What is a business process and how can BPM improve a business process?
A business process can be defined as “a well-structured or semi-structured workflow done in a consecutive or parallel order by two or more individuals to reach a common purpose”.
5 major points in the above definition:
- A business process comprises of a series of work whereas a piece of work executed by an individual cannot be considered a business process. With BPM, modeling businesses can help us easily determine a number of works to be eliminated or automated.
- A business process is ‘a well-structured or semi-structured workflow’, which means all such works are executed logically and not randomly. With respect to these principles, a process can be executed in an automated or semi-automated way.
- A workflow can be done in a consecutive or parallel order. Most works are done chronologically whereas, in some cases, two or more works are done simultaneously. BPM can help arrange structure of works in a clear way and at the same time check if such workflow are properly done or what outcome it will be.
- At least two individuals or applications are involved in a business process. When information is communicated from one individual to another, losses or mistakes (sometimes simply typing mistakes in reports) may appear. This possibility is more likely to happen when many individuals or applications get involved in the process. Automation of steps can help minimize this possibility. In addition, if one more application gets involved in any step of the process, integration will be much simpler thanks to ready identified information according to a standard format.
- A series of work must be done at the ultimate goal to reach a common purpose. By applying BPM’s principles, we can focus more on final results instead of paying attention to many steps.
During its establishment and development, BPM underwent 3 main phases (3 development waves of BPM)
- The first wave was mentioned in “management theory” by Fredrick Taylor in the 20th century which stated: “procedures are exemplified during working processes when manual details are concealed”.
- The second wave was pintpointed in the last decade which stated: “procedures can be manually restructured within the same former scope of business”. The solution suggests that all changes in a procedure can be fixed; nevertheless, basic functionalities will exist independently in the software just exactly the same as ERP applications: diversified and yet not very agile.
- BPM’s third wave allows companies and staff to promptly create and optimize business processes. Adaptability to changes is one major goal in the design. Thanks to agile business processes, a chain of values can be observed and improved constantly.
Sharing a common term, BPM in the third wave differs in nature in comparison with the first two waves. The latest BPM is created by advanced technologies which include:
- Workflow: Workflow is an automation of business processes either wholly or partially. During such process, data, information or works are transferred from one individual to another to proceed.
- Data management: Solutions for data management specify an itinerary for data to serve all operational demands. Nevertheless, these solutions cannot possibly create complex processes irrelevant to the data.
- Enterprise Content Management (ECM): ECM solutions assist in the management and facilitation of information exchange within an entire organization.
- Enterprise Application Integration (EAI): EAI solutions enables unlimited information sharing among different applications and data sources within an organization.
- Enterprise Resource Planning (ERP): ERP is a system for operation management integrating all operation aspects from planning, manufacturing to sale and marketing.
- Customer Relationship Management (CRM): CRM is a strategy, approach and technology for customer relationship management. “An organization seeking enlargement of sale or profits shall take challenges among relationship with customers into careful consideration”, said Ms. Watson, Customer Relationship Director, Oracle Asia-Pacific. This means how to get new customers at more reasonable costs, enlarge revenues from current customers, improve possibilities to retain customers bringing high profits and cut costs for services and business performance.
- Business Process Reengineering (BPR): BPR is a strategy and approach to restructure or reorganize business process operations for high efficiency in business performance and manufacture.
A complete BPM solution shall be a collection and extension of all above techniques and technologies to reach a unique scheme. Of all above solutions, Workflow Management shares the most common characteristics with BPM while the former should differ from the latter. For the past many years, business processes are covered by numerous management theories and technologies such as Business Change Management (BCM), Business Performance Management (BPM), Business Process Reengineering (BPR), Six Sigma, Workflow, Orchestration, Composite Applications, Web Service Choreography, Real-Time Enterprise, Agility,… These are just a few terms used in the field of business process management. Truth is that business process management is a very general definition to cover all activities in relation to operations of an enterprise and a good BPM system should include all above applications. This can help build our confidence that BPM shall undoubtedly bring about huge and basic benefits as follows:
- Change business processes on paper into electronic processes; cut manual steps, minimize errors and at the same time improve efficiency and enhance productivity.
- Improve control ability, clarification ability and agility of the business processes; logicize inner and outer business processes; minimize redundancy and improve automation.
- Propose the best shortcut from process design to process usage; BPM is not essentially a “Rapid Application Development” (RAD). It will instead separate application development from business processes.
- Support top-down and bottom-up modeling
- Serve as a foundation for sharing end-to-end business processes similarly to data sharing by DBMS, among both applications and business partners. BPM provides a solid foundation to build up the next generations of business process application.
- Support the ability to integrate, collaborate, combine and separate processes regardless of their origin and be independent from different technical infrastructure.
- Be defined by the ability to change business processes quickly depending on its business cycle (daily, weekly or quarterly)
- Provide feedback about the process status in real timeProvide time and cost assessment for the process, from which different approaches to optimize processes are given
- Processes in BPM are transparent and continuous and include all information about different components in the life cycle of a process
- Support changeable operations, monitor and manage workflow among companies. It helps to strengthen and enhance the chain linking the entire process
- BPM supports collaborative environment for partners and means to assess and analyze the processes