Michael Hammer writes, "Business Process Management (BPM) is a comprehensive system for managing and transforming organizational operations, based on what is arguably the first set of new ideas about organizational performance since the Industrial Revolution."
1. Origins of BPM
Two primary schools of thought led to today's BPM systems. First is the work of Shewhart and Deming on statistical process control which led to today's more sophisticated Six Sigma. These systems rely on the use of performance metrics to determine whether work is performed satisfactorily or not, reliant on hard data rather than opinion. Limitations for this process include, its definition of a process leads to an organization to have hundreds of processes that may or may not have significance to the enterprise as a whole, yet all have to be measured and evaluated.
Another school of thought was the authors, Michael Hammer called Reengineering. Reengineering redefined process as being end to end work across an enterprise that creates customer value and focusing only on the meaningful processes.
2. The Process Management Cycle
Over the last decade, these to processes have merged to give us Business Process Management.
Failure of the process can lie in the failure of the design and/or execution. Once the root of the problem is found, it is easy to fix.
The process is built on the premise that through deliberate management of the end to end process, customer value is created. BPM is customer-centered. Customer, results and process for a triangle that organizations should give attention to.
3. The Payoffs of Process Management
Enterprise benefits from consistency, cost, speed, quality and service which in turn improves customer satisfaction.
Recent Examples of companies that have benefited from BPM include:
-Consumer goods manufacturers who were able to reduce inventory by 25% yet 'out of stock' situations declined by 50%
-Computer maker reduced time to market by 75%, development costs by 45% and increased customer satisfaction by 25%.
4. Enablers of the Process
Companies need to have 5 critical enablers in place in order for BPM to work effectively
1. Process design
2. Process metrics - targets need to be set and performance measured
3. Process Performers - people with certain skill sets
4. Process Infrastructure - HR and IT departments that work together
5. Process Owner - senior managers with authority to make sure processes are carried out throughout the organization.
5. Organizational Capabilities
Four critical capabilities are needed to ensure success with the processes.
1. Leadership - passionate senior leadership to support efforts.
2. Culture - the culture of an organization should support the process by people at all levels will be involved.
3. Governance - process owners, executive leaders and other senior managers.
4. Expertise - companies need people with expertise in process design and implementation
6. The Principles of Process Management
1. All work is NOT all process work - there must be a balance between development process and creativity. Processes should not be misinterpreted as routinization or automation.
2. Any process is NOT better than no process - a process must be well defined.
3. A good process is better than a bad process - a bad process must be replaced
4. One process version is better than many - standardization across enterprise can allow companies to give better support services and allows redeployment of staff to other parts of of the business.
5. Even a good process must be performed effectively
6. Even a good process can be made better
7. Every good process eventually becomes a bad process - no process can stay effective forever and will need to be replaced.
7. The EPM as a Management Tool and BPMS
EPM is Enterprise Process Model and it is a graphical representation of an enterprise's process.
The graphic above is an example of an Enterprise Process Model
8. Frontiers of BPM
Despite its widespread adoption, BPM is still in its infancy. Challenges for the future include: Management structure and responsibility, IT support, Interenterprise process, Standards, Process and Strategy and Industry Structure.
There is much work to be done in the area of BPM but it is definitely "the wave of the present and we are in the Age of Process."
Review by Farah:
I think Hammer is a leader in his field and his analysis made so much sense to me.
I think the biggest hurdle in the broad acceptance and implementation of BPM will be finding enough qualified people throughout an organization to get across the board buy in: Having senior executives who are willing to implement and monitor such a process and having skilled IT and HR people willing to work with such a process.
I am a huge believer in proper training and implementation. I have seen so many great projects, great ideas and processes put into place, then very poor training and lack of documentation occurs, the ball is dropped and the project never really works as intended. Members of an organization must have on going training at every level and people should be in place to tweak, retweak and make sure the process is implemented effectively on an ongoing basis.
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