Clear Concepts. What does it really mean to Process Manage a Company?
Blog: Auraportal Blog
The rapid pace of innovation in the world of Business Process Management (BPM) has caused a difference of opinion of the concepts used, even among experts from the teaching sector, consultancy and even the BPMS vendors themselves.
Concepts such as Business Processes, differences between working by functions or processes, which has come to be known as ‘Management of Processes’, to differentiate from ‘Process Management’ are confusing to a large majority.
Such a complex issue can be addressed from many approaches. This is just one of them.
Working by Functions
Traditionally company management systems were conceived and structured to work using functions. This style of enterprise management is characterized by a rigid hierarchical structure supported by departments, sections, areas, etc., based on the control, analysis and optimization of the activities performed by each employee (or machine): billing, customer visits, the study and approval of proposals, etc.
This strategy is based on the idea that “if all functions are optimized, company management will, in turn, be optimized”. This is not true as it lacks Coordination, which is a very important variable.
A process is a combination of coordinated activities or events that are carried out (alternately or simultaneously) for a specific purpose.
It is an undeniable reality that every company or organization is managed internally using processes (even if they are unaware of it), given that all their activities are undertaken and coordinated to achieve specific objectives. In fact, the sum of all of the processes defines the company’s entire activity. In other words, all activities performed by a company or organization are the sum of its processes.
Some of these processes can be complex and very structured; others are simple and do not need defining, for example, an employee handing in a document to their supervisor for its approval or even a simple phone call (any activity can be broken down into smaller activities).
It is clear that the concept of Processes is vast, which is the reason behind such confusion. The “continuous improvement process”, the “quality process”, etc., are indeed processes because they are coordinated activities working towards a goal, however they are not considered as BPM business processes as explained below.
Working by Processes
Process Management is based on the optimization and continuous improvement of the processes, not the activities or functions.
Given that business activities can be spontaneous or routine, we can divide processes into two classes:
- Spontaneous activities, like when a boss wants to ask an employee about the results of a previous job, are managed through free workflow processes, meaning without prior structuring.
- Routine activities are managed through structured processes, a set of coordinated tasks with a pre-designed structure, that can be used repetitively over a long period of time.
These processes are called Business Processes and the strategy used to manage a company using business processes is called Business Process Management (BPM).
Business processes are operational and manageable. They are coordinated workflows that serve a particular function at a specific time, therefore they always have a beginning, a development and a completion.
- They begin when, from day to day, an event that needs solving occurs in the organization.
- In the development, activities (called tasks) are performed that are necessary for the resolution. There are two types of task:
- Personal Tasks. These are carried out by individuals while performing their work.
- System Tasks. These are carried out automatically by mechanical systems (physical or logical) without the need for human intervention.
- They are completed when they have been resolved, be it successful or not.
Having cleared up this concept, it is obvious why “the quality process” for example, is not a business process that falls under BPM. Where does it begin? What tasks are involved? When does it end? There are no answers.
Business Process Management (BPM)
Although no “official” definitions exist, BPM can be considered as a business strategy focused on managing business processes in line with the company’s mission, vision, culture and objectives.
Nowadays, nobody doubts that this form of management has proven much more effective than the traditional method of functional management as it has become the corner stone of all current management systems. But this is not enough.
Process management must include a high level of automation to ensure correct functioning and maximum efficiency, because even the best processes in the world would be useless if the people involved in those processes do not do their work correctly. Hence the arrival of BPMS, which is the software that supports BPM.
This is where we encounter another point of confusion surrounding process management. Until recently, most literature on BPM stated that BPM was much more than IT tools. Fortunately, today there are very few people who still believe that BPM approaches (analysis, process identification, definition and documentation, measurements, process maps, etc.) can be independent from the IT tools that support them.
Process Management cannot be done by hand. It is obvious that, like other business management disciplines, process management tools must be supported by hardware (computers, tablets, smartphone, etc.) and software (BPMS). If a company does not take this into account, it will not survive the digital era.
BPMS Implementation involves introducing the BPM theoretical approaches into the system, so that the system itself is responsible for automating their operational work to the highest possible level, optimizing the operations that cannot be automated, monitoring strict compliance and automatically providing a real-time analysis of the company activity.
Thus, when BPMS has reached a high level of maturity, the sets of coordinated tasks performed in the company form a structured system that acts as a network which, in addition to constructing the company activity, enables immediate access to all company information.