Business Process Management: Taking ERP Beyond Departmental and Data-Centric Boundaries
In today's global enterprise, numerous business processes occur each day that are outside the scope of ERP—from filling out a purchase request, to interacting with business partners, to assigning documents for review and approval: the effectiveness of each one, and the overall efficiency of your organization, is dependent on integrating these different tasks throughout your entire business and with ERP systems.
Business process management (BPM) is a term that many organizations are using as a means to solve the challenges facing a company's procedural needs in tying these different operations together. However, as technology vendors are establishing BPM solutions, they often fail to focus on the entire organization, leaving certain segments of the enterprise fragmented and fending for themselves.
By understanding BPM as a philosophy and concept, not a technology solution, companies can bring the employees and processes that live outside of your ERP system into the organization.
Executive Overview
Companies first turned to ERP solutions in an attempt to capture data and information associated with their business processes. However, the expectation that ERP solutions could impact all the processes required to run a business efficiently has never materialized.
With the typical ERP solution only reaching approximately 15% to 20% of an organization, ERP never matured into a solution for the entire "enterprise." This failure created a boom in the development of technology solutions claiming to do what ERP could not, provide a complete BPM technology. However, without a clear definition of BPM, these new solutions provide functionality all over the spectrum and have further confused the philosophy of true BPM.
The goal of BPM should not only focus on solving processes through technology, but also initiate a cultural shift within a company, encouraging the sharing of information. According to P.J. Jakovljevic of Technology Evaluation, a truly integrated workflow and BPM tool can allow users to achieve long coveted IT objectives such as the paperless office, management by exception and workflow as an electronic framework to guide employees.
By making information available to all those who can utilize it, and by enhancing the ERP technology investment that some businesses already have, organizations can achieve greater efficiencies throughout the entire value cycle of a business.
The Evolution of ERP
ERP solutions were designed to achieve automation across several departments of an organization, facilitating the manufacturing process. ERP addressed the issues of raw materials, inventory, order entry and distribution, but was unable to extend to other employees who were working on sales, marketing, non-transactional relationships with external partners and vendors and other non-inventory, non-order operations. ERP did not incorporate customer relationship management (CRM) capabilities, nor did it work with the development of Websites or portals for customer service/orders. Today's enterprise has evolved and expanded beyond internal influences and organizational borders. With global expansions, economic downturns, mobile workforces and a partner-driven economy, there are many real-time demands on businesses. Internal demands and competitive pressures have necessitated a consolidated view of the organization—both internally and externally—to ensure supreme cost and process efficiencies. Unfortunately, this consolidated view of the organization can not be accomplished solely through ERP deployment, leading to the materialization of the BPM philosophy.
The Emergence of BPM
In the era of the extended enterprise, the ability to capture, store and locate information has become critical. Increased regulatory factors and compliance issues are forcing companies to provide a broader view of their businesses. To accomplish this task, it has become clear that horizontal, as well as vertical, management techniques are required—techniques supported by specialized technology solutions.
Businesses are also being pushed to operate in what is rapidly becoming known as "zero latency mode," or more recognizably: "Internet time." Customers, partners and even internal constituents are demanding real-time access and visibility into the processes running the company. Instant access to critical information creates an environment in which businesses are better prepared to react to changes, and can adopt a "plan anytime" mind set.
What is being promised by vendors of BPM solutions is the ability to operate in real-time. They highlight the ability of BPM solutions to enhance decision making, while at the same time reduce overhead. They extol the virtues of simplifying complex, mission-critical business processes. BPM promises to help manage organizational change, keep businesses agile, and become a strong foundation for ongoing improvement. BPM solutions also promise to centralize corporate information, seamlessly integrating with previously deployed ERP systems, becoming a critical element of overall business success. BPM providers have made a great deal of promises that they have yet to deliver on, which is why a clear vision beyond all the BPM clutter is needed to offer businesses what they truly need, and should be looking for.
Taking BPM to the Next Level
What most organizations, and most BPM vendors, do not realize is that to obtain full value from BPM solutions, enterprises need to utilize an integrated suite approach that extends seamlessly across the enterprise, providing a holistic view of the business.
The majority of BPM solutions available today look and behave more like extensions of the "islands of automation" paradigm often associated with ERP deployments. They do not go far enough toward understanding that business processes are intrinsically linked, and that a "departmental approach" to BPM will eventually fall short of the intended goals. Companies, and their technology vendors, need to understand that business processes should not be viewed within the confines of departmental or even organizational boundaries. As we have already discussed, businesses are becoming increasingly horizontal and role-based, and thus, the rules for structuring these organizations must be based on how people interact on a daily basis. Top business integration software vendors have long understood that BPM cannot achieve its full potential until both vendors and their customers begin to look at their businesses from a different perspective and redirect the belief that business processes exist in a vacuum. By using technology that provides companies with the means to unify the people, processes and knowledge that matter most to a business, the result is the creation of an accurate, up-to-the-moment view of the organization that enhances decision-making, analysis, scenario planning and ongoing management across the organization. It is this philosophy of unification of the overall business which drives the success that BPM hopes to achieve.
What should customers look for in their BPM solution? To begin, one should look for a solution that is able to support a holistic view of the enterprise. This solution should provide a powerful integration capability within the platform enabling companies to unify the enterprise across departmental and functional boundaries, providing new clarity into the processes that drive the business. The ability to see where processes intersect and how they impact each other provides the necessary level of visibility into an organization that drives major cost savings and operational efficiencies.
Companies should seek out a solution that creates an environment in which companies can not only model, but effectively streamline workflow and automate manual, unsecured processes into a secure centralized environment. Within one of the top business integration platforms, access to information and documents based on roles and a rules-based schema offer business managers the ability to control access to data on a need-to-know and need-to-access basis for projects and outside managed operations. This roles- and rules-based approach eliminates the "islands of automation" inherent in most, if not all, ERP and BPM deployments.
In the new era of regulations and compliance, real-time access to the vital information driving the business is crucial. By replacing the traditional reporting paradigm with one that offers continuous monitoring capability, CEOs, department heads and other managers can manipulate hundreds of pre-defined report "views" in real-time or create their own. Access to information and flexibility to view and understand it in the ways that are most relevant provide the ideal environment needed to best manage every aspect of your business.
People-centric Business Operations System (BOS)
In order to achieve the true goal of BPM, organizations must encourage the sharing of information. Businesses must view the software and technologies that run their enterprises as a tightly integrated business operations system (BOS). A natural outgrowth of today's BPM solutions, a BOS is characterized by a comprehensive work environment, only achieved through seamless, total integration of the data, information and processes—internal and external—crucial to the business. The comprehensive work environment will be accessed by a self-service desktop that can be easily personalized to provide the most useful information to the employee, the information needed to best do their jobs on a daily basis.
Further, the desktop, through application integration, will link organizations together, providing not only a holistic view of the business, but a holistic view of how people throughout your entire value-chain (i.e. employees, partners, suppliers and customers) are interacting within and across your organization.
But most importantly, only by adjusting the thinking around the definition of "workflow" can a true BOS be built. Workflow should provide each employee, based on their roles and responsibilities, with a process-centric view of the business. Workflow shouldn't depend upon a crude "send"-only model like e-mail, but on a business-rules system which automates the flow of communication and tasks. Workflow should ensure that assigned tasks are completed, or elevated if need be. Workflow should be used in conjunction with advanced alert management technology to make certain that potential problems do not become crises.
Summary
Technology has made great strides in offering businesses greater efficiencies. The problem with the majority of BPM solutions is that the potential for vital movement beyond a single department or group of users has been slow to develop. As a result, most departments were operating on individual planes with regard to the solutions they were using to address their specific needs. Leading business integration vendors believe that by unifying these individual planes upon which departments and employees are operating, yet another level of efficiency can be reached. In essence, technology can be combined to create a platform which an entire business can utilize and operate off of. Such a platform can also extend beyond the organization to involve anyone who may be associated with the company's value cycle. Through greater centralization of critical business information for real-time decision making, companies put themselves in a better position to boost profitability and reduce operational costs, increase accuracy and timeliness of cost allocations and ultimately maximize financial decisions that shape the future of the company.
Exact Software™ believes in Business Unified™—providing solutions that connect the people, processes and knowledge essential to an efficient, competitive business. Exact's solutions provide greater visibility across the organization with real-time access to central Web-based corporate information and exchange. Exact e-Synergy® is a business management solution that maximizes an organization's access to the very latest information, anytime, anywhere. e-Synergy makes it possible to connect everything within an organization—people, documents, tasks, assets and more—in a single database, making regulatory compliance easy, for companies of all sizes.