BPM: Important as Ever
A business is run by the virtue of its business processes. Every business strives for excellence – whether that is excellent financial performance, customer experience or operational efficiency. It is inevitable that at some point a business will look to transform their processes to improve performance and achieve this desired excellence. Business Process Transformation done correctly is a capability that can be used as a competitive advantage. This is where Business Process Management (BPM) comes in. BPM is both a discipline and a technology platform that provides the continuous improvement cycle of your processes. You might think, is there something new with BPM? Sure, BPM is considered a mature model but its canvas has significantly widened with newer technologies like Low-code, RPA and AI. Almost every company today is driving some form of digital transformation to deliver a better customer experience than its competition. This rapid pace of technology change coupled with the even bigger need for business transformation are reasons why the BPM cycle is critical in fueling Business Process Transformation.
In order for Business Process Transformation to become a competitive advantage for your company, you need to approach it as a continuous process. Business Process Transformations that are viewed as an event or project often do not deliver the desired results or flat out fail. BPM is a key enabler of Business Process Transformation because the BPM model is a continuous cycle in itself. Instituting the BPM cycle as an on-going capability is critical to achieve success in your Business Process Transformation journey. Implemented correctly, the BPM cycle never stops and neither does your Business Process Transformation. This creates a flywheel of continuous improvements, better efficiency, and ultimately better company performance.
Model, Execute, Monitor, and Improve. These are the 4 phases of the BPM cycle. Let’s explore how these phases of the BPM cycle play a role in process transformation.
BPM Phase 1 – Modeling: Where do You Start?
You cannot transform what you do not know. The first step in transforming a process is to define it. This is called modeling where the process is fully defined. Within BPM, there are cloud based collaborative tools that easily centralize all the process knowledge you need to capture in the model. Process knowledge like the happy path, exceptions, process steps, systems used, decisions, data, documents and roles are built into the model. Spending the proper time getting this right is mission critical for a successful BPM execution, and ultimately transformed processes. Getting the process modeled correctly is analogous to setting the proper foundation for a house. If you do not set the right foundation, your end results will not be what you wanted. Fight the urge to rush into implementation and make sure you have done a thorough job of modeling. All the downstream changes and actions will be based upon this first phase.
Once the process is modeled, simulations are run to set baselines. This activity produces metrics like expected cycle times, or resource loading. This modeling exercise can almost function like a mini-transformation in itself because it provides visibility and opportunities that can usually be addressed almost immediately. Take a loan application process as an example. The simulation has set a baseline capacity for 50 loans/week. The simulation has shown that this baseline is consistently falling short because the loan application is spending too much time in underwriting. Simulations also provide you the ability to run alternate scenarios to improve cycle times. Can I affordably add more resources to solve my problem? Or do I need to look at other alternatives? These baseline metrics and simulations can provide substantial process improvements by themselves without even implementing code. These improvements create a higher probability of success in the process transformation producing the desired outcomes or even exceeding them.
BPM Phase 2 – Execution: Putting in the New Engine
This is the phase of the BPM cycle where technical changes are implemented, and the process is put to execution by a BPM engine. Data is modeled, new UI’s are built and technical integrations are developed with the back-end systems. The process is now executed centrally in a BPM System versus a set of disparate systems and off-line tools like e-mails and spreadsheets. Continuing with our example of the loan application process – it is now executed via a central portal with customer portions extended directly to them. The customer can directly enter their personal information, or even have it scanned from their driver’s license. This increases the speed of information capture, dramatically improves data accuracy, and removes that data entry task from the loan agent.
This phase of the BPM cycle is where the new technologies are readily applied and extend automation to a whole new level. Routine and mundane activities that were performed manually like copy-paste from files, maintaining data in files, or entering data into legacy systems can be accomplished with RPA. Low-code solutions ensure modern applications can be built very quickly giving a superior customer experience. AI also opens up new avenues to understand the customer better through sentiment analysis, behavior, preferences and likes. This is why the BPM cycle is so critical to achieving process transformation. As new technologies become available, the BPM model allows you to identify where and how the new technologies should be applied in a more surgical manner. This ensures the implementation success of the new technologies and mitigates unnecessary proliferation of new technologies just because they are new.
Once the process is executed in the BPM System, the process metrics like cycle times and throughput are improved. Work gets done quicker, more work goes through the process, and overall efficiency increases. Another benefit of implementing the process within a BPM System is that you automatically get an audit trail. This is especially important in highly regulated industries like Financial Services and Life Sciences.
BPM Phase 3 – Monitoring: Your Automated Process Supervisor
Transforming a process using BPM gives you the equivalent of a shop-floor supervisor who can monitor specific instances of the process. This monitoring capability allows you to drill down and investigate what is happening at specific points throughout the process. Especially where things might be going wrong. Issues that used to be buried in e-mails, on-line chats, or conference call discussions are now readily visible often with the corrective action presented for you to implement.
Examples are data errors, notifications not being properly sent, service level agreements not communicated, or data loads failing into back-end systems. Let’s go back to our example where the loan application was stalling in underwriting. Once monitoring is implemented, and the delays are investigated further, it is discovered that the loan applications sent to underwriting are incomplete. Changes can now be made to resolve data gaps improving the cycle time, throughput and quality within the underwriting department. New business rules can be implemented preventing the loan from going to underwriting before all the data is gathered and our example of extending the application process to the customer can be utilized to collect the data faster and more accurately.
Monitoring at the instance level turns reactive processes into proactive processes. This gives you the ability to address and mitigate issues internally well before they reach the customer.
BPM Phase 4 – Improvement: Continuing the Cycle
Executing processes on a BPM platform gives you a foundation to drive significant improvement. You can aggregate process data over a period of time to produce trends via heat map analytics. For example, with the loan application process it is observed that 70% of the effort is tied up in underwriting and approval over a 6 month period. This analysis would cover several thousand loan applications. This analysis that covers that many transactions over that amount of time provides hard evidence to address the problem. It cannot be swept away as a statistical anomaly or a one-off occurrence. Once that trend is observed, you can then quickly identify root cause, run scenarios, and implement the most cost-effective improvements further fueling the process transformation.
This added benefit of the process already being modeled with the ability to run scenarios via simulations creates a viable “case for action.” With the right facts, the recommendations get implemented faster and you realize the benefits more quickly. While most of the lift for business process transformation is realized in the first cycle, you are now setup to drive continuous improvement on these processes – especially as customer requirements and technologies change. You also now have an established BPM discipline in your enterprise so new processes can be transformed throughout your organization. Business Process Transformation is now a capability to drive continuous improvement.
Summary: BPM Forever
We mentioned at the start that BPM is a mature model. While that may be true, it plays a vital role in driving Business Process Transformation as described throughout the 4 phases of the BPM cycle. Pressures of increased efficiency, cost improvements and better business metrics will always be facing your organization. BPM is critical to applying newer technologies correctly in digital transformations. RPA and other automation technologies make processes more sustainable if implemented in the right manner. This positions your company to successfully manage the workforce of the future – a combination of digital and human workers.
Lastly, every company is becoming a data company. Transforming processes using BPM helps improve your overall data. The transformed process is improved and this will automatically lead to better data. Having better data flowing through your organization allows you to turn that data into information. This information can be used to facilitate decisions across marketing, new product development, or other internal improvements.
A better customer experience matters. In today’s world, choices are almost infinite and instantaneous. Extending processes in a convenient and simple manner to the customer can make a difference in the customer choosing to get their loan from you or your competitor. That’s why BPM will always be integral in driving continuous process transformation.
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