Process This...BPM Is More Than Just Workflow
In recent years, there has been a great deal of emphasis on the processes that guide how companies deliver goods and services. Many subscribe to the views cited by Jack Welch, former CEO of General Electric, who believes the power of your company is in the processes themselves, and the most valuable opportunity (to extract value) is in how a product is created, sold, delivered and supported.1
As a result, the marketplace has experienced a tremendous surge in interest in Business Process Management (BPM). In turn, a wide variety of vendors have jumped into the market fray, including Enterprise Application Integration (EAI) vendors and traditional workflow vendors—each desperately attempting to define BPM in their own terms.
This has created a lot of confusion and misinformation about BPM as companies struggle to identify real players versus pretenders. While most BPM vendor offerings promise to deliver more or less the same, in reality, they differ significantly in their technical approach, functional capabilities and, ultimately, in real fulfillment of the value that BPM has to offer.
Some businesses believe they are harnessing the power of BPM today to enhance competitive advantage. In reality, most have only implemented subsets of total BPM delivery requirements, such as process modeling tools, content approval workflows, business rules engines or EAI.
BPM vs. Workflow
Many people are confused as to the distinction between workflow and BPM. Workflow is a commonly used term that describes the automation of typically human-based business operations, tasks and transactions, and covers a whole spectrum of use cases from specific exception handling to high-volume transaction processing.
While workflow solutions do a great job of automating manual processes, they only deliver one part of the overall BPM equation. BPM solutions are much more comprehensive in nature and offer much more value. A true BPM solution must provide automation, integration and optimization of business processes throughout the enterprise. To ensure success, BPM solutions must be flexible enough to address a wide continuum of business processes from simple document review and approval to complex continuous improvement initiatives. Moreover, they must support the process, the business content that surrounds that process, and they must link the various systems and applications that drive the business.
Industry analyst firm Gartner, Inc., has published a number of research reports on this topic, which it refers to as process fusion, a blending of process automation, business rules, content and connectivity. According to Gartner, business process fusion requires systems integration to achieve the requisite scope for end-to-end processes, application flexibility to accommodate process changes, and information unification to support all types of decision making within a single framework.2
Fusing Process, Content and Connectivity
BPM enables businesses to develop highly responsive and adaptive processes so they can react immediately to events as they occur. This is achieved through the fusion of process, content and connectivity. Combining these three critical forces allows organizations to leverage valuable human and system resources when and where they provide the most value—reducing costs and cycle time and increasing responsiveness and accountability.
Straight-through processing (STP), or machine-to-machine processing, has become extremely vital to driving down transactional costs and cycle times. STP accelerates processing by eliminating the need for manual or human intervention. Applying business rules as part of STP further enhances operational speed and agility by directly managing the way work flows through the processing environment. Business rules set thresholds for approval, such as credit limits, and automatically enforce policy decisions throughout the process.
No matter how well designed a process may be, there will always be exceptions to the norm. In fact, handling exceptions is often the rule rather than the exception in managing business processes. BPM can further streamline exceptions handling, eliminating cost and potential for errors associated with human-based workflow while reducing cycle time. Together with business rules, companies can apply expert human resources when and where they add the most value to the decision-making process, realign resources to focus on higher revenue-generating activities and manage costs more effectively. This ultimately results in highly effective, efficient and responsive exception resolution, which can be a significant market differentiator. Process “nirvana” is finding the optimum balance of STP and human-based workflow to better manage costs, quality of service and risk exposure.
The Process-Content Connection
Not all data is created equally. However, all processes rely on some type of content—whether it be structured content, which resides in the context of a database, or unstructured content, which includes photos, images, faxes and forms. Processes can be and often are triggered by changes in content that is part of the transaction; e.g. a new application, claim or invoice is received, or a technical document is revised. Process improvement initiatives often only focus on leveraging structured information. However, it is estimated that only 20% of business information is structured. To make the right decision, systems and personnel need immediate access to both structured and unstructured information pertinent to the transaction or process at hand.
By linking processes with the creation, management and delivery of content, businesses can facilitate and accelerate information exchange, and more quickly respond to business or transaction events. The right information must be aggregated and delivered to the right people or systems at the “critical moment” when a decision must be made. This speeds overall decision making and helps companies manage exposure to risk, first by enabling the right decision to be made, and then capturing how and why decisions are made. This can assist companies with regulatory and compliance issues related to legislation, including Basel II, HIPAA and Sarbanes-Oxley.
The need for active content can be observed even in the simplest of examples, such as updating an online loan application. Suppose you were applying for a home equity loan and needed to increase the amount midway through the process to pay for unexpected home repairs. Your query automatically creates (1) a new request to the lender that invokes automated or human review and approval; (2) additional content; and (3) the need to update associated automated systems. Organizations are able to provide improved customer responsiveness through tight integration of content and process with the applications that run and drive the business.
As noted previously, along with process and content, connectivity is extremely important, as many organizations have stovepiped applications that create obstacles for information exchange. Workflow solutions do not directly address EAI and system-to-system connectivity, which is necessary to ensure that processes interact with core business applications such as ERP and CRM systems. BPM provides the full spectrum of integration and connectivity—spanning human-to-human and machine-to-machine processes and everything in between. This allows content and transactional data to be shared across applications, business processes and organizational boundaries, increasing organizational responsiveness and knowledge exchange, while maximizing the value and performance of existing resources.
“The value of integrated processes, content and connectivity cannot be underestimated in enabling companies to respond to changing market conditions, leverage windows of opportunity, minimize competitive threats and improve return on investment,” says Mark Gilbert, research director at industry analyst firm Gartner, Inc.
Process Optimization: Beyond Visibility to Predictability
Unlike workflow, BPM delivers operational visibility and metrics on how the business is performing—key to both business agility and continuous process improvement. This visibility enables businesses to track, monitor, measure and optimize processes in real-time; recognize issues before they become problems; quickly seize opportunities; identify trends and predict how market changes will impact their operations. Specifically, BPM’s ability to deliver process optimization, which incorporates process analysis and simulation, provides an unprecedented level of operational insight and intelligence needed to maximize the effectiveness of business processes. This increased visibility translates into improved agility and adaptability, crucial to keep companies a step ahead of the competition. Process optimization provides a critical feedback loop to help organizations monitor key performance indicators (KPIs) such as cycle times, customer service response times and employee productivity. By analyzing key elements of business operations tied to KPIs, companies can better evaluate overall business performance. A wide range of reports and critical alerts can then be generated to provide needed operational awareness, insight and intelligence to enable better, faster decision making and establish a foundation for continuous process improvement.
While evaluating the impact of past performance is extremely valuable, the ability to assess the organizational impact of future events can make the difference between a company’s success or failure. Process simulation enables businesses to replicate processes prior to their deployment. By determining the effectiveness of those processes up front, organizations ensure deployment of the best and most optimal process to deliver maximum value and mitigate risks associated with deploying “untested” processes.
Process simulation, together with analytics and reporting, enables enterprises to maximize BPM investments to help with critical decisions and investments in preparation for the future. For example, companies can review how changes in regulations or cost structure will affect their business. This powerful combination of analysis and simulation also enables companies to keep processes tuned at an optimal level on a continuous basis.
Now more than ever, companies need to fine-tune operations to not only cut the fat, but to ensure the continued growth and overall health of the company by executing flawlessly, anticipating and responding to change, and mitigating risk. By leveraging process, content and connectivity, BPM provides the required holistic context for process automation, integration and optimization. Process this: Enterprises that want ultimate competitive advantage need true BPM solutions.
FileNet Corporation (NASDAQ: FILE) helps organizations make better decisions by managing the process, content and connectivity that drive their businesses. FileNet’s solutions allow customers to build and sustain competitive advantage by managing content throughout their organization, automating and streamlining their business processes, and providing the full spectrum of connectivity needed to simplify their critical and everyday decision making.
Since the company’s founding in 1982, more than 4,000 organizations, including 80 of the Fortune 100, have come to depend on FileNet solutions for help in managing their mission-critical content and processes.
Headquartered in Costa Mesa, CA, FileNet markets its innovative solutions in more than 90 countries through its own global sales, professional services and support organizations, as well as through its ValueNet Partner network of system integrators, value-added resellers and application developers.
1 Jack Welch and John A. Byrne, Straight from the Gut (New York: Warner Books) 2001.
2 Gene Phifer, Simon Hayward, David Flint. AV-20-9898, Technologies That Enable Business Process Fusion, Gartner, Inc. Oct. 16, 2003.