Moving from Process to Performance Management
Over the past few years, business process management (BPM) has radically transformed the business world. Because of the tremendous gains companies have attained, BPM has become a corporate rallying point and key driver for business performance. And yet, we are on the cusp of yet another wave of business improvements that will be delivered through BPM.
The market is beginning to recognize that BPM can be applied to a vast variety of applications through the enterprise— which is moving BPM from simply a departmental solution to an enterprise infrastructure. And along the way, BPM has evolved, incorporating new business intelligence and decision management capabilities to address new and emerging market requirements.
"Internal Combustion"
BPM enables businesses to increase productivity, efficiency and deliver better service at a lower cost. In addition, BPM allows organizations to quickly employ changes to improve overall performance, adapt to changing business requirements and meet continuous improvement objectives— the essence of corporate performance management.
If business performance is lacking in some area, action needs to be taken to rectify the situation—often immediately. BPM enables businesses to track, monitor, measure and optimize processes in real time to quickly identify operational bottlenecks and fine-tune processes "on the fly" for optimal results. In this way, BPM provides a valuable feedback loop to help organizations monitor key performance indicators (KPIs).
Improving Operational Visibility & Agility
Surprisingly, most organizations don't have the visibility of how they are performing against their KPIs. BPM can provide the critical visibility to analyze how a company is performing against agreedupon benchmarks as well as identify the sources of impediment. Once the root causes of potential process roadblocks are understood, changes can be quickly made to the overall business process. In this way, analysis can help identify issues before they become problems.
Simulation validates that such changes to the process will have the desired effects on KPIs prior to these changes going into production— therefore greatly reducing the risk of putting the wrong or sub-optimal processes in place. Additionally, it enables organizations to conduct strategic scenario planning to respond more quickly to business events.
BPM gives organizations the ability to monitor and predict the impact of events (positive or negative, internal or external) and enact the best process to either capitalize upon or mitigate consequences before they occur, as opposed to merely reacting to these events after the fact. The significance of this is clear—organizations can take advantage of windows of opportunity and identify issues before they become problems, ensuring operational excellence, better decisions and thereby improved corporate performance.
By establishing a corporate performance management platform that has BPM at its foundation, organizations can truly transform the way they do business—delivering maximum productivity, superior service, increased operational visibility and adaptability for continued organizational success.
Tools for Driving Performance
A comprehensive BPM solution includes a complete set of integrated capabilities to automate, integrate and optimize business processes and manage the full spectrum of enterprise content. These include capabilities addressing:
Process modeling and process automation: Process modeling lets companies create more flexible and efficient workflows by simulating processes prior to implementation. BPM can be used to automate humanbased business operations, tasks and transactions and covers a whole spectrum of use cases from specific exception handling to high-volume transaction processing. The goal is driving greater productivity and efficiency in handling exceptions. BPM leverages valuable human and system resources when and where they provide the most value, while controlling costs.
System-to-system or straight-through processing (STP): BPM also encompasses system- to-system or application-to-application processing, which has become vital to driving down transaction costs and cycle times by reducing or eliminating manual or human intervention. Process "nirvana" is finding the optimum balance of STP and human-based workflows to better manage costs, quality of service delivery and risk exposure.
In-line analytics and simulation: By analyzing key elements of business operations tied to KPIs, companies can establish benchmarks for evaluating business performance. These metrics can then be used to generate a wide range of informative reports and critical alerts to provide visibility into business performance. Additionally, these reports can offer a holistic view of business operations to provide needed awareness, insight and intelligence, which in turn enables better, faster decision making and establishes a foundation for continuous process improvement. Process analytics closes the loop to more effectively drive business decisions, while opening the door to continuous innovation and improvement.
As mentioned earlier, process simulation enables businesses to replicate processes prior to deployment to determine their effectiveness up front, ensuring deployment of the best and most ideal process. Process simulation shows how the process impacts the organization with regard to cost, resource utilization, cycle time and responsiveness. Through simulation, companies can find the process that results in the optimal balance of KPIs to best fit the situation at hand.
Tightly integrated modeling, process analytics and simulation capabilities offer companies unique insight into how to improve business processes and control risk, and enable companies to quickly model, test and deploy new processes to address emerging requirements, avert disaster and seize new market opportunities.
Business activity monitoring (BAM): BAM provides real-time visibility into the effectiveness of business processes as measured against key performance indicators, such as cycle time, productivity, etc., across a heterogeneous IT implementation, and also provides the means to automatically take appropriate actions. BAM correlates business and operational data and events to present graphical views of business performance via a system of dashboards and alerts.
Combined with BPM, BAM improves visibility to the overall performance of the organization at both a macro and micro level—down to each individual transaction or business process. It also provides specific and relevant information through customizable dashboards that provide tailored views of the process performance to each individual and their role within an organization, enabling improved productivity, responsiveness, and better decision making across the board at both strategic and tactical levels.
BPM and BAM also aid in better management and reduction of risk by providing the visibility to identify issues before they become problems. They help increase organizational responsiveness by providing the ability to take immediate action—such as immediately launching a specialized process or sending an e-mail alert—to reduce the reaction time in response to threats. This faster reaction time further limits other potential consequences associated with the initial alert.
Business rules: Business rules enable straight-through processing through the automation of decision making and acceleration of the speed and accuracy of business processes. They also enable businesses to quickly and cost-effectively change policies that drive business processes and govern how decisions are made. This helps to foster business agility, allowing organizations to react much more quickly to marketplace events (i.e. regulatory changes, competitive moves, new product introductions, new pricing and eligibility programs) than ever before. Together with BPM, business rules enable organizations to manage policies that govern business more effectively and prove how and why decisions are made, essential for the majority of compliance initiatives that organizations face today.
New Benchmarks for Corporate Performance
Outside of the standard key performance indicators traditionally associated with corporate performance management, new competitive requirements have emerged. Leveraging BPM, companies can not only meet these requirements, they can also exploit these competencies to hone their competitive edge.
Managing risk and compliance: Regulatory compliance has ushered in new requirements for greater visibility and control of processes and content to lower business and financial risk, and fulfill corporate governance initiatives. Enforcement of policies and standard operating procedures is essential for compliance. BPM helps companies establish, control and manage business processes to ensure enforcement, operational control and accountability.
Effective regulatory compliance is not only proving that a standard operating procedure exists, but also proving how decisions were made and being able to manage the artifacts that represent the transaction. It is here that content management and automated management of the entire records management lifecycle process becomes key. The real opportunity is to "bake-in" compliance as part of the process rather than treating this aspect of the process separately. In-line content and records management delivered within a BPM context delivers a substantial return on investment via reduced corporate risk, lower operational costs and improved productivity.
By automating the management of a growing amount of business content associated with the transactions and decisions that the organization manages—organizations can reduce compliance costs because proper policies and procedures are integrated and the right information is captured and declared as records automatically. Compliance simply becomes the way business is done versus being treated as a separate discrete activity.
Handling exceptions: BPM can streamline exceptions handling; examples of exceptions are transactions that cannot be driven to completion due to missing information, or transactions involving customers who are eligible for discounts or priority handling due to "premier customer" status.
Within a business context, exceptions are the "rule," and the way organizations handle them can serve as a key competitive differentiator. Effective exceptions processing enables companies to realize improved business performance through enhanced compliance management, operational efficiency and cost control, and improved customer communications, which can provide companies with significant competitive advantage.
Reducing complexity: Yet another key area of concern for organizations is reducing IT complexity and simplifying integration. BPM helps reduce complexity and total cost of ownership by supporting existing investments and legacy applications. Organizations can "snap-in" or tightly integrate BPM as a service within the existing application and IT infrastructure. This includes the ability to easily integrate BPM with the applications that run the business as well as with all the information repositories that exist in the enterprise.
The focus here is to leverage existing infrastructure investments. However, the greatest opportunity for generating competitive advantage is to leverage BPM in the context of a larger service-oriented architecture (SOA) strategy. Here, full business processes can be treated as a set of re-usable services used to easily and quickly create component business applications. This allows organizations to more quickly leverage the value of BPM across a variety of use-cases and business applications, as well as improve responsiveness to business or market opportunities.
BPM: From Good to Great
The difference between a good corporation and a great corporation is execution and the ability to continuously improve and innovate over time. Many organizations have wholeheartedly adopted BPM to drive greater value to the organization and its customers, however many are just now realizing all the benefits and positive impacts that BPM can deliver.
Over the next few years, the focus of BPM will continue to shift from simply managing processes to managing corporate performance. And the winners in the marketplace will be the ones who truly understand the value that BPM has to offer and harness this power to maximize business excellence and performance.
FileNet Corporation helps organizations make better decisions by managing the content and processes that drive their business. For more information on FileNet's BPM solutions, visit (
www.filenet.com).