With the influx of so many advanced technology breakthroughs like Advanced Sensors, Cloud Computing, 3D Printing, Mobile Collaboration, Agile Robots, Virtual Reality Devices and much publicized and celebrated Digital Revolution, it really makes it hard for the corporations to resist the lure of these promising developments, which not only seems to change the future of business landscape but also inducing innovative and ground breaking business models in the market. Even the big corporations, that once upon a time seems “too big to fail” are hard pressed to innovate faster and extract the best out of these technologies to not only hold their grounds but also to beat their newly developed competition.
The Tricky Part
Now to be in sync with the market development and at times to make a great leap, companies often got hurried up in adopting these fast paced evolving developments, without exercising much due diligence of the impacted business processes that ultimately cause adverse effects on desired performance KPIs like increasing service level, reducing cost, increasing turnover etc.
The problem here doesn’t lies in embracing these IT systems and technologies but in the mindset of its adopters who basically always want to maintain status quo in their business processes yet like to create the maximum impact with just the inclusion of these IT systems. They are open to implement new advanced IT systems and processes but are reluctant to tweak or say transform their operational model because of many reasons that are out of scope of this blog-post.
My focus here are not on the revolutionary firms that had disrupted the market with their state-of-art business model by harnessing these radical technological developments but are aimed towards those organization that have a well-established business running from the past but presently struggling to exploit the potential benefits out of their aspirational technology investments to cope up with fast changing business dynamics.
Business Process Management: The Definition
This concept is around for a long time now but with the pace of developments happening around, the risk of ignoring it or any lapse in its planning, evaluation or execution could have multifold negative repercussions for the business.
To put it succinctly, Business Process Management is an activity to identify different processes undertaken, define measure for its effectiveness and efficiency, monitor the process, detect bottlenecks or constraints by analyzing its results and re-engineer the process to generate desired optimal output.
If you are looking for standard definition from industry, it is defined on bpm.com site as:
“Business Process Management (BPM) 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.”
Business Process Improvement, Optimization and Re-Engineering are one or the other forms of Business Process Management with strong interlinking.
To support this, I like to quote a reference from a study mentioned in one of the best and most reliable resource material for Supply Chain Management, titled “Designing and Managing the Supply Chain”. The research study focused on unraveling the linkage between supply chain performance and the maturity of business process and IT infrastructure. The research identified seven planning areas from supply chain to assess the maturity of business processes and systems at each level and the result obtained are described in brief as follows:
- The most significant and surprising revelation of this study was that the companies who invested only in IT infrastructure but not in supporting business process perform even worse than those companies that doesn’t have both mature business process and systems.
- One of the explanation for this dichotomy is cited as IT infrastructure requires significant investments which only results in information, and in absence of a structured and optimized business process the transformation and utilization of this information for an insightful decision making and continuous improvement seems to totally ineffective resulting in a bad strategy.
- Companies with mature business processes and aligned IT systems achieve significant improvement on operational performance resulting in 75% higher profitability compared to market average.
- Companies investing modestly in business processes have improved bottom line profitability and operational efficiency even if they don’t have mature IT systems in place and have 27% improvement potential when supported with relevant IT infrastructure
If this wasn’t proof enough, I got convinced of this hypothesis when one of our client approached us with the same problem, where they had invested heavily and implemented an ERP system but not getting promising results as sold by their respective implementation firm.
We analyzed their system and came to conclusion that their system are implemented as per individual stakeholder requirements but there is no synergy in their business processes across functions. Every department in isolation treated it as process automation where there current activity is performed through system now and even then all the operational stakeholders didn’t bother to even analyze their current business processes to make further improvements in their operational performance.
This kind of situations cause confusion and multi-fold damages to the firm. Now to add to it with our consulting intervention (further investment for the company) led to streamlining their business processes with optimal resolution and delivering the much improved operational performance through integrating and aligning all functions of their organization to achieve targeted business performance. Also don’t forget the whole activity results in revised implementation of ERP system(another incurred cost) but this time with meaningful intention generating focused results and achieving perfect coherence in between Business Processes and IT Systems.
Now some of the proven benefits of Business Process Management are mentioned as follows:
- Increased efficiency and effectiveness through higher resource utilization.
- Increased flexibility and adaptability to align with changing business dynamics along with reduction of cost for change management.
- Business Value Chain creation with removed redundancies and non-value adding activities.
- Consistent and optimized cross functional collaboration to enable continuous improvement.
The Path Forward
Now some of the IT integrators seeks that optimizing IT process is possible without changing the associated business process but the other way round , that is optimizing business process without IT is impossible to imagine. Well I agree to some extent for the later thought but in my view the first statement reflects a myopic view of their intentions and approach in their efforts of optimizing the results of intended business processes for the organization.
Well in my opinion any IT intervention should be first seen as business problem aimed at fulfilling specified business objectives. All the elements involved, like current IT Systems, Tools, Processes, Human Involvement(Knowledge, Skills, Participation) should be duly considered and evaluated before embarking on an aspirational journey of transforming business for the good with revolutionary yet expensive technology available at organization disposal.
The BPM Sources
Once organization realized the importance of Business Process Management for a successful IT intervention, there are many tools and frameworks available in the market to efficiently execute this activity.
Also it is recommended to get an expert help or hire consultant as their experience in enforcing best practices and optimization methodologies would help in optimizing the overall productivity and profitability by setting the right step in the direction of Process Improvement and Optimization and achieve stipulated goals in a timely manner.
Please follow links below to learn more about BPM and set yourself to fly safe and sound into the future:
A blog listing with I guess everything on Business Process Management(BPM)
A site dedicated for Business Process Management(BPM) professionals