Why BPM Matters

Mar 1, 2006

Lionel Carrasco

Ah, BPM. Surely it’s one of the most commonly heard buzzwords, zipping around executive offices and IT departments alike. A relatively recent addition to the technology industry’s world of acronyms, business process management (BPM) is in danger of becoming a catch-all for any IT project that touches a business process.

"So, what is it, anyway," you ask?

Simply put, BPM is a management model that helps companies manage their business processes while optimizing and leveraging IT assets. Those of us in IT have been trying to do this for years, but with new software tools today, we can really begin to develop powerful technology solutions that are flexible and agile enough to handle changing business processes, almost on-the-fly.

You can learn a lot about BPM by finding out what it is NOT:

  • BPM is not enterprise application integration (EAI). Do not fall into the trap of confusing the two, even though some EAI vendors are dabbling in both.
  • BPM is not a workflow tool, or a document management tool, or a portal. These are components of the IT landscape that interact with BPM. In this case, the sum is greater than its individual parts.
  • BPM is not just about technology: It’s really all about management.
  • Why is BPM even necessary given the ERP, workflow and EAI solutions that have been available for years?

    History 101

    You have to go back a few years to answer the question. The early 1990s brought about the promise that IT solution complexity could finally be integrated by unified platforms. The underlying goal was that the best market practices would be available pre-integrated in these platforms and translated into processes.

    One way to get there was to undertake, on some scale, some form of process reengineering and redesign. Legions of companies did just that, building in operational agility and honing competitive differentiators in brand new ways, but it took a lot of work. And the results were not pretty.

    The truth is many IT professionals were, to some extent, hamstrung. Despite understanding the pressing business needs, many were paralyzed by standardized platform products and significant restrictions built-in to monolithic ERP products.

    The results were predictable: Companies invested a lot of money and IT staff resources to build integrated systems, inevitably adjusting the business processes to accommodate the standardized work models supported by the ERP products.

    That’s putting IT ahead of business, when it should be the other way around!

    Business is a game of constant change, and frequent technology infrastructure adjustments are far too costly to support. The end result of this trend in the ‘90s was that many companies instead chose to customize the available ERP products, essentially giving up on standardization and solution evolution in future releases.

    When standardized ERP platforms didn't satisfy their needs, IT managers also worked with a mix of packaged solutions (e.g., ERP, CRM and SCM), along with customized, proprietary products developed internally, matched up with existing legacy systems that could not be replaced. Additional market pressures, from corporate restructuring to an increase in mergers and acquisitions, led companies to look for ways to develop processes in a more integrated and automated manner.

    Unfortunately, all of these internal and external forces resulted in a disconnected, cumbersome and highly complex systems environment. It was at this point in the late ‘90s when it started to become clear that there must be an easier, cost-effective way to implement flexible IT solutions that would accommodate constant business process change.

    The 'A-Ha' Moment

    The market conditions and pressures were right for BPM, which arose precisely from the need to align the company’s internal and external processes as well as the integration of all IT systems and solutions. The goal, of course, was to improve visibility into a company’s overall performance, ensuring operations would be executed uniformly and as effortlessly as possible.

    BPM also arose at a time when IT managers knew they were under significant pressure to extract ever more value from existing systems. Because BPM introduces tools to elaborate, manage and manipulate processes quickly, the IT department reinvented itself from “spenders” to “cost-controllers.” It also gained a level of control and flexibility to help reduce costs, increase revenue, and improve response to service demands from internal and external clients alike.

    The Nutshell

    BPM can be thought of as a framework to develop, deploy, monitor, integrate and optimize the automation of applications for different types of processes that involve people and systems.

    BPM essentially separates process design, simulation, orchestration, execution and monitoring from commoditized IT and business processes, such as transactions and data manipulation.

    BPM solutions come in all kinds of configurations, but the basic toolset is the same:

  • Process modeler and workflow tool
  • Application development tools with a process engine
  • Rules engine
  • Data repository
  • Management and administration resources with a repository for process data
  • Report and analysis tools
  • Process and application integration (EAI)
  • An application server based on open market standards such as JAVA or .NET
  • Many C-level executives think BPM is a panacea for bad business processes or the way to redesign company operations overnight. Those of us managing complex IT systems that tie into these business processes know that BPM can’t fix bad practices with the wave of a magic wand.

    BPM is a journey that starts with baby steps. It demands maturity within the company to handle process evaluation and evolution while keeping up with the demands of the day-to-day.

    However, BPM can bring measurable results and significant impact on organizations, including cost savings, streamlined operations and greater agilty to respond to changing business needs.

    Lionel Carrasco is CTO of Neoris, a global IT consultancy, systems integrator, custom application developer and leader in emergent technologies. Carrasco has more than 20 years experience in IT consulting in the banking, insurance, transportation, retail, manufacturing and oil industries.

    Ton Nogueria, director of Neoris’s Brazil office, also contributed to this article.


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