA). BPM is a philosophy which is a management discipline, and focusses on continuous performance improvement around iterative process improvement. SOA is a technology approach that delivers systems as a composition of discrete and independent services, and which is orchestrated by rules.

Together these elements provide explicit process management which include:

• Modelling and simulation
• Rules engines
• Human interaction
• Application interaction / integration
• Process analytics.

BPM gives control of the business to the business people, and bridges the gap between processes and systems. BPM systems provide solutions to a lot of integration challenges that combine aspects of loosely coupled, coarse-grained asynchronous integration with visual process definition and run-time process management.

Benefits of BPM

Implementation of BPM starts with the analysis of the top-level strategy of an organisation and drills down to the core of its business process. The BPM implementation is iterative, and processes are iteratively deployed as part of the system.

Since Process Oriented Architecture provides plug-n-play support for processes, the processes are deployed according to criticality. This iterative deployment provides cost advantage, and the cost savings resulting from each deployment can fund deployment of less critical processes.

BPM is a key that can unlock the potential of many a business. With BPM we can harness the capabilities within an organisation to the maximum.