Business Process Management Overview
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On This Page
 | What is Business Process Management? |
| What is the BPM lifecycle? |
| What are the benefits of BPM? |
| What are the challenges associated with BPM? |
| How can your organization get started with BPM? |
What is Business Process Management?
A business process is a set of linked steps or activities that taken together result in a specific business outcome, either internal or external to the organization. Documenting a business processes involves describing what is done, why it is done, how it is done, who (or what system) does it, as well as how well it is done.
Business processes may be structured or unstructured, depending on the extent to which the underlying steps are fixed and therefore automated or changeable and generally executed by people or people interacting with systems.
Business processes underlie all organizational efforts, and the effectiveness with which they are carried out contributes directly to critical business goals such as customer retention, length of time it takes to fulfill a product order or service, or regulatory compliance.
BPM Defined
Business process management (BPM) is a management discipline that combines a process-centric and cross-functional approach to improving how organizations achieve their business goals. A BPM solution provides the tools that help make these processes explicit, as well as the functionality to help business managers control and change both manual and automated workflows.
Business process management has its origins in total quality management and business process reengineering. While it adds to these a technological framework, it is more than just the combination of these disciplines. BPM is an IT enabled management discipline that promotes organizational agility and supports the efforts of people to drive process change and rapid innovation. As such, BPM supports the alignment of IT and business activities both within the organization and with business partners and suppliers.
Although early implementations of BPM have unfolded in large enterprises, managing business processes is critical for any sized organization that would benefit from greater visibility into and control over the processes that support their business goals.
Who does BPM?
Business process management is inherently a cross-disciplinary exercise involving personnel from all areas of the organization—from the process owners who are responsible for getting the day to day operational work done, to the department heads who are responsible for managing divisional areas, to the CXOs of the organization providing oversight and direction. That said, most organizations appoint or hire a point person to oversee the BPM process. That person, often referred to as a business analyst or process architect, generally comes from the business side of the organization, but nevertheless has a strong understanding of IT, critical to effective liaison with the IT department.
What BPM Is Not
While business process management endeavors make use of IT technologies to automate and increase efficiencies, BPM is not an amalgam of existing technologies cobbled together and labeled BPM. Nor is it a form of application development which in which business requirements are thrown to IT to interpret and develop, a solution emerging only after extended time and often with poor success translating business requirements into functionality.
BPM is a fast, agile process in which business and IT work together using tools that enable them to arrive at solutions that not only support the organization’s efforts right now, but provide the framework enabling rapid adaptation to new challenges.
What is the BPM lifecycle?
Every organization’s day to day work practices—from shipping clerk to CEO—support the organization’s ability to remain competitive. Workflow practices that support organizational goals are valuable assets to the organization, a principle made more obvious when you consider the knowledge that needs to be exchanged for successful outsourcing or mergers. Not all workflow practices are valued for the same thing: in some cases the most effective practice is also the most streamlined and efficient; in others, the practice that best supports organizational goals is one that enables the greatest ingenuity and innovation.
Driving improvement in business processes has the advantage of carrying the same underlying logic of process improvement and total quality management initiatives. The difference, as we have already seen, is tying together processes that span unstructured to highly structured work—from people to systems—with agile software support.
We see the iterative stages of BPM lifecycle as divided into the stages shown in the diagram: planning, model and design, develop and deploy, manage and interact, analyze and optimize. Preceding the onset of the BPM lifecycle with a planning stage helps to ensure success.
Planning
Business process improvement doesn’t just happen, and as a strategist in the business world, it’s evident that attempting to implement organization-wide changes without first culturing buy-in and support is almost guaranteed to simply waste resources and sour employee good feeling.
Businesses need to focus their initial efforts on understanding their current business practices and planning on the best course of action to improve their current situation.
The initial planning stage consists of identifying and prioritizing a short list of candidate BPM projects, identifying key players whose input is critical to project success, and establishing the governance to ensure that the BPM project stays on track throughout all of the iterative stages of the cycle.
Choosing the Business Process to Improve
Which business processes are good candidates for an initial BPM project? Look for two things. Those processes that have considerable impact on an organization’s ability to achieve its goals either in the short or long term. And those processes, which if improved, will enable the organization to realize a high return on investment.
Business processes related to productivity can have considerable impact on organizational efficiencies in the near term. Look at areas where there are known complaints, whether from customers, trading partners or internal staff. At the root of these complaints are processes that are ineffective and require reworking, streamlining, or better management.
In those business areas where today’s actions have an impact 12 to 18 months down the road, again prioritize those processes that are in greatest need of rework to better support such goals as innovation, growth, and regulatory compliance.
Because organizational buy-in is so critical to the success of business process management, the project that has the greatest support for the BPM process may be the one your organization chooses to go with. A successful BPM experience in one area of the organization will help create enthusiasm for subsequent projects in other areas.
Having completed the preliminary planning, the iterative stage of the BPM lifecycle begins with formally modeling the business process and beginning design work to build an effective solution.
Model and Design
Modeling business processes that span people and systems within the organization, as well as those that reach across to the business partners in the supply chain, is the critical first step of the iterative cycle of BPM. Why? Because modeling directly supports a number of goals, first and foremost of which is to make explicit the opportunities for how the business process might be improved.
Modeling enables you to clearly and explicitly lay out each step in a business process, including the critical touch points across people and disparate systems. It is this mapping that enables informed process improvement; in addition, detailing processes through rigorous documentation enables organizations to meet other goals, including effective outsourcing and regulatory compliance.
A business analyst—usually someone with a foot both in business and IT—oversees the model and design process. During the modeling phase, the analyst works first with process owners and end users to formally define and document the target business process. This stage maps the process from end-to-end, not only across functional divisions (such as finance or marketing) within the organization, but also across to relevant business partners outside of the organization. More than simply a mapping process, modeling also makes explicit the business rules that underlie the various steps in the process—how each of the steps relate, constrain or derive from others. During this modeling stage, stakeholders are encouraged to share suggestions on how changes to the workflow process can better support business goals.
Once all the steps of the target business process has been defined and documented (and often graphically represented in a model), the analyst works with IT to determine how IT can design improved support. This means looking at the entire business process to assess where integration, automation or workflow redesign will improve efficiencies or increase agility. Obviously not all steps in a business processes (particularly those steps that represent highly unstructured human workflow processes) will benefit from being linked to an underlying technology; for the many that will, such linkage is the primary focus of the develop and deploy stage of the BPM lifecycle.
Develop and Deploy
Armed with the detailed model of the business process and the underlying business rules, the IT developer maps the business needs onto the underlying technologies that contribute to the complete solution. These technologies include line of business applications and messaging systems, the former supporting highly structured workflows and the latter unstructured workflows.
Using BPM tools to uncouple business rules from their underlying technologies, the IT developer abstracts these rules to a layer independent of the systems and applications, then joins the logical components into a “composite application” that combines the functionality of underlying systems. Not only can this composite application be rapidly assembled and reassembled, it provides outputs that individual systems alone cannot (such as real-time metrics across the entire business process).
Much of the IT developer’s job during this stage is to ensure that the solution incorporates the functionality, performance metrics, and user interface to meet business user needs. Once the solution is tested and deployed, business users and IT alike begin the manage and interact stage of the BPM lifecycle.
Manage and Interact
With the BPM solution for a specific business process in place, end users interact with the process as it runs though the various process stages, providing or requesting information (though form-based interfaces) as appropriate. At the same time, business users can monitor for potentially disruptive events along the various steps of the workflow process (such as an event indicating low stock of a production item), and take appropriate action as required.
In the background, IT staff manage the entire automated business process solution to ensure that the running process continues to meet capacity and availability standards.
Analyze and Optimize
The BPM solution provides a number of different means through which the business analyst or manager can continuously monitor and measure improvements both within single and across multiple business processes.
Benchmarks are established using service level agreements (SLAs) and key performance indicators (KPIs). Information derived from performance metrics is critical in driving the iterative process of optimizing the business practices and policies that support organizational goals.
The most effective BPM systems enables IT staff or non-technical business users to optimize of business rules in real-time, an iterative process that enables rule change, versioning and simple execution.
What are the benefits of BPM?
The reasons for embarking on a business process management effort are as varied as the organizations that undergo the endeavor, but most organizations are driven by the following benefits:
| • | Increased customer retention, gained through better, faster customer sales and services, as well as providing customers better access to resources and information through the various access channels. |
| • | Reduced process time, gained through process optimization and efficiencies. Shorter process cycle times speeds time to market and time to service. |
| • | Improved regulatory compliance, gained through improved process control, regulation and monitoring. One of the most effective ways to move toward compliance is to replace manual processes with automated ones, lowering the risk of errors and security breaches. |
| • | Improved efficiencies across organizational boundaries such as departments, branches and trading partners (including both supply chain and outsourcing). Efficiencies are gained through improved visibility and control, as well as automation and integration. |
| • | Reuse and create new IT assets, through integration with legacy applications and the creation of new composite applications that help to overcome their limitations. |
| • | Greater personal productivity and satisfaction, resulting from greater insight into processes and improved workflow. |
| • | Reduced risk, reduced waste and more profitable allocation of human resources. |
| • | Increased agility through compression of BPM lifecycle, allowing for more rapid process innovation and response to changing business conditions. |
What are the challenges associated with BPM?
Successful business process management initiatives require both near and long term planning and goal setting, and the goals and means by which to achieve them must be supported by executives across the organization. Without clear alignment on the goals and commitment to the BPM process, organizational resistance will defeat the initiative.
BPM requires strong communication both within and across departmental boundaries. Handoffs between departments are notorious for providing the greatest challenge to process improvement, and the BPM process is no exception in this regard.
A strong business analyst or process architect, key to ensuring that the BPM process remains on track, is critical for ensuring effective communication throughout the initiative. It is the individual in this role who ensures continuous alignment between business and IT; failure to keep business personnel engaged in the process can too readily result in IT solutions that fail to meet business goals.
Both the business analyst and the IT developer must ensure that the chosen BPM system works with existing systems and is capable of supporting current business practices. Since one of the primary goals is to integrate processes across both people and systems, the BPM solution must be flexible enough to ensure that integration efforts can meet across the divide that has traditionally separated business and IT.
Having outlined these challenges, it is obvious that the first BPM project will be the hardest: familiarity and expertise with the method is most likely limited, and organizational reluctance (to yet another initiative) will likely be at its greatest. But with the completion of the BPM lifecycle and the delivery of measurable improvements, subsequent iterations to fine tune the process will be smoother, as will the undertaking of new BPM projects.
As the iterative process of BPM unfolds, workers develop a more nuanced understanding of their workflow processes. At the same time, IT gains a more sophisticated understanding of the business processes they are supporting. For their part, business managers develop a better understanding of how technologies can support their needs, which increases their abilities to suggest targeted changes to the functionality of the composite application supporting their needs.
How can your organization get started with BPM?
It is critical that the organization appoint or hire a BPM process architect who understands both business requirements and technical solutions. In addition to garnering organizational buy-in and choosing an initial project that targets a weak process directly impacting the customer, as well as one that offers a high return on investment, it is imperative to choose the right business process management solution to support the BPM process.
Choosing a BPM Solution
The BPM solution market is highly fragmented. BPM enabling technologies span a broad spectrum of activities, but can be generalized as supporting either activities that are unstructured (such as ad-hoc or collaborative tasks) or activities that are highly structured and often transactional in nature. Unstructured or human-workflow activities are supported by tools that center on the information worker; structured (or straight through processing) activities are supported by traditional IT business applications and integration middleware.
Until recently, solutions have been focused on one area or the other. Because of that, it’s important to look for comprehensive BPM solutions that:
| • | support both human-centric and straight through processing activities |
| • | offer a solution framework rather than simply a point solution (necessitating multiple point solutions) |
| • | support process standards enabling integration across different platforms and with different line of business applications |
| • | support integration across business partners |
| • | support solutions for different industries |
| • | provides business users with the ability to define the business rules that make up business processes, without IT programming |
| • | provides visibility into business processes, enabling real-time monitoring and event management |
What are the key differentiators of the Microsoft BPM solution?
The Microsoft business process management solution—a BPM system—is built upon the Microsoft application platform technology stack and spans both structured and unstructured processes. The BPM system provides a comprehensive set of tools, servers, patterns and practices for creating reliable, enterprise-grade BPM solutions.
| • | People-Ready Processes. The Microsoft BPM system empowers people to drive success for their businesses. This is in contrast to older business process reengineering type initiatives, which were about automating people out of the process. Because people are a critical part of effective processes, the Microsoft BPM system is built to enable business stakeholders to design, interact with, monitor, and innovate critical business processes. |
| • | Easy To Use. The Microsoft BPM system uses familiar tools and environments that considerable numbers of end-users are already productive with, such as Office for business users and analysts, and Visual Studio for developers. By building upon this existing experience base, organizations can quickly become productive using the BPM system, and can incrementally deliver new innovation through use of many tools already owned. |
| • | Breadth of Process Support. Only the Microsoft BPM system addresses the full spectrum of business processes from highly unstructured processes (human and document centric) to highly structured and transactional system processes. Most existing vendors focus on just portions of the spectrum, or have tried gain breadth by cobbling together numerous acquired tools. Microsoft BPM tools include Microsoft Office System providing best of breed information worker productivity, Microsoft Office SharePoint Server providing support for collaborative processes, and BizTalk Server for rich transactional process automation and monitoring capabilities.. |
| • | Integrated Platform for BPM. Microsoft BPM system is built upon a common application platform that enables businesses to realize the strategic business benefits of BPM. This platform provides an integrated set of capabilities around user presentation, process, business analytics, and development tools. The net result is a BPM solution that delivers greater agility and lower TCO than competitive solutions. |