Business Process Management (BPM) technology

Technology-savvy business managers have been hearing a lot about business process management (BPM) technology. BPM would seem to be the answer to all business problems, irrespective of your industry. It is also one of the hottest segments in the software industry, making it all the more difficult to separate hyperbole from reality. Proof points are starting to emerge, however. The BPM vendors are building their installed bases, and many can point to reference sites that are real success stories. But while BPM is now more than a buzzword, it remains a confusing concept to many in the user community. At a time when technology dollars are at a premium, there is a clear need to understand precisely what BPM can do, and where the business benefits lie - for your company.



What Is BPM?

BPM technology is a framework of applications that effectively tracks and orchestrates business process. BPM solutions automatically manage processes, allow manual intervention, extract customer information from a database, add new customer transaction information, generate transactions in multiple related systems, and support straight-though processing without human intervention when needed. BPM allows you to automate tasks involving information from multiple systems, with rules to define the sequence in which the tasks are performed as well as responsibilities, conditions, and other aspects of the process. But BPM not only allows a business process to be executed more efficiently, it also provides the tools to allow you to measure performance and identify opportunities for improvement - as well as to easily make changes in processes to act upon those opportunities.

In an increasingly competitive environment, your organization's business success depends on its ability to achieve efficiencies through effective management of its processes. Given that most business processes involve participants from multiple departments and organizations, and make use of information from multiple systems.



BPM requires the integration of the participating applications, systems, and people into a single, integrated solution. What's needed is a way to orchestrate and manage methodically the interactions and tasks among human users and between disparate systems, in an automated fashion. Beyond process automation, however, BPM also provides an integration services framework, as well as business analytics and reporting capabilities. The information that is derived can then be presented in a manner that users can consume via a dashboard, portal, etc.

The concept of business process management is not new; technologies designed to improve the efficiency of processes, such as workflow and business process re-engineering tools, have been around for well over a decade. BPM, however, automatically manages the processes themselves, by accessing repositories, applications, knowledge workers, and/or databases at the appropriate point in the business process. They automate not just the flow of documents, but actions - actions such as extracting customer information or adding new information about a customer transaction, and then generating transactions in the multiple systems involved in the business process.



Advanced BPM solutions can support applications that require human intervention and those that can undergo straight-through processing without human intervention - as well as automated processes that require human intervention for the handling of exceptions. The processes managed by BPM can involve the interaction of disparate systems and large numbers of people, at distributed locations and potentially from external organizations. But it is the ability to allow human interaction within sophisticated business process flows, in addition to the basic automation of system-tosystem processes, that sets BPM apart.

A further differentiator of BPM solutions is their ability to provide realtime visibility into business processes, monitoring a process across multiple systems, potentially on disparate platforms, even extending to external systems. They also provide different levels of visibility into your business process for different constituents within your organization (a business view for line-of-business users; a systems view for IT). Through a front-end dashboard, business users can establish metrics for measuring the health of the business and track progress. The result: all participants in the process can view the status of the process in real time, allowing them to manage the process both more effectively and proactively. What specific types of business problems does BPM address? Not surprisingly, BPM is particularly well positioned for process-intensive industries such as financial services, insurance, healthcare, government, and manufacturing. Core business applications such as residential mortgage processing and claims processing, both of which involve manual labor and integration with multiple internal and external applications, are good candidates for BPM.

BPM is also ideal for applications that fit the definition of true straight-through processing, such as brokerage investment and settlement, payment processing, and new account processing in the financial services industry. These applications require a BPM solution with a significant level of multi-system integration, transaction control, and monitoring/analytics.

But BPM also makes sense for a wide range of routine business processes and so-called horizontal applications: accounts payable, procurement, order management, and human resources processes such as new hire set-up, to name a few. While processes in these areas may not be part of your core business, they're still likely to be human-intensive. Automating some of these processes can achieve considerable business benefit, as well as cost savings.



What Does It Take to Be Successful with BPM?

The Challenges A BPM implementation is likely to present far-reaching implications for your organization. And BPM initiatives tend to require considerable preparation beforehand. The major challenge, however, is that many companies do not understand their own processes well enough to model them; throwing a BPM solution into such a situation will only lead to more confusion. What we're seeing, however, among many of the early adopters is that a BPM initiative tends to uncover many opportunities for process improvement. As you and your organization begin to define your business processes by adopting a disciplined practice to formalize those processes, it's quite likely that you will also identify many areas in which you can use the technology to improve efficiency - in addition to the ones you originally targeted.

A further consideration is that the systems that a firm might seek to coordinate via straight-through or manual processes must be extensible beforehand. Many organizations make the mistake of trying to use the acquisition of a BPM tool as the enabler of these transactions, when often it should be thought of in the reverse.

To achieve the benefits of BPM, you need to consider the key characteristics of your business processes. The fact is, BPM solutions share many components, including process design tools, process engines, and integration components. But finding the vendor that provides the functionality required for your unique BPM application is the key to the ultimate success of your initiative. Defining your high-level requirements, and then taking the time to investigate the options in the marketplace and find the best fit, will put you in the best position in the long term.



How to Plan, Choose, and Roll Out a BPM Solution

In the current economic climate, any technology acquisition requires that you and your organization perform the proper due diligence. BPM, with its potential to impact multiple areas of your organization, is no different.

The technology planning and selection process can be broken down into the following phases:
Information gathering
Requirements development
Product selection
ROI calculation

Many organizations today are seeking to improve operational efficiencies, meet customer demands more quickly, and leverage their existing technology investments. Process-intensive industries such as government, financial services, insurance, healthcare, and manufacturing are looking for technology to help them meet these critical needs - and, for many organizations, BPM increasingly looks like a promising candidate. Unlike workflow or business process reengineering.

BPM has the potential to deliver the benefits of process efficiency throughout all stages of a business process, to all areas of the organization - and even beyond the boundaries of the organization. The combination of an integration services framework and process automation, together with business analytics and reporting capabilities, is a powerful one. Not only does it allow you to achieve greater efficiencies by automating your processes, it also provides you and other business users within your organization the tools and the real-time information you need to make informed decisions. And BPM can also help you reduce your total cost of ownership and realize ROI within a short timeframe - good news for your investors.



For anyone considering a BPM initiative, the bottom line is that BPM is likely to be a key technology component that will play a vital role in the overall enterprise architecture. There's little doubt that a BPM initiative is a highly strategic investment, capable of delivering a wide range of business benefits, both tangible and intangible, and that a BPM solution represents an integral component of an enterprise architecture strategy.

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