What is BPM
Business Process Management, or BPM, is a set of different tools and techniques that together help businesses improve and optimize their processes. BPM aims to streamline and improve internal processes so that organizations can achieve their objectives, such as lower costs and increased effectiveness, easier and faster. BPM involves the analysis, design, implementation, and ongoing improvement of all the activities happening within an organization.
Nowadays, BPM is one of the go-to frameworks that companies refer to when starting with digital transformation activities. It gets misinterpreted as a single solution or software sometimes, but BPM is definitely more than that. In this article, we will have a look at what BPM is, how it works, what it is best at, along with its challenges and benefits.
Brief history of BPM
While there is no clear cut to when exactly did BPM emerge, one is certain – the concept and idea of it have been around for years, if not centuries. With the rise of the industrial revolution, the need for improving the processes grew faster than ever, which also eventually drove changes to the non-manufacturing side of the operations.
Frank Gilbreth was one of the early pioneers of Business Process Management. He created one of the first process mapping frameworks that broke down complicated and long processes into more manageable and sensible steps. His work was focused on optimizing production processes to increase efficiency and productivity and involved creating a graphical representation of the steps in a process.
Since then, BPM has been gaining momentum and growing tremendously, although under different names, but with the same overall goal. Hence, in the 1990s, Business Process reengineering became very popular. Later, the terms like Business Process Management Suite or Intelligent Business Process Management were coined to describe the frameworks that all deal with similar challenges – making processes smoother and more efficient.
Nowadays, the focus of BPM is not solely on saving costs and being more efficient but rather on providing better services for customers. Companies are more concerned about enabling better collaboration and creating a pleasant customer experience than ever before. Therefore, BPM is developing fast to be able to accommodate these demands; and the current tools are now capable of discovering the processes in a much faster and leaner manner.
Benefits of BPM
There are many benefits that BPM could potentially bring to organizations. Some of the higher-impact benefits are listed below.
- Enhanced Efficiency. By finding and removing bottlenecks, duplicate work, and inefficiencies in the business process, BPM can assist in enhancing the efficiency of a company's operations.
- Increased Agility. BPM gives businesses the flexibility they need to respond instantly to shifting consumer demands and market situations. Businesses can adapt quickly to new possibilities or threats and maintain their competitiveness in a dynamic market environment by assessing and optimizing their business processes.
- Improved Customer Experience. BPM enables businesses to better comprehend the requirements and expectations of their clients. Businesses can deliver individualized and consistent results that boost brand advocacy and loyalty by mapping out customer journeys and optimizing touchpoints.
- Better Risk Management. BPM helps organizations discover and manage risks in their operations by identifying potential areas of risk and introducing preventive measures wherever needed.
- Regulatory Compliance. With the help of BPM, companies can ensure that they meet the necessary legal and regulatory standards, keep the company's reputation as a responsible business, and avoid penalties.
You can learn everything about BPM from our wonderful BPM blog jointly produced with Peter Evans – the person who knows all about BPM from A to Z.
Challenges of BPM
As with any change management-related initiatives, there are a few challenges associated with BPM.
- Resistance to change. Since BPM implementation may alter how things have traditionally been done in the company, there may be resistance from employees who may be a bit skeptical and reluctant about changing their work practices and implementing new tools and processes.
- Complexity. There are often numerous interconnected steps and stakeholders involved in business processes; therefore, it can get difficult to map and optimize certain processes.
- Data availability. BPM relies on reliable data for decision-making, yet many firms have trouble gathering, cleaning, and accurately analyzing data.
- Continuous Improvement. BPM is a continuous process that calls for a dedication to continuing process updating and monitoring. As with anything requiring consistency, it might get challenging to maintain it for longer periods of time.
BPM use cases
In terms of where and when to use BPM, the sky’s the limit. It can virtually be applied to any organization or industry that has repetitive, manual, or complex processes of some sort. The suitable industries are many – from finance & accounting companies to pharmaceuticals to public organizations. For example, BPM could be utilized by a manufacturing company to optimize its production processes, while a healthcare company could use it to improve its customer service. Another example could be an insurance company using BPM to automate insurance request processing or invoice handling.
Process excellence expert Peter Evans has shared a few of the BPM success stories from his career in our Wonderful BPM series. He first shared what leaders need to do in the first 90 days of BPM implementation in order for the initiative to go as planned. He then shared his experience from the aircraft leasing industry where BPM laid the foundation for shortening the leasing negotiations processes from 90 to 30 days. Finally, he provided 4 business process analysis examples.
For more examples of use cases see:
- Process mining in banks and financial services
- Process mining for financial operations
- Process mining for procurement
- Process mining for insurance companies
BPM techniques and tools
As mentioned earlier, Business Process Management is a combination of tools and techniques rather than a single software. Process mapping, as mentioned earlier, is one of those techniques that entails visualization of the workflows and provides a concise and clear overview of the processes. Business process modeling notation (BPMN) is another tool that can be used to represent processes visually. Process monitoring and analysis involve measuring and analyzing the process performance, using information and metrics to identify improvement areas. This can involve using tools such as dashboards and analytics software.
To learn more about different tools and software used in BPM, see:
- Process Mining
- Task Mining
- Process Discovery
- Business Process Analysis
- Business Process Monitoring
- Business Process Implementation
BPM is a useful discipline that can support businesses in streamlining their operations and thus achieving certain business goals. BPM can increase efficiency, keep costs down, and increase the customer experience. BPM implementation can be difficult due to the high initial investments and potential change resistance from the employees. However, BPM may be a useful tool for achieving digital transformation and enhancing business performance when used effectively.