Benefits of BPM v 1.0
Benefits of BPM v 1.0
Posted on January 28, 2011 by Pieter van Schalkwyk
BPM Benefits v 2.0 will be addressed in a follow up post and revolves around the additional benefits gained from a dynamic BPM approach and the value of getting better at getting work done. For now we will list the benefits from a basic BPM implementation or project.
The traditional benefits of BPM (v 1.0) are primarily focused around:
Reducing Cost
Improving Revenue or Customer Service
Managing Risks and Ensuring Compliance
Creating Competitive Advantage
Enabling Innovation and Process Improvement
The additional (lower level) benefits of electronic forms processesing includes:
Improved throughput (productivity)
Removing unnecessary manual controls and steps (efficiency)
Improve accuracy and repeatability (quality)
Improve visibility, decision trails and process logging (customer service and governance)
Improve monitoring and load planning (operational efficiency and improvements)
More options for re-location, hosted services, outsourcing (organisational flexibility)
BPM can be done without systems but the November 2008 Aberdeen Research Report – BPM and Beyond : The Human Factor of Process Management – reports that Best in Class organisations that have implemented BPM systems achieved a 53% improvement in process consistency, compared to a 13% improvement for the Industry Average and a 13% decline for Laggards.
Roger Tregear at Leonardo Consulting provides an expanded version of these v 1.0 benefits:
Reduce costs, remove waste. Why waste time and resources doing unnecessary things or doing necessary things the hard way?
Avoid opportunity losses. Deeper understanding of processes and their relationships reduces the chance of missed opportunities.
Improve customer service (value delivery). Business processes are the only way any organization can deliver value to its customers.
Increase organisational agility. Change demands understanding. Big change and fast change demand intimate understanding.
Improve risk management. The more you understand a process the better you can predict and protect its weaknesses.
Improve compliance management. Effective ongoing compliance management is an automatic consequence of a managed business process architecture.
Document processes. Simply documenting a process provides new understanding and reference material for training and review.
Process consistency. Documenting how a process work provides a clear guideline for how that same process should be executed everywhere in the organisation.
Protect intellectual capital. The fragile and portable heads of key staff members is not a good place to store an organisation’s intellectual capital.
Support contingency planning. Process-based management focuses the development of contingency processes on the things that will matter in a crisis.
Improve strategy execution. Business processes are the way in which every organisation executes it’s strategy.
Reduce complexity. Unnecessary complexity in any aspect of an organisation is a handicap to optimum performance.
Improve IT outcomes. The purpose of IT systems is to support the execution of business processes. How can that happen without shared process understanding?
Improve effective performance measurement. A process-based management approach allows us to measure the full set of things that really matter.
Support staff to achieve success. If “people are our most important asset”, why do we so often frustrate them with broken processes.
Roger also has an interesting way to describe what BPM is (while we are on the subject):
Organisations exist to deliver value to customers and stakeholders. That’s strategy.
They do this via a series of coordinated activities across a number of functional elements of the organisation. That’s a process.
It makes sense to optimise these processes so that they satisfy the requirements of customers and other stakeholders. That’s process improvement.
Taking a coordinated view of the performance of the processes by which an organisation delivers value, optimises performance. That’s process management.
Process management allows organisations to focus on processes that create the market differentiation described by the strategy. That’s execution.
This is not an exhaustive list or explanation of the benefits but a good conversation starter on how BPM can have significant impact in your organisation.
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