What Is Business Process Improvement

A successful business must change with the times. Customer bases can change throughout the years, technology changes and social trends change. Businesses that want to withstand these tests will want to improve upon their company as needed. Keeping this in mind, it's imperative to know when is the time for change, and what the best method for change is. Taking the proper steps can be the difference between success and failure.

Business Process Improvement (BPI) is a method in which many companies improve upon their business when improvement is needed. Business Process Improvement is a systematic method of helping organizations to achieve more efficient results within the business model. The method was first documented by H. James Harrington in the book "Business Process Improvement" in 1991. BPI reduces the cost to run a business and the cycle time by as much as 90% and improves overall quality of the business by over 60%. The method works for any type of business, be it a for profit organization, non-profit organization or some other type of business. It was the first methodology that address the service and support process of the business and was developed at IBM at the request of the president, John F. Akers.

BPI works by deciding what the organization's goals and purposes are. This basically means that the company decides who they are, what it is they do and why they want to do it. They must also determine whom their customer base is and how that customer base might change over time. After gathering the information, the company makes a strategic plan to meet its business goals. The methodology is used to implement radical change rather than gradual changes over time and employs many principles of project management.

When using this method, it is important to define what the company's existing structure is, its current processes and what changes are imperative. Clear timelines with well-defined goals must be kept in order for the method to work. It is also important that the company's resources not be spread too thinly in order for Business Process Improvement to work.

If a company is on the verge of bankruptcy or otherwise not doing as well as it needs to be, Business Process Improvement is a quicker method to get things back on track as long as the right team is put together to be sure that tasks are done as they should be.

Business Process Management

Every business house tries hard to save its unnecessary expenditures. Since its inception, it tries to work on a cost effective model by converting its saved pennies into profits. In these days of cut throat competition, it is vital to engineer ways to save money because every penny saved is every penny earned. Business Process Management (BPM) aims at providing plans which gives the best possible utilization of resources. It is a part of operations management which focuses on improvement of a company's performance by putting its resources on optimum utilization. BPM optimizes and manages the business processes and practices adopted by an entity.

Objectives

Every business process adopted by an entity is its asset as it works to generate revenue and ultimately profits. Every business wants to thrive and grow manifold but it is its policies and processes adopted by it, that hinders its growth. Business Process Management aims at removing those hindrances and opening doors to success. The primary objective of BPM is to analyze the business and working environment of entity and then planning out the best processes which can bear fruitful results. BPM closely resembles supply chain management but is a broader concept. It is also quite similar to Total Quality Management and Enterprise Resource Planning, all being part of operations management.

Implementation

The Business Process Model comprises of certain steps which are to be taken in succession to get results. The process includes steps, namely,

- Design: This is the foremost step which requires understanding and analyzing the entity's business and requirements.

- Modeling: It is the second step, which gives a model to the designing done in the previous step. It gives a shape to the analysis done in Step 1.

- Execution: This is an important step which requires implementation of the model prepared based on analysis of entity's requirements.

- Monitoring: This requires constant supervision of the implemented model. It enables a person to objectively and practically find out shortcomings in the model.

- Optimization: This step works on the findings in the 4th step. This step makes changes in the BPM system according to the shortcomings found.

Monitoring and optimization is a regular process which works on trial and error method. Every time a problem is incurred, a solution is to be found to fix it. It is an ongoing process.

To implement BPM the management and employees of an entity have to be open minded. They need to welcome aboard changes that might help them generate more profits. BPM is an effective method if utilized adequately.

Why is Business Process Automation Essential in Today Business Environment

In the business world, it is tautological to assert that good innovation, whether tangible or conceptual, one that reduces operational costs, increases productivity and improves transparency will receive widespread adoption and popularity. One such innovation is the concept of Business Process Management (BPM) which outlines a process-oriented approach to a business model that allows one to examine each distinct process and propose improvements within the model in a modular fashion.

Any good business model will invariably incorporate some concepts inherent to BPM. A creative management will concretely implement ideas outlined within the BPM framework in terms of offering flexibility and allowing for potential growth for the business. However, such attempts at streamlining the business model do not realize the full potential offered by BPM. Instead, by utilizing the guidelines provided by BPM to create a roadmap towards automating critical business processes, the creative mind is free to think of the big picture rather than get bogged down by detail. This important concept of Business Process Automation (BPA), or workflow management, allows for monitoring the performance of various business processes, identifying troubled tasks that require resource reallocation and specifying benchmarks for future performance.

In order to fully achieve BPA, all processes within the business model must be identified and described in detail. This description of the workflow within a process consists of three components: individual tasks to be performed and their execution order, flow of data and resource dependence. By encapsulating data as well as tasks to be performed using that data and available resources, one achieves modularity in a way that is inherently consistent and fault-tolerant. Furthermore, information about resources is available throughout the process, thus avoiding unnecessary verification each time a resource is required. By implementing these concepts, each business process achieves flexibility in terms of handling changes in resource availability and task specifications in a timely manner. Testing for changes before actual deployment by performing analysis and simulation can decide whether correctness criteria are met and desirable outcome is obtained. Problems within a process are detected early and effectively through monitoring, which will provide a natural way to cause escalation of tasks that demand attention. Post-processing of event logs, or process mining, can be used to suggest improvements. These steps that manage workflow--creation from anew or by repurposing an existing model, analytic and/or simulated testing, deployment, monitoring, process mining, improving--describe a BPM life-cycle for a process.

Depending on the complexity required and the underlying architecture, actual implementation or creation of a business process can be as simple as choosing an existing model or as involved as creating an information system and describing its details from scratch. This is followed by process enactment, where the process is executed, and process monitoring, where various performance indicators are monitored as well as logged for later use. Afterward, a business process may enter the diagnostic phase which draws upon information gathered from the monitoring phase to suggest improvements. The results from this phase may form a basis for suggesting adaptation to the process, thereby creating a new model ready for testing, and the cycle repeats. Allowing this life-cycle of a process to be automated lets a business adapt readily to changing circumstances.

Different methods have been prescribed for capturing business processes. Opinions vary on the applicability of these methods based on the need to ultimately analyze and automate processes. This lack of consensus may be attributable to several reasons such as inherent complexity and non-adherence to standards. It is possible that tasks within a process may have unusually complicated temporal or resource dependencies, pushing against the limit of ideas describable by process modeling languages. It is also possible that lack of common business standards for describing processes results in poor BPA implementations.

In the field of BPA, when describing business processes, one may notice similar sets of tasks, data flow and resource dependencies across various processes. This is a workflow pattern and it can be abstracted out of actual implementations and carefully analyzed on its own. This pattern may subsequently be used during process modeling for a variety of processes, thus making the pattern reusable.

Business Process Management Basics

In an article entitled "Will GPS Make Us Dumb?" that expounded on advances in GPS technology, ABC News quoted Ian White, founder and CEO of Urban Mapping this way:

"When we develop a crutch for technology, we lose the ability to do that which we did previously."

As the organizational approach to business process management (BPM) develops over time, there have been many discussions around which technology or software suite will make optimization of existing processes easier to manage. There are many schools of thought around which BPM system will best assist in creating the "perfect process". Tibco, Lombardi, Savvion, Skelta, Cordys... the list goes on. But, you can't help but wonder if the fundamentals of the BPM discipline are being overshadowed by our own obsession with technology.

There is some validity to the idea that, as we rely more on technological innovation, we lose a bit of our edge in practicing the tasks necessary to be successful should (god forbid) this technology ever disappear from our organization's arsenal. Put more succinctly: Is technology itself making us dumb? The truth of it all is that BPM is more about business process and behavior than tools. It's a good thing too, since many organizations at this time have limited resources needed to invest in software, support, licensing, and maintenance.

While the IT PPM article in the March 8, 2010 issue of InformationWeek is mostly about using project portfolio management, there is good advice that can be applied to getting back to the fundamentals of business process management (BPM). Here are some excerpts with my interpretation:

First thing's first: "Decide on what problem you're solving and how to know when you've solved it."

Business process management (BPM) itself can be complicated, simply because you're changing the way people work. As with any problem, identifying the end goal (e.g., reduced time spent on a task, less resources required to complete a task, etc.) helps to quantify how close you are to it.

Next, don't be overly concerned with automated integration too early in your assessment.

It's very easy to weigh system integration as a "pro" more heavily than other benefits of the overall offering. Understanding your business needs well help avoid being distracted by bells and whistles that are not must-haves.

Remember to "manage the change".

Organizational change management is key to a BPM implementation. Forgetting to educate staff and support teams can quickly undermine even the best solutions. Quantifying your success with periodic measures of progress will be sure to convince skeptics who may not have been on board from the start. Also, don't be afraid to ask skeptics and proponents alike for feedback. Constructive criticism will help in making the deployed solution better for most, if not all, users involved.

Remembering to stick to the fundamentals of why we look to business process management (BPM) in the first place will keep things in perspective and help keep us on track for a successful implementation.

Benefits of Business Process Automation

Modern businesses have been actively using computers to manage their business systems. This has resulted in increased business process automation, faster communication, better planning and management, better infrastructure, effective database management, low-carbon footprints, and efficient time management. Businesses usually have a process cycle that involves generation or leads, qualifying and converting them to customers, generation of demands, campaign analysis, etc.

Automation of these services involves using certain business software to make the system work efficiently, thus reducing the cost, manual work and delays. Here, we will know about some of the benefits of business process automation such as cost reduction, lead generation, lead prioritization, email automation, timely response, and customization.

Cost reduction

Once the installation of the business process automation system is done, a series of advantages follow effortlessly. The system helps to improve the communication between various departments of a company. It makes the sales and the marketing teams to interact with each other to deal with the problems of lead generation, qualification, and nurture. It also eliminates conflicts between the departments over the delay in or improper communication. Apart from these benefits it triggers a quick return on investment which reduces the burden of installation costs.

Lead generation

The business process automation system helps the sales and marketing teams in sorting out the good leads which can be taken forward for qualifying and scoring. As the sales and the marketing teams will be accessing the same information, the lead generation becomes a smooth process.

Prioritizing of the leads

The automation system analyzes the information and ranks the leads based on their interest and buying capacity. This makes it easy for the businessmen to prioritize their leads so that they can be taken forwarded to complete a deal. This reduces the complexities and anxieties regarding the qualification of the leads, thus helping the business better allocate their resources.

Email automation

The business process automation software can be used to send automated emails to the clients, which can be used to provide them the information about the company's products and the services. This feature can also be used to figure out the potential client for a particular product and sort out the client lists based on their requirements to suggest them the more appropriate product or the service.

Timely response and customizations

Another advantage of the business process automation is - based on the general requirements templates can be prepared to address particular email campaigns. Triggers can be used to send certain mails to the clients automatically, which eliminates delays and misses. Clients will be satisfied by the timely responses. Another important feature of these automation programs is that they can be customized, and the adding of images and videos can make the software explain the business in much a better way.

The Growth Of Offshore Business Process Outsourcing

In the fast-moving world of Information technology, Business Process Outsourcing, or BPO as it is known, has rapidly taken hold of the industry. It is heralded as the perfect answer to minimising costs, but is it all it's cracked up to be? Sometimes contractors make costly mistakes, as you will gather below.

Services are contracted remotely, with practically no overheads in terms of employee insurance and benefits, let alone running costs of an office. The tasks most appropriate to outsourcing tend to be back office, such as billing and purchasing. Front office tasks would be customer care, marketing and technical support, which many companies prefer to take care of themselves.

The contracted personnel are often located in a different country from the contractor. This is known as offshore outsourcing, and can lead to time-difference problems and delays in communications, particularly between countries where the Internet infrastructure is not very reliable.

The most popular countries for offshore outsourcing are India (commanding a whopping 63% of the market), Eastern Europe, The Philippines and South Africa, with China a more recent runner in the race to supply the occident with low-cost labour. These countries are a natural choice, because of the strong presence of the English language and the extremely low wage costs, which are often about a tenth of what a worker from the same country as the contractor would charge. India, however, seems to be slowly loosening its stranglehold on the industry, having dropped seven percentile points since last year, although BPO there in general is expected to continue to grow. Transferring risks to the outsourced vendor is an attractive prospect, but the range services which can be thus provided is limited. Processes such as human resources, finance and administration are just too complex to be offered on this basis. The BPO market is expected to grow to $146 billion in 2008, although in a fragmented market of single bulk transactions, shared services and vertical processes and applications.

So what is the experience of this kind of contracting? Many companies experimenting with BPO report inflexibility of contracts, management problems and erratic performance. Certain tasks which are expensive to administrate at home are only tentatively being offered to outsourcers, because of doubts about the ability to cope with complex tasks and problems of control of the quality of the processes remotely.

The most likely candidates for offshore outsourcing are repetitive, transaction-intensive processes, although many businesses are unwilling to give up control of the processes because of strategic or security risks. Viable options here would be offshore insourcing or shared service centers. The fastest growing sector of the BPO market is set to be simple bulk transactions, predicted to expand to $58 billion in 2008. This segment includes the simplest tasks for vendors to master, such as credit card or stock trade processing.

Broad shared services will, at $57 billion, be the second most popular sector by 2008, meaning finance, administration and human resources. A smaller segment will be high-volume vertical processes, with a predicted volume of $6 billion by 2008. You can go to http://www.business-process-outsourcing-guide.com to find more information on business process outsourcing.

The smallest, currently at about $5 billion, will be niche vertical applications, although this segment is expected to take a massive upturn once customers become comfortable with outsourcing in these areas, to achieve $24 billion in 2008. These applications include complex processes such as data reporting on the environment and the monitoring of chemical process, matters which require a very high level of specialization.

Improving a Business Process

If you are new to business process work, you may be eager to focus immediately on how you can improve a process, but resist jumping in too quickly to see what you can fix. You first want to know the baseline, so you can see whether your improvements work. To establish your baseline, start by identifying the boundaries so that you understand the start and end of the process, drawing the map so that you have identified the activities involved, estimating how long the process takes and how much it costs, and validating that the information you have collected is correct before moving to the improvement step.

Improving a business process is similar to losing weight. You know that you have to change your daily routine. You may change your eating habits and eliminate dessert, add an exercise like jogging, or partner with a friend for motivation. The same kind of evaluation has to occur to improve a business process.

There are many techniques that you can use, to look for improvement opportunities including:

• eliminating bureaucracy (even though it is easier said than done, it is possible)
• evaluating value-added activities (what the customer or client really cares about)
• eliminating duplication and redundancy (why do things twice)
• simplifying everything (or KISS - keep it simple )
• reducing cycle time (a key concern of customers or clients)
• looking at how you can automate the process

Of course, you can use any technique that you find useful, but I have found these six methods consistently helpful. I like to apply each of the techniques one at a time and in a certain order because doing so helps to make sure that you wring every last drop of improvement out of each one. So, spend time challenging bureaucracy; determine which activities add value to your customers/clients; look for opportunities to reduce the number of employees doing the same thing, simplifying forms, or streamlining a step in the process; and set a cycle time reduction target.

One question you have to deal with in process improvement is around technology:

Does the technology drive the process?

Or....

Does the process drive the technology?

If you have been involved in a large system implementation, then you have probably seen the technology drive the process. I feel that you should only automate an efficient, not an inefficient process, so I prefer the latter.

Bill Gates is credited with saying, "The first principle for any technology you contemplate introducing into a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will just entrench the inefficiency."