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Why BPM?

Do you need Business Process Management?  YES.

BPM is applicable across all types of businesses, and in reference to my last post, doesn’t have to be complicated.  Even the smallest business has a cash flow that can be modeled.  Large companies, like the Citigroup’s of the world, definitely use BPM to help optimize processes, thus reducing expenses.  I have personally worked with some of the largest companies in the world, and often times, they have processes that are stuck in the stone age.  Paper based.  What always gets me is in the insurance company that gets claims faxed in from their agents, only to print out the faxes and scan them back in using OCR software for storage in a content management repository.  The extra steps can add extra time and extra human capital costs.  As most people know, people are a corporation’s best, and most expensive, asset, so they should be utilized as best as possible.

In this example, I talked about people cost, but you can also extend this to largely automated processes as well.  A process may have been designed a long time ago, and there may be steps which may be now unnecessary.  Or, as in my experience, steps that are unnecessarily computationally intensive, thus slowing down the whole process and costing the firm money (from my personal experience, this occurred at a financial firm, where quite literally, time was money and speed was of the essence).

When you think about your processes, how many of them are “spaghetti” processes?  How many spread over multiple pages?  How many have font so small that you can’t read each of the steps?  If the answer is more than one, you’re losing money.  You may not realize it, you may have people doing unnecessary work, or you may be doing duplicate work (as in the example above), but somewhere, money is being wasted.

Given the economy now, companies can’t afford to waste money.  There will always be some amount of waste, but by utilizing BPM, you can start to figure out how much waste there is and how you can get it under control.

 

Coming next: Business process analysis, ie, Help me! My process is running too slow!

 

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Categories: BPM

What is BPM?

What is Business Process Management (BPM)?  Is it something as simple as drawing a Visio diagram of a revenue producing process?  Is it creating a word document that describes how back end systems work?  Does it have to be complex?

You can look it up on Wikipedia, but in reality, the concepts around BPM are very simple.  Every business has processes.  Some of these processes have direct costs (like recruiting and hiring), while some are revenue generating (like order to cash).  Some of these processes may have indirect costs, like people costs.  BPM is the study, analysis, and optimization of these processes.  In today’s world of limited budgets and a focus on increased employee productivity, BPM is critical for all companies to consider implementing.

Does BPM need to be complex?  No.  Most companies today have processes documented in some form, whether it’s in training manuals or Visio diagrams.  Collecting these documents and organizing them is the first step on the BPM journey.  Contrary to what many companies will tell you (including my employer, IBM), you don’t need to spend tons of money to get started.  Does software help?  Certainly.

Now, I have worked with clients who take BPM to an extreme, utilizing powerful software to model and perform analysis on business processes.  They will draw out a business process in a tool similar to Visio, then walk around with a stopwatch to see how long each step in the process takes.  With a maniacal focus on metadata accuracy, they can see where process bottlenecks are, and eliminate them.

There is a middle ground, and there’s a lot of help out there.  BPM software will not only help you model your process (ie, draw it out), but also let you execute it in a runtime engine.  Sometimes you can also have human interaction (think of this like a queue, people claim work and complete it through a browser).

The bottom line is that while BPM can be complex, the concepts are simple and everyone can get started today.

Categories: BPM