What is BPM
The term Business Process Management (or BPM) refers to activities performed by businesses to optimize their business processes.
A Business process is a collection of activities and tasks that produce something of value to the organization or its customers. The term Workflow refers to the movement of tasks or documents through the business process
BPM is a set of tools and services that support human and application interaction with business processes. BPM suites automate manual processes by routing tasks through departments and applications. These routings are rule and action-based, and are defined in a set of formulas. Actions can be automatically triggered, without an underlying rule requiring additional information; therefore, the process can be continuous and manual processes can be avoided.
Organizations use BPM systems to improve the effectiveness of their core operations. BPM specifically coordinates interactions between systems, business processes, and human interaction. It automates the routing of activities and tasks to employees, taking away non-value adding activities, such as routine decisions, data, and form transfer etc., and instead, provides users with tailored lists of task. With today’s tight integration of process definitions and underlying applications, changes in the definition can be deployed and communicated virtually immediately.
Additionally, BPM can also add value to a company requiring procedures to be created and published because it offers compliance management. Companies can use it to meet the US Sarbanes Oxley Act (SOX) and International Standards Organization (ISO) requirements. It can opening up a range of functions such as process (quantitative) analysis, and optimization. Thus, by implementing BPM, companies are able to orchestrate and leverage cross-functional business processes that are used over multiple systems, divisions, people, and partners.
There are five stages in a BPM life cycle:
Design, Modeling, Execution, Monitoring, and Optimization.
Process Design encompasses both the identification of existing processes and the design of “to-be” processes. Areas of focus include representation of the process flow, the actors within it, alerts & notifications, escalations, Standard Operating Procedures, Service Level Agreements, and task hand-over mechanisms.
Modeling takes the theoretical design and introduces combinations of variables (e.g., changes in rent or materials costs, which determine how the process might operate under different circumstances).
One of the ways to automate processes is to develop or purchase an application that executes the required steps of the process; however, in practice, these applications rarely execute all the steps of the process accurately or completely. Another approach is to use a combination of software and human intervention; however this approach is more complex, making the documentation process difficult.
Monitoring encompasses the tracking of individual processes, so that information on their state can be easily seen, and statistics on the performance of one or more processes can be provided. An example of the tracking is being able to determine the state of a customer order (e.g. ordered arrived, awaiting delivery, invoice paid) so that problems in its operation can be identified and corrected.
Process optimization includes retrieving process performance information from modeling or monitoring phase; identifying the potential or actual bottlenecks and the potential opportunities for cost savings or other improvements; and then, applying those enhancements in the design of the process. Overall, this creates greater business value.