Business Process – Linking Business and IT

Janelle Hill of Gartner kicked off day 2. Business Process Management is the current approach to being process-centric and part of a long history stretching back to Taylor/Deming, Business Process Reengineering and more. In particular it is an evolution from computerized process flow, to packaged applications as best practices and now flexible and adaptive processes. More dynamic composition of an end-user facing solution based on more flexible and adaptive processes is now the key.

Business process management, as an approach, is seen as an area that will have an impact on competitiveness both directly in that people say it matters and indirectly in that things like transparency and traceability are also important.

Similarly, software has always supported business change but it is now focused on supporting processes more holistically – applying SOA, BPM, BI and more to people, processes and information is driving better organizational efficiency. In particular this has enabled much better process management across business boundaries – managing the ecosystem – and to empowering people. Increased effectiveness of knowledge workers has become really key in BPM (personally I think this means both supporting them AND automating some of the decisions they are currently responsible for so that they can focus on higher-value add activities).   Regulatory compliance is a growing problem as there are more and more organizations who can impose regulations on you and do so on their own schedules. This drives to a focus on agile processes.

Gartner sees tremendous benefits for organizations that can externalize and manage their processes. There are three waves of benefits, typically gained sequentially.

• Efficiency and productivity gains – lower costs, faster throughput, lower staffing levels
• Effectiveness gains – market responsiveness, context understanding, better resource utilization, more accurate forecasts. Value typically exceeds value of efficiency gains after 10 years, perhaps.
• Innovation – new business opportunities, faster time to market, cost/problem avoidance. Could become more valuable than effectiveness after another 5 years or so.

Business Process Management is really reliant on technology today – it allows the movement of process from implicit in software/people to explicit in a model, decoupling it. The software also allows business professionals to make changes to the process and give them feedback about current state in terms of an understood and explicit model. Finally it allows better service level agreements and KPIs.

She identified three paths to explicit process:

1. BPM Suites
   These are being improved with a heritage of best-of-breed components like business process analysis, content management, BAM, business rules and pure-play BPM. This creates a constantly changing and evolving list of vendors as folks build on specific capabilities.
2. Process-driven middleware
3. Applications composed by orchestrated services
   Application vendors are starting to realize that this is more than just adding a process view. They are starting to break up their applications into services so that they can be more easily composited.

However, the BPM journey involves a lot more than software. It requires business empowerment, a more disciplined culture for processes, changing culture and job descriptions/performance metrics etc. Companies who become process-driven have to:

• Change roles and responsibilities
• Give leaders end-to-end visibility
• Make handoffs more explicit
• Business rules (decisions) and process step ordering are changed by business owners
• Cost accounting is linked to process steps
• Risk analysis uses simulations based on current operational conditions not gut instinct

You can take a top-down approach with CEO-level vision and senior managers assigned to top level processes. You can also take a bottom-up approach focused on a single problem area. It is fundamentally about change management in either case. Process people – business and IT both – are going to be key so organizations need to legitimize and value cross-over skills.

Critical management actions include:

• Robust governance framework before processes start crossing and breaking down functional boundaries
• Assign analysts to each process end-to-end
• Create a competency center and get it an experienced leader
• Focus on creating a real-time management culture – a real operational one

IT, on the other hand, can only be an enabler of BPM. It can prepare the groundwork (SOA and pilot BPM projects) and look for opportunities like performance management, application upgrades, compliance etc to focus on business processes.

Janelle wrapped up with some value statements – cost and efficiency savings are real but just a start. Reducing cycle times, process improvement, better risk management and agility are where the payoff comes in the long run. BPM, she says, can transform your business and its value grows over time.

I have blogged about Janelle a couple of times before.