Firms can gain from proper BPM deployment

perspective Business process management (BPM) is an important tool to help solve specific business problems and better align business with IT objectives. BPM that is well-planned and implemented can do a lot for an organization's process agility.

To illustrate what BPM can do, we look at a company that we will call Shopping Limited. In 1998, the mid-sized global retail chain with 193 stores in seven countries, more than 2.5 million customers, and 55,000 employees adopted enterprise resource planning (ERP) software with a discrete point-of-sale (POS) product and financials application.

It then followed this up with a series of specialized applications from another vendor to handle business requirements such as warehouse management, staff rostering, merchandising and logistics.

Already equipped with sufficient in-house IT skills, the IT department then performed the integration between the two systems. The objective of the exercise was simple: increase overall operational efficiency and integrate different functional areas.

A decade later in 2008, Shopping Limited had expanded into three new geographies, grown its customer base by 16 percent, introduced five new in-house product lines and acquired one small company in the Philippines.

Over the years, there has emerged a clear demarcation between the company's Business and its IT organizations--IT being more focused on systems and operational execution and Business being more focused on commercial and business-related benefits.

By then, the ERP application was not only exhausted in its offering, but there was also a gaping lacuna observed in managing cross-functional processes. Functional silos restricted the efficiency of the organization as a whole.

In an economic environment that was both highly competitive and rapidly changing, the company was unable to retain its agility and information visibility–-both key differentiators for any business.

Bridging a long-felt gap
The essence behind BPM is the realization that in today's world, the real differentiator for a business is how efficient (and responsive) its process is and how well one leverages the information that the business generates. While the second part is well understood and the business analytics and intelligence space has been adequately exploited by organizations; the process part was not as well addressed due to the limitations of technology.

So, what is BPM, and more importantly, what can it do? BPM is a method of efficiently aligning an organization with the needs and wants of clients. It is a holistic management approach that promotes business effectiveness and efficiency while striving for innovation, flexibility and integration with technology.

The term BPM generally refers to the designing, executing and optimizing of cross-functional business activities that synergizes people, processes and systems. It is an important tool to help solve specific business problems and helps bridge the gap to better align Business with IT.

As organizations strive for attainment of their objectives, BPM attempts to continuously improve processes, and can be regarded as a "process for processes".

BPM suites allow you to define, execute, monitor, analyze, optimize and improve your processes and in real time. The suites provide a common GUI (graphical user interface) where a Business process owner can define the processes and the IT developer can attach automation scripts, UI screens, integration adaptors, et cetera, to the process. The suites provide for deployment of these processes without additional programming (no loss in translation) and monitoring, information gathering and analysis of process data in real time. They provide capabilities in the creation of alternatives and simulations to optimize the process in real time. These capabilities can be managed by business users which give them tremendous control over the process.

The important thing to remember is that BPM does not replace an application; it only provides one with a process orchestration layer to wrap around and tie the applications to, to make them more responsive to changing business needs.

A closed loop BPM lifecycle.

What BPM can NOT do
To effectively implement a BPM initiative, business planners should follow an iterative discovery process and create a BPM strategic plan.

Successful BPM is about being clear about the pain points and building the process to make it most efficient for the business. It is also about successful change management. It is about clarity of architecture where one distinguishes between the process and transaction components and handles them appropriately so that they function optimally.

In order of importance, the questions relating to the following need to be answered when deploying BPM:

1. Is it a process problem?
The business issue may arise from a variety of factors. These could be problems with the process--either it is broken or inefficient. But it could also be a data problem or a transactional efficiency problem. A BPM situation will work if the business issue is emanating from inefficient processes. However the challenge is that there may be times when the business itself may not be able to identify what is the cause of the problem. In such a case, if a BPM suite is force fitted it may not deliver the benefits and the ROI (return on investment) expected and would lead to a quick disillusionment with the technology paradigm itself.

2. Human change management
The most significant value that BPM delivers is agility and visibility. While agility would be a readily acceptable virtue, visibility and therefore control may not be acceptable and one therefore needs to understand the soft issues at stake. Managing the human element becomes a critical success factor. Change management becomes more important considering the fact that unlike earlier automation efforts which focused on the line people, there is a strong element of control on middle management functions due to capabilities that BPM provides. Hence it is critical to ensure that the process design is nuanced to in a way that leaves enough entropy in the system to enable middle management to function and deliver value while having the visibility to drive operational efficiency.

3. Architectural clarity
One of the most frequent mistakes that people make in BPM implementations is to try and build the application in the process layer. An attempt to eliminate the application will not work. It is pertinent to understand that BPM is very good at process management, but not at transaction processing or data management. Trying to build these layers into the process layer is a recipe for disaster. Disaggregating the process components from the transactional components and setting up the process orchestration piece right is important for the success of the implementation.

4. Technology choices
There are different BPM suites based on the differing process needs--integration-centric, human-centric, document-centric et cetera. The nature of the process will influence the choice of BPM. There is another parameter as well--most organizations' applications are either aligned to a stack (SAP, Oracle, IBM, et al) or are dominated by it. Since most stack vendors have a process layer as a part of their stack, the choice is also between choosing a "best-of-breed" BPM versus the "in-stack" BPM. Here again there are no easy choices as the decision will entirely depend on the process needs that of a company and the maturity of the stack vendor's BPM offering for the kind of process needs identified.

If correctly planned and implemented, BPM can do wonders for an organization's process agility and end-to-end visibility. It can help CIOs analyze process data and simulate "what if" scenarios to anticipate and address process issues and look at optimizing currently efficient process. It also allows CIOs to take out a large part of the process automation piece and hand over its ownership to the business process owners.

This, by itself is a significant improvement by eliminating most "lost in translation" overheads. The CIO's organization is able to directly demonstrate ROI and benefits and is well aligned to the overall business objectives.

Satishchandra Nayak is head of Center of Excellences for BPM, IT Governance and Application Portfolio Rationalization, Patni Computer Systems.