BPM: The Next ‘Must Have’ App

What Is BPM?

BPM, like CRM, defines both a corporate strategy and a software segment. The focus is managing the efficiency and effectiveness of business processes throughout the organization, by modeling, automating, managing and optimizing any business process. By addressing end-to-end business processes, BPM cuts across departments, applications, and users. It runs inside and outside corporations, touching not just employees but customers, partners, and suppliers. At the same time, the application of BPM within companies immediately delivers not just ROI, but new levels of visibility, accountability, and predictability for the business. With this foundation, everything happens faster and easier with less wasted time and money.

The BPM market has evolved from the convergence of four market sub-segments that have each addressed a part of the BPM problem:

Workflow Automation — which has been focused on automating human-centric processes.

Enterprise Application Integration — which is focused on the exchange of information between heterogeneous systems.

Business Process Modeling and Analysis — which is focused on gaining a detailed understanding of business processes and the potential impact of changes to those processes.

Business Activity Monitoring — which is focused on analyzing the efficiency and effectiveness of business processes and activities.

A complete BPM solution must provide capabilities in all of these areas.

With BPM, the organization of process management and workflow can be much cleaner. Instead of a myriad of point-to-point connections with unique interfaces, implementation models, and management environments, BPM provides a unified layer that unites applications and users in a process driven context.

From an architectural standpoint, this view of BPM fits in perfectly with the new service oriented architecture (SOA) concepts that are gaining in popularity. The basic idea behind SOA is to leverage Web Services to expose key functionality within applications as callable services. The goal is to make companies more agile by enabling them to mix and match these services into dynamic solutions at much lower costs than ever before.

SOA is a great concept that needs BPM to succeed. This is for three reasons:

In order to take advantage of services, organizations must understand their business processes in detail. BPM provides the ability to gain that understanding.

Without BPM, the interconnection of services between applications will look like spaghetti, creating management challenges and making it difficult to introduce changes quickly, like our embedded workflow example from earlier.

Finally, most BPM solutions lend themselves to faster, lower cost deployments (when compared to departmental applications). It is easy to focus on a few processes, get them implemented, then add more as needed.

The combination of BPM and a SOA approach reduces delays, time, and costs not only in process execution, but also in automated process development and maintenance.

A Process Example

It’s safe to say that the Internet has caused more change than any other technology cycle the IT industry has experienced. From a technology level, the change is all about incredible levels of access — people can be connected anytime, anywhere. From a business level, it simply means customers know more, expect more, and want everything faster. Customers don’t care about functional silos or organizational models. They care about getting the product they want, when they want, the way they want it.

For example, a customer of a manufacturing company needs an enclosure custom built for a new product they are developing. In the functional world, the customer may be able to create a request online, or the sales rep will do it for them. This will be stored in the CRM system. It will be updated when the company has determined if it can build the item and how much they want to charge for it. Finally, that will be communicated to the customer and they will place an order (or not).

This sounds pretty good on the surface, but several things are missing:

The determination of the ability to build the item and how much it will cost, and how long it will take requires involvement of several other departments (design, manufacturing, testing) that are not part of the process as defined by the CRM system.

The steps to determine a price using the cost information are not part of the CRM process.

The ability of the customer, or the sales representative, to find out the real status of their request is non-existent. It is nearly impossible to find out which department has completed their tasks and which ones haven’t.

Outside the CRM system, there is no visibility or accountability for any other department involved in the process. From a CRM perspective, the visibility is limited.

When looked at from this perspective, the best-case scenario is all of this happens correctly and quickly and the customer is satisfied. Most scenarios lead to frustration and dissatisfaction for both customers and employees.

The BPM Approach

With BPM, the approach is different. Instead of looking at the process from the perspective of a single department, the entire process is addressed. Here is how the process above will change:

When the request is made, by the customer or sales representative, the BPM system will determine which departments need to be involved to compile the information (cost, delivery date, and pricing) for the quote.

The BPM system will assign time limits for each task to be completed and notify appropriate parties in each department about their deadlines.

If other systems need to be used to develop the quote, the BPM system can drive the integration to both feed information into the system and get information back out of it.

The BPM system will enable the customer or sales representative to monitor the status of their request, finding out exactly who has completed their work (and who hasn’t). This improved visibility drives more accountability for each department.

With BPM, we have seen typical cycle times for this type of process reduced as much as 90%, with the quote being delivered back to the customer in two days rather than 20. In addition, errors were reduced, pricing was more accurate, and customers and employees were more satisfied.

The other important benefit that has been cited is the new levels of cooperation and business understanding that results among the different departments. With BPM, departmental involvement no longer occurs in a vacuum — everyone has a shared context of the reason for their work and the role it places in the entire process. Organizational computing and productivity has arrived.

Summary

BPM is the natural choice to be the next “must have” software category. As with CRM and ERP, it takes advantage of enhancements to the computing infrastructure to address real business problems. Unlike CRM and ERP, it moves beyond the functional silo approach to enable businesses to work across departmental, user, and organizational boundaries. It builds on the gains we have already achieved in individual user and departmental productivity, extending them into an organizational context.

This approach is being mandated by today’s business climate. Customers won’t tolerate slow response times, bad service, or incomplete information. Businesses can’t afford system deployments that take years to implement and years to deliver results. At the same time, organizations have learned more about their customers and processes than ever before. They’ve learned the challenges of implementing workflow and integration solutions in stovepipes with limited process awareness. This combination of business needs and implementation experience sets the stage perfectly for BPM.

By helping companies model, automate, manage, and optimize their business processes, BPM provides the framework for sustainable competitive advantage. Picture the impact of being able to respond to customers in days rather than weeks — and respond with more complete, more accurate information, while spending less than your competitors. That is exactly what BPM intends to deliver.

Rashid Khan is the co-Founder & CEO of Ultimus, a pioneer in business process management and workflow automation software. Khan holds an MBA from Harvard Business School, a Masters in Computer Science from University of California at Berkeley, and a B.S. in Computer Science from MIT.