What is BPM?

by kirangarimella on August 21, 2011

Everyone wants to know, what is BPM?

This is the first question on their minds when they meet me and I tell them I specialize in BPM. They may not actually ask this question, but they are surely thinking it.

If you are in the same boat, read on. Even if you are a BPM guru, read on and see if you agree with me or not.

The most important point to get your head around is that BPM isn’t just an IT thing. Not just a new piece of technology. Just as MS Outlook isn’t just an email tool but more fundamentally a tool for semi-formal written communication, BPM is fundamentally a way of thinking about how companies perform work everyday.

What is BPM? First, A Way Of Thinking

Process-centric thinking is radically different from the traditional way work is performed in companies. In just about all companies, work is organized into functions (or departments) and the organization chart itself reflects it.

There are good reasons for this state of affairs: the need to control scope, specialize in a domain, and ensure governance. And the system works.

Except when it doesn’t.

The notion of process-centric thinking merits several books, and I intend to write more blog posts to explore various aspects of it. For now, suffice it to say that process-centricity is a way to manage work across functional boundaries and formal organizational hierarchy.

This helps the company adopt a customer-centric viewpoint because customers don’t (and shouldn’t) care about how the company is organized. More importantly, they won’t pay for functional transactions (or wouldn’t, if they knew about it).

Customers only care about the end result – and that’s exactly as it should be.

At its core, process-centric thinking is simple to describe: look at how work is performed in your company from a customer’s point of view.

It’s easy to think about it, of course, but very hard to practice. Part of the difficulty in practicing it is that you need to break out of your functional box. The rest of the difficulty is that you have no incentive to do so.

What is BPM? It’s All About Business

It’s rather ironic that just about all the IT acronyms encapsulate business issues, but the first thing that springs to mind when you hear them is the software.

For example, what do you think about when someone you just met says they are responsible for CRM? Probably, what CRM system are they managing? Siebel/Oracle? Salesforce.com?

But CRM is all about managing customer relations. People get tied up in the mechanics of the tool and forget the keywords in CRM: ‘customer,’ ‘relationship,’ and ‘manage.’ They allow the tool to get in the way of connecting with the customer, instead of relegating it to the status of an efficient tool.

One of the best salespeople in a prior company consistently exceeded his sales targets quarter after quarter. The company kept shrinking his region to give chunks of this territory to other reps who complained that their own territories did not have enough large customers.

No, problem. He kept beating his targets.

Here’s the strange thing: we couldn’t get this guy to use our Siebel CRM system. He was always late in maintaining his accounts and forecasts.

But, boy, did he excel at CRM! He knew his customers very well. He went to their kids’ games, graduations, bar mitzvahs…whatever. He knew the birthdays, anniversaries, hobbies, passions, hopes, dreams, concerns of not only his customer but those their kids and their grandkids.

This is a classic example of CRM-centric thinking. Is it easy to do? Not in the beginning, because it calls for a huge investment of time and effort. But it gets easier – and all his “CRM” activities just became part of his lifestyle.

If you are asking ‘what is BPM?’ the analogy to process-centric thinking should be clear.

BPM Is About Processes

It should be no surprise that the second letter in BPM is all about processes. Despite that, the very first thing most companies do when they start on the BPM journey is to try to improve their function.

While it is true that each department has its own processes, the spirit of BPM is to transcend local, departmental processes.

What is BPM?

What is BPM?

You don’t buy an airplane and then taxi it all they way to the destination. An airplane is used to transcend localized ‘travel process’ and travel in a different dimension (or medium) altogether.

An airplane journey is NOT a series of car rides. Process optimization is not a series of functional optimizations.

BPM Is About Managing Work

When I say ‘managing work,’ I don’t mean project management, which is a domain unto itself. I mean it in the sense of managing the day-to-day operations of the company.

In this context, what is BPM? It is about monitoring and managing process end-to-end. It is about defining and monitoring key performance indicators (KPIs) that not only capture the performance of ‘localized’ processes but that also aggregate and relate the localized performance to the performance of the end-to-end processes.

Without this end-to-end view of process management, everyone could be doing their job very well, yet leave the customers unhappy and the company unprofitable.

To hammer home this point, consider the airplane analogy again. Let’s say you are an airline company and you bought several aircraft. Your customers bought tickets because they wanted to fly.

However, your org chart makes your employees responsible for moving the aircraft in 50 mile segments. They all do their jobs perfectly.

The end result, however, is a series of 50 mile puddle jumps. Can you be profitable that way? Will your customers be happy?

Only if your marketing your airline as a puddle jumping experience. Not otherwise.

Technology Is Missing In ‘What Is BPM?’

The actual technology of BPM, known as BPMS (‘S’ is for ‘Suite’ – the set of tools), is simply an enabler of all this. It’s there to support your process-centric thinking, your efforts to define your processes to achieve business goals, making your customers happy, and managing your business operations efficiently.

BPMS isn’t there so you can brag about adopting the latest, coolest technology. It’s not for doing ‘BPM projects’ (those don’t exist, by the way).

To sum up, BPM is about using process-centric thinking to align the company’s work (‘business operations’ or ‘management’) to your company’s goals (‘business’). BPMS is the technology enabler for BPM.

I found this to be the only workable answer to the question ‘what is BPM?’

 

{ 1 comment… read it below or add one }

Alex June 1, 2012 at 12:41 am

Excellent Article.

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