Business Process Management

BPM
A business process is an activity or set of activities that will accomplish a specific organizational goal. Business process management (BPM) is a systematic approach to making an organization's workflow more effective, more efficient and more capable of adapting to an ever-changing environment The goal of BPM is to reduce human error and miscommunication and focus stakeholders on the requirements of their roles. BPM is a subset of infrastructure management, an administrative area concerned with maintaining and optimizing an organization's equipment and core operations.

BPM
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. In fact, BPM is an approach to integrate an organizational "change capability" that is both human and technological. As such, many BPM articles and pundits often discuss BPM from one of two viewpoints: people and/or technology

BPM life cycle

Design
Process Design encompasses both the identification of existing processes and the design of "to-be" processes. Areas of focus include representation of the process flow, the factors within it, alerts & notifications, escalations, Standard Operating Procedures, Service Level Agreements, and task handover mechanisms. Good design reduces the number of problems over the lifetime of the process. Whether or not existing processes are considered, the aim of this step is to ensure that a correct and efficient theoretical design is prepared. The proposed improvement could be in human-to-human, humanto-system, and system-to-system workflows, and might target regulatory, market, or competitive challenges faced by the businesses

Modeling
Modeling takes the theoretical design and introduces combinations of variables e.g., changes in rent or materials costs, which determine how the process might operate under different circumstances It also involves running "what-if analysis" on the processes: "What if I have 75% of resources to do the same task?" "What if I want to do the same job for 80% of the current cost?".

Execution
One of the ways to automate processes
purchase an application Another approach is to use a combination of software and human intervention; however this approach is more complex, making the documentation process difficult.

Automating a process definition requires flexible and comprehensive infrastructure, which typically rules out implementing these systems in a legacy IT environment. Business rules have been used by systems to provide definitions for governing behavior, and a business rule engine can be used to drive process execution and resolution

Monitoring
Monitoring encompasses the tracking of individual processes, so that information on their state can be easily seen, and statistics on the performance of one or more processes can be provided. An example of the tracking is being able to determine the state of a customer order (e.g. order arrived, awaiting delivery, invoice paid) so that problems in its operation can be identified and corrected. In addition, this information can be used to work with customers and suppliers to improve their connected processes. Examples of the statistics are the generation of measures on how quickly a customer order is processed or how many orders were processed in the last month. These measures tend to fit into three categories: cycle time, defect rate and productivity. The degree of monitoring depends on what information the business wants to evaluate and analyze and how business wants it to be monitored, in real-time, near real-time or ad-hoc. Process mining is a collection of methods and tools related to process monitoring. allows process analysts to detect discrepancies between the actual process execution and the a priori model as well as to analyze bottlenecks

Optimization
Process optimization includes
Retrieving process performance information from modeling or monitoring phase Identifying the potential or actual bottlenecks and the potential opportunities for cost savings or other improvements; and Applying those enhancements in the design of the process.

Overall, this creates greater business value.

BPR Vs BPM
BPR Automates and reuses the existing processes Risk is low Change is continuous Time taken for implementation is comparatively less Business and IT collaboration is must BPMS are the technology used One or more process can be simultaneously taken and worked upon BPM leads to asset optimization Does not have any effect on the culture of the organization Outcome is continuous and incremental Less expensive BPM Recreates processes from the scratch Risk is high One big and radical change is done It takes lot of time to be implemented Business and IT collaboration is optional Based on workflow One major process is taken and worked upon at a time Sometime BPR leads to lay offs During implementation cultural issues become a major concern Outcome is drastic More expensive

Case study BPM @ BNP Paribas, France

BNP Paribas automatically adjusts product offers and fees based on customers profiles and delivers customized services on demand when it implements a master data management initiative based on IBM Software Business need: Knowing your customer and having the ability to customize product offers based on each customers needs Solution: For BNP Paribas, a European leader in global banking and financial services, personalization is key to winning customer loyalty and increasing profits. To this end, the bank is rolling out a new master data management initiative that will give it unprecedented flexibility and speed to accommodate to changing market conditions and customize offers for each client. Benefits: * Enabled bank to personalize offers through any channelInternet, mobile phone, branch and morebased on each customers profile * Reduced time to market for new products from weeks to days * Improved competitiveness with the ability to flexibly and rapidly evolve offers based on market conditions, competitive actions and new regulatory requirements

Advantages of BPM
BPM makes it easy for companies to program their current processes, automate their execution, monitor their current performance and make on-the-fly changes to improve the current processes. A BPM software enables you to automate those tasks that are currently being performed manually. Handling exceptions is an area where BPM really shines. BPM is excellent for processes that extend beyond the boundaries of an enterprise and communicate with processes of the partners, customers, suppliers and vendors. BPM Gives businesses the agility to stay competitive BPM reduces the time elapsed in a business process BPM Increases the productivity per person Business process consists of many steps. A typical BPM initiative reduces the number of steps by 50%. A Business Process needs many people and resources. A good BPM should reduce the number of resources needed for the same process. BPM helps improve coordination across departments and geographic locations of a company