Business Process Management: Understanding and Implementing

by Nowshade Kabir

Published on this site: December 14th, 2005 - See more articles from this month

If yours is a business with several departments, at one point you start to realize that in order to stay competitive, increase productivity and bring efficiency to your business, you need to optimize and automate some of your business processes. To identify which parts of your business activities required to be optimized, first you need to have a clear understanding of the processes involved in your particular business.

What is a Business Process?

A business process is a series of specific, measured tasks performed by people and systems and designed to achieve a predetermined outcome. The processes have these important characteristics:

1. The processes have internal and external users.
   
   
2. They take place across or between organization's departments or different organizations.
   
   
3. They are based on how work is done in the organization. The business processes have three key elements:
   
   Entity, Object, and Task.
   
   Entities: Where the process occurs.
   
   Objects: The processes are results of handling objects. Objects could be physical or informational.
   
   Tasks: Works done to handle the objects.

The followings are examples of business processes:

Mortgage application processing

Credit verification

Product development

Travel planning

Opening a new account

Answering to a Request for Quote

Shipping a product

Companies are trying to improve their business processes using computer technology starting ever since the computer technology has emerged. Initial emphasize was given to enterprise resource planning. Main areas where automation was adopted were production, accounting, procurement and logistics. The next step was sales and marketing automation. Next came customer relationship management and supplier relationship management. Last couple of years we are seeing implementation of Business Process Management across the board. Companies are adopting BPM in the areas where it could make real differences. Some of these processes involve several departments of the company and some are result of real-time interaction of the company with its suppliers, customers and other business partners.

Interest in BPM is growing really fast, according to a report from Forrester Research, one-third of organizations surveyed by the firm are currently using or piloting BPM, a dramatic increase compared with mid-2002, when just 11% were trying BPM.

What is Business Process Management (BPM)?

BPM automates and streamlines the business processes which are crucial for the organization in order to improve productivity. From hiring a person to processing a purchase order, BPM helps restructuring, controlling and handling workflows involving people and systems to complete a process more efficiently.

To use BPM effectively, companies must focus on the outcome of the process and design workflows based on the expected result from the process. There should not be any difference between a task done by computer systems or people. BPM should be able to map the interaction among the entities, objects and tasks and bring them inline with the process workflow. Business rules used in the process also should be clearly defined. While trying to automate a business process you have to keep in mind that finding a process which should be streamlined is not that difficult! Problem occurs when you try to define which entities are involved and how the evolved method will distribute the previous roles among the new tasks owners.

The benefits of BPM adoption are enormous:

Direct

• Update processes in real time
  
  
• Reduce overhead expenses
  
  
• Automate key decisions
  
  
• Reduce process maintenance cost
  
  
• Reduce operating cost
  
  
• Improve productivity
  

Indirect

• Improve process cycle time
  
  
• Improve forecasting
  
  
• Improve customer service
  
  
• Improve sourcing time cycle

How to figure out which of the business processes you need to automate?

Companies use BPM systems to automate virtually every aspect of their businesses. A company for example might have priorities to automate their sales activities, requisition process, procurement process, warehousing, call center, etc. However, the focus initially should be given on those areas that meat the following criteria:

• The business process should be crucial for productivity improvement
  
  
• Savings from automation is clearly visible
  
  
• Return on Investment from implementation is high and preferably
  immediate

Since your business has unique characteristics which differ from others, you might have business processes that have exceptional business rules. Normally, this type of business processes need maximum attention and substantial resources. Business Process Management tools are great in handling exceptions. Use BPM systems to streamline these processes.

What are BPM Systems?

BPM Systems are applications that help organizations to automate their business processes end to end from a workflow task to process outcome so that they can reduce process costs, improve productivity and bring efficiency to their business.

A successful implementation of BPM systems requires clear understanding of organization's business processes, business rules, and willingness of the management and workers to embrace new way of doing business.

Your Enterprise Portal can be the BPM platform you need

Your company Portal is the access point for your customers, vendors, business partners and staff to company information and services. A typical company Portal is an integrated website of Intranet, Extranet, Repositories, Procurement and Sales Systems, Customer Relationship Services, etc. Today, advanced Portals are also integrating Business Process Management Systems, which enables automation of workflows that model end-to-end business processes.

In any business process the owners of the process, the users and the objects interact at many levels, such as starting a process, monitoring the process, doing a task, creating new activity, approve a task, etc. In order to reflect the business processes, their progress and interaction with users and owners, a dashboard is used. You can easily integrate any business process into your company Portal and display needed workflows, notifications, charts, performance indicators as a dashboard on it.

Conclusion

BPM is the same as any other technology related investment. If you plan the project properly, set a clear goal, educate the people those who have to change their mindset once the system is implemented and get necessary support from the management, you can count on a massive return on your investment.

Nowshade Kabir is the CEO of Rusbiz.com. Companies can optimize and handle some of their vital business processes such as supply chain management with the features available on Rusbiz.com (http://www.rusbiz.com). Read more articles related to online business at http://ezine.rusbiz.com