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Money Making Drivers for BPM Part 1
By Jim Sinur | April 29, 2008
There is a trend toward more emphasis on process activity; even process excellence these days. It’s because business leaders know that there is money to be made in BPM. Because processes are in the critical path of progressive business change, business processes are coming under intense scrutiny.
The need for process understanding and automation will create significant business process management activity. I take heart in the success of recent BPM projects. The numbers that are emerging from BPM projects are more than encouraging, but it will take true justification efforts to spring the cash to invest in BPM up front (See Justifying BPM blog posting).
Here are some things that are driving business process activities today and where it is proven that money can be made.
Determining if Your Processes are Right or Wrong Through Current Process Understanding:
Traditionally, business people will continue to do their work the same way unless they run up against some operational problem and/or exception. Although it’s not common knowledge, most enterprises don’t really understand the depth and breadth of their business processes, if they haven’t had a recent business processing discovery effort.
In fact, there are a lot of shadow processes that are not seen nor understood. This isn’t intentional; however, processes that were designed years ago have been adapted for volume changes, exceptions, managerial regime changes and additional regional activities. Processes tend to become costly and burdensome as a result of process entropy (what non-engineering types call “decay”).
During down economic times, the studying of processes shows opportunities for cost savings that enterprises thirst for during tough times. I believe that this is an ongoing opportunity, but enterprises tend to forget this when new opportunities burgeon in an up economy.
Build Better Processes Faster for Fun and Profit:
During the mid-1990s, business process “gurus” asserted that enterprises needed to break their established processes and start over. They believed that creating new processes was the primary reason to perform modeling exercises.
Although these gurus, who were active during the business process reengineering (BPR) era, almost killed business modeling as viable activity, designing new business models is still a major activity. This is especially true for new products and services. During up economic cycles, this is a common way of understanding and simulating the kinds of processes that need to be put into place to support progressive new offerings.
There are numerous areas of opportunity that are available to the business leaders. The first place to look is manual activities that are ripe for improvement. These activities could include collaborative knowledge work where best practices emerge or just for standardization for more consistent results. One does not have to look far to find process opportunities, but I would recommend going after a “hot button” area where you could solve a significant point of pain for an organization.
If you do not view yourself as a risk taker, then there are tons of small manual processes that are available for discovery and some form of automation.
Leverage Processes in Mergers and Acquisitions:
Mergers and acquisitions are common during all economic cycles and are great opportunities to normalize and standardize processes across combined organizational entities immediately or in the future. Some dominant acquirers insist on using proven business processes; however, modeling the acquired entity’s processes will be crucial in building a transition plan.
Other acquirers look to pick the best-of-breed business processes, and comparing business models is a proven technique for success. Some acquiring enterprises exhibit different behaviors on a case-by-case basis, but understanding the explicit or implied processes goes a long way in M&A activities. BPM-driven SOA can play an important role here in the resulting processes by publishing a SOA interface into legacy applications and processes.
Bottom Line:
Good business leaders understand that it is wise to invest during down times, so that when they get busy again, they will not have the opportunity to focus resources anywhere, but supporting the business operationally. BPM is as good as any investment that I have seen to invest in going forward.
Topics: BPM |