What is Business Process Management: Everything you need to know about BPM

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Business Process Management (BPM) is a comprehensive approach that focuses on the optimization and improvement of an organization’s business processes to enhance efficiency, productivity, and overall performance. 

According to Fortune Business Insights, the BPM market is expected to increase at a CAGR of 12% during 2021-28. Moreover, according to Gartner’s BPM maturity model assessment, 75 percent of organizations are still in the midst of standardizing and automating processes.

It involves the systematic analysis, design, implementation, monitoring, and continuous improvement of processes to achieve strategic goals. BPM encompasses various activities, tools, and methodologies that enable businesses to streamline operations, reduce costs, and deliver superior customer experiences. 

This article provides an in-depth exploration of BPM, covering its definition, importance, types, levels, lifecycle, benefits, best practices, challenges, technologies, use cases, future prospects, and concludes with frequently asked questions to offer a holistic understanding of BPM and its potential impact on organizations.

What is Business Process Management?

According to Gartner, “Business process management (BPM) is a discipline that uses various methods to discover, model, analyze, measure, improve, and optimize business processes. A business process coordinates the behavior of people, systems, information, and things to produce business outcomes in support of a business strategy.”

According to the Association of Business Process Management Professionals (ABPMP): “Business process management (BPM) is a disciplined approach to identify, design, execute, document, measure, monitor, and control both automated and non-automated business processes to achieve consistent, targeted results consistent with an organization’s strategic goals.”

BPM aims to streamline and optimize business processes by eliminating inefficiencies, reducing costs, improving customer experiences, and aligning processes with strategic objectives. It emphasizes the importance of understanding the end-to-end flow of activities, identifying bottlenecks or areas for improvement, and leveraging technology and automation where appropriate.

Additionally, BPM can be supported by various methodologies, frameworks, and technologies, such as Lean Six Sigma, Business Process Modeling Notation (BPMN), workflow automation, and Business Process Management Systems (BPMS).

BPMComponents

  • Process Discovery and Modeling: Understanding and documenting existing processes, identifying stakeholders, inputs, outputs, and dependencies, and creating process models or diagrams.
  • Process Analysis and Improvement: Analyzing processes to identify areas for optimization, waste reduction, and performance enhancement. This involves evaluating metrics, identifying bottlenecks, and redesigning processes to achieve desired outcomes.
  • Process Implementation and Automation: Implementing the redesigned processes and leveraging technology, software, and automation tools to streamline and accelerate process execution.
  • Process Monitoring and Control: Establishing mechanisms to measure and track process performance using Key Performance Indicators (KPIs) and implementing controls to ensure compliance, consistency, and quality.
  • Continuous Improvement: Emphasizing a culture of continuous improvement by regularly assessing processes, gathering feedback, and implementing changes to drive ongoing efficiency gains and adapt to evolving business needs.

BPM Importance

Business Process Management (BPM) holds significance for both Business-to-Business (B2B) and Business-to-Consumer (B2C) organizations, albeit with some differences in their specific contexts. Here’s an explanation of the importance of BPM in each type of organization:

 Importance of BPM in B2B Organizations

  • Streamlined Collaboration: B2B organizations often engage in complex, multi-step processes involving multiple stakeholders and departments. BPM allows for the streamlining of collaboration by clearly defining roles, responsibilities, and handoffs, ensuring smooth coordination between different entities.
  • Enhanced Efficiency: B2B processes can be time-consuming and resource-intensive. BPM helps identify bottlenecks, eliminate redundancies, and optimize workflows, leading to improved efficiency, reduced cycle times, and cost savings.
  • Improved Customer Satisfaction: B2B organizations serve other businesses as customers. BPM allows for the design and implementation of customer-centric processes, ensuring consistent delivery of products or services, meeting SLAs, and exceeding customer expectations.
  • Better Compliance and Risk Management: B2B transactions often involve adherence to industry regulations, compliance requirements, and managing associated risks. BPM provides a structured approach to implement controls, monitor compliance, and mitigate risks, ensuring legal and regulatory compliance throughout the business processes.

Importance of BPM in B2C Organizations

  • Seamless Customer Experiences: B2C organizations cater directly to individual consumers. BPM plays a crucial role in designing and delivering seamless customer experiences across various touchpoints, enabling organizations to meet customer expectations and build loyalty.

     

  • Agility and Adaptability: B2C markets are dynamic and subject to rapid changes in consumer preferences and market trends. BPM enables organizations to quickly adapt to market changes by allowing for agile process design, implementation, and continuous improvement.

     

  • Scalability and Growth: B2C organizations often face the challenge of managing high volumes of transactions and scaling their operations. BPM facilitates process scalability by automating repetitive tasks, optimizing resource allocation, and ensuring consistent quality even as the business grows.

     

  • Real-time Insights and Decision-making: B2C organizations deal with large volumes of data generated from customer interactions. BPM, when combined with analytics and business intelligence tools, enables organizations to gain real-time insights into consumer behavior, preferences, and market trends. These insights help make informed decisions and drive business growth.

BPM Types

  • Integration-centric BPM – Integration-centric BPM, also known as integration-centric process automation, focuses on streamlining and automating the flow of information and data between different systems, applications, and stakeholders within an organization.
    It involves integrating disparate systems and technologies to enable seamless communication and data exchange, often leveraging integration platforms, middleware, and APIs. Integration-centric BPM aims to eliminate manual handoffs, reduce errors, and improve the efficiency and accuracy of information exchange across various business processes.
  • Human-centric BPM – Human-centric BPM emphasizes the involvement and collaboration of people in the execution of business processes. It recognizes the critical role of human judgment, decision-making, and creativity in certain processes that cannot be fully automated. Human-centric BPM typically involves providing user-friendly interfaces, task assignments, and notifications to individuals involved in the process.
    It focuses on optimizing human interactions, facilitating effective communication, and ensuring that tasks are performed efficiently and accurately. Human-centric BPM often integrates with collaboration tools, workflow systems, and user experience design principles to enhance employee productivity and satisfaction.
  • Document-centric BPM – Document-centric BPM centers around managing and optimizing processes that heavily rely on the creation, review, approval, and handling of documents. It encompasses workflows and automation techniques specifically designed for document-centric processes, such as contract management, regulatory compliance, invoice processing, and document approval cycles.
    Document-centric BPM aims to streamline document-based processes, ensure version control, track document status, and improve collaboration and information sharing related to documents. It often involves the use of document management systems, electronic signatures, and document-centric workflow automation tools.
  • System-centric BPM – System-centric BPM focuses on optimizing and automating processes that are tightly tied to specific systems or applications. These processes are often repetitive, rule-based, and involve system-to-system interactions.
    System-centric BPM aims to streamline and automate activities within individual systems or applications, eliminating manual effort, reducing errors, and increasing process efficiency. It typically involves the use of software robots (RPA – Robotic Process Automation) or other automation tools to interact with systems and perform tasks within predefined rules and guidelines.

 
Read more: BPM in Crisis Management: Building Resilience and Ensuring Business Continuity

BPM Levels

In the field of Business Process Management (BPM), Paul Harmon, a prominent BPM thought leader, introduced the concept of BPM levels or maturity levels to assess an organization’s BPM capabilities. These levels, often referred to as the Harmon Levels, provide a framework for understanding an organization’s progress in adopting and implementing BPM practices. Here are the different BPM levels according to Harmon:

    • Level 1: Ad Hoc Processes – At this level, processes are informal, unstructured, and lack standardization. Organizations have limited awareness of BPM principles and practices. Processes are typically reactive and driven by individual knowledge and expertise. There is little to no formal process documentation or measurement.
    • Level 2: Repeatable Processes – At this level, organizations begin to recognize the importance of process standardization and repeatability. They focus on documenting and formalizing key processes, defining basic guidelines, and establishing some level of process consistency. However, processes may still be inconsistent across different areas of the organization, and process improvement efforts are limited.
    • Level 3: Defined Processes – Level 3 represents organizations that have defined and documented their key processes. There is a clear understanding of process inputs, outputs, activities, roles, and responsibilities. Organizations at this level establish process ownership and governance structures. Process performance metrics are defined, and basic process improvement initiatives are undertaken.
    • Level 4: Managed Processes – At this level, organizations actively manage and monitor their processes to achieve desired outcomes. They establish performance targets and regularly measure and report on process performance using Key Performance Indicators (KPIs). Continuous process improvement practices, such as Lean Six Sigma or Kaizen, are implemented to drive efficiency and quality. Process automation and technology enablement may also be adopted to enhance process effectiveness.
    • Level 5: Optimized Processes – The highest level of BPM maturity, Level 5 organizations focus on continuous process optimization and innovation. They leverage advanced techniques, such as predictive analytics, artificial intelligence, and advanced automation, to drive process excellence. Continuous improvement is embedded in the organizational culture, and process innovation is pursued to stay ahead of competitors. These organizations actively seek feedback from customers and stakeholders to drive further enhancements.

BPM Lifecycle

The BPM lifecycle is iterative and cyclical, with organizations continuously evaluating, analyzing, and optimizing their processes based on changing business needs and goals. The process of improvement is ongoing, with organizations moving through the phases repeatedly to ensure their processes remain efficient, effective, and aligned with strategic objectives.

  • Discovery/Identification: In this phase, organizations identify and select the processes they want to improve or optimize. This involves understanding the organization’s goals, strategic objectives, and key performance indicators (KPIs). Stakeholders are engaged, and the scope and boundaries of the processes are defined.

     

  • Process Analysis: In this phase, organizations analyze the selected processes in detail. The current state of the process is documented, including process steps, activities, roles, inputs, outputs, and dependencies. Process analysis techniques such as process mapping, value stream mapping, and root cause analysis may be used to identify inefficiencies, bottlenecks, and areas for improvement.

     

  • Process Design: Once the existing process is analyzed, organizations move on to the design phase. In this phase, they develop a future state or optimized process model. Process design includes defining streamlined process steps, establishing clear roles and responsibilities, identifying automation opportunities, and incorporating best practices. Process modeling techniques like Business Process Modeling Notation (BPMN) may be used to visually represent the new process design.

     

  • Process Implementation: The process implementation phase involves translating the designed process into action. It includes developing detailed process documentation, creating work instructions, training employees, and configuring or developing necessary IT systems and tools to support the new process. Any required process changes are communicated to stakeholders, and change management practices are implemented to ensure a smooth transition.

     

  • Process Monitoring: Once the new process is implemented, organizations need to monitor its performance to ensure it is achieving the desired outcomes. Process monitoring involves establishing KPIs, collecting relevant data, and analyzing process performance against the established targets. Key monitoring activities include tracking process cycle times, error rates, resource utilization, and customer satisfaction.

     

  • Process Optimization: In this phase, organizations identify areas for further improvement and optimization based on the process monitoring data. They analyze the process performance data, identify bottlenecks, and implement corrective actions. Continuous improvement methodologies such as Lean, Six Sigma, or Kaizen may be employed to drive process optimization efforts.


Learn more: Design Thinking and BPM: The Winning Combination for User-Friendly Processes

BPM Benefits

  • Augmented Operational Efficiency: By applying BPM, businesses have been able to increase operational efficiency by up to 30%, minimizing redundancies, dismantling bottlenecks, and supercharging overall productivity. Automated tasks and technologically enhanced processes can reduce cycle times by 25%, diminish costs by up to 40%, and improve resource utilization by 35%.

     

  • Elevated Customer Experience: In our customer-focused world, BPM plays an instrumental role in amplifying the customer experience. By remapping and restructuring processes around the customer, organizations can identify and alleviate 60% of customer pain points, thereby improving service delivery. BPM enables an up to 40% faster delivery of products and services and a 50% more efficient response to customer inquiries, consistently exceeding customer expectations.

     

  • Agility and Adaptability Booster: BPM empowers organizations with the agility to stay ahead of 90% of market shifts and customer demands. By adopting flexible and scalable processes, companies can swiftly respond to emerging opportunities, allowing them to remain competitive in ever-evolving environments.

     

  • Unrivaled Visibility and Control: By offering real-time process insights, BPM equips organizations with the tools for superior monitoring, control, and data-driven decision-making. With state-of-the-art analytics and reporting capabilities, organizations can track process performance with 95% accuracy, promptly identify deviations, and ensure full compliance with business objectives and regulatory standards.

     

  • Culture of Continuous Improvement: BPM fosters a culture of continual improvement, with 70% of organizations implementing methodologies like Lean Six Sigma or Kaizen reporting significant process enhancements. By promoting employee engagement, collaboration, and innovation, BPM helps organizations to relentlessly pursue operational excellence and unlock an average of 30% in optimization opportunities.

     

  • Business Agility and Digital Transformation: BPM plays a vital role in driving digital transformation initiatives. By automating processes, leveraging emerging technologies like robotic process automation (RPA), artificial intelligence (AI), and machine learning (ML), organizations can achieve greater agility, scalability, and innovation. BPM enables organizations to embrace digitization, achieve seamless integration with existing systems, and lay the foundation for future technological advancements.

BPM Best Practices

  • Define Clear Objectives: Clearly define the objectives and goals of your BPM initiative. Align these objectives with the strategic goals of the organization to ensure that BPM efforts are focused on driving desired outcomes and delivering value.

     

  • Engage Stakeholders: Involve stakeholders from various levels and departments within the organization. Collaborate with process owners, managers, and employees to gain their insights and perspectives. Encourage open communication and active participation to foster a sense of ownership and drive process improvement.

     

  • Document Processes: Thoroughly document and map existing processes to understand the current state. Use standardized notations such as BPMN (Business Process Model and Notation) to create clear and visual representations of the processes. Documenting processes helps identify bottlenecks, inefficiencies, and areas for improvement.

     

  • Streamline and Simplify Processes: Analyze existing processes to identify opportunities for streamlining and simplification. Eliminate non-value-added steps, redundancies, and manual interventions. Simplify decision-making and approval processes to enhance efficiency and reduce errors.

     

  • Leverage Automation and Technology: Identify opportunities to automate manual tasks and activities within processes. Leverage BPM software, workflow automation tools, and robotic process automation (RPA) to streamline processes, reduce human error, and improve consistency. Evaluate emerging technologies such as AI and ML to enhance process efficiency and decision-making.

     

  • Establish Performance Metrics: Define key performance indicators (KPIs) and metrics to measure process performance. Establish benchmarks and targets to track and evaluate process efficiency, cycle time, cost, quality, and customer satisfaction. Regularly monitor and analyze these metrics to identify areas for improvement and drive continuous optimization.

     

  • Implement Continuous Improvement Practices: Foster a culture of continuous improvement within the organization. Encourage employees to identify and report process issues, provide feedback, and suggest improvement ideas. Implement methodologies such as Lean, Six Sigma, or Kaizen to drive continuous improvement initiatives and ensure that BPM efforts are ongoing and adaptive.

     

  • Enable Change Management: Implement effective change management practices to support BPM initiatives. Communicate the purpose and benefits of BPM to employees, address their concerns, and provide adequate training and support. Encourage a positive mindset towards change and actively manage resistance to ensure smooth adoption of new processes.

     

  • Monitor and Measure Results: Continuously monitor the impact of BPM initiatives and measure the achieved results. Regularly evaluate process performance against the defined KPIs and targets. Analyze the data to identify areas of success and areas that require further improvement. Use these insights to refine processes and drive ongoing optimization.

     

  • Foster Collaboration and Learning: Encourage cross-functional collaboration and knowledge sharing. Facilitate regular meetings, workshops, and forums to share best practices, lessons learned, and success stories. Create a learning environment where employees can exchange ideas, explore new technologies, and contribute to the overall improvement of processes.

BPM Challenges

  • Resistance to Change: Introducing BPM often requires changes to existing processes, roles, and responsibilities, which can be met with resistance from employees. People may be resistant to new ways of working, fear job insecurity due to automation, or lack the necessary skills to adapt to the changes. Overcoming resistance to change and fostering a positive mindset towards BPM can be a significant challenge.

     

  • Process Complexity: Many organizations have complex processes that involve multiple departments, systems, and stakeholders. Understanding and mapping these processes accurately can be challenging. Managing process complexity requires careful analysis, collaboration, and the ability to break down complex processes into simpler components for better visibility and optimization.

     

  • Lack of Executive Support: Successful BPM implementation requires strong leadership and executive support. If senior management does not prioritize BPM or allocate adequate resources, initiatives may lack the necessary momentum and resources to drive change. Lack of executive sponsorship can hinder the adoption of BPM practices and make it challenging to overcome organizational barriers.

     

  • Data and System Integration: BPM often involves integrating data and systems from various sources and departments. Disparate legacy systems, data silos, and incompatible technologies can pose integration challenges. Achieving seamless data and system integration requires careful planning, coordination, and technical expertise to ensure smooth flow of information across processes.

     

  • Change Management and Sustainability: Implementing BPM is not a one-time event but an ongoing effort. Sustaining BPM practices and driving continuous improvement can be challenging without a strong change management strategy. Organizations must continuously engage employees, promote a culture of process improvement, and establish mechanisms to capture feedback and ideas. Maintaining the momentum and sustaining BPM initiatives beyond the initial implementation phase can be a significant challenge.

BPM Technologies

  • Intelligent BPMS (Business Process Management Suites)
    Intelligent BPMS is an advanced BPM technology that combines traditional BPM capabilities with artificial intelligence (AI) and machine learning (ML) capabilities. It leverages AI and ML to enhance decision-making, automate complex tasks, and provide intelligent insights.
    Intelligent BPMS can analyze large volumes of data, identify patterns, make predictions, and dynamically adapt processes based on changing conditions. It enables organizations to achieve greater efficiency, agility, and intelligent process automation.
  • BPM’s Increasing Use of Low-Code/No-Code
    Low-code and no-code development platforms are gaining popularity in BPM. These platforms allow business users with limited coding experience to create and customize applications and process workflows using visual interfaces and pre-built components.
    Low-code/no-code platforms enable faster development and deployment of BPM solutions, reduce reliance on IT resources, and empower business users to take an active role in shaping and optimizing processes. They promote collaboration between business and IT teams and accelerate the delivery of BPM solutions.
  • RPA (Robotic Process Automation) vs. BPM
    RPA and BPM are two distinct but complementary technologies. RPA focuses on automating repetitive and rule-based tasks by deploying software robots (bots) to mimic human actions. RPA is particularly useful for automating manual data entry, data extraction, and data processing tasks across different applications and systems.
    On the other hand, BPM provides a broader framework for managing end-to-end processes, encompassing process analysis, design, optimization, and monitoring. BPM focuses on the entire process lifecycle and aims to streamline and optimize processes for improved efficiency and effectiveness. While RPA offers quick wins for task automation, BPM provides a holistic approach to process management and optimization.
 

Explore more: Top 8 Useful Digitalization Trends in the BPM Industry for 2023

BPM Use Cases

  • Healthcare
    Use Case: Patient Journey Management
    Description: BPM can be applied to manage the end-to-end patient journey, from appointment scheduling to post-treatment follow-ups. It involves streamlining processes related to patient registration, diagnostics, treatment planning, medication management, and discharge. BPM helps optimize resource allocation, reduce wait times, ensure compliance with regulatory requirements, and enhance overall patient experience.

     

  • BFSI (Banking, Financial Services, and Insurance)
    Use Case: Loan Application Processing
    Description: BPM can streamline the loan application process by automating document collection, verification, and approval workflows. It facilitates seamless collaboration between loan officers, credit teams, and customers, improving transparency, reducing manual errors, and accelerating the loan approval cycle. BPM ensures adherence to regulatory guidelines and provides real-time visibility into application status for all stakeholders.

     

  • Logistics
    Use Case: Supply Chain Management
    Description: BPM can optimize supply chain processes, including order management, inventory tracking, warehouse management, and delivery logistics. It enables end-to-end visibility and control over the supply chain, automates workflow handoffs, facilitates collaboration with vendors and partners, and enhances efficiency and accuracy in order fulfillment. BPM also assists in managing exceptions and handling contingencies effectively.

     

  • IT/ITES (Information Technology/Information Technology-Enabled Services)
    Use Case: Service Request Management
    Description: BPM can improve the handling of service requests, such as IT support tickets or customer service queries. It streamlines the request handling process, assigns tasks to the appropriate teams, tracks progress, and ensures timely resolution. BPM enables efficient communication, escalations, and knowledge sharing, resulting in improved customer satisfaction and faster response times.

     

  • Travel & Tourism
    Use Case: Travel Booking and Reservation
    Description: BPM can optimize the travel booking process by automating reservation requests, payment processing, itinerary generation, and customer communication. It integrates with multiple systems and databases, such as airline, hotel, and transportation providers, to ensure accurate and real-time availability of services. BPM improves booking efficiency, minimizes errors, and enhances the overall travel experience for customers.

     

  • Real Estate
    Use Case: Property Management and Maintenance
    Description: BPM can streamline property management processes, including tenant onboarding, rent collection, maintenance requests, and lease management. It provides a centralized platform for tracking and managing property-related tasks, automating workflows, and ensuring timely responses to maintenance requests. BPM improves transparency, reduces manual paperwork, and enhances tenant satisfaction.

BPM Future

  • Healthcare
    Use Case: Patient Journey Management
    Description: BPM can be applied to manage the end-to-end patient journey, from appointment scheduling to post-treatment follow-ups. It involves streamlining processes related to patient registration, diagnostics, treatment planning, medication management, and discharge. BPM helps optimize resource allocation, reduce wait times, ensure compliance with regulatory requirements, and enhance overall patient experience.

     

  • BFSI (Banking, Financial Services, and Insurance)
    Use Case: Loan Application Processing
    Description: BPM can streamline the loan application process by automating document collection, verification, and approval workflows. It facilitates seamless collaboration between loan officers, credit teams, and customers, improving transparency, reducing manual errors, and accelerating the loan approval cycle. BPM ensures adherence to regulatory guidelines and provides real-time visibility into application status for all stakeholders.

     

  • Logistics
    Use Case: Supply Chain Management
    Description: BPM can optimize supply chain processes, including order management, inventory tracking, warehouse management, and delivery logistics. It enables end-to-end visibility and control over the supply chain, automates workflow handoffs, facilitates collaboration with vendors and partners, and enhances efficiency and accuracy in order fulfillment. BPM also assists in managing exceptions and handling contingencies effectively.

     

  • IT/ITES (Information Technology/Information Technology-Enabled Services)
    Use Case: Service Request Management
    Description: BPM can improve the handling of service requests, such as IT support tickets or customer service queries. It streamlines the request handling process, assigns tasks to the appropriate teams, tracks progress, and ensures timely resolution. BPM enables efficient communication, escalations, and knowledge sharing, resulting in improved customer satisfaction and faster response times.

     

  • Travel & Tourism
    Use Case: Travel Booking and Reservation
    Description: BPM can optimize the travel booking process by automating reservation requests, payment processing, itinerary generation, and customer communication. It integrates with multiple systems and databases, such as airline, hotel, and transportation providers, to ensure accurate and real-time availability of services. BPM improves booking efficiency, minimizes errors, and enhances the overall travel experience for customers.

     

  • Real Estate
    Use Case: Property Management and Maintenance
    Description: BPM can streamline property management processes, including tenant onboarding, rent collection, maintenance requests, and lease management. It provides a centralized platform for tracking and managing property-related tasks, automating workflows, and ensuring timely responses to maintenance requests. BPM improves transparency, reduces manual paperwork, and enhances tenant satisfaction.

Conclusion

Organizations across industries can leverage BPM to unlock value, drive growth, and stay competitive by effectively managing their processes, delivering exceptional customer experiences, and embracing continuous improvement in the dynamic business landscape.

Across various industries, BPM brings benefits such as streamlined workflows, automation, integration with systems, improved customer experiences, and data-driven insights for process optimization. It enables organizations to adapt to changing business environments, embrace digital transformation, and achieve operational excellence.

As BPM continues to evolve, future trends such as intelligent automation, advanced analytics, customer-centricity, and integration with emerging technologies will further enhance its capabilities. The future of BPM lies in leveraging AI, machine learning, and process mining to drive greater efficiency, agility, and innovation in process management.

Frequently Asked Questions

EOSGlobe is a leading business process management organisation that strives to provide high quality services focusing on exceptional customer experience and digital technological innovation. EOSGlobe is committed to becoming a value-driven organisation with the highest standard of services to their customers. With an exceptional team having rich domain expertise and robust digital solutions, helps businesses to transform their futuristic goals into reality. It aims for strategic partnerships with its global clientele to build a culture of innovation and business transformation at cost effective rates and with more productivity.
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Our mission is simple – to digitally transform business processes, optimise cost, and drive greater returns.

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