Other View on BPM

I came across below article and thought it would be a good addition to our blog. 

What BPM is?

“BI by itself lacks context,” says Howard Dresner, chief strategy officer at Hyperion Solutions, a maker of BPM software. Dresner explains what BPM is in this way: “There are four phases in the management cycle: concept and vision, goals and objectives, managing execution, and evaluating strategy afterwards. The connective processes in between those four things are BPM.”

BPM is more of an innovation in management, not technology. However, technological innovation is at the core of any good BPM plan. Ken Vollmer, a principal analyst at Forrester Research, sees BPM as the convergence of integration-centric process management out of IT with the more human-centric process management from the work flow-oriented business side. Vollmer enumerates the many ways a good BPM strategy can make a difference:

• Supports cross-functional processes among departments
• Transparency — allows business users or customers to monitor status, preferably in real time
• Agility — adapts and changes business processes frequently
• Captures process knowledge for analysis
• Reduces human error or labor intensity in work activities

Getting started
For the CIO starting at square one, the question is where to begin when putting together a BPM strategy. Experts recommend taking the following steps:

• Talk to key people on the business side Dresner recommends approaching them informally when people tend to be more candid, or as he puts it, “tap into that black market of information.”
• Take an inventory of processesWhat processes are already in place? What’s working and what’s not working? As Hill points out, most companies measure success in terms of function, not process. For example, a manufacturer may determine success by the amount of inventory delivered and pay less attention to the cycle time between order and cash received. “Functional excellence needs to become subordinate to process excellence,” says Hill.
• Determine how decisions are made Who are the key players in decision-making? What needs to happen to reach consensus and begin execution? “Organizations tend to do either too much or too little,” says Dresner. “Find the pain points so you can build a roadmap of BPM.”
• Talk to the CFO At the C-level, the CFO is typically the person most likely to understand BPM just by the nature of what he or she does (e.g., tracking financial processes across departmental lines). The CFO can be a great resource in assessing the organization’s current BPM, as well as being a CIO’s best ally in making improvements.

A Golden opportunity
Many CIOs fear becoming entangled in BPM strategy, sometimes seeing only encroachment on their departmental turf, or perhaps preferred IT projects getting short-changed. It’s actually a great opportunity to be a company-wide hero and have a tremendous impact on the organization.

“A CIO very often has that enterprise perspective, because he or she already works across departmental lines so much,” Hill says. “They really are in great position to be an agent of change in business process management.”

Renee Oricchio is a freelance writer in Norwalk, Conn. For the past 20 years, she has been writing and producing news segments about technology and business for CNN, MSNBC, Ziff-Davis, CNET and a variety of Silicon Valley-based local news outlets.

BPM/BPR Steps

BPM/BPR Steps

If you’ve decided that you can benefit from Business Process Management or Business Process Reengineering (BPM/BPR) you should follow these simple steps to help guide you in your project. 

Step 1: Partial or Full BPM/BPR System Development  

First you need to decide if you are going to do partial or full BPM/BPR system overhaul. What this means is: Are you going to start from scratch and replace your current system entirely or are you going to start with one particular section or department and fix that before you move on?  We always recommend, especially for first timers, that you start with partial BPM/BPR system development. This will allow you and your team to concentrate on a smaller piece of the puzzle and ensure that you do not skip any details. Also it will allow your team to get familiar with what you are doing and allow them to become part of it. It’s very easy to add to the system once you have it built, there is no need to rush through this. 

Step 2: BPM/BPR Mapping

BPR/BPM Mapping requires that you discover and document all of your business processes, and workflows. Find out who is doing what, where and when. Write it down in an organized fashion so you can get a good picture of your current situation. Remember, in order to improve your processes you have to know your current state and have a realistic picture of your situation. At Vela, during this phase, we would present you with illustrations of you business processes and workflows. 

Step 3: Collect Business Rules 

Go around your departments (the ones you are trying to improve) or your company if you are doing full scale BPM system development, and collect and document all Business Rules. The way to get to business rules is to keep asking questions, who, what, where, when. Business rules are often undocumented and happen often as a result of a meeting. An email goes out to notify employees of the new rule and the work continues. Lack of business rules documentation is apparent in companies that have to provide training to new employees beyond the first week. Because Business Rules are undocumented new employees are constantly asking how to do their job. 

Step 4: Customize Workflows and Create Your Utopia 

This is one place where you can have Utopia! Take a good look at your current system, learn it, study it, and find out where your redundancies are, which steps are unnecessary, what you can do to improve the picture and work more efficiently. Find out what you can do to minimize training for new employees, what you can do to automate processes. Think about how you can leverage technology to help you solve your problems, not reinforce them. During the first three steps you are concentrating on who, what, where, and when. During this step you need to concentrate on WHY. Ask why things are done in certain manner, it will often be because it’s an inherited process, not necessarily because it’s the best/most efficient way to do something. Once you’ve done all that, put together a plan and a perfect, utopian picture of what your processes should be. 

Step 5: Add Reports and Visibility Into Your Organization/Department 

The last step is to think about the reports and visibility into your organization/department that you would like to get from this system. If you have done your homework correctly this system will be home to an enormous amount of information that’s pertinent to your organization/department. Information is power and you want an easy way to access that information so you can plan your upcoming months and years acordingly.

Making Case for BPM

Making a case for BPM 

If you are trying to make a case for a BPM project in your organization, understanding the ROI that other companies have realized can help make or strengthen your position. Benefits such as reduced costs and increased revenue are common to many if not most BPM projects. Below are excerpts* from a case study about KPN, a leading Dutch Telecommunications company. 

“The existing system [for taking orders] was entirely manual.” 

This suggests that KPN was dealing with a straightforward and frequently repeated process that lends itself to automation—a scenario common to many organizations. According to the case study they were able to process 80% of orders automatically, which cut processing time from 2 days to 2 hours and resulted in a savings of almost 200,000 Euros a month. This demonstrates how an increase in processing speed can deliver ROI in the form of reduced costs. 

“KPN expected these figures [number of orders] to increase threefold [to 30,000/month] in the coming months.”This represents the expected revenue growth component of the ROI, as KPN intended to handle this increased volume (with the aid of BPM software) without increasing head count. 

“In November and December, we saw orders of 100,000 a month [10 times manual capacity]“ This represents the actual ROI they saw as a result of revenue growth. This also illustrates the importance of finding a scalable solution. If KPN had selected a solution addressed only their anticipated needs, they would have lost the revenue from 70,000 additional orders per month. 

*Excerpted from BPM Now

Who is a BPM candidate?

Maybe you have been learning and reading about BPM and it’s starting to sound good to you. Now you are wondering if this is something your department or organization can use. So how do you know who is a good BPM candidate and, more importantly, if you are one? 

There are number of ways to tell, but the most important questions you need to ask yourself are:

1. Do I manage 5 or more people?
2. How much ‘hand-off’ does my department/organization have?
3. Do I have visibility into my department/organization?
4. Do we have the ability to scale, to grow? 

1. Do I manage 5 or more people? 
If you are managing 5 or more people it’s possible that your organization/department is a good candidate for BPM. We have found that in groups larger than 3 people, processes begin to weaken and get confusing. When you reach 5 people it’s likely that you already have some redundancy and issues with your processes.

This is nothing alarming, every company has process issues, and none can function at 100% efficiency, 100% of the time. We are humans, we get tired, we don’t have enough time, and we make mistakes. It’s only natural that we have some issues; it’s what makes us human. 

What you do need to be concerned about is a point when those processes become a burden to you, your department or your organization. The best way to check this is to see how organized your department is and how fast they react to any given issue. Do they know what to do in any given situation or are they looking for answers elsewhere or guessing how to handle certain situations? Do you have a lot of turnover and how long is your training process? 

2. How much ‘hand-off’ does my department/organization have?
This question directly relates to the number of people you have in your department or organization and how many clients you deal with daily/weekly/monthly. If you are a small, exclusive jewelry store that has 10 high priced regular clients per year, and 3 employees, you won’t need to worry about processes.  You won’t have that much ‘hand-off’.

However, even if you have only 3 employees and you have larger number of clients, or other departments you have to deal with, and your department may be servicing, it’s likely you will have significant amount of information exchange. This information exchange becomes a perfect place where processes break down and redundancies set in.

3. Do I have visibility into my department/organization?
By our standards this is one of the most important benefits of BPM. Every department head, manager, or CEO has to know at any point in time what is happening with their department or organization. The moment you lose this control things slowly start falling apart.

“What destroyed Enron, Arthur Anderson, WorldCom and today the Bear Sterns Companies? The common denominator seems the fact that those organizations are destroyed from within; they collapse onto themselves.” Hans Norden

If you ask yourself, what is my department/organization doing right now, could you answer it? And if so, how quickly?  How accurate is that information? If you don’t have accurate information as to what is happening in your department or organization at any moment you definitely need BPM! 

4. Do we have the ability to scale/grow? 
Scalability is also a crucial aspect in any organization for both specific departments and the organization as a whole. Every company is striving for growth and many companies achieve great results. However, there are many companies that “grow too fast”, or they break even, or make a small profit. The main reason for this is that generally as companies grow they hire more people, bring in more resources, buy more applications and products to support new business.

Rarely do companies look back and try to figure out how to clean up and utilize what they already have. Can your company support new revenue without increasing overhead cost? If not, it may be time for BPM analysis.    

Maja Kazazic, CEO
Vela Business Soutions 

What are typical process problems?

When we evaluate small and medium sized organizations’ processes, we frequently come across five common issues:

1. Unorganized and undocumented processes 
2. Undocumented or not properly implemented business rules
3. Mammoth and antiquated applications and systems
4. Lack of process visibility for department heads and managers
5. Employee training and turnover is large. 

Maja Kazazic, CEO
Vela Business Solutions

What is BPM?

There is a lot of hype and talk about Business Process Management, Business Process, Reengineering, SOA, BPM, BPR, workflows…..It’s enough to overwhelm anyone. Wikipedia describes BPM as:  

“Business process management (BPM) is a method of efficiently aligning an organization with the wants and needs of clients. It is management approach that promotes business effectiveness and efficiency while striving for innovation, flexibility and integration with technology. ”

In other words, BPM is a way of organizing and restructuring your department or organization that will allow your organization or department to be more efficient, agile, and scalable. To do more with less, cut cost, handle turnover easier, provide less training and so on.  

In addition to that, BPM will help you orchestrate your processes and provide visibility to continually grow and improve your department or organization.

A ‘BPM system’ can notify users that they have work, it can prioritize work and direct it to appropriate department or person, automatically update and move information. BPM systems will increase your accuracy and allow technology to become part of the solution, not part of the problem as we have seen with many proprietary applications.