A Look at the Stages of Business Process Management
In the era of digital transformation, organizations collect large quantities of data each day. This valuable information paints a story about the supply chain and the performance of internal business processes. It's critical to tweak and improve business activities to maintain a competitive edge as external conditions change. Both small and large-size organizations employ business process management to make sure each current process aligns with new company goals.
Business process management helps executives define, measure, monitor, and evaluate each internal activity to ensure they operate at optimal performance. While many assume process management refers to BPM software and automation, it's about much more than that. BPM is a holistic discipline that businesses use to revamp and optimize all areas of operations. 6 elements constitute the entire process. These include
- Alignment - Business activities must align with organization-wide goals and requirements. If there is not a link between BPM and objectives, the BPM system is a waste of time and resources.
- Governance - Executives need to communicate a BPM strategy to all employees and involved participants. This will ensure that everyone knows their responsibilities and requirements. The owner should guide business decisions that involve BPM, along with any employee incentives.
- Methodologies - The organization should manage all BPM solution methods and techniques that help to optimize task management. For example, many companies employ the Six Sigma method in conjunction with BPM to optimize business processes.
- Information Systems - The success of any BPM strategy relies on how functional the internal IT solutions are. An organization should ensure all information systems and databases can integrate and work with process automation software.
- People - All people involved with process management software need to know how to operate the software and leverage it to align with company goals. The organization should train all employees on the software and explain exactly why it is used.
- Culture - Any business that invests in a management system needs to align its values and culture with BPM initiatives. Technology cannot function without a company culture that embraces it.
If a company prioritizes and strengthens each of these components, it is equipped to implement a process improvement strategy. But how does a business process model work? 6 separate phases constitute the BPM life cycle. These include
1. Plan and Strategy for Process Improvement
Unfortunately, too many companies invest in an expensive BPM tool without a business strategy. Every company should know why it needs process design and how they want it to work. To ensure success, the organization should focus on the elimination of inefficient internal activities. More importantly, any business process management system and strategy must align with customer needs. There are two steps within the planning stage. These include
- List Company Strategies and Goals - All goals and strategies will guide the direction of a BPM strategy as they must align with one another.
- Define and List Each Existing Processes - Leaders should drill down into current processes and list all of them before they embark on a BPM strategy.
The organization should categorize existing processes depending on whether they are primary, secondary, or management. Primary processes are the essential requirements that generate a product or service. Everyone should be able to easily identify these.
Secondary processes offer support to the primary activities. While secondary activities do not provide value to customers, they are essential to maintain operations. Human resources, securing supplies, or managing information systems are all secondary processes.
Finally, management processes include any activities that management handles. For example, a manager/owner supervises the BPM strategy from start to finish. The company should also identify any metrics and KPIs it plans to use to measure the performance of a BPM initiative.
2. Analyze Business Processes
The BPM manager should determine whether existing business activities align with company goals during this phase of the life cycle. Most companies collect all relevant data on each of these activities. They gather information from current company records, databases, or process models. It's also critical to drill down into every metric used to assess performance to determine whether it is effective.
Organizations perform qualitative analysis to further pinpoint waste and duplicate efforts in processes. They may use value-added analysis to discern whether each process adds enough value to the company. Other forms of analyses include root-cause, in which analysts employ cause and effect modeling to extract any inefficiencies about processes. Finally, the popular Pareto bar chart method identifies the impact each inefficiency has on the organization.
Organizations also use quantitative or statistical analysis to drill down into data. They may use flow to assess capacity requirements, queuing to analyze variability in delays and rework, and process simulation to review processes that run simultaneously. Organizations employ various types of analyses depending on the size and scope of the company. The main purpose of this stage is to determine whether processes align with the company objectives or not.
3. Design and Model Business Processes
The company may have to redesign old processes depending on its findings in phase 2 of the BPM lifecycle. The purpose is to ensure each activity provides value to both the organization and customers. In phase 3, BPM managers should identify whether each current process is valuable or whether it needs to change.
Modeling documentation is also a part of this phase. This requires individuals to outline the time and duration of each activity, where it occurs, and who is involved. It's also helpful to include any technologies or sequences within the process, as well as any external factors that impact it.
Diagrams, summaries, or workflow charts are effective ways to document and analyze all internal workflows. Managers may continuously improve processes and find solutions for new problems, or redo the entire structure from start to finish.
4. Business Process Implementation
Now, BPM managers are ready to implement the new, revamped processes. Implementation can either be systemic or non-systemic. Systemic implementation requires an organization to employ BPM software or other systems.
The non-systemic implementation does not involve technologies, but it may require a change in personnel or an adjustment in the activity sequence. A business can choose either implementation strategy, depending on its type of activities and the number of resources at its disposal.
5. Monitor and Control Business Processes
Once an organization implements a new process, business process automation managers need to regularly track and monitor it. This stage is where they acquire data to see whether any design revamps were effective. It also measures the performance of the activity to determine if the new BPM process is worth the time and resources.
Of course, the organization should always check to see if the performance aligns with its own goals and requirements. Most companies invest in dashboards or other business intelligence solutions to easily monitor process performance and generate reports.
6. Refine and Improve Business Process
Because an organization keeps monitoring and controlling its processes, each activity usually produces high-quality results. Phase 5 and 6 never really stop because external conditions and customer needs continue to evolve.
Businesses can innovate and optimize processes if managers regularly monitor and tweak current activities. This phase exists to employ various strategies in conjunction with business process management software to optimize process management, and achieve operational effectiveness.
Key Takeaways for the Stages of Business Process Management
In conclusion, here are the key takeaways to remember about business process management
- Business process management is composed of strategies/plans, governance, methodologies, information systems, people, and culture.
- The first stage of the business process management life cycle is planning and strategizing. Next, managers need to analyze current business processes to determine which areas need improvement.
- The third stage of the life cycle is to implement process modeling to improve existing activities. This requires diagramming techniques. In stage four, the organization is ready to implement the process.
- A manager needs to review and manage each process with BPM tools to make continuous improvements in stage 5. In stage 6, the organization grows and innovates as it refines and improves each activity. As external conditions change, so should the business activity.