Building Future with Business Value based BPM - part 3 of 6
“why to adopt business value focus seriously and how to go about it”
As I see, BPM is all about business and hence it needs to be grounded on what’s most valuable to the business – ‘Business Value’. For the rest, neither the business people want to understand really nor they care about (BPMN, SOA, XML and the endless list that all of us know) it. That’s fair I suppose. How many times people really care what technology the digital camera or mobile phones work upon when they buy it? How many times do we bother about the technical wizardry of microwave ovens when we buy it and use it? So we all need to listen to the message. No point in wasting time in selling technology nuts and bolts to business. We need to take the business realization to them. I will be surprised if that is a news to anyone.
Moving forward with the business value thinking, I came across a fairly crisp blog by Sandy Kemsley on BPM that talks about changing expectations on BPM (you can read this blog here). She says “…ROI might still be used to sell BPM projects (necessary in these budgetary times), but the final metrics will be business value-based, since ROI doesn’t necessarily measure the actual business improvement…”. Those of you who have had first hand experience of dealing with the top secret ROI calculations, I’m sure this is going to be something very close and interesting to you. Let me bring another important reference here. Jim Sinur from Gartner says on his short blog (that you can read here) says “…BPM, in the future, will be goal driven and will orient itself around goals…”. So it’s pretty much the same thing, little different wording, slightly different orientation…
Now how is this approach different than conventional approach? Not just for BPM but for otherwise too, Business value focused approach differentiates itself by way of having design strategies/principles that are governed by the business value goals and not just creating solutions against some functional specifications that are built for ‘user requirements’. In my experience, there are less than 40% of the specifications are mostly driven by what business users want while those specifications may not have a direct link/relationship with the business value that organization cares about. So this is the shift of moving from pure functional specification based design to business value linked design.
So how does this business-value-linked design thing works? To simplify this, let us break it down into complete value chain as shown below.
Figuring out what values to create – this is where I think problem starts. While businesses are fairly clear what are the business values they want to achieve, this rarely appears in any of the matters that IT is dealing with. Business value in BPM context are the metrics that businesses use to define how well their business and operations are going on. These are driven by the overall organizational business goals. For example, in an order management process, # of orders that are stuck in the validation stage could be important metric that governs how many orders can be processed in a day and that defines how much revenue potential organization can have in a day on an average. These metrics (as driven by the organizational goals) can be of various types as the diagram shows, i.e., efficiency metrics, compliance metrics, cycle-time related metrics, cost metrics etc. It also has metrics that are not direct business process outcomes, for example, business user satisfaction, business capability reuse etc. Organizations care about them so should the solutions that businesses adopt.
Figuring out where to create the value – a solution like BPM has multiple dimensions as we saw in the first bloglet. Different capability areas of the solution provide different type of opportunity to create the business value. Alternatively, I can say that these capability areas have different influence/impact on the business values. Also, different capability areas of the solution will impact various business values in different ways and to varying levels.
Figuring out how to create the value – this is what is missing majorly in the solutioning practice in many organizations. IT task forces are really not geared up with necessary methods, approaches and design strategy that can have differential guidelines/mechanisms for different business value needs. And as I said, prime reason is because most of the time solutioning is done purely based on the functional specifications that reflect just the user needs but not necessarily the business goals.
In the diagram below I have attempted to provide the summary view of the capability areas of the BPM and the categories of various business metrics that BPM can influence.
In the next bloglet, I will try to uncover more life-cycle specific views of practices that business value centric BPM can adopt.
