Transforming the future with BPM

Business process management optimisation initiatives are becoming faster and increasingly digital (and robotic).

The way organisations approach business process management (BPM) is changing. Dr Wissam Raffoul, an advisor at analyst firm IBRS, told Technology Decisions that those looking at BPM approach it “with a different perspective nowadays”, adding that how it was done in the past “did not work properly”.

Firstly, he said that in contrast with the initiatives of yore, BPM is now “all about integrating the IT and the business processes”. Previously, it was mainly the IT department that focused on BPM, with IT considered separate from the business itself. But “that’s no longer acceptable nowadays”, Raffoul said. And it’s not sufficient for IT and business to be merely aligned - “they need to be more integrated”.

Secondly, BPM programs are required to be much swifter than they used to be. “In the old days, a BPM used to take probably two to three years to implement properly, which was not satisfactory at all. Now, within six months you need to be able to release a new BPM to production,” Raffoul said.

This need for speed requires organisations to change the way they undertake BPM. Organisations going through such a transformation need to focus on the state of the business in the future - not the state of the business now. “In the old days, the BPM used to focus a lot on fixing or automating the current status - the ‘as-is’ status. It used to take a lot of time to understand the existing business processes before they start designing the desired state. And by the time they get to that level, maybe the business has changed again, so they never catch up,” Raffoul said.

To achieve the speed required from a modern BPM, organisations “need a more rapid process design, which means you do not have to automate or do a detailed analysis of the as-is state,” Raffoul said.

“You need to understand what’s going to change in the business, the business transformation itself. Some practitioners call it the ‘delta approach’ - it means focus on what needs to be changed. Do you need to change the marketing process, customer service - what do we need to change to make that impact on the market over the next six months, or sometimes over the next quarter only?”

By taking such an approach, “this rapid process design then will allow organisation to start leveraging the BPM and associated tools”, Raffoul said.

The cloud

According to Raffoul, organisations that have decided to make changes to their business processes should look to the cloud, particularly software as a service (SaaS). “You do not have to rely on yourself to go out and buy the package nowadays, or build software from scratch. The cloud helps you a lot,” he said.

He noted that some organisations are reluctant to move aspects of their operations to the cloud. They look at the way they’ve done things traditionally and decide that SaaS doesn’t meet their requirements.

But, Raffoul warned, these organisations may be focusing too much on incorporating legacy into their BPM. If you find yourself avoiding SaaS, he recommends you consider how much legacy you want to retain.

“Does it help the business transformation or not? If not, I need to drop it,” he said. Organisations with a cloud-aversion should “try any way to change to fit within the software as a service” rather than “make the software as a service fit within your own structure - because it’ll never happen like that”.

Organisations “need to have the courage to drop the legacy and do the business transformation properly”. Nowadays, SaaS can support most of the soft business processes that come before product manufacture, like ordering, accounting, billing and customer service, Raffoul said.

Business intelligence

To make the most of a BPM initiative, organisations should make sure they link their transformation process with their business intelligence or analytics programs, Raffoul advised. There’s “no point in doing the business process engineering if you’re not going to integrate the information”.

“What’s the value of a process which is highly efficient that doesn’t get the right information at time, and doesn’t produce the right information on time?” he asked. “So that’s where somehow you need to link it with the business intelligence activities - the analytics.”

If the facilities being implemented are not linked to the business processes, the stakeholders within the company won’t use it, Raffoul said. “They don’t know how to use it, they don’t know when to use it. The BPM should tell them where to get the information, when, why, and all that stuff, so the integration with collaboration, with business intelligence, is a critical success factor,” he explained.

The end point

So what lies at the end of this reformed approach to BPM? According to Raffoul, organisations that go through such a transformation can have the capacity to, for example, provide advanced self-service facilities to the consumer. “So you go can straight away and you place an order from your mobile device, you can track the progress of the order, you can pay. And if, when the product arrives, you don’t like it, you can return it. And all these processes are laid down and automated.”

Raffoul talks of ‘digital companies’. Amazon and Netflix provide examples of digital companies, which were “created to be digital from the beginning”. These companies integrated their business and IT processes - automating their administration and other business functions - from the start.

Not every organisation can be made “fully digital”, Raffoul said. But companies looking to transform “can use the digital companies, who were created as digital, as the benchmark for them to go and see how far they can go. That’s what’s important.”

Like Raffoul, analyst firm Gartner sees the digital organisation as the end point of a business transformation. According to a BPM report from the firm, penned by analyst Bruce Robertson, a trend is emerging that sees organisations “creating new business designs by blurring the physical and digital worlds”.

Specifically, the firm uses the term ‘digital business’, which the report said refers to “the digitalisation of business operations and customer interactions, and the evolution of many companies to support digital business models”.

According to the firm, while digital business is something new, it relies on the meeting of a multitude of trends, many of which have been around for some time. These trends include what the firm calls the ‘Nexus of Forces’ - social media, mobile technologies, big data and the cloud - as well as the Internet of Things, digitisation of business processes and information, and smart machines.

Digital business is no small concept for the firm, which said, “Digital business promises to usher in an unprecedented convergence of people, business and things that disrupts existing business models - even those born of the internet and e-business eras.”

Some readers might greet these assertions with scepticism, saying that it sounds a lot like what they’ve been doing already for the last few years. To many, the firm’s vision of digital business will sound much like e-commerce.

Gartner, however, said that its digital business is quite distinct from e-business and digital marketing. For one, the firm argued, digital business features integration with ‘things’ like sensors, beacons, wearable devices, smart machines, media platforms and RFID technologies. Digital business, the report said, will also introduce “non-human customers/consumers of information and events”.

“Smart machines hold the potential to replace human-cognitive work and harness the insights from the IoT [Internet of Things],” it said.

Gartner reckons that digital business is already changing industries, business models and business processes. It says that the use of robots in manufacturing is being extended today, with the IoT allowing devices to interact with people and systems.

“Heavy asset manufacturers, for example, are leveraging sensor data from their machines to offer new services to better manage maintenance, lower costs and maximise uptime,” the firm said.

Gartner sees digital business as far-reaching, saying that whatever industry you’re in, digital business will impact both business and IT investments.

Indeed, the firm said that digital business will be the “single most important source of innovation” for most businesses, claiming that by 2020, more than 7 billion people and businesses - and at least 30 billion devices - will be connected to the internet. “Businesses will introduce new products and services, even new business models, which are built around people, business and things that are connected together by the internet. These things will create a level of value that will ensure their ability to compete for years into the future.”

On top of these lofty predictions, the firm has pretty heavy prognostications for those organisations that fail to capitalise on digital business; by 2017, one quarter of businesses will lose market position thanks to “digital business incompetence”, while 20% of industry leaders will have lost their market dominance to a company founded after 2000, the firm said.

Big change

Like IBRS’s Raffoul, Gartner sees a change not just in the results of business transformation, but also in the way organisations approach the transformation process itself.

Gartner calls this ‘big change’, and defines it specifically as the “shifts in mindset, behaviours, methodologies and technologies that organisations must employ to make significant alterations to their business operations when pronounced levels of novelty, volatility, disruption and complex scope are present”.

There are a few forces driving the need for such a change to how organisations approach transformation, but the dominant catalyst for big change, the firm said, is its specific concept of the digital business.

The firm acknowledged that the need for big change is, itself, not all that new. “What is different now is that digital business, mobility, the Internet of Things, smart machines, 3D printing and a host of other forces are simultaneously driving unprecedented levels of these four factors” - the aforementioned novelty, volatility, disruption and scope - “in business transformation initiatives”.

So that’s what’s meant to be behind this change in business transformation. But what exactly is different about it? According to Gartner, it’s a move from one-time big transformation programs to constant change - “change as the new normal”.

“But it’s not just old-style continuous process improvement either - tweaking current work here and there to wring out efficiency gains. Now processes must also innovate, going beyond existing business operations to enable new and differentiating business products and services. Process improvement must integrate into an overall approach to big change,” the firm said.

There are parallels here with Raffoul’s idea that BPM initiatives need to be implemented not over the space of a few years, but in the space of several months. In both models, there’s an emphasis on urgency of transformation.

To paint a more complete picture of what such a big change business transformation would look like, the firm returned to the four factors it said are driving big change: disruption, volatility, novelty and scope.

“Big change means more disruptive change - a significant departure from current business operations, employee work styles and even personal habits. It means more volatile change - when challenges and change efforts evolve quickly, in unpredictable and even uncontrollable ways.

“It means more novelty - change that is new to the organisation, or even to the industry or market as a whole. Finally, big change means a more complex scope - involving a large and diverse array of people, things, processes, technologies, systems, cultures, regulations or other factors.”

At this stage, few organisations have fully embraced big change, according to Gartner. “Most organisations tend to focus on lower-risk approaches to business operations by ‘getting better at what we do now’, in the hope that improvements to efficiency and scale will still convey competitive advantage,” the firm observed.

“While efficiency and scale are still important, they are only applicable in stable situations where there is an experience curve to go down. Digital business demolishes the economics of the experience curve. While a number of organisations have built or are building a capability for big change, use of big change is still in early stages by most end-user organisations.”

Image courtesy of Simon & His Camera under CC