What is BPM, Really?
Business process management, frequently abbreviated as BPM, is the discipline that consists of modeling, automating, implementing, controlling, measuring, and improving business processes and activity flows. A primary objective of BPM is to optimize process execution as well as overall business operations in order to deliver value to customers.
Common BPM terms and their corresponding definitions include-
- Modeling- Process modeling represents existing business processes, oftentimes through visual aids.
- Automation- Also commonly referred to as digital transformation or robotic process automation, business process automation uses technology in order to complete a business process.
- Measurement- Process measurement refers to the analysis of process performance in order to gauge effectiveness.
- Execution- Process execution is the performance of the business process.
- Optimization- Process optimization consists of consistent and steady improvements in business processes.
- Software- BPM software includes management tools ranging from business applications that are low code to artificial intelligence robotic process automation.
Business Process Management Benefits
The BPM discipline contributes extensive benefits to enterprises. Prominent benefits of business process management include increased-
1. Profitability- Process improvement assists in optimizing the value delivered directly to customers. Added value translates into increased customer satisfaction levels and higher rates of customer retention.
Considering that the majority of business profit is generated from returning buyers, the enhanced value provided to customers through using BPM will likely result in increased bottom line profitability.
2. Accountability- Fraudulent activity can quickly damage not only a company's financials but also its reputation and overall company culture. Using BPM correctly deters fraud through built in checks and balances that encourage complete transparency.
3. Accuracy- Unintentional human error can wreak havoc on workflow management and process management initiatives. Workflow automation and process automation allow for tasks to be executed uniformly and precisely.
Additionally, the data that BPM tools gather can be used to increase decision making accuracy.
4. Security- Business rules can be built into BPM tools and BPM software programs to avoid both fraud and accidental mistakes. Cloud based BPM software programs grant an extra layer of security for deterring the theft or the loss of confidential company information.
5. Compliance- With constantly evolving regulations and laws, remaining compliant can be difficult. If non-compliant, companies can face costly fees, legal repercussions, and even business closure.
Proper business process management simplifies and streamlines business compliance with all applicable regulations and laws.
6. Savings- Repetitive or unnecessary tasks executed during business processes result in wasted resources. Both labor costs and employee morale are negatively impacted by performing processes inefficiently.
Using BPM companies can pinpoint specific areas where they can optimize business processes and utilize resources most efficiently. The combination of increased profitability and lower resource expenditure supplied by using a BPM solution results in a more successful enterprise.
6 Stages of BPM
There are 6 main stages of business process management including-
1. Planning- The process planning BPM life cycle stage requires a comprehensive understanding of both business strategy and objectives. There are 3 categories of business processes- primary, secondary, and management.
Primary processes are core processes that provide direct value to customers. Secondary processes support primary processes but do not provide direct value to customers. Management processes are used to monitor and measure primary and secondary processes.
2. Analysis- During the analysis BPM life cycle stage, existing business processes are comprehensively analyzed. A main objective of the analysis life cycle stage is to make sure existing processes align with business objectives and strategy.
The 2 main analysis categories used are qualitative and quantitative analysis. Quantitative analysis is numerically based while qualitative analysis is not.
3. Design- During the design stage, new processes are created or existing processes are redesigned. Make sure to utilize process design and process modeling if the analysis life cycle stage determines it necessary.
The business process model formed during the design life cycle stage is valuable for both new business process creation and process performance evaluation initiatives undertaken in the future.
4. Implementation- During the implementation stage of the BPM life cycle, both designed and redesigned processes are executed. Implementations can either be systemic or nonsystemic.
While a systemic implementation uses specific BPM software and technology, a nonsystemic implementation does not. Make sure when deciding between systemic and nonsystemic implementation to consider not only business processes but also available budget.
5. Monitoring- During the monitoring stage, process performance is measured in order to determine if any additional action is necessary. Process improvement necessitates consistent monitoring, measuring, and controlling.
6. Refinement- During the refinement stage, processes are continuously redesigned and reengineered. Using the data gathered throughout the entire BPM process, companies optimize business processes as much as possible.
- In order to support business process improvements, a business process management system should be created and maintained.
- Benefits of the BPM discipline include increased profitability, accountability, accuracy, security, compliance, and savings.
- The 6 life cycle stages of a business process management system include planning, analysis, design, implementation, monitoring, and refinement.