Ultimate Guide to Business Process Management (BPM)

True Co. Solution’s Ultimate Guide to Business Process Management (in 2022)

Today, we're diving into business process management (or BPM). What it is, how it works, and why every business should make it a priority. Wondering what BPM can do for your business? Keep reading.


WHAT IS BUSINESS PROCESS OPTIMIZATION?

benefits

BENEFITS OF BPM

BPM is the systematic approach to improving the efficiency and effectiveness of business processes. It's a strategic way to eliminate bottlenecks, reduce costs, and improve employee and customer experience. The result is a more productive and profitable organization.

 

Although they sound similar, process management shouldn't be confused with project management. The more well-known project management focuses on the outcome of one temporary set of related tasks (usually with an immediate goal). It measures its success from a single sample set.

 

Process management focuses on sets of repeatable, linked tasks that play a part in meeting broader organizational goals. It can be applied to both external and internal actions and often includes the integration of automation technology. Because processes recur frequently, the benefits of improving them increase exponentially over time.

 

Like Henry Ford and his moving assembly line, BPM's ethos comes from a desire to work smarter, not harder. But, unlike Ford's innovation (which only optimized the mechanical side of production), BPM looks at every part of a process (machine, human, or cloud-based) and asks, "how can we make this better?"

3 TYPES OF BUSINESS PROCESSES

 

 

  OPERATIONAL

  • a.k.a primary processes
  • transforms inputs into outputs
  • generate income for the business
  • Example: sales funnel

  SUPPORTING

  • a.k.a. secondary processes
  • make carrying out operational processes possible 
  • Example: employee payroll

  MANAGEMENT

  • provide oversight for operational and supporting processes
  • responsible for identifying threats to organizational success and/or opportunities for growth

 

Most business processes fall into three categories: operational, supporting, or management.

Operational (or primary) processes include anything that drives revenue for the organization. Sometimes called core processes, these actions are essential to an organization's functionality as a business. They include designing and developing products or services, marketing, and providing customer service and support to buyers. 

Supporting (or secondary) processes don't generate income but are still critical to a business's success since they create the conditions necessary to carry out a primary process effectively. Maintenance, IT, and payroll workflows are great examples of supporting processes. 

Management processes typically meet objectives related to the oversight of the company, including planning, monitoring, and overall strategy. Like supporting processes, they don't directly drive revenue but can still significantly impact the business's growth over time.


APPROACHES TO BPM

BPM encompasses a wide variety of techniques. Practitioners can adhere to a strict methodology or pick and choose from different strategies to create one tailored to the organization's needs. Both options have advantages and drawbacks. 

Adopting a single method helps ensure all stakeholders are on the same page. It can also limit available options when situations crop up that demand flexibility. Customized approaches, on the other hand, offer greater agility but are more complex to manage. The right choice for a business depends on its unique needs.

 

3 POPULAR BPM METHODOLOGIES

DMEMO

Design - Model - Execute - Monitor - Optimize


DMAIC

Define - Measure - Analyze - Improve - Control


DMADV

Define - Measure - Analyze - Design - Validate

ESSENTIAL ELEMENTS OF BPM

Method aside, there are certain elements that all BPM approaches share. Different schools of thought may give them other names, but the core concepts are the same.

Assessment Phase

The first step in any BPM effort is understanding the current state of a business's processes. Then identify processes with obvious issues and ones that contribute to the company's KPIs to determine what to address first.

Next, choose one or more high-priority workflows. Map out each process, defining all steps and their corresponding stakeholders. Consider what is working well, what isn't, and possible solutions. Fully understanding the workflow is vital to its optimization.

Strategy Phase

After assessing the current processes and brainstorming potential improvements, it's time to create an actionable strategy. Decide which steps to reengineer, which to automate, and which to eliminate. Create a plan for how and when changes will be implemented and consider challenges that could arise during the transition. Set a timeline and clearly define the strategy's KPIs.

Implementation Phase

With an actionable strategy mapped out, the next step is putting it to work. Clear communication is key to the successful implementation of BPM efforts. Multiple changes will happen at once, so all stakeholders must understand their roles and responsibilities.

Optimization Phase

With the new processes in place, a monitoring period begins. Feedback and data should be gathered and analyzed to determine if previous friction points have been resolved and if KPI targets are being met. If unexpected issues have cropped up, the process may require additional adjustments.

Integrating Supportive Technology

Incorporating assistive technology into a business’s operations is a critical component of most BPM strategies. BPM software (BPMS) targets the same objectives as BPM services, mapping out processes, automating tasks, and streamlining operations. It typically includes features like visual process diagramming tools, form designers, reporting & analytics, collaboration channels, and information management hubs.

In addition to BPM-specific software, employing cloud-based applications and platforms can help operations run more smoothly. Though not exclusively rooted in BPM methods, these applications support BPM efforts by making it easier for employees to perform vital tasks like accessing data or collaborating from any device or location.


CHALLENGES OF BPM

Despite its obvious benefits, many businesses remain hesitant about BPM. Some common reasons include resistance to change, cost of implementation, and poor understanding of what BPM entails. 

Resistance to change is a natural human reaction. It can appear at any level within an organization's hierarchy. Fear of failure, loss of routine, and increased workload are just a few reasons stakeholders may drag their feet when facing process changes. 

Trust in management is the best tool for easing these concerns. Communicating the shortcomings of the existing process, the upsides that come with optimization, and the path to get there can go a long way to increasing employee buy-in. 

Concerns about the cost of implementation are less challenging to overcome since two frequent benefits of a successful BPM strategy are reductions in operating costs and increased revenue. For that reason, it's important to view implementation costs as a long-term investment. 

Lack of awareness is possibly the biggest challenge to BPM efforts since some businesses either don't realize they have a problem or don't know where to turn for a solution. The same agility and adaptability that makes BPM practitioners great at what they do have resulted in a lack of cohesive messaging across the industry. Overlapping terminology and rapid technological advancements add to the confusion.    


WITHOUT BPM, WHAT HAPPENS?

When a business overlooks process management, it leaves itself vulnerable to the corrosive effects of unrecognized friction. Problems that may not be significant enough to threaten the business's success can still negatively impact growth over time. 

Neglected or outgrown processes are the most common cause of growth plateaus when a business’s progress levels off following a period of consistent improvement. The business isn’t losing ground, but they're no longer gaining any either. 

When this happens, this sudden stagnation comes as a surprise to the company. Everything they were doing was working just fine until suddenly it wasn't. Upon closer examination, these companies often find the abrupt halt to their growth is rooted in flawed processes. 

Even if a BPM expert didn't design them, initial processes often do a fine job at the level they're created for. At this stage, achieving the desired outcome takes priority over ensuring the process is fully optimized. Any truly fatal flaws are noticed immediately and addressed, while minor flaws (anything that doesn't cause too much disruption) are unnoticeable or written off.  

But, as the business grows and greater demand is placed on the process, those minor flaws grow too. What started off as an acceptable amount of friction begins to chafe and, if left unaddressed, will ultimately break under the strain of the ever-increasing load. Engaging a BPM expert before these rough spots make themselves apparent is key to achieving sustainable growth as a business. 

To use another example from the automotive industry, think of it this way: Processes affect a business's growth in the same way aerodynamics affect a vehicle's fuel efficiency. Boxy, unwieldy models create unnecessary drag and waste resources, while sleek, streamlined models glide along with ease.

Automobile manufacturers invest in extensive aerodynamic testing, using wind tunnels and complex computer modeling. They want to be able to attach the highest possible MPG to a vehicle. They know every hundredth of a percentile in fuel economy they gain by adjusting their design and reducing drag will pay off when the model hits the market.

Similarly, ensuring processes are as streamlined as possible often pays off with improved metrics across the board. The sooner a problem is identified and addressed, the less damage it can do and the sooner you can begin to reap the benefits of its solution (like cost- or time savings).


UTILIZING BPM IN YOUR BUSINESS

The demand for BPM services is growing rapidly. Across every industry, investments in process optimization and digital transformation are rising.

From entrepreneurs to large enterprises, leveraging emerging technology to operate more efficiently and bring customers new and improved experiences is a smart move for any business.

Many larger companies maintain in-house positions dedicated solely to process optimization. Others engage agencies or consultants that specialize in BPM. 

Regardless of the type of service model, the industry shares a common focus on agility and adaptability. No matter the size or scale of your company, there's a BPM professional out there that offers what you need. 

 

TRUE CO. BUILDS GROTH SYSTEMS THAT HELP SMBs SCALE CONFIDENTLY. WANT TO LEARN MORE?