By Renee Oricchio
The only culture that loves acronyms more than the business community is perhaps the IT community. And because of this, one would think that there would be a widespread understanding of the term "BPM" -- especially since it's one of the hottest acronyms in the growing shared lexicon between IT and business. But apparently that may not be so, especially among CIOs.
The truth is, most organizations have been streamlined about as much as they can through downsizing and by implementing time-saving, cost-cutting IT applications. Business process management (BPM) takes those efforts to a whole new level. It may be used to overhaul the budget process, revise planning procedures, shorten time-to-market or order-to-cash cycle times, or even bolster client retention rates.
What BPM isn't
"The average IT manager gets it, that this notion of business process management for whatever reason, is getting a lot of interest," says Janelle Hill, a vice president of research, at Gartner. "What they don't get is that the way business people think about process is different from the way IT thinks about process."
Hill points out, for example, that most North American companies are highly automated. In the IT manager's world, this translates to efficiency. To the business mind, while it may be efficient, it's not necessarily effective. Effective is what counts.
The other big misconception about BPM is that it's the same thing as business intelligence (BI). Business intelligence consists of the actual technologies and applications used to gather and analyze operational information about an organization. A popular example is the software dashboard, an analytics application that offers key data in real-time. While BI is an essential set of tools in any BPM plan, it is just one component. Experts say that CIOs need to go beyond the dashboard to help their organizations carry out BPM strategies.
What BPM is
"BI by itself lacks context," says Howard Dresner, chief strategy officer at Hyperion Solutions, a maker of BPM software. Dresner explains what BPM is in this way: "There are four phases in the management cycle: concept and vision, goals and objectives, managing execution, and evaluating strategy afterwards. The connective processes in between those four things are BPM."
BPM is more of an innovation in management, not technology. However, technological innovation is at the core of any good BPM plan. Ken Vollmer, a principal analyst at Forrester Research, sees BPM as the convergence of integration-centric process management out of IT with the more human-centric process management from the work flow-oriented business side. Vollmer enumerates the many ways a good BPM strategy can make a difference:
- Supports cross-functional processes among departments
- Transparency -- allows business users or customers to monitor status, preferably in real time
- Agility -- adapts and changes business processes frequently
- Captures process knowledge for analysis
- Reduces human error or labor intensity in work activities
Getting started
For the CIO starting at square one, the question is where to begin when putting together a BPM strategy. Experts recommend taking the following steps:
- Talk to key people on the business side Dresner recommends approaching them informally when people tend to be more candid, or as he puts it, "tap into that black market of information."
- Take an inventory of processes What processes are already in place? What's working and what's not working? As Hill points out, most companies measure success in terms of function, not process. For example, a manufacturer may determine success by the amount of inventory delivered and pay less attention to the cycle time between order and cash received. "Functional excellence needs to become subordinate to process excellence," says Hill.
- Determine how decisions are made Who are the key players in decision-making? What needs to happen to reach consensus and begin execution? "Organizations tend to do either too much or too little," says Dresner. "Find the pain points so you can build a roadmap of BPM."
- Talk to the CFO At the C-level, the CFO is typically the person most likely to understand BPM just by the nature of what he or she does (e.g., tracking financial processes across departmental lines). The CFO can be a great resource in assessing the organization's current BPM, as well as being a CIO's best ally in making improvements.
A Golden opportunity
Many CIOs fear becoming entangled in BPM strategy, sometimes seeing only encroachment on their departmental turf, or perhaps preferred IT projects getting short-changed. It's actually a great opportunity to be a company-wide hero and have a tremendous impact on the organization.
"A CIO very often has that enterprise perspective, because he or she already works across departmental lines so much," Hill says. "They really are in great position to be an agent of change in business process management."
Renee Oricchio is a freelance writer in Norwalk, Conn. For the past 20 years, she has been writing and producing news segments about technology and business for CNN, MSNBC, Ziff-Davis, CNET and a variety of Silicon Valley-based local news outlets.