Without clear understanding of the daily processes of a company, it is impossible to implement any changes, automate processes or make improvements in an organized, manageable and predictable manner. The goal of, “We would like to reduce the costs, so, let’s automate our processes” is a common refrain. In general, it’s a good idea, but if this automation is implemented with an outdated, non-optimal process, the result will not be what was desired.
The truth is that, in many companies, the transformation, process automation and digitalization initiatives become more expensive and less efficient than were expected because they are too narrowly focused. They are mostly tactical, improving a single department’s process, or automating an existing process, instead of building a better process for the whole company. Business Process Management (BPM) could help to solve this problem.
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What is BPM?
According to Gartner, “Business process management (BPM) is a discipline that uses various methods to discover, model, analyze, measure, improve, and optimize business processes.”
As a very popular component of business transformation, BPM, if well implemented, can help to understand a company in greater detail. Moreover, it can be the basis of a large-scale changes, continuous improvement and automation. This approach could be very effective in integrating the strategy and goals of an organization, with the expectations and needs of customers by focusing on end‐to‐end processes.
Identifying Existing Processes
Firstly, complex existing processes spread across different departments and systems should be identified. This can be done by documenting and making the diagrams of the “AS-IS” processes. For the large organizations, like banks, this step is very comprehensive and vital for the future success, because all the processes are very distributed, involving many participants and using systems.
The “AS IS” business process model can be done in a few ways:
- Interview: to ask the questions about the process execution.
- Observation: to observe and document the process that is executed.
- Survey: to sent the list of questions to the interviewee who fills it out.
- JAD (Joint Application Development) sessions: to involve the process executor to the process modelling.
Assessment and Design
After completing the set of processes and reaching conclusions about the detailed flow, the identified processes should be assessed. Factors like complexity of the process, number of systems involved, turnaround time and so on should be taken into consideration.
We must document the problems with existing processes and find some improvement opportunities. The list of elements that can cause troubles and indicate some “problem” processes could look like this:
- Process has unnecessary bureaucracy and include the activities that do not aggregate business value.
- The process is very hard to control. There are no automated method for planning and monitoring of this process (the managers using a variety of systems, like Excel, Access, etc.).
- The process is very time consuming.
- The process is risky. Many manual activities could cause the mistakes.
- The process includes rework/ checking/review stages.
After that, we are ready to start the design the “TO-BE” processes. The new processes could de described, documented and the set of process’s diagrams should be completed. All these alternative solutions should also be assessed according to some criteria. For example:
- The complexity of the process changing
- Cost vs benefits
- Implementation period
All changes for the large-scale business are always not easy in implementation. So, it’s not obvious to start the BPM transformation with the most complex process. Good strategy is to start the implementation in a small phases, realize some alternatives in a one department and after that spanning the changes across departments. Be sure that the transformation team have good communication flows inside the company and all participant of the process and stakeholders have the information about the goals of transformation and its stages. Usually it could be very useful to involve the specialists of the “AS-IS” processes to the implementation of the “TO-BE” processes.
Review and Analysis
The company need to review the results of BPM transformation by measuring some parameters like these:
- Key Performance Indicators (KPI) (in comparison “AS-IS” and “TO-BE” processes).
- ROI (return on investment) for each process treated.
- Costs and earnings.
Upon identification of well-done and problem areas, a company could make changes in the BPM implementation strategy or in designed processes. The end goal is to reach “TO-BE” stage, with continuous assessment and improvement of processes.
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BPM transformation could be very useful because it gives many advantages.
- Optimize operational processes and find hidden wastage. In this case, we talked about all type of wastage – money, time, efforts.
- Decrease costs and increase the profitability.
- Overcome barriers that slow down business performance and innovation.
- BPM could be very good way of the processes automation.
- Close process gaps between customer-facing and operational teams. BPM is a very efficient way to improve the back-office processes. At the same time, it could help to improve the customer experience performance.
- Improve collaboration across employees, customers, and partners.
- Decrease the dependence of the human factor.
The start of BPM implementation means the start of continually improving and transforming main business processes in the company. But there are some rules that should be taken into consideration throughout the BPM implementation.
- BPM programs require a strong foundation with clear and measurable goals.
- BPM should be business oriented. It’s good when the goals of the process transformation are formulated in the terms of business outcomes.
- It’s hard to achieve the goals without senior management and business attention to the BPM initiatives.
- BPM must be integrated in the long-term business strategy of the company and must help reinvent and transform processes to guard by key trends (for example, digitalization, expanding customers demand due to the mobile and social, etc.).
Business Process Management (BPM) is not easy, but it is not impossible to implement at any sized organization. The “AS-IS” processes aren’t necessarily bad or wrong, but with BPM tool the “TO-BE” processes could be great. This process is also most important during a time of transformation like most organizations are experiencing today.