Introduction
The next “must have” application for business in the 21st century is Business Process Management (BPM). BPM solutions enable organizations to improve both the efficiency and the effectiveness of the processes that drive business operations. The emergence of BPM is driven by three major factors:
i. Logical Evolution - The use of desktop computing technologies continues to evolve from supporting individuals, to supporting departments, to supporting entire organizations.
ii. Rapid Response Requirements – Competitive pressures continue to force companies to find ways to work faster, adapt quickly, and reduce errors.
iii. Embedded Workflow Failures – Process automation efforts that have relied on embedded workflow capabilities in applications like CRM, ERP, and document management have not addressed the requirements of enterprise processes.
This paper will explore the business drivers behind each of these factors and how BPM solutions have become a “must have” by effectively addressing these three categories.
Logical Evolution
Since the introduction of desktop computing in the 1980’s, we have seen companies continue to seek new ways to maximize the value that they provide to their organizations. Initially, the focus of desktop computing was solely on personal productivity through applications like word processing and spreadsheets. The next phase of computing introduced LANs and WANs, with e-mail and groupware (primarily focused on small teams) gaining prominence.
While this was occurring, traditional business applications began to move off of the mainframe to client/server environments, again to leverage the power and presentation of desktop computers. The focus of these business applications—whether financial, manufacturing (like ERP), or sales and service oriented (CRM)—was on improving the productivity of a particular functional area or department.
The Internet is driving the latest phase of evolution. With customers in more control, functional silos are no longer acceptable. The next phase of software needs to focus not on individuals or departments, but on tying them together in an organized fashion to drive organizational productivity improvements. These improvements will break down the walls between departments—cutting cycle times, reducing costs, and improving service for internal and external customers.
Building Responsive Organizations
The Internet is forcing companies to share more information quickly and be more responsive. This is not as easy as putting up a Web site or letting customers order online. Instead there must be a focus on end to end business processes. Within every business process that operates without the aid of automation and management, there exists significant opportunities for valuable improvements.
Years of research have shown that most business processes follow the 80/20 Rule. That is, 80% of the total time consumed to complete a typical business process is “lag time.” This is the time tasks are waiting in the in-baskets or queues of the performers, in transit, or consumed in tracking status. It is dead time that does not add any value to the business. Only 20% of the total process time is consumed by “task time,” the time performers actually spend working on the tasks.
To get significant productivity gains, the focus must be not just on task time, but on reducing the lag time as processes flow across the organization. Workflow routing is designed to attack that lag time or dead time. If lag time is reduced by 50%, the overall process time is reduced by 40%!
Many companies have already seen these results with departmental workflow solutions or workflow capabilities that are embedded in their business applications. At the same time, these solutions have not been able to cost effectively drive the same type of results for processes that cross the organization, flowing in and out of a variety of user populations and applications.
Embedded Workflow Can’t Drive Organizational Computing
As described earlier, most business applications, like CRM and ERP, continue to build on the functional silo approach to information technology that has been going on for years, albeit with newer technology that delivers better results for that department. Many of these applications now have workflow capabilities to automate routing of tasks to the different types of people within their primary user base. The introduction of these capabilities has helped these solutions drive some significant departmental productivity gains.
