Business Process Management (BPM) Definition and Solutions

CIO —

• What is BPM?
• Can I see a quick example?
• What does BPM provide that other enterprise applications do not?
• How does BPM fit in with legacy, ERP and other enterprise systems?
• What kinds of processes are typically the best candidates for BPM?
• It seems like everyone is selling BPM—what does the BPM vendor landscape look like?
• How is BPM related to service-oriented architecture (SOA)?
• Are there any standards being developed for BPM?
• What does BPM cost? What are the hidden costs?
• What is involved in implementing BPM?
• How do companies organize their BPM projects? Who should own a BPM initiative, business or IT?
• How do I build a business case for BPM?
• How do I measure and actually get ROI from a BPM project?

What is BPM?

BPM is a systematic approach to improving a company's business processes. For example, a BPM application could monitor receiving systems for missing items, or walk an employee through steps to troubleshoot why an order did not arrive. It is the first technology that fosters ongoing collaboration between IT and business users to jointly build applications that effectively integrate people, process and information.

BPM gives an organization the ability to define, execute, manage and refine processes that:

• involve human interaction, such as placing orders
• work with multiple applications
• handle dynamic process rules and changes, not just simple, static flows, (think tasks with multiple choices and contingencies)

Important components include process modeling (a graphical depiction of a process that becomes part of the application and governs how the business process performs when you run the application), and Web and systems integration technologies, which include displaying and retrieving data via a Web browser and which enable you to orchestrate the necessary people and legacy applications into your processes. Another important component is what's been termed business activity monitoring, which gives reports on exactly how (and how well) the business processes and flow are working.

Optimizing processes that involve people and dynamic change has been difficult historically. One barrier to optimization has been the lack of visibility and ownership for processes that span functional departments or business units. In addition, the business often changes faster than IT can update applications that the business relies on to do its work, thus stifling innovation, growth, performance and so on. But today, the pervasiveness of Web browsers and the emergence of simpler application integration technologies such as SOAP/XML have enabled IT to deploy technology that supports the business process across functional, technical and organizational silos.

(See also, "Application Development: Web Services in the Real World" and ABC: An Introduction to SOA.")

Can I see a quick example?

Suppose a large retailer buys an HR application to improve human resource management capabilities. The HR department, located at corporate headquarters, gets the new application and probably improves its HR department processes to take advantage of the software's features. However, the day-to-day activity of hiring, firing, pay changes and so on happens at the stores, rather than at corporate headquarters. Store managers don't use the application directly; they send information to headquarters and HR analysts to input it into the system. Through the use of Web and integration technologies, BPM provides store managers a defined process and user interface for performing each of the HR transactions they need to, enforces the business rules that HR needs, and submits transactions to the HR and related applications automatically.

Here's another: Consider a retail call center representative who uses a Web-based application that walks him through how to return two items from separate purchases with two different forms of payment bought weeks apart (so governed by different parts of the exchange policy). What a BPM application would do is walk them through the steps of the exchange. Rules are built into the system so there's no need to call for a manager's consultation or approval (unless the program directs him to do so).

To complete the transaction, the BPM application must call on siloed legacy applications that hold necessary information—for example, customer, inventory or logistics data. But to the call center rep, completing the product return appears as a seamless series of tasks. He is spared the effort of hunting down the siloed information himself. The application he uses is powered by a BPM platform that provides tools for:

• business analysts to model (and change) the product return processes and define the business rules that control how those processes behave
• IT to integrate the necessary legacy systems
• joint teams to build applications for the end user that enforce the process and rules
• management to review process performance (for example, time to resolve client return exceptions) and even adjust process parameters in real-time (for example, increasing the dollar threshold during peak periods to trigger management review and approvals of client returns)

With the leading BPM platforms, everyone is working on the same shared model, so changes to the process can be put into production very quickly. These platforms are called BPM suites (BPMS) because they provide integrated process modeling, real-time monitoring, Web-based applications and management reporting—all working together to support rapid process innovation.

("Business Process Management: A New Glue or the Old Soft Shoe?" and "How Process Management Enhances Business" provide additional insights and case studies on BPM.)

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