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BPM: A Critical Strategy for Business Efficiency, Effectiveness, and Customer Experience
By Connie Moore, SVP of Research, Digital Clarity Group
For several years, business process management suites (BPMS) have been slowly inching up in importance with CIOs and CXOs as an invaluable tool for automating complex business processes. While CRM, HRM, ERP, and SCM suites are readily available for well-known and well-understood processes, many other lesser-known and largely industry-specific business processes still languish from the lack of commercial software that codifies and encapsulates all the known best practices. And this lack of out-of-the box software for many un-automated, end-to-end business processes that are still unaddressed by large suites leaves organizations with poor options. These include:
• Custom development that results in hard to change software that quickly gets out of sync with the real-world process being automated.
• Packaged software that only tackles a portion of the business process, requiring IT to integrate with other tools, such as analytics, content management, social, collaboration, and custom and packaged applications.
• Incomplete solutions (packaged, custom, or partial applications) that look at portions of the business process—typically within a department—rather than automating the process comprehensively across the organization, usually known as end-to-end processes.
“BPM is a discipline for continuously improving cross-functional, horizontal business processes that deliver value to customers and other external stakeholders.”
Business Process Management (BPM) – although many people refer to the software for automating processes as BPM, the term “BPM” actually does not refer to software at all. Instead, BPM is a discipline for continuously improving cross-functional, horizontal business processes that deliver value to customers and other external stakeholders. Although a well-documented BPM discipline is emerging from organizations like the Association of Business Process Management Professionals (ABPMP), BPM also draws from other core methodologies for continuous improvement, like Six Sigma and Lean. Within a business process, Lean is typically the best method for examining the process end-to-end while Six Sigma is excellent for drilling into a specific part of the process that isn’t working properly.
Business Process Management Software or Suite (BPMS) – is a software suite for designing, automating, monitoring, and improving a collection of interrelated business activities that form an end-to-end business process. ABPMS product is designed for use by multi-disciplinary teams composed of developers, enterprise architects, business analysts, business architects, and business people.
On average, when automating a business process largely for knowledge workers, the productivity gain is in the 20-30 percent range. If the BPMS is targeted at a process for clerical workers, productivity gains usually increase by 35-50 percent. And this doesn’t take into account the productivity gains within IT by providing programmers and designers with advanced modeling and programming tools.
Efficiency is only the tip of the iceberg
Efficiency is a good thing: when done on a large scale the benefits can be in the millions of dollars, or hundreds of days saved, and dozens of full-time-equivalents (FTEs) not added to the payroll because processes are more efficient. But most organizations seek more than sheer efficiency—they also want greater business effectiveness across the board. And BPM and BPMS can deliver the goods, not just for efficiency but also for effectiveness.
Take a discrete manufacturer for example. This organization relies on SAP to power its business, from ERP and HRM to e-commerce. But the business discovered it had a serious problem when a new CIO arrived several years ago and took a deep look at the organization. This problem went well beyond inefficiency; it struck at the heart of the business’ ability to perform and thrive. The two burning issues were: the organization could not ship products in time for customer needs and could not get paid in time for cash flow. Fortunately, this CIO was experienced in continuous process improvement and led the rest of the C-suite in process transformation using BPM. By examining their end-to-end processes, rather than focusing solely on departmental processes, the executives discovered major problems in hand-offs between departments. These included lost work, delays in requests, uncaught mistakes, rework, and many other issues from running the company like 20+ small businesses rather than one streamlined organization. By switching to end-to-end processes, making major organizational changes, and by adopting a max of six core processes, the company was able to reverse the damages and embrace corporate excellence and effectiveness.
The name of today’s game is customer experience
Today’s C-suite is no longer content with efficiency or effectiveness. Almost every organization is now busily improving the customer experience (CX). If you go to any CX conference you’ll see lots of hot topics on the agenda including commerce, personalization, omni-channel, the Internet of Things, and wearable computers, to name only a few. But it’s fascinating to dig a little deeper into how the project teams advocating transformation in the customer experience stop at marketing’s door with a focus on improving digital channels.
Similarly, if you attend a BPM or BPMS event, everyone will be talking about the need for transforming the process to support customer engagement, or the need to embrace outside-in-processes. Attendees and speakers will bemoan the dominance of internal process thinking or the fixation on using Six Sigma for achieving internal efficiency. But there will be little actionable advice about how to extend customer facing business processes out to the customer so that the customer’s experience is totally transformed in every single way. It’s as if process people know this is important, but don’t know how to do it.
Here’s what needs to happen: BPM project teams need to connect with customer experience teams. Both groups have invaluable insights about how to really engage with the customer, going beyond digital channels into the organization, across all the departments, and back out again, and delivering huge value to delighted customers. BPM projects that look at cross-functional processes but don’t focus most of their attention on customer experience management and don’t involve CX teams are not providing as much value as they should be.
Really, it’s quite simple. BPM and BPMS has gone through three areas of focus:
• Efficiency – this is a holdover from workflow/imaging and EAI transaction process days; it’s still an admirable although an insufficient goal.
• Effectiveness – this is a holdover from BPMS startup days, when the focus was on customer-facing processes; it is still an admirable although another insufficient goal.
• Customer experience – this is where BPMS today. CX teams and BPM teams need to find each other and join forces. And organizations need to do it before their competitors do.
That means customer experience is round three for BPMS. Focusing on it can turn your organization from one that hopes being efficient is sufficient to one that is efficient, effective, and a winner for offering good customer experience.