Business Process Management (BPM) is a widely-used and effective management approach that aims to transform organizational operations using holistic and structured methods and technologies. With a central focus on efficiency and effectiveness, BPM simplifies processes, lowers costs, and boosts customer satisfaction to help organizations achieve their objectives.
This blog post explores the fundamentals of BPM, its stakeholders, and how implementing Business Process Management Systems can benefit your company.
What is Business Process Management?
Business Process Management (BPM) is a well-established and widely used management discipline that focuses on managing and transforming business processes, holistically and within defined, structured methods and technologies. These methods and tools are used to analyse, design, implement, monitor and continuously improve business processes. BPM focuses on identifying and eliminating inefficiencies and process redundancies to improve performance, reduce costs, and increase customer satisfaction.
Why engage in Business Process Management?
Organizations use Business Process Management to successfully address various challenges arising from external and internal factors. According to researchers1, there are two different drivers for BPM – business and IT. On one side, coming from the strategic aspect, are business trends such as globalization, dynamic markets, rapid information transfer, global standards, interorganizational value chains, rapid decision making, and outsourcing; and on the other, emerging from the IT perspective, are flexible IT architectures, mobile IT, and new communication tools.
What are the benefits of Business Process Management?
BPM offers numerous advantages to businesses. Some of those benefits include:
Increased productivity and efficiency
By automating and streamlining workflows, companies can eliminate bottlenecks, and reduce the time and effort required to complete tasks. This in turn leads to improved productivity and efficiency.
Increased quality of results
BPM helps standardize all processes in an organization. Standardizing work and ensuring compliance, if done properly, leads to higher and better quality of results.
Increased customer satisfaction
By understanding a process and identifying areas where it could be made more customer-friendly, organizations can increase customer satisfaction and improve their reputation.
Cost and waste reduction
BPM helps companies identify and eliminate inefficiencies and redundancies in their processes. This results in lower operating costs and higher profitability.
BPM helps companies understand their customers’ needs and provide them with a more personalized experience. The same approach also helps build relationships internally with employees, increasing their satisfaction and thus productivity. By identifying and fixing issues, companies can improve the overall satisfaction of their stakeholders.
Increased flexibility and agility
BPM enables companies to quickly adapt to changing market conditions and customer demands. By being able to change processes quickly and efficiently, companies can be more flexible and agile in responding to new opportunities and challenges.
Improved collaboration and communication
BPM helps break down silos and improve communication and collaboration between different departments and stakeholders. By providing a unified view of processes and real-time collaboration, BPM can help organizations achieve their goals more effectively and efficiently.
Overall, BPM is a powerful vehicle that can help companies improve operations, reduce costs, and create a better customer experience. By adopting BPM, organizations can achieve greater efficiency, flexibility and collaboration, leading to improved business performance and long-term success.
How to implement Business Process Management in companies – methods & best practices
Successful implementation of BPM in organizations requires collaboration among all stakeholders, including management, employees, and customers. It requires a commitment to continuous improvement and a willingness to adapt and change to achieve business goals.
Implementation of BPM – Important steps
As defined above, Business Process Management is a systematic approach to achieving business goals, and there are several key steps to consider when implementing it in an organization:
- Process Definition
Identifying processes that need to be managed and their inputs, activities and outputs.
- Process Analysis
Identifying processes that need to be managed and their inputs, activities and outputs.
- Process Optimization
Redesigning processes based on the analysis to achieve better efficiency and effectiveness.
- Process Implementation
Communicating changes to all stakeholders, providing training on the new processes, and ensuring that all stakeholders understand their roles and responsibilities.
- Process Execution
Performing the actual work.
- Process Monitoring
Controlling and observing the execution of processes and evaluating performance.
What are common BPM methods
Looking at BPM from a higher-level perspective, it’s a fairly intuitive management approach – you standardize the way your organization gets things done, share the preferred way of doing things with all stakeholders, and make sure that your work flows in the way you want it to. This all however does require a deeper dive into the subject. There are many different BPM methodologies, and we recommend that you do your research to find the most suitable one for your organization.
The diversity of methods in Business Process Management results from the different levels of BPM adoption in a company. According to the Handbook on Business Process Management, methods such as Six Sigma and Lean Management cover the entire business process lifecycle, but are not as rich as the methods that support enterprise-wide BPM adoption.
The Six Sigma approach to quality management can be part of a more holistic BPM. Applied within a BPM framework, Six Sigma provides a structured approach to identifying and prioritizing areas for improvement, establishing measurable goals, and monitoring progress toward those goals. By integrating Six Sigma with BPM, companies can streamline processes, reduce waste and improve overall efficiency. What’s more, Six Sigma can help companies align their business processes with the needs of their customers, thereby increasing customer satisfaction and loyalty. Therefore, Six Sigma is an effective process improvement tool when used as part of a larger BPM approach.
Lean Management is a methodology that can be integrated with Business Process Management to optimize value streams and eliminate waste. By identifying and eliminating non-value adding activities, such as overproduction and waiting, organizations can create lean processes that are more efficient and cost-effective. Lean Management emphasizes employee engagement in process improvement, which can improve work morale and create a culture of continuous improvement. By integrating Lean Management into BPM, companies can improve process efficiency, reduce costs, and improve the overall customer experience.
Other BPM methods
Furthermore, there are a number of other methods that can be used within a broader Business Process Management framework to improve process performance, including:
- Total Quality Management (TQM): A holistic approach to process improvement that emphasizes the importance of quality at all levels of the organization.
- Agile: An iterative approach to software development that emphasizes collaboration, flexibility, and rapid response to changing customer requirements.
- Design Thinking: A customer-centric approach to problem solving that emphasizes empathy, ideation, and experimentation.
- Kaizen: A Japanese term meaning “continuous improvement.” It involves the gradual and continuous improvement of processes, with an emphasis on small, incremental changes.
- Business Process Reengineering (BPR): A radical approach to process improvement that involves the complete redesign of business processes.
- Plan-Do-Check-Act (PDCA): A four-step, iterative approach to process improvement that includes planning a process, implementing it, reviewing the results, and taking action to improve it.
These methods can be used in any order and in combination with others to create a comprehensive BPM framework, tailored to the unique needs and challenges of each organization. One of the more comprehensive approaches that combines the above methods is Process Management Lifecycle.
Process Management Lifecycle
The Process Management Life Cycle (PMLC) is a cyclical procedure model for Process Management and supports companies in increasing their business success through Business Process Management.
The PMLC consists of six phases:
- Strategic Business Process Management
- Process Design and Documentation
- Process Analysis and Optimization
- Process Implementation & Change Management
- Process Execution & Operation
- Process Controlling & Feedback
Each phase builds upon the previous one and provides the necessary foundation for the subsequent phase to be effective. Therefore, it is important to recognize the critical role that each phase plays in the PMLC and give equal attention and importance to all of them.
BOC Group’s Process Management Lifecycle (PMLC)
The Process Management Lifecycle (PMLC) method has width, depth, and flexibility, and can be used on strategic, tactical, or operational levels. PMLC covers the entire process portfolio, allowing organizations to gain a comprehensive understanding of how value is created, optimized, and delivered to customers.
Value chains illustrate the holistic nature of BPM, where each activity, task, and process works together to maximize value. PMLC can be applied to single processes or the entire portfolio. Depending on the maturity of Process Management, PMLC can be started at any phase and phases can be skipped, allowing organizations to be agile in implementing process management and organization.
New technologies can help discover process data and automate processes, which PMLC can support in an iterative way. The iterative approach is essential in continuously improving processes over time by identifying potential issues and areas for optimization at each stage. This helps organizations to be more adaptive and responsive to changes and continuously boost their operational efficiency and effectiveness. It further ensures that BPM delivers value to the organization and its stakeholders.
Notation and standards in Business Process Management
To manage the processes in an organization, it is necessary to have them documented. While this topic is a subset of the process documentation topic, it basically impacts all other phases of the Process Management Lifecycle. Documented processes are crucial for effective Process Management in an organization and should be understandable outside of the process manager’s bubble. Also, processes may sometimes be executed by machines and may be subject to automation, so they must be documented in a machine-readable way.
There are many different approaches to documenting processes in BPM. Some of them are:
- BPMN (Business Process Model and Notation): a widely recognized standard for process modelling
- Text-based documentation such as Standard Operating Procedures (SOPs)
- Event Driven Process Chains (EPC): focusing on the flow of events in a process and how they relate to each other
- UML Activity diagrams: providing a more detailed view of a process, including branching and merging of activities
However, while some of these notations may be useful for certain organizations and industries, they may not be as widely recognized or standardized as BPMN. The choice of process modelling notation should ultimately be based on the specific needs and requirements of the organization.
BPMN (Business Process Model and Notation)
BPMN 2.0 is a standardized graphical notation used for process modelling and documentation that enables different stakeholders to communicate and understand business processes in a clear and concise manner. It addresses the challenges of interoperability between different systems and allows for the modelling of complex process scenarios and integration with external systems. However, one limitation of BPMN 2.0 is that it may not capture all the information required for quality management, process analysis, simulation, calculating process costs, or risk management.
Consequently, adaptations or extensions to BPMN 2.0 are necessary to fulfill the lifecycle of process management. Tools such as our renowned BPM suite ADONIS enable users to add information to processes to facilitate business needs and fulfill the requirements for quality management, compliance, and risk management – while keeping the process notation standardized for integration with other executable tools.
For further details, check out our poster with an introduction to BPMN 2.0 and find out how ADONIS makes BPMN fit for business.
Who are the stakeholders involved in Business Process Management?
BPM is not just for process managers or IT professionals; it involves everyone from the C-level executives to the worker on the factory floor who reads working procedures. By working together, stakeholders can identify process improvement opportunities, implement changes, and monitor the results to ensure that the process is running efficiently and effectively. When employing the PMLC approach to BPM, roles and responsibilities of the stakeholders may vary based on the phase.
These are the most important BPM stakeholders and their roles:
- Process managers: Responsible for the day-to-day operation of the process, ensuring that it runs smoothly and meets its objectives.
- Process owners: Responsible for managing the end-to-end process and ensuring that it is running efficiently
- Subject matter experts: Individuals who contribute information to the processes, using their practical knowledge to expand on the documentation of the organizational processes.
- Business analysts: Work closely with process managers and process owners to identify process improvement opportunities and develop action plans.
- Readers: Those who read the process documentation, including working procedures and policies. They may be employees who need to understand the process they are working with, or auditors who are reviewing the organization’s processes for compliance.
- Auditors (both internal and external): Internal auditors are responsible for ensuring that the organization’s processes are compliant with internal policies and procedures, while external auditors ensure that the organization is complying with relevant regulations and standards.
- Change managers
- Quality managers
- Compliance managers
- Risk managers
- Enterprise architects
Business Process Management (BPM) is a management approach focused on analysing, designing, implementing, monitoring, and improving business processes to transform organizational operations holistically. It can increase productivity, improve quality outcomes, enhance customer satisfaction, improve collaboration, increase flexibility and agility, and reduce costs.
In order to implement BPM successfully, all parties involved must work together. The introduction of a tool such as our industry-acclaimed BPM suite ADONIS can support this even better. It allows companies to exploit the full potential of BPM and join forces across the enterprise.
Related BPM Resources:
1 – Karagiannis, D. (2013). Business process management: A holistic management approach. Springer.
2 – Taylor, F. W. (1998). The principles of scientific management. Routledge. (Original work published 1911)3 – Aalst, V. D., & P, W. M. (2013, February 12). Business Process Management: A Comprehensive Survey. ISRN Software Engineering
4 – OMG (2011). Business Process Model and Notation (BPMN), Version 2.0 Object Management Group (Technical report, Object Management Group)
5 – Brocke, V. J., & Rosemann, M. (2016). Handbook on Business Process Management 1 introduction, methods, and Information Systems. Springer Berlin.