BPM: A key step towards Process Digitization, in turn, aiding Digital Transformation

BPM“Digital” and “Customer-centricity” has been key agenda items for many organizations nowadays. Broadly speaking, digital transformation entails 3 aspects (a) Greatly improving customer experience (b) process digitization and (c) rethinking/recreating new business models. Majority of the firms are focusing on (a) and (b).

Companies must tackle customer experience and process automation together to be able to leap-frog in digital transformation.

Part of process digitization is automating the existing business processes and gaining efficiencies. That’s where Business Process Management (BPM) comes in.

BPM is ….

… end-to-end business process improvement leveraging technology, innovation and human capital. BPM is not a product or service that you buy, it is something you do.

BPM strives to enable partnership between business, marketing, sales, operations, IT, customer service, product development, etc. – basically, all aspects of business, for better customer outcomes and operational agility. BPM enables an organization to develop business processes as “reusable assets” that can be leveraged partially or in whole, similar to enterprise data.

Why now? What are the current business process issues?

Big organizations have processes and applications that were built over a decade ago. Since then add-on functionalities have been patched over years. So, this has caused several problems –

  • Business Processes are poorly defined or understood within organizations, impeding visibility and strategic planning.
  • Metrics and KPIs are often very hard to measure, thereby limiting good decision-making
  • Business Processes are inconsistent across organizational or geographical silos.
  • Changes to the business strategy take too long to realize. Changes too hard to implement in business process and takes several weeks to months
  • Existing business processes and underlying systems restrict the business from innovating or creating market differentiation.
  • Lack of alignment of Business Processes with strategic goals and objectives
  • Business Processes involve unnecessary delays: due to manually intensive tasks, inefficient and/or redundant steps, or restrictions due to governance/ technology / organization.

If organization need to innovate, they must redesign business processes and adapt “Build once, leverage many times” mantra.

By 2017, 70 percent of successful digital business models will rely on deliberately unstable processes designed to shift with customers’ needs (Source: Gartner)

Deliberately unstable processes are designed for change and can dynamically adjust to customers’ needs.

BPM is “Internal” process improvement (not External)

Digital transformation can be looked at from two lens – from eyes of customer (external) and internal. BPM is internal part and provides all the capabilities to enable cool external features for end customers like blending digital+physical worlds, IoT, sensors, smart phone apps, wearables etc.

A few Business use cases that can be addressed by BPM

I’ll list some use cases as food for thought. It is recommended to pick use cases / business process that have high value and high impact, for BPM projects.

  1. Usecase 1: How to? New business initiatives and innovation, Time to market, Agility, etc
    • Answer: With BPM, you can simulate “what-if” scenarios. With process simulation, you can do cost-benefit analysis on processes well before the processes are implemented.
  2. Usecase 2: How to? Gaining operational efficiency
    • Answer: Business Activity Monitoring (BAM) provides end-to-end process view of all costs and throughput (people and technology); BPM enables monitoring compliance of key processes.
  3. Usecase 3: How to? Process standardization across geographies for ‘Performance management’
    • Answer: BPM can help define consistent and global definition of processes (centralizing business process and business rules) along-with ways to standardized KPIs for measuring performance. BPM helps move from paper-based processing to automated workflow.

Bottom-line

You may ask – I am focused on building customer experience, so, how important is BPM for me?  Very important, it’s like 2 sides of same coin.  BPM is the like the foundation to a house…. and the orchestration of the digital enterprise.  You can only enable great customer experiences provided underlying processes and technology is robust. Key point being that technology, marketing and business are now one entity in their delivery of value into digital age. All organization must  recognize “process as core business asset”.

Being relevant today requires increasing focus on customer focus, innovation and speed-to-market. BPM is a core requirement for the Digital Enterprise. BPM market is expected to grow from $3.4 billion to $10 billion by 2020 – a huge opportunity for consulting firms.

What do you think? Is your organization undertaking BPM effort and if so, what success has it seen so far? Please chime in with your thoughts.

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