Business Process Management Insight

Using Business Process Management (BPM) to Create Value

Business Process Management (BPM) is the practice of designing, building, monitoring and optimizing processes using a Business Process Management System (BPMS). Companies use BPM to create value through:

Operational Efficiency

Many companies start by automating workflows like vendor onboarding, or proposal management. These typically involve multiple applications (e.g., ERP and PLM) and platforms (e.g., SharePoint and BI), integrating semi-structured data (RFP docs and drawings), with structured data (customer history) into a seamless, accelerated, and informed end-to-end process.

Example BPM Workflow

(An example workflow is shown above. The design and execution flow are one in the same, closing the gap between vision and execution – which creates to Organizational Agility)

Organizational Agility

As companies quickly find out, it’s easy to make changes to these workflows. A BPMS is a Business Analyst tool, and as Business Analysts learn BPM and realize the potential, recognition of opportunity accelerates and a continuous improvement cycle takes hold, which impacts overall performance. There can be hundreds of performance improving workflows created by empowered Business Analysts, like Kimberly-Clark:

Value Chain Extension

Michael Porter, Professor at The Institute for Strategy and Competitiveness, based at Harvard Business School, said: “Strategy goes far beyond the pursuit of best practices. It involves the configuration of a tailored value chain—the series of activities required to produce and deliver a product or service—that enables a company to offer unique value. To be defensible, moreover, the value chain must be highly integrated.”

The biggest value creation we’ve seen with BPM is extending end-to-end processes outside the organization to connect customers and suppliers into a fully integrated value chain. A customer can initiate a request that can cascade to the end and respond immediately. This creates a company that is highly responsive, which results in higher customer retention, higher margins and lower selling costs.

Smart Customization

As many ERP and software vendors move towards a standardized cloud offering, customization is going to become more difficult to implement and maintain. A BPMS is designed to host customized processes that differentiate the business, while the ERP can remain standardized – lowering overall costs while maintaining differentiators.

BPM ERP image

Summary

BPM is a very powerful approach to creating value through Operational Efficiency, Organizational Agility, Value Chain Extension and Smart Customization. Application is only limited by vision and leadership, and like Jessica Wesener at Kimberly-Clark, the potential is substantial.

More information is available on our Business Process Automation page.


– Software Delivered as Promised. No Surprises.

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Ellen Terry

Insight written by Ellen Terry

Director, Business Intelligence at Rand Group

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