posted 4 Mar 2009 in Volume 12 Issue 5
Last word: Fast returns justify BPM when money's tight
You can always justify spending money when it saves money. The sooner the better in the current climate.
I’ve been asked a number of times lately, for reasons which I’m sure are fairly obvious, “How can we justify spending money on ECM projects when purse strings are being tightened all around us?”
The answer is you can always justify spending money as long as it saves money “over the cycle” to steal a phrase from our prime minister. The difference in the current climate is that for many organisations, the cycle has come down from the usual two or three year payback period to just the one year. And the application that can achieve this is Business Process Management (BPM).
Started out as ‘workflow’
Starting out in the early nineties as ‘workflow’, and teaming up along the way with EAI (Enterprise Application Integration), BPM has become the meat in the sandwich when it comes to hard-dollar returns from investments in Enterprise Content Management.
Early users of document management systems realised the majority of business processes were driven by paper forms and case notes, passed between different duties, frequently with multi-coloured copies for each activity, and with complex conditional circulations. Scanning the paper forms – and managing their circulation electronically rather than physically – produced immediate benefits in terms of faster processes, fewer missed actions and less lost files.
Fifteen years on, there are still many paper-driven processes but the concept of a computer-defined workflow and an electronic image of the claims form, invoice or job application is well established. The move from the workflow terminology to Business Process Management partly reflects a much more sophisticated way of modelling and monitoring processes. It additionally reflects the involvement of non-document oriented applications in the process, as exemplified by the invoice processing application where paper invoices are scanned and circulated but the data-driven financial system is also involved for order matching and payment processing.
Business process improvement saves money
Workflow provides an easy way to connect people, tasks and content but it can still require laborious and extensive programming work to connect applications. Furthermore, workflow solutions can suffer from incomplete or fragmented toolsets. While workflow delivers process automation, it can lack related functionality, such as integrated process modelling. In a complementary fashion, EAI (Enterprise Application Integration) promised to simplify the integration of multiple standalone yet related processes.
But EAI offered little means to route work amongst and between people, monitor personal work queues, or support interactive people-based tasks and decisions. BPM (Business Process Management) is a convergence of workflow and EAI.
However, BPM is more than just the automation of processes and simplification of application integration. BPM is a business management practice that encompasses process automation, process modelling and process monitoring, and adds simulation, process modularisation, service orientation and process optimisation.
It is based on a number of principles and methodologies such as process-centricity, process excellence and core competencies. A more formal definition reads, “A management practice that provides for governance of a business process environment toward the goal of improving agility and operational performance” – hence the likelihood of a measurable Return on Investment (RoI) from its adoption.
RoI in one to three years
In fact, in a recent AIIM survey*, a full 70 per cent of those who reported carrying out an RoI exercise on their BPM investment indicated direct cost savings as an achieved benefit. Some 23 per cent of these achieved or predicted a return on investment within 12 months, and a further 53 per cent within three years. As regards project implementation, 34 per cent were completed in under one year, with a further 30 per cent in two years. It is no surprise, then, that 65 per cent of survey respondents indicated that BPM was imperative or significant to the success of their organisation.
Given the likely restrictions on IT spending as budgets tighten up, producing a return within the first year seems like a very compelling case. However, as with any business change process, implementing BPM brings its own challenges. The AIIM survey indicated that in 48 per cent of implementations, staff underestimated the process and organisational issues; 41 per cent struggled with the lack of training or knowledge of internal staff; and in 30 per cent of cases, the project was derailed by internal politics.
Perhaps the most interesting finding of the study was that a full 87 per cent of survey respondents indicated that having a process owner for each targeted process is a best practice. Process owners are responsible for the management of processes within the organisation. They are the people who receive the solutions created by an improvement team and end up being responsible for managing the improved process.
The role of process owner does not yet exist for many organisations that have yet to establish a process-centric approach to managing business. Many individuals participate and perhaps provide management within a process, but no one person owns it. Process owners often have to transcend departmental barriers (as processes do) and maintain a vigilant inspection of the process itself, continuously looking for improvements and opportunities. This level of scrutiny is fundamental in the early stages of BPM when the process must be analysed, modelled and re-engineered.
It is also important over time to ensure the RoI on the BPM-ed process is maximised through ongoing analysis, refinement and improvements. This is a key strength and benefit of BPM that goes underutilised if a process owner is not in place. While 61 per cent of the organisations surveyed have owners for their core processes, evidence suggests this role is still somewhat immature. Only eight per cent of the organisations are leveraging the process audit trail data provided by BPM solutions (a powerful form of business intelligence and insight into processes) to any significant degree. For most, this represents a new form of intelligence with a learning curve not yet mastered.
To help users implement a BPM strategy in their organisation, AIIM has developed a BPM education programme which consists of two-day practitioner and four-day master training classes which can be taken as public or private classes, or online – see www.aiim.org.uk/training.
*A free copy of the AIIM Market IQ report “Business Process Management (BPM): Leveraging Competencies and Streamlining Processes to Achieve Operational Excellence” can be downloaded from www.aiim.org.uk/surveys
Doug Miles is the