Business Process Management or BPM, is the area of operations management which seeks to improve business performance by ensuring that business processes are effective and optimal. BPM is a reiterative process, and is sometimes known as Process Optimization. BPM is believed to be able to make an organization, typically a large one, more effective and more agile, capable of making more money and also being able to change direction quickly to take advantage of opportunities and avoid threats.
BPM differs from traditional management practices, in that it is less concerned with hierarchies and people, and more focused on how business processes impact costs and revenues. BPM looks at business processes as an asset in themselves, and these assets must be understood and managed for the benefit of the business, particularly in terms of adding value to clients.
In this regard, BPM bears some resemblance to Total Quality Management (TQM), however BPM is more reliant on IT and technology to perform its functions.
Business Process Management Lifecycle
There are five main steps in the BPM Lifecycle and there are:
Design
This covers the review and identification of existing business processes, and the ideation and design of new ones. This pays particular attention to process flows, the creation of alerts and how they are reported, and also enforcement and compliance with policy and procedures.
Modeling
This involves taking the design and testing it by using a range of variables to see how the process might operate in practice, for instance if unit cost of raw material changes, then how does this affect the outcome (typically, this is where sensitivity or “what if” analysis is carried out).
Execution
This usually involves buying a software application which takes the model and allows a computer to run the process. Sometimes this will involve human input, however this becomes very complex, very quickly and tends to introduce inflexibility and bottlenecks.
Monitoring
a maxim of BPM is that if it can be seen, then it can be measured, and it follows that if we can measure something then we can analyze the results and work out strategies to improve those results. Typically, key metrics will be selected for measurement, such as time to complete a customer order, or to carry out a particular task within a business process.
Optimization
process optimization takes place after we have gathered data on the results of the existing new process we are implementing. Remember that BPM is reiterative and while we may have designed a business process which is effective, it is almost impossible to develop an optimal process without undergoing several iterations of the original model.
Finally, closely related to BPM is the practice known as Business Process Reengineering (BPE). This is used where an existing business process is not delivering the expected or desired results, despite undergoing review and optimization efforts. BPR is the process by which existing business processes are completely retooled, usually resulting in the destruction of the original process completely, and the institution of a very different way of doing work.
Jane Wrythe writes extensively on business and technology issues for a number of blogs and is currently reviewing a number of Lean BPM solutions, such as JobTraQ.
