What is Business Process Management, How it Works, and What BPM Software Can Do For You
Editor's Note: This is a guest blog submission from Emily Hunter of TGO Consulting, a provider of innovative business solutions designed to improve the productivity and performance of organizations. TGO's vision and goal is nicely aligned with that of Cerasis. Both of our companies aim to use technology and services to make our client's business lives much simpler. Whether it's streamlining every business process, which is the aim of TGO, or in the case of Cerasis for efficient transportation management processes, like booking a shipment or dealing with transportation accounting, we both are looking to reduce overall costs for our clients through business process management. This post will help you understand how to be better at business process management and how technology can aid in that pursuit.
What is Business Process Management?
Business process management is defined as "a systematic approach to making an organization's workflow more effective, more efficient and more capable of adapting to an ever-changing environment." But what does that actually mean? And how does it help a business reach its goals?
First, let's start with the definition of a business process. Basically, it's something a company does to accomplish one of its goals. Clearly, this is a broad definition, encompassing a many specific activities. The idea goes back to the economist Adam Smith, who described the production of a pin as a series of steps: drawing out the wire, straightening it, cutting it, giving it a point, adding the head, and so forth. In this case, the goal is to produce a pin or pins. Breaking down a goal into a series of tasks, many of which can be allocated to different people, makes reaching a given goal much easier. In many cases, it would be impossible to reach a goal at all without some kind of business process.
So, business process management is the discovery and implementation of ways to make business processes run more smoothly. Henry Ford's use of the assembly line to produce cars is a very famous example of this. He developed and directed a means to make cars more quickly and more cheaply by creating a set process of mass production, rather than having a group of people make each vehicle "by hand".
In today's business world, business process management (BPM) does the work of creating and directing processes that best suit a particular business and its particular goals, usually focusing on people or technology (or both) as assets which can be used to facilitate the best process for the job.
The Ways BPM Works
By establishing a clearly set process, BPM takes out many of the usual causes for error or mixed messages. When everyone knows exactly what to do and how to do it virtually flawlessly, the end result is likewise free of error.
The business world tends to look at BPM in three ways: horizontal, vertical, and full service. As the name suggests, horizontal BPM is broad. It's more concerned with developing and creating new processes, often with the use of technology. Vertical BPM starts with established templates which can be modified to accomplish specific goals. Full-service BPM has a number of components, such as design, monitoring, modeling, optimization, simulation, and more depending upon the methods chosen. Following are details on several categories often associated with full-service BPM.
Design: Designing a process can start with finding and defining existing processes, or it could mean creating a process from scratch. It may also include the creation of something like a flowchart or other representation to show the process from beginning to end. The design portion is where a business process is born.
Modeling: Once a design is conceived, it's put through its paces. Life rarely conforms to anyone's plans, so each process is put through a series of theoretical situations to see how it hold up against various financial or personal circumstances that might affect the process.
Execution: Today's business processes are often heavily tied up in technology. Sometimes, a process may be entirely completed by computer. In fact, there are specific computer languages -- Business Process Execution Language (BPEL) and Business Process Management Notation (BPMN) -- especially developed so business people and IT people can have a common language by which to design and execute business processes. Through these languages, even those who are not software developers can design, then execute a business process entirely on computer. Processes with complex steps will still need human input, but those processes which can be automated move much faster.
Monitoring: Once a process begins to work, it needs to be observed, to see if it's actually accomplishing its goal in the most efficient way possible. Information about the process is gathered, then used to improve the processes in a later step.
Optimization: This part generally comes after either modeling or monitoring. Observation of the process in action, either virtual or actual, will inevitably show places where it can be made to perform even better. If there's a place where the activities become too slow, ways can be found to speed them up. If there's a place to cut costs without reducing quality, this part is also attended to while optimizing.
Enterprise software and BPM go together very well. Since computing works through distinct tasks which are built into processes, applications have been developed to organize and automate processes. Keeping up with other business software, BPM has entered the cloud, allowing for those utilizing BPM to optimize their businesses to do so without hiring on specialized IT staff.
Like all recent technologies, the greater implications of developing cloud-based BPM software are still emerging, but the benefits of lower cost and greater mobility are already very clear.