All businesses have processes, whether it is to assemble a product, process a credit card payment, onboard an employee or check for quality assurance. Sometimes, those processes work seamlessly, and other times they do not. Business process management is a system that gets hold of your processes and whips them into Olympic-swimmer shape. A good BPM implementation will improve visibility into your processes, making it easier to remove bottlenecks and prevent the duplication of work.
TL;DR (Too Long; Didn't Read)
Business process management is a methodology for streamlining the way that a company does things, with a view to improving performance.
What Is an Example of a Business Process?
A business process is a series of steps that the people in your organization perform to achieve a specific goal. These steps are repeated many times, often by many people and typically in a standardized way. Just about anything – from authorizing a vacation request to the triage assessment that medical staff perform in the emergency room – will qualify as a business process.
Take, for instance, the example of a loan application to a bank. To start this process, the customer will fill out an electronic application form on the bank's website. Now, the bank's wheels start turning. First, the bank will verify that the customer has filled out the form correctly. Then, the application will go through a credit check. Someone else may perform an income verification, another team might request additional documentation and there may be other activities to enable the bank to make a decision about whether to approve the loan.
The key is that the process is multifaceted. Like most business processes, it involves multiple steps and multiple people, and these people use various tools and systems to get things done. Taken together, the whole system is designed to convert a series of inputs (the loan application and supporting documents) into a desired output (an approval decision that is communicated to the customer).
What Is Business Process Management?
When your business is very small, business processes are relatively easy to manage. There may only be a handful of people in the office performing everyday tasks, and everyone has a solid overview of the big picture. This situation changes as you grow. Tasks that were once dealt with by one person suddenly get handed off between multiple departments. People duplicate each other's effort, tasks fall through the cracks and there's a greater potential for people to make mistakes.
The primary purpose of business process management is to put these chaotic processes under the microscope and figure out how to make them better. The easiest way to understand this is to visualize all the activities in your process as a flowchart of steps. BPM is the discipline of formalizing these steps into a more logical and consistent workflow.
What Are the Advantages of Business Process Management?
The main thrust of BPM is to save you time and money by trimming the fat in your processes, such as removing the bottlenecks, eliminating redundancies and stopping the unnecessary duplication of work. BPM isn't all about increasing the bottom line, however, and there are other positive outcomes from which businesses can benefit:
Both employees and managers benefit from a clearer definition of their roles and responsibilities, as they are all following a systematic pipeline to get things done.
Teams pull together and communicate better when everyone is on the same page regarding outputs and deadlines.
- There's less stress because overworked employees no longer have to attend follow-up meetings or juggle multiple competing tasks at once.
- BPM aligns your processes with organizational priorities so you're not wasting time on processes that add the least value to the business.
- Managers get better visibility into the workflow, which provides a helpful trail for auditing and regulatory compliance.
- Customers benefit from improved lead times, leading to greater customer satisfaction.
How Does a BPM Work?
BPM is, first and foremost, a methodology. It consists of a clear series of steps and techniques that help to formalize the BPM process so that waste and other inefficiencies can be identified and improved. Of the many established BPM methodologies, some, such as Lean or Six Sigma, have entered the popular vocabulary. Generic methodologies follow many of the same principles. Whichever methodology you choose, you can expect it to focus on the three pillars of BPM: process, people and technology.
BPM's core focus is to optimize business processes so they are fit for purpose and achieve the correct outcomes at the correct time.
Making sure that people do the right things in the right way is key to a successful process. BPM looks at the tasks that people are doing and asks such questions as: Whose job is it to perform Task A and in what time frame? What happens if the relevant person ignores the problem? Who gets alerted when the process is stuck? This level of visibility is essential if you're going to build efficiency into the system.
For your processes to work smoothly, the transition of tasks must be seamless all the time. Business process management software is the tool that helps to enforce the process. So, if you run a BPM exercise and define a better process, technology can help to make sure that the process is performing in the exact way you've defined it. A main feature of technology is to collect performance data so you can track the metrics that are essential to the success of the process.
How Do You Design a BPM Methodology?
BPM works differently depending on what type of business you have. So, before you even begin to design a BPM methodology, you must assess what you want to improve by implementing it. If you are a service organization, for example, you may want BPM to improve your response time to clients. Companies that manufacture or construct products, on the other hand, may be looking for better efficiency and performance on the assembly line or synchronization with other systems and processes.
Using these commercial drivers as a guide, every BPM methodology will then follow a life cycle of phases, each with its own set of tasks that need to be implemented. The most common BPM methodology, DMEMO, follows five stages: design, model, execute, monitor and optimize.
Stage One: Design
The design phase uses BPM technology to map out your process as it is now, before redesigning the workflow so the process runs much more efficiently. What you get onscreen is a visual depiction of the flow of work so you can see at a glance where the bottlenecks and duplication may be situated. The idea is to create the simplest, most straightforward workflow possible so the process can be completed in the least amount of time while making the fewest mistakes.
Stage Two: Modeling
This phase is all about testing your process to see how it works under different conditions. Think of it as a "what if" exercise. What if we allocated two people to this task? What if this employee is late in delivering her output? What if this task were done in a different way? Can we make further improvements?
Stage Three: Execution
Once you have simulated the flow of work, the next step is to test the improved process on the ground using your BPM software's workflow engine to allocate each task in the process to one or more people.
Stage Four: Monitoring
Monitoring is the process of gathering data to make sure the process is performing as you expect. Using your technology, you can track both a single step in a single process – the same way you would track a FedEx package – or you can aggregate the data and see how you're doing across the workflow as a whole. Tools deployed at this stage include business activity monitoring, dashboards, reporting and audit tools.
Stage Five: Optimization
At this stage, your process may be far from perfect. Now, you need to consider what you can do to further optimize the process. For example, do you need to add another resource to specific areas where bottlenecks frequently occur? Bear in mind that optimization is not a one-and-done event. Rather, you need to listen to the feedback of employees and customers and make changes whenever problems occur. If the new process does not improve your stakeholders' experience of the service, then it cannot be said to be a success.
Who Performs Business Process Management?
It often takes a team of experts with IT and business knowledge to implement a BPM project, but really it depends on the scope of the project you're planning to run. If you're looking to achieve a few quick wins by improving some low-risk, high-return processes in your own small business, then it should be relatively easy to get a BPM project off the ground aided by a small internal team and some quality software to map your processes.
A good way to start is by attending a BPM training course. A quick Google search should turn up some local options or an online program. Many companies opt to put their employees through a business process management certification program that allows key staff to get officially trained in the appropriate methodologies. The Business Process Management Institute currently offers 30 programs and seven certificates in the various disciplines and methodologies associated with BPM. Check their website for details.
What Is a BPM Tool?
Simply, a BPM tool is the software you use to automate the BPM implementation. Its job is to enable your business transformation so you can take your processes to new heights. The options are as broad as they are long, but generally, you'll be looking for a system with at least the following features:
- Visual processing diagramming tool: This allows you to model your processes and create new workflows. Some tools require coding skills as a way to implement the modeling; other vendors offer a low-code approach which uses a "drag and drop" system. The latter may work well if you haven't got a hardcore programmer on the team.
- Management dashboards and access control: This gives decision makers the visibility to track progress and provides security by restricting the access of information to certain people.
- Error handling: It's helpful to have a verification module that finds and solves errors and malfunctions.
- Integration with existing software: Your BPM solution will be of limited use if it does not communicate with other core ERP/CRM systems.
- Reports and analytics: A good BPM solution will run reports on such key metrics as open items, the average time it takes to complete a task and how often an item gets rerouted.
In terms of specific business process management tools, it's a fairly crowded market. Some of the big players include Pegasystems, bpm'online studio, Nintex, KiSSFLOW, Zoho Creator, Appian and Process Street. Reviews are readily available on the internet, and most tools come with a free 14+ day trial so you can examine the functions before you make a final purchase.
- Smartsheet: The Real-World Guide to Business Process Management
- BPM.com: What is BPM?
- TechTarget: Business Process Management (BPM)
- BPMInstitute.org: Which BPM Methodology is Best for Us?
- BPMInstitute.org: Business Process Management Training
- BPMInstitute.org: BPM Certification
- KiSSFLOW: Top 10 (+1) Features a Good Business Process Management System (BPMS) Must Have
- FinancesOnline: Comparison of 15 Leading Business Process Management Software Products