The article was published in The Financial Brand
Is it possible to improve the process that you could not manage? Could you manage some process if you don’t know exactly how it is executed? Of course, the answer is “no”. Without a clear understanding of the daily processes of a company, it is impossible to implement any changes, automate processes or make improvements in an organized, manageable and predictable manner. “We would like to reduce the costs, so, let’s automate our processes”. In general, it’s a good idea (from the first sight), but… if the automation is implemented for the outdated, non-optimal process, the idea becomes not so good.
The truth is that in many companies the transformation, process automation, and digitalization initiatives become more expensive and less efficient than were expected as they are too narrowly focused. They could be mostly tactical, improving a single department’s process or automating an existing process instead of a complex program for the whole company. The Business Process Management (BPM) could help to solve this problem.
What is BPM?
According to Gartner “Business process management (BPM) is a discipline that uses various methods to discover, model, analyze, measure, improve, and optimize business processes.”
As a very popular practice of the business transformation, BPM, if well implemented, can help to understand your company in details. Moreover, it could be the basis of large-scale changes, continuous improvement, and automation. This approach could be very effective in integrating the strategy and goals of an organization with the expectations and needs of customers by focusing on end‐to‐end processes.
The stepwise approach to BPM implementation:
Identification of the existing processes
Firstly, identify the complex of existing processes spread across different departments and systems. This can be done by documenting and making the diagrams of the “AS-IS” processes. For the large companies, like banks, this step is very comprehensive and vital for the future success, as all the processes are very distributed, it involves many participants and systems.
The “AS IS” business process model can be done in several ways:
Interview: ask the questions about the process execution.
Observation: observe and document the process that is executed.
Survey: send the list of questions to the interviewee who fills it out.
JAD (Joint Application Development) sessions: involve the process executor into the process modeling.
Assessment and design
After completing the set of processes and reaching conclusions about the detailed flow, the identified processes should be assessed. Factors like the complexity of the process, number of systems involved, turnaround time and so on should be taken into consideration. We should document the problems associated with existing processes and find the improvement opportunities. The list of elements that can cause troubles and indicate “problem” processes could look, for example, like this:
- Unnecessary bureaucracy. Process includes the activities that do not aggregate business value;
- The process is very hard to control. There is no automated method for planning and monitoring of the process (managers use a variety of systems, like Excel, Access, etc.);
- The process is very time-consuming;
- The process is risky. Many manual activities could cause the mistakes.
- The process includes rework/ checking/review stages.
After that, we are ready to start the design the “TO-BE” processes. The new processes could be described and documented. The set of process’s diagrams should be completed. All these alternative solutions should also be assessed according to the criteria, like:
- The complexity of the process changing;
- Cost vs benefits;
- Implementation period.
All changes in the large-scale business are always not easy in implementation. So, it’s not obvious to start the BPM transformation with the most complex process. A good strategy is to start the implementation in small phases, realize some alternatives in one department and after that spanning the changes across departments. Be sure that the transformation team have good communication flows inside the company. And all participant of the process including stakeholders have the information about the goals of transformation and its stages. Usually, it could be very useful to involve the specialists of the “AS-IS” processes to the implementation of the “TO-BE” processes.
Review and analysis:
The company needs to review the results of BPM transformation by measuring some parameters like these:
- Key Performance Indicators (KPI) (in comparison “AS-IS” and “TO-BE” processes);
- ROI (return on investment) for each process treated;
- Costs and earnings.
Upon identification of “well-done” and “problem” areas, the company could make changes in the BPM implementation strategy or in designed processes. The end goal is to reach “TO-BE” stage with continuous assessment and improvement of processes.
What are BPM expected benefits?
BPM transformation could be very useful as it gives many advantages.
- Optimize operational processes and find hidden wastage. In this case, we talked about all type of wastage – money, time, efforts.
- Decrease costs and increase the profitability.
- Overcome barriers that slow down business performance and innovation.
- BPM could be very good way of the processes automation.
- Close process gaps between customer-facing and operational development teams. BPM is a very efficient way to improve the back-office processes. At the same time, it could help to improve the customer experience performance.
- Improve collaboration across employees, customers, and partners.
- Decrease the dependence of the human factor.
The list of expected benefits looks great, isn’t it? The start of BPM implementation means the start of continually improving and transforming main business processes in the company. Of course, this process couldn’t be absolutely simple and straightforward. We would like to underline some rules that should be taken into consideration throughout the BPM implementation.
Some rules how to implement BPM efficiently:
- BPM programs require a strong foundation with clear and measurable goals.
- BPM should be business oriented. It’s good case when the goals of the process transformation are formulated in the terms of business outcomes;
- It’s hard to achieve the goals without senior management and business attention to the BPM initiatives.
- BPM should be integrated into the long-term business strategy of the company and should help reinvent and transform processes aligned with the key trends (for example, digitalization, expanding customers demand due to the mobile and social, etc.).
We hope that our short overview of BPM and, especially, the list of benefits will make you want to implement it in your company. The “AS-IS” processes aren’t necessarily bad or wrong, but with BPM tool the “TO-BE” processes could be great.