Business Process Management: a change for the better

In the ultra-competitive corporate environment, business process management is a powerful tool which shouldn’t be overlooked, writes Gary Collier of PricewaterhouseCoopers...

As the business climate becomes increasingly competitive, pressures on management grow exponentially.

On top of the need to avoid “commoditisation” and to effectively differentiate your business’s offer from that of the competition, there is the added pressure to maximise performance internally – to do more with less.

Meanwhile, your competition is not standing still. They are evolving, innovating and adapting to the same pressures, with the same value and cost levers driving them forward.

Competitors’ speed to react to innovation is frequently measured in days. In the fashion industry it is not unusual for identical replicas of catwalk haute couture to be available off the rack within days of major shows. To enable better, faster and more cost effective business, what is needed is an approach which consistently delivers rapid evolution.

Constantly reviewing costs is only one side of the equation. This must be balanced by increased responsiveness and agility to maintain positive revenue growth.

Added into this mix are unprecedented levels of business consolidation, driven by increasingly prevalent private equity activity, giving an environment to challenge even the world’s best management minds.

Technology needs to somehow support all of these demands and meet the increasingly time-critical requirements for information. This involves the deployment of business process management (BPM).

In combination with a “change” philosophy and a determined focus on customer requirements, BPM has the potential to deliver the agility business requires, within a reasonable budget.

BPM recognises that change, far from being a concept to be feared, is a prerequisite of successful business development. Business processes, and how they are managed, provide the fundamental basis for dictating how a firm delivers value to its customers and ultimately rewards its staff and stakeholders.

Business processes are about people, the way they work together, the technology that enables their peak performance and the objectives and rewards that underpin this performance.

Take customer relationship management (CRM) as an example – the concept of effectively recognising customers’ behaviours and subsequent needs. CRM can be interpreted very differently by differing parts of an organisation, frequently leading to contradictory decisions being made, based on the same data set.

This in turn will impact upon the seamless manner with which the same customer will be treated. However, the ultimate objective of the firm is to integrate their activities to ensure a consistent customer experience. In order to drive the “silo” management approach out of organisations, and reduce the amount of conflicting decision making and contrary activity, organisational structures need to be reviewed.

For important processes which cross organisational boundaries a “process owner” should be responsible for the manner in which that process “flexes” to reflect the needs of the relevant business unit.

The relationships between executive level management and those designing and implementing process change is absolutely critical. These relationships will assist greatly in clarifying the approach to corporate governance and reporting, in order, for example, to ensure that the approach is consistent and coordinated.

The early definition of areas of responsibility, how the BPM process itself will be measured and the key performance indicators (KPIs) to be used will all assist in ensuring the critical success factors will be attained.

The additional benefit from establishing these relationships at the outset of any programme is that when the, sadly, inevitable conflicts arise, they can be resolved rapidly and at the appropriate level.

In addition, the move to a process-based organisation will necessitate looking at the behaviours and values the firm wishes to encourage amongst its employees. This is a significant journey of cultural change, one which may span many years and several iterations.

Encouraging the right behaviours at all levels of the firm will allow greater leveraging of the necessary changes, and far earlier realisation of the competitive advantages which will flow from them.

A review of existing reward structures within the organisation will probably be required. The streamlining processes across functional areas will not be encouraged if the reward structure re-emphasises the previous silo-based mentality.

Underpinning the philosophical and people approach of BPM is a strong need for technology to provide the required foundations upon which to build the new processes.

This software provides the infrastructure that enables the translation of strategic choice into firm plans of action, thus driving performance and providing visibility of day-to-day activity.

The most critical component of BPM technology is arguably the capacity to directly translate intelligence into focused action. It enables the identification, and subsequent management, of issues as opposed to problems.

One analogy is that it reduces the volume of infernos raging within an organisation and allows smaller “spot fires” to be more easily managed. With real-time visibility into the guts of the operation, management can proactively anticipate concerns.

BPM, and its associated technologies, provides the means to identify and embed new processes. If the majority of processes are automated it is how the exceptions are managed that drives this differentiated offering.

There is a growing trend amongst vendors to add greater levels of functionality and interpretative capability to their BPM solutions. Whilst these are frequently beneficial, and the tools can indeed be very useful, they should not act as distractions from the core BPM goal.

When choosing a BPM solution, it is vital to ensure it is delivered with the relevant software integration capability and capacity.

A BPM solution should be proactive. If an event is detected the system should prompt action, not merely present information. To drive optimal business performance the solution must enable managers to evaluate execution across all cases to validate performance against pre-set KPIs and trends.

Providing support to the planning process requires the ability to harvest data automatically and utilise it in “what if ” scenario planning.

The chosen solution must also be flexible, user-friendly and intuitive to use. It is first and foremost a business tool and needs to be used and understood by business people who can optimise their performance to meet business needs. Any selection process must, as a matter of criticality, incorporate the views of those who will be using it on a daily basis. To deliver on the promise of performance improvement through the dynamic of BPM it is essential to establish an environment whereby these two concepts are complementary rather than conflicting.

The embrace of change as part of everyday business, as opposed to a threat to everyday business, is fundamental. Adopting this philosophy will enable an organisation to achieve core business objectives, including:

• Improvement of the customer experience – being consistent, more responsive and offering greater levels of flexibility. This truly begins to move organisations towards the oft-touted, but seldom achieved, goal of being “customer-centric”;
• Reducing cost – focusing on achieving greater levels of business efficiency and optimising the use of all available resources;
• Distributing the process – allowing the firm to focus on its core capabilities and competencies, identifying where additional and superfluous processes are inhibiting their flexibility and agility;
• Fixing broken processes – through the effective integration of disparate application systems, reducing complexity and simplifying the required supporting skill requirement;
• Improving and enhancing compliance – without jeopardising flexibility and agility.

Unlike an approach focused on analysing past events and re-evaluating historical decision making, BPM is about visibility of today’s events, and the ability to influence these events today.

The true measure of business value delivery is, in the end, about how effectively and efficiently it delivers its core process requirements to support its people and strategy.

The level of human change requirement should never be underestimated, but BPM delivers the vehicle and levers for true transformation and competitive advantage.

If approached correctly BPM closes the gap between strategy and effective execution. It allows great ideas to become rapid reality.

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