A Phased Approach for a Strategic BPM Project
BPM considers processes to be strategic assets of an organization that must be understood, managed, and improved to deliver value added products and services to clients, writes contributor Vinod Jain. But how do you get started?
Successful service companies deliver value to their customers by honing business processes over time. The nuances of carrying out a particular business process are continuously measured and analyzed by management, resulting in a valuable inventory of core business processes. The value of these processes or "assets" is difficult to capture on traditional financial statements, yet their importance cannot be ignored as a means of differentiation in an increasingly competitive global marketplace. Thus, business process management (BPM) methodology is being applied with ever increasing vigor to consolidate and optimize companies’ business and operations models in order to gain a competitive edge.
Organizations are consistently challenged with the need for establishing a standard processing model in order to have tighter control of businesses. This standard processing model decreases companies’ reaction time changes in the marketplace. A highly functional model in this context of rapid change is capable of not only optimizing company operations in a dynamic competitive environment, but it is also capable of capturing the changing regulatory demands and technological advances.
The difficulty in creating such a model is the complexity of the business processes involved. This paper will provide a framework for analyzing a business process from a high level managerial perspective. We will attempt to cover all the bases for making an informed decision on how to deploy resources when applying BPM to a given business process.
For most companies, current BPM initiatives and approaches are still in the evolution phase as organizations decide which approach will be best suited for their needs. So how do you initiate a new project to resolve the above needs?
Identify & Understand the Business Need
In the first phase, the overall aim is to identify the business needs and unravel the complexities of the business processes. The first and foremost step in initiating any BPM project is to understand the needs of clients, and key expected outcomes (list of current issues)
As a managerial approach, BPM considers processes to be strategic assets of an organization that must be understood, managed, and improved to deliver value added products and services to clients. BPM is an approach to integrate a "change capability" to an organization - both human and technological.
Figure 1 shows a complete lifecycle of BPM project. Critical steps involves performing "Advanced Process Analytics", Positive ROI, Process Simulation and Scenario Analysis.
Figure 1: Lifecycle of a BPM Project
Selecting the Appropriate Analytical Techniques
In the second phase, the overall aim is to select appropriate techniques to help you understand the business at a modular level. There are multiple ways to incorporate these changes and it is hard to define a specific implementation schema.
The benefit and approach may vary by industry, business type, history, etc. Adopting BPM strategies (Agile approach) is very beneficial for financial organizations, for instance, because of its ability to analyze troublesome, complex and distributed business areas as well as being able to start with smaller approaches. BPM modeling provides a quick and visual overview of any gaps and issues associated with given business processes.
Analytical data collection through multiple interviews helps to identify sub-functions and systems across front, middle and back office. Synthesize all information to develop a conceptual future state business process map, highlighting major functional areas.
Successful adaptation of these practices then depends on company size, culture, exposure, flexibility to adapt changes and balance sheet strength.
Figure 2 below shows 4 different analytical techniques to initiate a new project. Selecting your best approach depends on the type and complexity of your business.
Figure 2: 4 different analytical techniques to initiate a new project
Modeling for a complex system is difficult, time consuming, and expensive for multi dimensional (embedded) financial business. However, most complex operations can be defined by breaking it into smaller domains modules or dividing into functional areas easily (using any of above mentioned 4 approaches).
Through BPM we can turn external and internal client’s relationships into strategic partnerships, this allows financial institutions to work effectively with changing requirements in the market. BPM allows us to deliver integrated value added solutions.
Aligning client strategic needs into operational service delivery model where outcome can support requirements like event monitoring, compliance, quality, process improvements, SLA’s and transformation goals. Each business and process must be guided along the process maturity model. Every step in maturing BPM capabilities leads toward optimization and improvement to core processes.
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