Business Process Management
A Strategic Imperative for a Down Economy
It may seem counter-intuitive, but a declining economy can serve as an ally in building a lean, thriving organization—if you know how to use it to your advantage.
An economic downturn compels some organizations to shift focus primarily to the reduction of unnecessary expenses. Consequently, many business and IT leaders—facing tightening budgets—simply abandon some projects and compromise others by cutting back on essential project management methodologies and deliverables. Long-term strategy is sacrificed for short-term fixes.
Other organizations reject such a one-dimensional approach. In addition to reducing expenses, they continue to invest in systems and business processes. And astute organizations know that efficient and effective business processes are the cornerstone of an effective business strategy—enabling them to compete successfully in the marketplace. This strategy positions them to have a strong competitive advantage when the economy begins to recover.
It’s for this reason that business process management (BPM) is one of the few technology initiatives organizations still invest in during difficult economic times. It’s considered a key strategic technology to reach many operational goals, such as reduced costs, increased productivity, higher customer service levels and a respectable return on investment (ROI). According to a Gartner BPM survey of more than 50 companies, 78% reported an ROI of more than 15%.
To ensure that BPM technology investments align with business objectives, organizations need to adopt a more strategic approach—one that involves much more than selecting the right products. By following BPM best practices, organizations can develop the framework for transforming their business processes. Four essential best practices can directly affect an organization’s BPM project successes and process transformation: the BPM strategic discovery workshop; enterprise business process architecture; measuring results and linking to strategic objectives; and centers of excellence.
BPM Strategic Discovery Workshop
The core purpose of a BPM strategic discovery workshop is to identify areas of the business ready for process transformation and BPM implementation. The primary objective, particularly during challenging economic times, is the selection of a BPM project that will make a measurable difference.
The strategic discovery workshop requires involvement of business and IT executive management not only to ensure that the vision for BPM project delivery is aligned with strategic corporate objectives, but also to develop a broad base of support for the initiative. Experience with workshops shows that executive buy-in and involvement is a critical success factor.
An essential step in gathering project support is the creation of a BPM steering group that includes cross-functional stakeholders. This enhances horizontal process improvement across the organization and ensures control of process fragmentation, functional silos, process leakage and process hand-offs. When business units do not collaborate, organizations repeatedly lose opportunities to cross-sell and close active leads—at tremendous cost.
The BPM steering group should include significant stakeholders with exclusive responsibilities, such as the executives of the diverse business departments, agencies, or regions; the CIO or IT executive who will offer visibility to other IT projects and ensure support for the high-level strategy of the firm; the BPM program manager, or manager of the BPM center of excellence; and senior line-of-business managers from the directly affected business units.
Led by an experienced BPM consultant, the typical discovery workshop is a one- or two-day event involving a structured set of activities designed to assist the organization to answer the following questions:
What are the targeted business processes? For example, if the organization is a bank, the targeted line-of-business process could be new account opening (NAO) or loan operations.
What are the strategic corporate objectives for the business processes? With the economy in a downturn, it becomes more important than ever to ensure straight-line connection between corporate objectives and business processes. For an insurance company, the corporate objective might be to decrease the total cost of claims processing.
What are the core deliverables of the BPM discovery workshop? The primary workshop deliverable is a BPM strategic process report that:
- Defines stakeholder objectives;
- Links key process-performance indicators to organizational objectives;
- Describes key performance indicators and targets;
- Matches processes to corporate criteria and prioritizing;
- Determines critical success factors;
- Identifies strategic technologies; and
- Delivers a change-management strategy for the process-transformation initiative.
Additionally, the initial steering workshop should: obtain formal commitment from the business to dedicate key resources to the initiative; clarify how the program directly supports the strategy of the firm and assists it in achieving key business objectives and the specific requirements of the targeted applications; and reach a tactical agreement on the choice of project and consensus on scope, including a realistic roadmap and delivery timeframe that will ensure that the project stays on track and the team is not diverted to support other goals.
Enterprise Business Process Architecture
An enterprise business process architecture is emerging as a strategic focal point for organizations seeking to optimize business environments and governance structures. The architecture takes input from corporate strategy and then provides: structured definition of all processes in the organization, which ensures that stakeholders are knowledgeable about the processes; their roles and tasks; the cross-functional hand-offs; and IT support systems.
A business process architecture should also communicate the policies, models and business rules for managing business processes; provide a framework to assist during the decomposition and evolution of business processes; and act as a navigation guide to ensure that processes, business systems and business architecture align with the organization’s strategy.
The business process architecture is an outline that provides a visual view—from high level to low level—of an organization’s process value chains. It is invaluable when documenting the cross-functional processes and activities of the enterprise as a whole. The architecture enables various process stakeholders—from business and IT executives to process analysts and architects—to gain bird’s-eye view and in-depth understanding of the organization’s business processes prior to identifying process improvement opportunities and deploying BPM projects. Thus, this process navigation guide ensures that processes are aligned with corporate strategy—a critical step for organizations to become process-centric.
The graphic on page S11 (KMWorld Supplement, January 2009) is a high-level, abstract view of a business process hierarchy. Process decomposition can become quite complex; this example shows a simplified view. Within this graphic, the green boxes are the focus of the process decomposition activities.