Accelerating ROI with BPM
New research from Aberdeen Group validates what many business and IT leaders have discovered for themselves: accelerating process improvement efforts through business process management (BPM) is yielding significant returns as organizations continue to grapple with the unstable global economy. The new report, called BPM Accelerated: Slashing Cost and Time with Agile Business Processes, uses Aberdeen’s methodology of "Best-in-Class," "Industry Average" and "Laggard" to show that "companies that have developed the organizational maturity and are leveraging the right tools for BPM are generating more robust, flexible and agile business processes." Further, best-in-class companies are the most successful at rapidly enabling business users to drive process improvement, allowing them to better leverage these optimized processes for a substantial reduction in operating cost and cycle time.
In fact, best-in-class companies (the top 20% of total survey respondents) are seeing extraordinary results including:
- An 18% average reduction year-over-year in operating cost (compared with a 4% reduction for the industry average, and a 5% increase for laggards);
- A 16% average year-over-year reduction in process cycle time (compared with a 5% reduction for the industry average, and a 1% increase for laggards); and
- A 17% average year-over-year improvement in output (compared with a 4% reduction for the industry average, and a 2% decline for laggards).
Accelerating BPM efforts enables these transformational results by directly addressing common fundamental business pains felt by most organizations around four key areas: lack of communication and collaboration, lack of agility due to rigid systems, slow response times and an inability to conduct proper measurement and management of operations. Executives can’t ensure that all of the organization’s moving parts are functioning in support of corporate goals. Line of business managers lack operational visibility and control. End users can’t weed through disconnected and inconsistent data sources to find the precise information they need to make smart, well-informed decisions on a given task. IT, dealing with mounting pressure from the business in the face of reduced resources, has its own internal process issues in addition to limitations in its ability to effectively collaborate with the business.
The Aberdeen report states that as companies continue to search out cost savings, many are looking to a new generation of BPM tools that enable "an efficient alignment of IT and business by improving solution usability for the business users while empowering IT with more function-specific tools to meet the demand for better process automation." To reduce their cost structure while also enabling an enhanced ability to sell to, service and support customers, organizations must not only improve their processes, but they must do so quickly, nimbly and continuously. Accelerating the pace of process improvement is the key, because the faster a company can deploy and iterate new process solutions, the better its competitive position. According to the report, the new generation of BPM technology that enables this speed is characterized by broad feature-rich functions, including natively integrated analytics, reporting and collaboration capabilities.
This accelerated pace of improvement naturally leads to an acceleration in realizing ROI from a BPM investment. The report benchmarks that best-in-class companies, which generally all share a focus on applying BPM to capabilities to ever-larger parts of their business, see ROI of 147% in roughly 10 months. This is in stark contrast to laggards, who achieve less than break-even in roughly 20 months. Best-in-class companies generally measure ROI across a short list of common key indicators that directly support organizational excellence. These include bottom-line cost reduction (83%), ability to meet goals faster (56%), top-line revenue increase (50%), and better resource optimization (44%).
As Aberdeen’s research shows, accelerating BPM initiatives delivers significant business value. It drives better and lower-cost service, improves collaboration to deliver an enhanced and consistent employee and customer experience, enables real-time operational management and creates a flexible, extensible infrastructure that can adjust to changing business conditions and changing customer requirements.
BPM at Enterprise Rent-A-Car
The Aberdeen report includes a BPM case study on Enterprise Rent-A-Car, the world’s largest rental company. The example illustrates how an appropriate BPM technology, integrated with other enterprise systems, plays a crucial role in turning a process improvement strategy into business value. Enterprise Rent-A-Car uses the Appian BPM Suite.
Enterprise Rent-A-Car operates more than 878,000 rental and fleet services vehicles and maintains more than 7,000 locations worldwide. The organization’s request services department is part of its 1,500-person IT staff charged with efficiently and effectively fulfilling product and services requests from their 65,000+ employees worldwide. With Enterprise Rent-A-Car’s expansive growth, the number of IT requests nearly doubled in 18 months, pushing the existing system to capacity.
Enterprise Rent-A-Car’s request services department recognized that a BPM solution would consolidate functionality, increase manageability, enable better performance reporting and create a platform for rapid change and increased growth.
Today, the BPM-based request online system efficiently and effectively fulfills product and service requests for Enterprise’s more than 65,000 employees worldwide. The request services department has experienced a 100% increase in capacity and a 90% reduction in the time to generate management reporting.
Intuitive interfaces supporting request submissions have reduced the level of manual input, minimizing errors in the system and supporting more efficient fulfillment of work.
Appian is a global innovator in enterprise and on-demand business process management (BPM). Contact us at 703-442-8844, or info@appian.com.