Companies used to coordinate activities through the company manually. This resulted in inefficiency and errors in the operational process and often led to difficulties in improving the process itself. Organizations are increasingly focusing on the implementation of business process management (BPM) solutions for the purpose of improving functional efficiency and effectiveness in their core business processes.
Evolution of BPM
Approximately ten to fifteen years ago, organizations began assimilating their legacy systems in specific industries or divisions by integrating enterprise applications via data transformation and routing, event triggering, process automation, and adapters. Enterprise resource planning (ERP), customer relationship management (CRM), and supply chain management (SCM) vendors were flourishing at this time. They automated their transaction systems with ERP software while including the information systems from CRM software. Five years later, business process integration (BPI) solutions, namely business process modeling, business-to-business (B2B) connectivity, and vertical industry process templates were built on top of these enterprise application integration (EAI) systems.
Today, the market offers BPM solutions that incorporate both the EAI and BPI functionality in addition to functionality such as workflow, business activity monitoring, web services, rule engines, and portal capability.
What Is BPM?
Business process management (BPM) was recognized by the academic world in the fifties and sixties as an important ingredient in the quality management approach. In the eighties, authors Hammer and Champy drew the attention of business managers to process management, process (re-)engineering, and workflow management. Today, BPM is continually gaining ground. Many companies have learned from experience that BPM is a strong asset when facing the rapidly changing requirements that are typical of today's dynamic world.
The acronym BPM has been the cause of some confusion in the past. It can be mistaken for business process modeling, which is a subset of the more "evolved" business process management. It is important to note the distinction between the two.
Business process modeling is issued solely for the graphical representation of the workflow, which can be either information or an actual document in a business process. Business process management is the definition of the process as a whole, including EAI, business process modeling, workflow, and even B2B transport capabilities. Furthermore, BPM should not be confused with business performance management which belongs to the world of business intelligence (BI) and data warehousing.
Organizations regularly implement CRM, SCM, and ERP applications. As a result, key business functions such as inventory management, warehouse management, or product lifecycle management are highly integrated. All these applications focus on a specific function or area within the company and are vertically managed.
What companies are looking to do these days is to (1) achieve horizontal integration in order to cater to cross-functional business processes, and (2) achieve true process automation to enhance the processing efficiency of company transactions.
What Are the Different Components in BPM?
BPM encompasses several disciplines intended for use across different divisions and areas within organizations. Some of these disciplines are
Business Process Modeling. "Defines" the process (usually in graphical format). As explicitly modeled processes are required for all subsequent BPM disciplines, process modeling is often perceived as the starting point of BPM. Defined with the use of a process modeler (not to be confused with graphical editors such as Visio or PowerPoint), the resulting model is composed of objects that are able to be related to by the BPM engines. Composed of different diagrams (to represent different dimensions of the organization), the model is stored in a structured repository.
Business Process Documentation. Responsible for the process-enhanced documentation. It complements the process diagrams by providing, through graphics, the what-to-do description and sequence of steps. It also adds the extended documentation by providing the how-to-do of business tasks to the model "skeleton". Items such as the work instructions, standard operating procedures, master templates, training components, etc. are added to the diagrams to create a documented process.
Business Process Certification. Takes care of the process's ability to comply either with industry documentation standards such as ISO or with an internal "gating process". It confirms that the processes have been approved or certified in a proper manner before their internal deployment.
Business Process Collaboration. Deploys processes (intranet or extranet publication) on the one hand, and provides users with the ability to leverage the process know-how into enhanced productivity via user and task collaboration, on the other hand. This BPM discipline addresses corporate-wide knowledge management (KM) by not only making documented and certified processes readily available to all employees and associates, but by also providing employees collaboration functions, which enable them to manage projects, tasks, or transactions in a work team approach.
Business Process Compliancy. Establishes the process's readiness to comply with internal and external regulations (such as Sarbanes-Oxley [SOX]). The compliant certified processes are then used to achieve governance certification, audits, or both.
Business Process Optimization. Responsible for continuous process improvement (CPI), including tools to assess the performance of the actual process against internal norms or industry benchmarks. The integrated quantitative analysis capability is used to identify bottlenecks and estimate throughput times and cost saving opportunities. This often includes a simulation engine to perform "what-if" analyses to locate process issues in a proactive manner.
Business Process Automation. Responsible for the integration between users, processes, and related applications, resulting in the system automation of the process tasks. Driven by a workflow management engine, the BPM process information, as modeled, can be used for automated transaction execution and routing, including task execution triggered by previous events, evolved task scheduling and user notification, real time monitoring of task execution, ad hoc execution, etc.
Organizations use BPM systems to improve the effectiveness of their core operations. BPM specifically coordinates interactions between systems, business processes, and human interaction. The expected results include
Saving money by automating the routing of activities and tasks to employees, taking away the non-value-adding activities such as routine decisions, transfer of data or forms etc., and providing users with tailored task lists.
Saving time by changing business processes as per technology, government, or competition requirements. With today's tight integration of process definitions and underlying applications, the changes in the definition can be deployed and communicated virtually immediately.
Adding value by opening up a range of functions that can be leveraged in a truly BPM-minded company. Value can be added in several areas—process (quantitative) analysis and optimization, quality certification (e.g., ISO)—requiring procedures to be created and published. Another area is compliance management (e.g., SOX) which is imposed on many organizations.
By implementing BPM, companies are able to orchestrate and leverage cross-functional business processes that are used over multiple systems, divisions, people, and partners.
The beneficiary of BPM systems is actually the customer. The customer will receive information sooner and products faster, which results in an improved level of customer satisfaction. This will translate into more revenue for the company.
Evolution of BPM
Approximately ten to fifteen years ago, organizations began assimilating their legacy systems in specific industries or divisions by integrating enterprise applications via data transformation and routing, event triggering, process automation, and adapters. Enterprise resource planning (ERP), customer relationship management (CRM), and supply chain management (SCM) vendors were flourishing at this time. They automated their transaction systems with ERP software while including the information systems from CRM software. Five years later, business process integration (BPI) solutions, namely business process modeling, business-to-business (B2B) connectivity, and vertical industry process templates were built on top of these enterprise application integration (EAI) systems.
Today, the market offers BPM solutions that incorporate both the EAI and BPI functionality in addition to functionality such as workflow, business activity monitoring, web services, rule engines, and portal capability.
What Is BPM?
Business process management (BPM) was recognized by the academic world in the fifties and sixties as an important ingredient in the quality management approach. In the eighties, authors Hammer and Champy drew the attention of business managers to process management, process (re-)engineering, and workflow management. Today, BPM is continually gaining ground. Many companies have learned from experience that BPM is a strong asset when facing the rapidly changing requirements that are typical of today's dynamic world.
The acronym BPM has been the cause of some confusion in the past. It can be mistaken for business process modeling, which is a subset of the more "evolved" business process management. It is important to note the distinction between the two.
Business process modeling is issued solely for the graphical representation of the workflow, which can be either information or an actual document in a business process. Business process management is the definition of the process as a whole, including EAI, business process modeling, workflow, and even B2B transport capabilities. Furthermore, BPM should not be confused with business performance management which belongs to the world of business intelligence (BI) and data warehousing.
Organizations regularly implement CRM, SCM, and ERP applications. As a result, key business functions such as inventory management, warehouse management, or product lifecycle management are highly integrated. All these applications focus on a specific function or area within the company and are vertically managed.
What companies are looking to do these days is to (1) achieve horizontal integration in order to cater to cross-functional business processes, and (2) achieve true process automation to enhance the processing efficiency of company transactions.
What Are the Different Components in BPM?
BPM encompasses several disciplines intended for use across different divisions and areas within organizations. Some of these disciplines are
Business Process Modeling. "Defines" the process (usually in graphical format). As explicitly modeled processes are required for all subsequent BPM disciplines, process modeling is often perceived as the starting point of BPM. Defined with the use of a process modeler (not to be confused with graphical editors such as Visio or PowerPoint), the resulting model is composed of objects that are able to be related to by the BPM engines. Composed of different diagrams (to represent different dimensions of the organization), the model is stored in a structured repository.
Business Process Documentation. Responsible for the process-enhanced documentation. It complements the process diagrams by providing, through graphics, the what-to-do description and sequence of steps. It also adds the extended documentation by providing the how-to-do of business tasks to the model "skeleton". Items such as the work instructions, standard operating procedures, master templates, training components, etc. are added to the diagrams to create a documented process.
Business Process Certification. Takes care of the process's ability to comply either with industry documentation standards such as ISO or with an internal "gating process". It confirms that the processes have been approved or certified in a proper manner before their internal deployment.
Business Process Collaboration. Deploys processes (intranet or extranet publication) on the one hand, and provides users with the ability to leverage the process know-how into enhanced productivity via user and task collaboration, on the other hand. This BPM discipline addresses corporate-wide knowledge management (KM) by not only making documented and certified processes readily available to all employees and associates, but by also providing employees collaboration functions, which enable them to manage projects, tasks, or transactions in a work team approach.
Business Process Compliancy. Establishes the process's readiness to comply with internal and external regulations (such as Sarbanes-Oxley [SOX]). The compliant certified processes are then used to achieve governance certification, audits, or both.
Business Process Optimization. Responsible for continuous process improvement (CPI), including tools to assess the performance of the actual process against internal norms or industry benchmarks. The integrated quantitative analysis capability is used to identify bottlenecks and estimate throughput times and cost saving opportunities. This often includes a simulation engine to perform "what-if" analyses to locate process issues in a proactive manner.
Business Process Automation. Responsible for the integration between users, processes, and related applications, resulting in the system automation of the process tasks. Driven by a workflow management engine, the BPM process information, as modeled, can be used for automated transaction execution and routing, including task execution triggered by previous events, evolved task scheduling and user notification, real time monitoring of task execution, ad hoc execution, etc.
Organizations use BPM systems to improve the effectiveness of their core operations. BPM specifically coordinates interactions between systems, business processes, and human interaction. The expected results include
Saving money by automating the routing of activities and tasks to employees, taking away the non-value-adding activities such as routine decisions, transfer of data or forms etc., and providing users with tailored task lists.
Saving time by changing business processes as per technology, government, or competition requirements. With today's tight integration of process definitions and underlying applications, the changes in the definition can be deployed and communicated virtually immediately.
Adding value by opening up a range of functions that can be leveraged in a truly BPM-minded company. Value can be added in several areas—process (quantitative) analysis and optimization, quality certification (e.g., ISO)—requiring procedures to be created and published. Another area is compliance management (e.g., SOX) which is imposed on many organizations.
By implementing BPM, companies are able to orchestrate and leverage cross-functional business processes that are used over multiple systems, divisions, people, and partners.
The beneficiary of BPM systems is actually the customer. The customer will receive information sooner and products faster, which results in an improved level of customer satisfaction. This will translate into more revenue for the company.
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