BPM means Business Process Management. Let’s break this down into its constituent parts: “business process” and “management”. A process is a series of events that targets a certain outcome. So a business process would be some sort of activity that a business engages in that results in some sort of expected (or sometimes unexpected) outcome. For instance, when a business hires a new person, there is an entire process for that. It is referred to as “on-boarding”. Different companies will scope on-boarding differently. Some would count the recruitment phase as part of the on-boarding process. Others would consider recruitment an entirely different process, in which case the recruitment process may or may not lead into the on-boarding process. As we can see, we have a potential breakdown in the process, or at least a difference in opinion of what the actual process is.
So now, if we combine people from different companies with different definitions and processes for on-boarding, there is a likelihood that the whole process of recruiting and hiring people will be a confusing mess. Some people will work it one way, and other people will work it another. Without some sort of defined process for a given company we could have a mess, or the potential for one.
Additionally, small companies will probably have just a single person, or actor, involved in the on-boarding process. However, large enterprises could have many actors involved. Who does what, and when, needs to be defined and preferably directed. Without that, we’ll end up with what looks like a bunch of chickens running around with their heads cut off.
Now, multiply this headless chicken fiasco by 10, 100 or even 1000. Large enterprises have thousands of business processes; everything from on-boarding to expenses, from sales to procurement, from pay checks to annual reporting. Some of these business process are value chain processes, or processes that contribute to the core value of the business. Many of them span entire departments or even divisions. Other processes are enterprise level processes and involve strategic planning, strategic sourcing, capitalization planning, product/service development, etc. All these things are processes. Many of these processes follow a predictable pattern.
Because these processes consist of a series of steps, they can be documented. In this documentation, we could display the business process visually in a flow diagram, or a work flow. The work flow is a kind of recipe for the business process. This work flow or recipe then lends itself to optimization because we can visualize it. We could even monitor each step of the process and capture metrics at each stage. This will show us any bottlenecks or places where things get hung up on a regular basis. Time is money, so smoothly flowing business processes are an absolute must. In every repetitive process there is an opportunity to fine tune the business.
The repetitive processes need to be managed to keep them efficient. This management could include company wide or individual training. It could include documentation in the way of Standard Operating Principles (SOP) or some intranet based wiki or CMS. It could even involve verbiage written into the articles of incorporation or corporate by-laws.
BPM is the practice of documenting and streamlining recurring business processes. We do this to save money, cut down on processing time, limit the occurrence of mistakes, and help overall morale. There are numerous ways to help with BPM. From adopting certain management practices and/or using Information Technology tools to instilling a process centric culture within the organization, Business Process Management must be bought into at all levels of the organization. BPM is not a magic bullet though, and there are certain pitfalls we must be wary of when attempting to implement some sort of BPM methodology.
I’ll be following up with a more detailed review of Business Process Management in the next post. This will then lead into a couple of write-ups about Business Process Automation (BPA) and Business Process Management Suites (BPMS). Following that, we’ll examine some of the existing BPA/BPMS software that is available on the market today. Stay tuned.