In the late 1980s, Michael Hammer and James Champy published a bestselling book, Reengineering the Corporation, promoting the idea that radical redesign and reorganization of an enterprise was necessary to lower costs and increase quality so American businesses could become more competitive. The book also promoted the idea that IT was the key enabler for such radical change. For many organizations, then and now, this “wipe the slate clean” approach to business process re-engineering (BPR) is simply too difficult, too radical and too comprehensive. The impact on employees, on facilities, on existing investments in systems, and even on the organizational culture is too significant. Few CEOs have the fortitude to drive such comprehensive transformation.
Against this background, it is no surprise that many are reluctant to adopt today’s “BPM” focus. Like BPR, discussions of BPM often emphasize process thinking as a way to lower costs, increase the quality of services and products, and improve personnel productivity. Many BPM promoters also stress technology (again) as an enabler of business transformation.
Although BPM today clearly draws on earlier process-oriented management theories, there are significant differences.
Iteration Not Perfection
Business process reengineering theory suggested that businesses could become more competitive through radical efforts to redesign key operational processes. Through observation of workers, time and motion analysis by task, documentation of work volumes and statistical measurement of outcomes, BPR practitioners attempted to design the perfect process.
Wherever possible, human efforts were often replaced with automation. In contrast, BPM advocates using an iterative methodology for making incremental process improvements. In today’s globally connected economy, operational conditions change faster – evidenced by accelerated cycle times in nearly every industry – than in the 1980s and 1990s with competitors only a ‘click’ away. An iterative and incremental approach to process change enables more frequent adjustments and recognizes that business conditions change faster in globally connected markets.
In BPM thinking, change is recognized to be the constant; making a change that delivers incremental improvements for most of the cases is better than striving towards a “perfect process.” BPM’s less radical, more tolerant approach for mid-course corrections provides time for the organization to assimilate process improvements and learn new management disciplines. Although some earlier process-oriented thinking, such as Six Sigma, also stressed continuous improvement, BPM recognizes that improvements are only temporal and that today’s business climate creates more pressure to reduce the cycle time between changes.Rather than continuous improvement, it is better to deploy a less-than-perfect approach as long as it can be adjusted quickly.
People are Key to Process Innovation
Process orientation starts with understanding the workflow and quickly identifies manual steps that are highly repetitive, in large volume or very sequential in nature. Activities with these characteristics are ripe for automation. With the economic recession after the hyper inflation of the 1970s, the central feature of business process re-engineering theory was advocating the use of technology to replace such manual efforts. The result, it was argued, would be increased efficiencies, lower costs and increased quality.
Consequently, automation of these kinds of activities led to the term “BPR” being interpreted as a cover-up for major downsizing and reduction in staffing. Like BPR, BPM starts with process modeling to understand workflows and identify manual and systems automated tasks. However, the objective of process analysis today is not simply to eliminate manual efforts. After all, the obvious places have already been automated. Rather, the objective is to understand the interactions and dependencies among the people, the systems they rely on, and the information they require to do their tasks best. BPM early adopters, especially in industries where products and services are increasingly commoditized – such as retail banking and insurance – and where market dynamics have allowed companies to infiltrate customer bases and introduce highly-similar products, use process modeling to help them identify where manual efforts significantly contribute to the quality of the consumer experience. Personalization of these interactions can be a source of differentiation.
The Role of People
BPM treats people as equally important contributors to successful work process as systems and business documents. BPM advocates better coordination of the manual steps and human interactions, along with automated steps and information flows, in order to optimize work outcomes. BPM disciplines guide managers to identify which work tasks are best accomplished by people, rather than machines, and to identify the benefits of better coordination of human and systems.
Modern BPM-enabling technology, which Gartner calls business process management suites (BPMS), empowers workers to find ways of improving the process and sharing their innovations easily. No matter how much automation is deployed, there are always exceptions that workers will need to address in creative ways. Of course, some of these “workarounds” are inefficient. But, on the other hand, some of them can be highly innovative.
Process Visibility Leads to Innovation
Emerging BPMSs make these variations visible quickly using executable process models. Once they are discovered, their value can be assessed using inline simulation tools. These emerging best practices can quickly be disseminated to others and applied to work in progress. In contrast to BPR, BPM is about reinserting human interactions into work processes, empowering workers to share best practices in real time – not about reducing reliance on people. In BPR days, with the elimination of many manual work tasks, “process” became largely embedded in applications. When the process is embedded in applications, it makes it very difficult for participants to see and understand how their efforts impact others. Furthermore, process is difficult to change due to the need for specialized programming skills. Thus, process improvements, or adjustments, became constrained by IT’s application development cycle time. Modern BPMS technology abstracts the process from its implementation. The process model depicts all of the work steps and resources performing them, and should also reflect information flows and business rules. This model is interpreted (a.k.a. read) by a runtime engine and becomes executable. In this way, the process remains visible to non-technical employees and managers. Managers can easily change the model, often re-routing work, overriding exceptions, and leveraging IT-created parameters even to adjust system behavior. Changes are immediately reflected in the execution. Business managers can manage processes holistically, with IT deciding how to implement specific tasks. Thus, IT is no longer solely responsible for changing processes.
Conclusion
As technology advances and business leaders become comfortable with BPM approaches, operational processes will become more agile, positioning companies to better meet today’s cycle time pressures.
