Business process management

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The term Business Process Management (or BPM) refers to a set of activities which organizations can perform to either optimize their business processes or adapt them to new organizational needs. As these activities are usually aided by software tools, the term BPM is synonymously used to refer to the software tools themselves.

Although it can be said that organizations have been performing BPM for some time, a new impetus has been given to the theme with the advent of software tools (business process management systems or BPMS) which allow for the direct execution of the business processes without a costly and time intensive development of the required software. In addition, these tools can also monitor the execution of the business processes, providing the management of an organization the means to analyze their performance and make changes to the original processes with the aim of improving them. Using the BPMS the modified processes can then be quickly placed into operation.

Business Process Management encompases other process elements, such as Total Quality Management (TQM), Six Sigma, Performance Management, etc.. Where Business Process Reengineering (popular in the 1990s) dealt with one-off changes to the organization, Business Process Management deals much more with the continuity and embedding of process-thinking and doing in the organization. Business Process Management is not about technology but about management.

Business Process Management Activities

The activities which constitute business process management can be grouped into three categories: design, execution and monitoring.

Process design

This encompasses either the design or capture of existing processes. In addition the processes may be simulated in order to test them. The software support for these activities consists of graphical editors to document the processes and repositories to store the process models.

Process execution

The traditional way to achieve the automatic execution of processes is that an application is developed or purchased which executes the steps required. However, in practice, the applications developed only execute a portion of the overall process. Execution of a complete business process is typically achieved by using a patchwork of interfacing software (transferring the data from one application to another) and human intervention (for example, reading the data printed out from one application and entering it into another). In addition, certain process steps can only be accomplished with human intervention (for example, deciding on a major credit application). Due to the complexity that this approach engenders, changing a process is costly and an overview of the processes and their state is difficult to obtain.

As a response to these problems, the Business Process Management System (BPMS) category of software has evolved. BPMS allows the full business process (as developed in the process design activity) to be defined in a computer language which can be directly executed by the computer (see #standards). The BPMS will either use services in connected applications to perform business operations (e.g. calculating a repayment plan for a loan) or will send messages to human workers requesting they perform certain tasks which cannot be easily automated. As the process definition is directly executable, changes in the process can be (in comparison to the traditional approach of application development or maintenance) relatively quickly moved into operation. In order to work effectively a BPMS often requires that the underlying software is constructed according to the principles of a service-oriented architecture. Thus, it is often difficult to make a suite of existing legacy systems fit with a BPMS.

The commercial BPMS software market has focused on graphical process model development, rather than text-language based process models, as a means to reduce the complexity of model development. Visual programming using graphical metaphores has increased productivity in a number of areas of computing and is well accepted by users. Business rules are a growing area of importance in BPMS as these rules provide governing behavior to the BPMS, and the business rule engine is used to drive process execution, resolution and automation. Much of the domain knowledge in the organization that a BPMS must capture may already reside in a central rules repository. There are many options for writing business rules including traditional coding, two-stage conversions that translate natural language rules into technical rules, as well as approaches that dynamically convert accessible rule forms to technical rules.

Process monitoring

This monitoring encompasses the tracking of individual process so that information on their state can be easily seen and the provision of statistics on the performance of one or more processes. An example of the tracking is being able to determine the state of a customer order (e.g. ordered arrived, awaiting delivery, invoice paid) so that problems in its operation can be identified and corrected. In addition, this information can be used to work with customers and suppliers to improve their connected processes. Examples of the statistics are the generation of measures on how quickly a customer order is processed, how many orders were processed in the last month etc.. These measures tend to fit into three categories: cycle time, defect rate and productivity.

Although such functions may be within the scope of current applications, the use of a BPMS is expected to ease the development of such reporting. Manufacturers of BPMSs will often offer process monitoring software as well as MIS and execution.

Future Developments

Although the initial focus of BPM was on the automation of mechanistic business processes, this has since been extended to include support for human-driven processes in which human interaction takes place. A common form is where individual steps in the business process which require human knowledge, judgment or experience to be performed are assigned to the appropriate members of an organization (as with workflow systems). More advanced forms are in supporting the complex interaction between human workers in performing a workgroup task. In the latter case an emerging class of BPM software known as the Human Interaction Management System is used to support and monitor these processes as well as to permit their ongoing redefinition at runtime.

There is also a growing interest in the use of BPMS as a means to understand the organization through the expanded set of relational data a BPMS can be used to organise and present. This data includes the relationships of processes (which can often span multiple tiers) to each other which, when included in the process model, provides the ability to draw on these relationships for advanced reporting and analysis that is typically previously not available. BPM is regarded to be the crucial backbone of enterprise content management.

Formal methodologies and approaches for successfully implementing BPM are now emerging. Alongside the commercial efforts of consultants business schools and not-for-profits are producing their own frameworks and maturity models. A free framework (The 8 Omega ORCA toolkit) can be downloaded from the BPM Group, a not-for-profit organization (www.bpmg.org), developed over the last decade by a dozen leading global companies.

References

Howard Smith, Peter Fingar. Business Process Management: The Third Wave. ISBN 0929652339

Keith Harrison-Broninski. Human Interactions: The Heart and Soul of Business Process Management. ISBN 0929652444

Roger Burlton Business Process Management: Profiting From Process. ISBN 0672320630

Steve Towers In Search of BPM Excellence. ISBN 0929652401

John Jeston and Johan Nelis "Business Process Management: Practical Guidelines to Successful Implementations" ISBN 0750669127

Sandeep Arora "Business Process Management. Process is the Enterprise" ISBN 1-4116-3117-X

Michael Havey "Essential Business Process Modelling" ISBN 0-596-00843-0

External links

General

Standards

A number of technical standards have been specified for business process management, notable among them are:

BPMN is a notation for diagramming business processes.
BPEL4WS are process description languages which can be directly executed by a business process management system.
BPML was a proposed language, but now the BPMI has dropped support for this in favor of BPEL4WS.
Wf-XML supports run-time interoperability between different business process management systems. Wf-XML is based on ASAP.
XPDL is a standard for exchanging process design between process modelling tools.