Business Process Management (BPM)

What is business process management (BPM)?

Business process management is an organizational discipline that deals with managing and improving operational business processes. BPM ensures that every organization benefits from structuring, analyzing, and improving these processes while coordinating people, information, and technology.

Every organization has one or more processes to run smoothly. These can range from customer service and supply chain, to accounting and signing off on projects. BPM framework helps companies solve major problems to gain a competitive advantage, improve existing processes, and increase revenue flow through the current ones.

Companies use business process management software to automate and report on organizational processes, optimize them, and deliver on set goals. Business process management systems often integrate knowledge with technologies such as workflow management software to organize and plan different activities.

Business process management solutions are often used in conjunction with many other technologies and practices, including business intelligence, decision support systems (DSS), enterprise resource planning systems (ERP), service-oriented architecture (SOA), enterprise architecture (EA) software, business modeling, and design thinking.

Why is business process management important?

Poor business processes can wreak havoc if left unstructured and unsystematized. Organizations can only see part of a process at a time, and few are able to scan and see the full impact. They miss out on essential information, including where the process originates and concludes, the critical data needs, and any roadblocks and redundancies.

Business process management helps companies better control their operations and continuously improve. It ensures efficient organization, better equipped to supply goods and services while adapting to change.

Business process management examples

With the right BPM software, every part of the business process management lifecycle can be made more efficient, quick, and accurate. Here are some common BPM examples:

• Human resources (HR): Forms and document handling accounts for most HR work, which can be hectic and time-consuming. With business process management, organizations can automate their HR operations from start to finish, saving money, time, and paperwork. They can also optimize employee onboarding and approval workflows.
• Sales: The sales team at most organizations spends considerable time coordinating with the Accounts Receivable (AR) team to get sales invoices approved. Even a minor invoice error can harm a business. Business process management automates the invoice approval process, reducing the possibility of mistakes and back-and-forth clarification between salespeople and the accounting team.
• Customer service: BPM facilitates customer-centric activities. It integrates technologies and departments for a smooth operation and helps meet customer expectations. It also uncovers inefficiencies in the buyer's journey, optimizing the entire purchase process.

Types of BPM

The different types of business process management systems are:

• Integration-centric BPM: Also known as system-centric BPM, this form of business process management system automates operations that essentially bounce between a company's existing systems such as human resources management system (HRMS), customer relationship management (CRM), and enterprise resource planning (ERP) without major human intervention.
  Integration-centric BPM systems feature many connectors and application programming interface (API) access to enable creating fast-moving processes.
• Human-centric BPM: This approach focuses on human skills in processes. Regardless of how automated your business is, only humans can take care of certain approvals and responsibilities. Human-centric BPM solutions provide a user-friendly interface, simple notifications, and rapid tracking, making it easier to hold employees accountable throughout the process.
• Document-centric BPM: This system is used when a document (like a contract or agreement) is at the core of the BPM process. It enables handling, formatting, validating, and authenticating records in a pipeline.

Benefits of BPM

Business process management helps companies digitize and accomplish broader organizational goals. Here are the main benefits of BPM:

• Increased business agility: BPM helps pause, change, and rerun business processes. Changing, reusing, and adapting workflows make these processes more responsive and offer companies more insight into the impact.
• Reduced costs and increased revenues: A BPM solution eliminates bottlenecks, which translates to considerable cost savings over time. Lead times for product sales shorten, giving consumers faster access to services and products and increasing sales and income. BPM solutions also help assign and track resources to reduce waste, which can help cut costs.
• Improved visibility: BPM enables automation while ensuring real-time monitoring of KPIs. This increased transparency leads to improved oversight and the ability to effectively adjust practices and systems while tracking outcomes.
• Improved process scalability: As BPM drives enhanced process implementation and workflow automation, this translates well when scaling processes to different regions. BPM tools can help teams focus more on innovation by establishing responsibilities and maintaining consistency throughout the process.

Business process management lifecycle

A sound BPM system begins with outlining the steps of a workflow. This helps identify areas for improvement and KPIs to monitor progress. Businesses can streamline their processes and achieve better results with BPM. For this, they must first fully understand the BPM lifecycle.

Here are the five stages of the business process management lifecycle:

1. Design: Business analysts examine existing processes, conduct interviews with various stakeholders, and meet with leaders to set goals. This stage helps capture business needs and ensure the results align with the established goals.
2. Model: This stage involves developing a visual representation of the process model. It should include detailed information such as deadlines, task summaries, and data flows in a process. BPM software facilitates easier process modeling.
3. Execute: The BPM team should prototype and evaluate the new BPM system on a small group of people. After integrating any feedback, it can roll out the process for a broader audience.
4. Monitor: During this stage, the BPM team needs to monitor the process, assess improvements, and discover new bottlenecks. It should further set KPIs and use reports or dashboards to measure performance. This also includes distinguishing between macro and micro indications, such as an entire process versus process segments.
5. Optimize: With an efficient reporting system, businesses can successfully direct their efforts toward optimization or process improvement. Business process optimization (BPO) is the redesign of business processes to simplify and increase efficiency and align them with a larger strategy.

Business process automation (BPA) vs. business process management (BPM)

Business process automation and business process management are similar and synergistic in certain aspects, but they’re not identical. BPA automates processes, whereas BPM manages them, which may or may not entail automation.

Business process automation (BPA) refers to any approach that uses automation to simplify business operations. It encompasses a wide range of applications and technologies to increase productivity, agility, efficiency, and compliance in a company's daily operations. Companies use robotic process automation (RPA) software to develop bots that automate routine tasks.

Business process management (BPM) is a methodical approach to improving business processes. When implemented correctly, employees and other stakeholders see how they contribute to accomplishing company objectives.