Building Future with Business Value based BPM - part 1 of 6
2010 is already here, for some reason I feel this time it has come very quietly, yet to sink in that there is something new in the new year…anyways, wish all the readers a very brighter, happier and safer year ahead….
In the series of business value focused blogs, I’m starting a new one for BPM since that is possibly very close to business and business value (in principle at least). I also felt that despite it being so close to business value capability, most of the BPM programs unfortunately are not so much business value driven today. I do not mind if BPM implementations are driven by technology capability deployment, even for those cases, it must have a clear view of what business value it is going to deliver. So with that emphasis, I’m picking up this chain of 6 bloglets. For me blog is really a thinking process, its thinking aloud, it’s lab to present the seeds and test their viability in an open platform. So feel free to drop in your side of story that will collectively help all of us to evolve together.
In the first bloglet of this series, I would like to just focus upon getting arms around what really BPM is. It may be basic stuff for some but I think creating that baseline is important before value creation is spoken for BPM.
BPM as a discipline has five key capability areas:
- Codification of the business process design and knowledge to formalize the business process blueprint – in this focus area of the BPM, organizations discover and formalize the blueprint of their business processes, codify it in some formal notation (BPMN is one of them) and reuse it later.
- Process scenario intelligence through business process analytics, scenario simulation and predictive modeling – in this capability, organizations develop mechanism to gain insight into the behavior and the state changes of the important business activities. Such insights helps organizations to reduce the risks, proactively response to gainful business opportunities and improve the business efficiency/effectiveness of the process
- End-to-end integrated delivery of the business processes including system and human activities (both structured as well as unstructured processes) – this is probably the core of the BPM. This capability brings end-to-end wire-frame of the process execution and integrates all business activities/functions under unified umbrella of the business processes.
- End-to-end business process performance monitoring – Business KPIs are the integral part of the business process and this capability of BPM monitors the performance of the business processes /activities to ensure that processes are performing to required (or better) service levels.
- Business process change management – last but not least, BPM also focuses on managing the continuous changes in the processes. Changes are inevitable and to large extent are actually important part of the nature of the business going forward. Conventional wisdom always had the stability as the value around which solutions were designed but as things stand today, we don’t build anything for it to stay as it is for years. Capability to deal with the change has to be in-built strength in anything that we build today. BPM enforces the same from business process perspective.
Looking closely into variety of business processes, we find few important characteristics that distinguish different process patterns from one another. These characteristics are:
a) Automated Business flow execution – This is more of straight through processing. Here entire process step is executed in a system in real-time or batch mode without needing human intervention.
b) Human interaction – this is entirely human activity that may involve a human operating on a system or doing some activity absolutely manual (like paper checking etc.)
c) Document administration – this basically involves administration of digital documents in terms of validation, processing, creation, transfers etc.
d) Policy and rules execution – as part of the business process, it will require execution of pre-defined rules and policies.
Different types of processes will have mix of intensity of all 4 characteristics described above. For example, claims process will have very heavy document administration while say leave approval is very heavy human interaction. So based on variation of intensity, there are 3 basic patterns of business processes identified:
- Type 1 – Workflow centric processes: In these types of processes, there is heavy element of the human activities.
- Type 2 – System centric processes: In these types of processes, there is very little or no human activity, mostly system
- Type 3 – document centric processes: In these types of processes, very heavy document administration
All three types will have mix of all characteristics but as I said, intensity levels will be different. A generic representation of intensity levels for 3 types of the processes across all the 4 characteristics is shown in the diagram below.
So how does this help as we move forward in the value articulation? Well, this is important because each pattern of the process and each characteristic of the process has its own mechanism to create business value. We need to profile different processes to discover how values need to be administered for them and the way values are driving the process design/profile in one type of process could be very different than the way values are driving the design/profile of the process in other type. So if we want to design the future business platforms with business value as the core, we need to clearly understand how these values drive different types of process differently.
Next bloglet will focus on debating why BPM is critical for the future of the business so that we realize the need to invest in this area.
