Business Process Management (BPM) is a way for companies to improve and streamline the way they handle their everyday tasks and processes.
It is a discipline that involves analyzing, modeling, implementing changes, monitoring and continuously improving the processes that an organization uses to get work done, serve customers and generate business value. BPM can be applied to various optimization methodologies such as Six Sigma, Lean Management and Agile.
There are well known for a long time in the banking and insurance industries, where procedures are essential not only for efficiency but auditability and reducing human errors.
Decades ago, BPM software and technologies were developed to support large-scale business change, often there would be 7-figure yearly contract for large enterprises tackling multiple business processes. Nowadays technologies allow digital solutions to be applied to smaller organization using off the shelf products costing 4 figures a month. Solutions and BPM benefits are increasingly driven by advances in AI, machine learning and other intelligent technologies.
These newer solutions allows more flexibility and responsiveness, actively supporting from dynamic and real time operations such as in Supply Chain and Operations where lead times are tight.
BPA (Business Process Automation) and IBPMs are the Gartner's categories where most players supporting BPM can be found.
Outline:
- Why is business Process Management key for high performing organization?
- Understanding BPM and BPA
- Where BPM and BPA can be applied best?
- What are the blockers in gaining substantial and sustainable results from BPM and process automation?
- What are the different types of BPM technology?
- What are the key vendors and how to compare them?
- The role of AI, machine learning and other advanced technologies in BPM and BPA.
Why is business Process Management key for high performing organization
By implementing BPM, companies can make better use of their resources, reduce errors and risks, and ultimately drive growth and profitability.
- Efficiency and Productivity: Streamlining processes and automating repetitive tasks leads to increased efficiency and productivity. People can save huge amount of time.
- Cost Savings: Identifying and eliminating waste, improving resource utilization and reducing errors and rework can reduce costs. The automation of repetitive tasks can also reduce unfulfilling jobs.
- Compliance: Automating and monitoring compliance-related processes can help organizations to ensure compliance with industry regulations and standards. It can minimize the risk of non-compliance and the associated penalties with customers and suppliers.
- Risk Management: Providing visibility into processes can help organizations to identify and manage risks by identifying potential issues and taking proactive measures to mitigate them. It can also help trigger automated actions in the right order for fast mitigation.
- Improved Customer Experience: Identifying and addressing issues that impact customer satisfaction can lead to increased customer loyalty and repeat business. What a surprise!
- Competitive Advantage: Optimizing operations can give organizations a competitive edge in the marketplace. They can respond more quickly to changes in customer demand, improve their products and services, and reduce their costs. Imagine the same price for two items but one is faster to deliver by 2 days. Just because some processes are automated for one organization instead of waiting 2 days to get a customer representative to to manually check and then initiate the fulfilment process.
- Tie Strategy to Execution: Aligning company's goals with the execution can ensure that the company is on the right path to achieve its objectives and goals.
And make employee lives easier with more fulfilling jobs where automation remove low value added and annoying activities for human beings.
Understanding BPM and BPA
Both acronyms have some overlap. BPM is the discipline to improve business process while BPA defines the category of tools enabling BPM improvements. Today, most benefits will come from applying technologies to gain BPM improvements. Thus the two definitions often merge when listening to experts.
Business Process Management (BPM) is the discipline which focuses on improving and optimizing the efficiency, effectiveness, and overall performance of an organization's business processes.
When starting BPM efforts, there are typically 5 phases to structure the approach:
- Identifying the key business processes that need to be improved or optimized within an organization.
- Designing and modeling the business processes to ensure they are efficient, effective, and adaptable.
- Implementing the necessary changes to the processes.
- Monitoring and analyzing the performance of the business processes to identify areas for improvement.
- Continuously refining and improving the business processes to drive better business outcomes.
Business Process Automation (BPA) is the use of technology to automate and streamline business processes.
BPA tools can also help BPM by providing organizations with the ability to automate the execution of the process.
Where BPM and BPA can be applied best?
Here are some more practical examples of how BPM can be used to achieve specific business objectives in different enterprise departments within an organization:
Human Resources:
- Coordination of employee onboarding by creating an electronic form for new hires to complete and submit their paperwork.
- Tracking employee vacation days, time off, and PTO.
- Employee performance reviews by creating an electronic form for managers to complete and submit.
Finance:
- Invoice approval and payment by creating an electronic workflow for approvals and payments.
- Budgeting and forecasting by creating an electronic spreadsheet for budget tracking and forecasting.
- Expense reporting by creating an electronic form for employees to submit their expenses.
Sales:
- Generate leads by integrating with CRM systems and automatically assigning leads to the appropriate sales representatives.
- Improve sales forecasting by integrating with CRM systems and historical data augmented with sales team insights
- Order processing by creating an electronic workflow for processing and tracking orders from start to finish.
Operations:
- Automating the process of inventory management by integrating with warehouse management systems and automatically tracking inventory levels in real-time.
- Automating the process of production scheduling by creating an electronic workflow for scheduling and monitoring production runs.
- Automating the process of supply chain management by integrating with logistics systems and automatically tracking the status of deliveries and shipments.
Customer Service:
- Streamlining the customer support process by integrating with a customer service platform and routing tickets to the appropriate agents.
- Managing customer feedback by creating an electronic form for submissions and analyzing responses.
- Retaining customers by identifying at-risk customers and implementing retention strategies through integration with CRM systems.
These examples demonstrate how BPM can be used to improve efficiency and streamline processes in various departments within an organization.
What are the blockers in gaining substantial and sustainable results from BPM and process automation?
There are several factors that can impede an organization's ability to achieve substantial and sustainable results from Business Process Management (BPM) and process automation.
Some of the common blockers include:
- Lack of buy-in and support from top management: Without the support and buy-in from top management, it can be difficult to secure the necessary resources and budget for BPM initiatives.
- Insufficient process analysis and design: Without a thorough understanding of the current processes, it is difficult to identify areas for improvement and design effective process automation solutions.
- Poor data quality: Inaccurate or incomplete data can lead to poor decision-making and impede the effectiveness of process automation.
- Insufficient training and change management: Without proper training and change management, it can be difficult to ensure that employees are able to effectively use the new process automation tools and that the changes are adopted and sustained.
- Lack of process governance: Without effective process governance, it can be difficult to ensure that the processes are being followed correctly and that they are aligned with the organization's goals and objectives.
- Lack of monitoring and measurement: Without monitoring and measurement, it can be difficult to track the performance of the process automation solutions and to identify areas for further improvement.
- Fragmented and disparate systems: When different systems are not integrated, it increases the complexity of automating the process and it can lead to inefficiency and errors.
- Resistance to change: Employees can be resistant to change, which can make it difficult to implement process automation solutions and to achieve buy-in from employees.
- Lack of awareness and use case projection: teams in charge of improving productivity and business processes not having a full awareness of current possibilities. Alternatively, some may struggle to identify how these technologies could be applied to their respective organization needs.
By identifying and addressing these blockers, organizations can improve their chances of achieving substantial and sustainable results from BPM and process automation.
What are the different types of BPM technology?
For the right use cases, one or several of the following technological components may be assembled:
- Workflow management systems: These systems automate and manage the flow of tasks and approvals within an organization.
- Process modeling and simulation tools: These tools allow businesses to model and simulate their processes to identify bottlenecks and inefficiencies.
- Case management systems: These systems manage the end-to-end process of a specific case or incident, such as a customer service request or a claims process.
- OCR (Optical Character Recognition): It is a technology that enables the recognition of text characters within digital images and scanned documents.
- IDP (Intelligent Document Processing): It is a technology that uses artificial intelligence and machine learning techniques to automate the process of extracting, classifying, and processing information from structured and unstructured documents.
- Process Mining: this is useful to discover, monitor and improve real processes by extracting knowledge from event logs recorded by the IT systems.
- RPA (Robotic Process Automation): It is a technology that allows organizations to automate repetitive, rule-based tasks that are typically performed by humans. RPA software "bots" or "robots" can mimic human actions, such as navigating through applications, inputting data, and performing calculations, to complete tasks quickly and accurately.
- Machine Learning & AI: more in the last chapter of this article.
What are the key BPM vendors and how to compare them?
There are many vendors that offer Business Process Management (BPM) software and solutions. Some of the key BPM vendors include:
- Appian
- Bizagi
- IBM
- iGrafx
- Kissflow
- Nintex
- Pegasystems
- SAP Signavio
- Tibco
- Process Metronome
For more useful and up to date information, checking the Gartner Quadrant for iBPMs, BPA and Process Mining can be a good start.
Process Metronome can do BPM, process automation and orchestration using Machine Learning and AI off the shelf.
The role of AI, machine learning and other advanced technologies in BPM and BPA.
AI and machine learning can be integrated with BPM solutions to provide decision aid for end users in several ways:
- Predictive analytics: to analyze historical process data and predict future outcomes, such as customer behavior or process bottlenecks. This can help end users make more informed decisions about how to optimize their processes.
- Process optimization: to analyze process data and identify inefficiencies or bottlenecks. This information can be used to automatically optimize processes and improve performance.
- Decision automation: to automate decision-making in processes, such as by automatically routing tasks to the best-suited employee or department based on their skills, capacity and other factors.
- Chatbots and virtual assistants: to create chatbots and virtual assistants that can answer end-users' questions, provide guidance, and assist in completing tasks.
- Natural Language Processing (NLP): to analyze unstructured data, such as emails and documents, to extract relevant information, classify documents and provide insights.
Here are 3 related blog post with more practical applications of AI, machine learning with BPM in Supply Chain and Operations:
