What is BPM (Business Process Management)?

BPM can be applied to large and small organizations alike.

The goal - the improvement of business performance and agility by applying one or all of the following:

The following defines a few basic terms before we delve further.

A business process can be anything from processing a customer order, to opening a new account, to on-boarding a new employee. It is the set of steps taken in our day to day work activities that is performed to accomplish a desired outcome.

There are different levels or types of business processes.  Types of processes referred to here as  'Super Processes' (include management processes, operational processes and supporting processes).

Operational processes – also considered 'core value streams' or 'primary processes', are those processes that are central to the design, production and delivery of a company’s products and services.  The top chart includes some examples of these super business processes.  A key concept in BPM is to focus on optimizing the “value stream” or the processes that collectively deliver value to the customer.

Super processes can usually be broken down into high level business processes or groups.  For example, if we look at the Employee Lifecycle Management super process in more detail, it can be unpacked into several business processes such as Recruiting, Employee On-boarding, Benefits Management, Performance Reviews and Employee Exit.

These high level business processes in turn can be broken down into workflow level processes which are the detailed activities and tasks performed to complete each process as depicted by the Performance Reviews workflow to the right. Understanding how day to day work activities ultimately roll-up to high level processes and super processes is fundamental to the establishment of metrics and the alignment of work activities to strategic goals and business objectives. 

Learn more about industry standard process frameworks with defined process categories and breakdowns by visiting APQC. 

There are many workforce and business system inefficiencies today that can easily lead to to problems such as poor quality of service and resulting customer satisfaction, unnecessary costs, and employee morale issues. Often, you can directly tie these issues and problems to poor understanding, measurement and control of day-to-day work activities- (AKA business processes).  So another major aspect of BPM is the better understanding of processes (through techniques such as mapping/documenting processes and workflows) and looking for waste and ways to streamline and improve processes.

With some of these elements defined, let's get back to the question - what is bpm?

The benefits of BPM are both qualitative and quantitative and there is not an industry segment that cannot benefit from BPM. Both top line and bottom line benefits have been proven time and time again- from increasing revenues by speeding time to market, improving customer service or improving product and service quality, to lowering costs through workforce and business systems optimization. 

You can lean more about the benefits of BPM by reviewing the many case studies available in our database, viewing this video on the benefits of BPM or downloading this BPM Case Study Summary Report.

Below are 7 factors and related considerations for implementing BPM. Once you determine scope and goals, method(s) can be derived. Once you determine the method(s), then skills, tools, investments and sponsorship can be determined.

The next sections answer common questions asked about BPM and provides some short videos and references to articles that expand upon relevant concepts or terms.

BPM lifecycle does require, however, that some structured approach is used to 1) understand processes, 2) analyze them to determine opportunities for improvement, 3) implement the improvements,  4) measure the results and 5) revisit them for continuous improvement. Depending on how complex the process is, what problem(s) you are trying to solve, your company's skills, culture ,etc., you might embrace Six Sigma or Lean holisticly, or leverage some of the techniques from these methodologies and use that within your customized BPM lifecycle.

Learn more about specific BPM methods and methodologies

Depending on the focus of the improvement initiative, different modeling and analysis methods and tools might be used.  For example, if a process is taking too long, value stream mapping might be used. If a process produces too many defects, techniques from Six Sigma may be more useful.

You can accomplish many BPA activities with simple tools like white boards, post it notes and a calculator. However, there are many BPA software tools available that might be helpful, especially for more complex processes. Some are stand alone tools, some are a subset of more comprehensive BPMS software system. * Learn more about process modeling and analysis.

In many organizations, day to day activities may be so ingrained and routine that it's not always clear what the exact steps are in a given process. Different members of the organization may not know what happens to an item once it leaves their hands. Official processes write-ups that you might find in the corporate operations or policy guide might not map what actually is being performed. Complicating all of this is the high probability that it may not be very clear at all what processes might yield the greatest improvement opportunities.

Process discovery can be as simple as gathering teams together (physically or virtually) and discussing and documenting (mapping out) how a particular process is performed. Through discussion and interviews with the people directly involved, you can usually discover the end to end steps of a process across teams, departments, divisions, etc. During this collaboration, you can also extract key metrics (volumes, costs and other measurements) that can help determine if making improvement investments will yield the results you seek to meet strategic goals. There are a number of BPMS (software) tools that that facilitate process discovery with group collaboration, data collection and documentation features.

Automated process discovery is done by mining existing information systems. By analyzing event and transaction logs for example, you can use the actual work being done (who did what, when, for how long). Today, technology tools have emerged that can read in data from various systems and present that information in flow diagrams, charts and in other ways to help us understand process steps, bottlenecks and more.

 

BPMN is a standard notation for describing a business process. It has a standard set of icons and was created so that there would be a common way to visually depict the flow of work and information. Today, most BPMS tools and many process modeling and analysis tools support this notation as a standard way to map out a procedural process flow. Go to BPMN aids section of the site to learn more.  

While you certainly can improve a process without automation, BPMS systems are also generally used for automating processes as part of the execution, monitoring  and optimization phases. BPMS tools can be used to create entirely new applications, convert paper processes to paperless or augment, enhance or modernize existing business systems. They can extract, format and distribute information and route that information between systems and people in accordance with the business process steps and business policies and rules. This  helps to enforce standard work procedures and timelines, as well as track work activities and metrics. BPMS systems include workflow, electronic forms, alerting features and user work portal (in-boxes, real-time monitors, reporting and dashboards). Most also include some type of business rules engine, system integration and service orchestration capabilities.

As you can see by the diagram below, the core components continue to expand as software vendors seek to provide comprehensive and complete capabilities in each core area and adapt to technology evolution. This is being handled through acquisition as well as through internal development efforts.  The result is that the market now has offerings that range from just core components to the “whole enchilada”.

While the depth and complexity of these the larger platforms can be intimidating, we should expect to see that better integration of acquired components and more evolved user interface designs will tend to provide cleaner and more user friendly end user environments with less steep learning curves. To understand more on how to tackle using and investing in BPM software, review the  guidance section of the site.

Business Process Management technology assumes that a process has a structured and repeatable set of steps. For example, let's assume that processing an expense report takes 5 specific steps. 1) The employee completes the expense claim form, 2) a manager approves it, 3) a senior manager approves it, 4) it is sent for payment where a check is cut and 5) the check is sent to the employee. While there may be variations – for example an expense might route to different approvers based on the total amount of the expense or the employees department, the number and type of possible paths and steps are still definable.

Dynamic BPM has emerged in order to tackle those situations where there are too many exceptions to document all the possible paths a process might take. In these cases, a person who currently has the work needs to make an on-the-spot decision as to how it should be routed. Dynamic BPM systems allow the user or manager to add steps to the process, at execution time, as might be needed for that particular piece of work.  This is often found in processes like legal or insurance case management where a wide set of people may need to be provide input, approvals, comments, appeals or executive decisions on an ad hoc, case by case basis.

Agile BPM is rooted in the Agile software development lifecycle management methodology (SDLC). The basic concept is that for development of software, or in the case of using a BPMS to implement a process-centric application, the Agile SDLC approach is applied. 

Traditional SDLC methods did everything in long and complete phases – gather all the requirements (and every possible use case for how the system will be used), design the entire system, and deliver the complete system to the users. Agile SDLC is an iterative approach where things are done in many smaller iterations in all phases. You define a subset of requirements, build it, test it and then do more. – keeping user involvement throughout. It relies on prototyping, tight communication in daily or weekly meetings to keep things moving and on track.  Agile fosters more rapid, iterative development and is typically very beneficial to use when implementing a BPMS tool.