What is Business Process Management (BPM)
“Business Process Management (BPM) aligns to the delivery of business objectives in terms of organizational goals, services, or products that customers or clients need, through the management and improvement of several sets of activities that are carried out.”
BPM is a non-stop activity that integrates employees, customers, partners, information, and systems, which should collaborate to deliver beneficial results. Business Process Management formulates strong connections between cross-functional business processes.
Starting with BPM, it should be clear that a system can not perform Business Process Management on its own. BPM system supports people in increasing operations transparency, collaborating effectively, maximizing profits, and reducing costs. Without Business Process Management, organizations are experiencing difficulties on adopt the new trend of Digital Transformation.
Business Process Management Life Cycle
Focusing on delivering business value on the day-to-day operations, BPM is a discipline that evolves year by year and entails the continuous:
Understanding current or prospective business processes is the aim of business process management. The objective of the analysis phase is to discover whether the processes that are currently in place align with the goals and objectives set forth by the business. It is also important to identify all dependencies of the identified business processes.
Certain methodologies can be used in the analysis phase, with the most common one being the gathering of relevant data and information regarding the process under examination and analysis. At this stage, the business might also want to take a look at the performance requirements, which can be used in conjunction with the process analysis to identify the strengths and weaknesses of the processes under examination. By doing so, the business can understand how core business processes affect its performance.
Business process management analysis can be divided into qualitative and quantitative analysis. Qualitative analysis is important in identifying redundancies, wastage, and losses in business processes so they can be eliminated. Quantitative analysis, on the other hand, focuses on raw numbers, statistics, and figures with a focus on capacity requirements, wait times, parallel activity performance, error rates, costs, and capacity issues.
Once a business completes the analysis phase, it can tell whether its processes are aligned with its goals and objectives. If not, the findings are used in the next phase: modeling.
Depending on the results from the analysis stage, a business might have to come up with and implement new business processes. The business might also decide that its current processes are good enough but need to be tweaked a little. The main challenge here is not knowing whether and how the new or improved processes will affect the business.
Modeling is where theoretical business processes are analyzed and put in graphical format. Here, automated processes and human activities are added together to a workflow design with their various conditions and requirements. These requirements are considered to see how the new or improved business practices will perform under different circumstances. The one thing businesses might be looking for, and in most cases expect, is that the new processes behave and perform differently in the different circumstances they are tested in.
Presenting new processes and workflow designs to users so they can test them using real or hypothetical data is usually a great way to find out which of the processes presented at the end are most effective. Business Process Management best practices also encourage businesses to eliminate all but the solutions that help reduce problems that the business faces during the lifecycle of specific processes.
At this stage, a business should have a model in hand. The next step is to execute it. The two execution options are automatic and manual execution. Manual execution is great for smaller teams, as the management can pass the new models to employees to implement in their daily . Sometimes, the new process guidelines can be passed on to a whole department for implementation. This implementation is sometimes called non-systemic implantation because it does not require the use of any business process management technologies, solutions, or software for implementation.
The second type of implementation is automated , also called systemic implementation. Here, the software is used to automate the implementation process. Businesses can choose from a myriad of business process management tools for this stage. Systemic or automated implementation is great when a business has a lot more employees involved or would like to take advantage of the available tools for faster implementation.
Whether a business decides to use automatic or manual automation, it has to monitor activities and the new processes as it goes on. This process often involves measuring, tracking, and controlling and is so important because it allows execution and monitoring to be done at the same time. Once execution is underway, monitoring helps to ensure that the execution and implementation are effective. The purpose of monitoring is two-fold. The first purpose is so the business gets information that allows it to know whether there should be further changes to the process design or the tools and resources used in the implementation of new practices.
The second purpose is to measure the performance of the new process(es) to see whether they are leading or have led to the achievements they were put in place to achieve. Analytics is the main input here, with these analytics used to control the process as it is implemented. Monitoring is usually done through widgets and dashboards for businesses that have the infrastructure in place.
Everyone involved in the implementation of the new business processes must know which metrics need to be monitored. Additionally, these metrics are highly dependent on what the business wants to achieve with the implementation of the new processes. For example, if the business is looking to move in a new direction in its content marketing strategy or improve the processes surrounding it, it would be better to know which metrics to monitor such as when and where their content performs best the business can only focus on these areas. The data collected for the improvement of another process such as lead generation would be completely different.
Maintenance goes hand in hand with monitoring. The data collected during the monitoring process is used to see if there are any bottlenecks in the implementation of the new processes. During this phase, the business can also use data to analyze the performance of processes to correct any defective situations that might arise now or in the future.
By analyzing enough data, businesses can improve the quality, efficiency, and speed of the new business processes.
Once a business has data on how the new processes are performing and the numbers look ok, the next step is optimizing the processes. At this stage, you are not only improving on the processes but also trying to ensure that their success is repeatable. Improving and optimizing the new processes is especially important where the numbers do not look great and you want to ensure you avoid any mistakes done along the way. The two main ways to innovate and improve are through redesign and reengineering of the solutions you already have.
To do this, businesses need to collate all the performance data collected across all the stages of business performance management. This should include data on what has worked and what has not worked at every stage. The main reason for doing this is so that the business can learn from both data and any mistakes done so that it is easier to replicate successes along the way. Businesses are already seeing the benefits of technological advances, like Artificial Intelligence (AI) and Machine Learning (ML) in process optimization and improvement. For instance, AI predictive models use algorithms to analyze and learn from historical data and predict results.
Basically, a business should try to use the results of all the analysis, modeling, and monitoring done above to fine-tune its processes. The optimization and refinement of business processes are often done at this stage, and this is where most of the results come from. To ensure that the whole process achieves its aims, businesses should not try to manipulate any results along this whole process. This is because manipulating even a single stage means that the data to be used for both maintenance and optimization will be skewed, and the process will fail to achieve its aims in the long run.
Process designers go through the above phases for newly created processes that should deliver business value or go straight to the 2nd stage onwards to re-design workflows and bridge any gap. To reach the upper level of a) meeting stakeholders’ requirements, b) adapting to shifting environment, and c) making the business process effective and efficient, you have not to stop the evaluation of this business process.
Types of business processes
Business Process Automation is fundamental to make your business run and succeed. As technology evolves rapidly and businesses adopt the new operation improvement techniques, it is essential to understand in-depth how these techniques can be also applied to your business by analyzing and categorizing your own business processes.
There are many factors that determine how these processes should be categorized and interrelated to be automated.
Process Categories by type of interaction:
By “process interaction type” we mean the type of interaction with external resources that a process needs to be successfully executed. Those resources can be:
1. Human-centric Processes:
Processes that require the involvement of people (who will control, check, approve or assign tasks).
2. System-centric Processes:
Processes that require integration and/or interaction with external applications (to import, use, or export data for analysis, etc.).
Process Categories by importance:
There are four main process categories and the first step is to identify to which of these categories each process belongs:
1. Primary Processes
Primary Processes (or core operational business processes) are all the fundamental activities executed by an organization in an effort to accomplish its mission. Those processes are customer-oriented as their main characteristic is that they directly add value to the customer.
Example of primary processes:
- Sales Logistics
2. Support Processes
Support Processes (or secondary processes) are support-oriented processes, which means that they provide support to the execution and completion of the core processes. Although this kind of process does not generate direct value to customers, they are also very important as their existence in the operation’s lifecycle can be strategic for the effective execution of the core processes.
Example of support processes:
- Information Systems
- HR Management
- Technology Development
3. Management Processes
Management processes are a part of the general strategic management of the business operations. They are not customer-oriented and they have one single goal: to ensure that the core and support process is meeting their objectives.
Example of management processes:
- Analysis & Evaluation
4. Quality Management Processes
Quality Management Processes analyze, control, and improve all kinds of business processes to achieve maximum effectiveness in the decision-making of a business environment.
Example of quality management processes:
- Quality Control
- Quality Assurance
- Process Improvement
This article is written by the Comidor team in conjunction with Boris Dzhingarov, who is a digital nomad traveling the world. He is the CEO of ESBO ltd.