John Jarrett Talks Implementing BPM Enterprise-Wide: Part One

John Jarrett

The statements, views, opinions and commentaries expressed herein are those of the participant in his personal capacity and do not represent those of AGF Management Limited or any of its subsidiaries or affiliates.

Business Process Management (BPM) is known for its ability to automate repeatable processes, create greater visibility of an end-to-end process, and enhance process agility. The end result is improved business performance, which translates into providing greater value for customers and stakeholders. Where the challenge lies, however, is implementing BPM enterprise-wide.

In part one of this two-part interview, John Jarrett, Director of Business Process Management at AGF Trust, a premier Canadian-based investment solutions firm, discusses the benefits of deploying BPM across an organization and reveals how to take the first steps in creating an enterprise-wide strategy.

How can BPM produce innovation and agility within an organization? Where can BPM have the most impact from a business value standpoint?

Business Process Management technology and methodology can improve the execution and work-quality of virtually any department within an organization. An important difference between BPM and previous process improvement methodologies like Business Process Reengineering is that BPM does not require a "build from the ground up" approach. By improving the visibility into already existing processes, BPM can uncover areas for innovation that may be unseen or lying dormant.

Process areas that are ripe for optimization benefits of BPM are typically those with numerous process steps, excessive hand-offs between people and systems or large numbers of exceptions — also in areas where there are crucial human decision-points requiring real-time access to data. BPM not only generates an automation boost to straight-through processing, but it can also deliver the biggest business value impact in areas that involve ad-hoc and unstructured processes.

Companies often want to start small with BPM by targeting low-hanging fruit around activities such as employee on-boarding or automated expense management to score a BPM "quick win" that demonstrates value. However, ultimately mission-critical processes are the ones that deliver the biggest benefits to the organization. A mission-critical process that can be treated like an end-to-end "case scenario," such as the origination and servicing of a bank loan, is a prime BPM project candidate.

How does BPM tie in with Process Excellence/Lean Six Sigma? What, if any, synergies are there between BPM and Process Excellence/Lean Six Sigma and how can they best be leveraged as part of an overall Process Excellence strategy?

I think that there are several key ties between BPM and Process Excellence. One of my mantras is that "you cannot successfully figure out where you need to go if you do not know where you have been." BPM provides the foundation to help determine where you need to go. BPM will help to uncover the concrete and repeatable processes that can then be monitored, measured, and improved upon. Or, if the BPM platform is tied into a reporting database, then it can also provide reliable metrics for various processes, which may then be analyzed for further improvement opportunities.

Without BPM, an organization may have processes that are documented, but for various reasons are not actually followed according to the way they were documented. In this case, studying these processes for improvement opportunities will be a hit and miss affair.

Also, often reengineering efforts are based on a review of metrics to identify process improvement opportunities. However, it’s important to consider first whether those metrics are the right metrics, as the metrics could potentially be just as flawed as the processes being targeted for improvement. It is therefore risky to base process improvement decisions on a flawed set of metrics as it could deliver unexpected results. Here the linkage between BPM and Six Sigma is that metrics driven from standardized, repeatable processes through BPM will provide a better set of measures to feed into a Six Sigma type of analysis of the problem.

For many institutions, there are even bigger tie-ins to corporate governance, compliance, and risk management, all of which are critical due to their importance to overall organizational well-being. A company may have a wonderfully detailed set of policies, procedures, and processes. However, if managers and front-line employees do not understand them, do not follow them, or misinterpret them, they will not have served their purpose. With BPM, the business can create a process which is both the "approved" and the "actual" organizational workflow process. The process could then have key activities embedded right into the platform such as escalations to certain authority levels, access levels to work on something at a given step, and/or have built in quality controls where required. Thus, BPM provides both the discipline and governance so that the policy, processes and procedures are actually being followed.

If an organization is looking to implement BPM enterprise-wide, what is the most compelling internal business case?

If you want to free up business users from mundane tasks that can be automated so that they may focus on more value-added or complex steps in the process, then you have a good potential case for exploring BPM. If you want to improve consistency, repeatability, and documentation of your existing processes then you have a good case for exploring BPM. The goal of enhancing corporate governance, compliance and risk management also provides a compelling business case. With a good BPM platform, your people can also be freed up to focus on the work at hand rather than all of the other stuff that impedes their work. This creates better quality output along with more consistent and repeatable activity which can improve employee productivity. It also generates other potential benefits such as reduced cycle or training time.

What are the critical first steps in creating an enterprise-wide BPM strategy? What are the critical factors of a successful strategy?

I think that it is important to have leaders at the top who are committed to BPM. Their support is critical in terms of driving organizational engagement, securing funding for various IT and business resources, and sponsoring the vendor that will be required. They also help to champion the changes that the organization may have to go through on its BPM journey.

Establishing a Centre of Excellence (COE) within the organization is also critical as successful BPM cannot be accomplished by one area in isolation. Full participation from IT, the business, risk management, compliance, the vendor and all other areas that have a contribution to make will go a long way towards integrating BPM across the organization. It’s important to note that there may be challenges where BPM can blur the traditional boundaries of functions across various departments. Bringing all the players to work on BPM together will help ensure that the key components for success besides just the system components are considered in the development of enterprise-wide BPM.

Another major component related to the COE is to determine ownership and accountabilities for all aspects of the BPM initiative. The first critical question to ask is who is the leader of the BPM initiative, that is, will it be an IT-led initiative or business-led? This question needs to be tabled at the very beginning of the journey plus during the on-boarding stages of the platform, as well post initial rollout. Apart from a decision around BPM leadership accountability, clear owners also need to be appointed to engage in the journey from both IT and the business.

Consideration also needs to be given to creating a specific process group in the organization, or to empowering an existing one with some independence for process development. Ideally, this process group should reside outside of both IT and front-line operational groups. This structure ensures that the process group is well positioned to determine the optimal use of technology versus people resources. It also provides the opportunity for the organization to take more global or end-to-end view across the enterprise versus a narrow focus specific around one or two areas.

Finally, the choice of BPM technology must be aligned to the strategic objectives and business requirements that will be crucial to the success of your BPM program. It’s important to be clear about what requirements you are seeking from BPM (e.g., is it ease-of-use, is it workflow management, or is it content management, etc.) so that you can choose the right vendor to meet your needs.

Continue to part two of the interview.