Industry Commentary

The benefits of BPM (business process management) reach from the mail room to the board room and beyond.

BPM, with enhancements enabled by Web services, provides tactical benefits that significantly enhance application creation and extension, while delivering strategic benefits to companies that leverage BPM methodology and reinvent themselves as process-managed enterprises.

Tactical Benefits of BPM

BPM systems employ graphical tools to connect existing IT assets, speeding applications and sophisticated workflow creation. These tools bring business users closer to their own business processes, from which they had been precluded previously. Extended at the process level, processes created with BPM systems are much easier to customize and maintain than the embedded processes in their ERP and legacy systems counterparts. BPM implementations have been shown to reduce application development costs up to tenfold and significantly lower process ownership costs.

Components of a BPM System
BPM systems offer an extensive set of services that improves the entire process life cycle - from concept to improvement. Described below, the basic BPM system components offer a rich set of functionality.

• Design: Business users model the intent of their processes. BPM systems directly access or import these processes, and IT specialists, programmers, or, ultimately, business users convert processes into executable functions.
• Orchestrate: IT professionals enable business process execution by connecting (or binding) graphical icons to IT assets in one or more applications or systems.
• Rules engine: The rules engine maintains the business rules, enabling access by multiple programs as well as creation and modification by business users.
• Integrate: Connectivity via Web services and adapters links internal, customer, supplier, and partner systems in a cost-effective, reusable, pervasive manner.
• Deploy and execute: Processes are deployed to the BPM system and run in its execution engine, which supports high-volume transactions that span traditional systems.
• Monitor and analyze: The process logic flow is explicitly laid out in the BPM system, which feeds data to dashboards and other systems, enabling real-time monitoring, analysis, and process control.
• Simulate and improve: The BPM system enables scenarios wherein processes are validated, compared with forecasted levels, and when necessary adjusted to ensure resources are adequate.

Access, Standardization, and Reuse

The above feature set alone is compelling. Enterprises can use BPM systems' graphical modeling tools out of the box to create business processes that can span applications and be analyzed and monitored in real time.

Manipulating processes has previously been largely off limits because their dynamic nature and numerous dependencies made interaction with them more difficult than with data. However, just as data was decoupled from systems 20 years ago, processes are being extracted today via BPM systems. Placing program flow logic in the BPM system orchestration tool and business rules in the rules engine extracts them from individual programs and makes them more easily reusable across the enterprise. Their new-found abstraction increases their accessibility. The BPM system is becoming the application for processes just as a relational database has been for data.

Processes will increasingly be stored in BPM systems and accessed by other programs and user productivity tools, analogous to data access today. New process modeling languages that standardize the format of the end-to-end business processes are enabling portability across systems and compatibility between interwoven enterprises. These languages build on the reconfigurability and dynamism of Web services standards and further BPM systems' delivery of standardized, cost-effective integration that is both faster and easier to extend and reuse.

Strategic Benefits of BPM

Beyond enjoying tactical benefits, companies that realign their organizational structure to exploit BPM's new cross-functional capabilities benefit as well. BPM bridges application and enterprise silos, driving companies to operate around a set of business processes as opposed to business functions or specific applications. BPM allows this to occur incrementally rather than starting from scratch with multimillion dollar, multiyear projects with ROI projected years into the future. ROI can be delivered and measured throughout the implementation, rather than waiting for a "big bang" that may never occur.

There are three major strategic components of BPM: cross-functional processes, process-driven enterprises, and the process feedback loop.

Cross-Functional Processes

BPM systems automate business processes that span applications, enterprises, and the extended enterprise. However, cross-departmental automation requires enterprise-wide managerial cooperation - especially that of the senior management - in order to institute and enforce cross-departmental projects.

Process improvements must also be reviewed across enterprises. For companies currently operating in close tandem with trading partners, the inefficiencies in business processes typically lay at the enterprise borders between the companies. In today's close-knit business world, when the major challenge of mapping the entire process between partners and creating optimized end-to-end business processes is solved, it generates tremendous competitive advantage.

Process-Driven Enterprise

Cross-functional business processes require a new management structure and mindset. Consider a typical order-to-cash process that touches sales, distribution, and accounting departments. The VP of Sales, CFO, and VP of Operations each has functional control of his or her individual business fiefdom. However, ensuring that end-to-end processes run smoothly requires one person - a process owner - to be accountable at the process level.

As the enterprise migrates toward BPM, one of the senior managers cited above may control the process, while all the functional managers remain intact. During this interim period, the organization would operate in a horizontal and vertical hybrid mode. Long term, it would probably replace its functional managerial structure with a process-centric model and operate horizontally, to better align itself with its business processes.

Process Feedback Loop
As business processes, automation increases, business ambiguity decreases. To automate processes, they are necessarily defined and documented. Business processes become better managed because senior management has aligned the processes with strategy.

These elements combine to create improved access to information. The end-to-end processes are contained in the BPM system and, thus, measurable. The forecasted results are already known, making comparisons straightforward and meaningful. Enterprises can benefit by implementing strategy rapidly and reacting to change faster, with increased accuracy.

Conclusion

Tactically, the BPM system enables superior application development and a set of full life-cycle support services. Companies that embrace BPM strategically create both clearly defined processes architected to leverage today's technology as well as the management structure to properly oversee the newly designed processes. The graphical tools used by both the business users and the IT professionals to model business processes achieve the seemingly impossible - unifying IT and business. All of this creates an enterprise that runs with a clear vision and the ability to predict and proactively act on business change, helping the process-managed enterprise stake out leadership in its markets.