What is a Business Process Management

Business process management (BPM) has been referred to as a "holistic management" approach to aligning an organization's business processes with the wants and needs of clients. It promotes business effectiveness and efficiency while striving for innovation, flexibility, and integration with technology. BPM attempts to improve processes continuously. It can therefore be described as a "process optimization process." It is argued that BPM enables organizations to be more efficient, more effective and more capable of change than a functionally focused, traditional hierarchical management approach.

An empirical study by Kohlbacher (2009) indicates that BPM helps organizations to gain higher customer satisfaction, product quality, delivery speed and time-to-market speed. An empirical study by Vera & Kuntz (2007) conducted in the German hospital sector indicates that BPM has a positive impact on organizational efficiency.

A business process comprises a "series or network of value-added activities, performed by their relevant roles or collaborators, to purposefully achieve the common business goal." These processes are critical to any organization, as they can generate revenue and often represent a significant proportion of costs. As a managerial approach, BPM sees processes as strategic assets of an organization that must be understood, managed, and improved to deliver value-added products and services to clients. This foundation closely resembles other Total Quality Management or Continuous Improvement Process methodologies or approaches. BPM goes a step further by stating that this approach can be supported, or enabled, through technology to ensure the viability of the managerial approach in times of stress and change. In fact, BPM offers an approach to integrate an organizational "change capability" that is both human and technological. As such, many BPM articles and pundits often discuss BPM from one of two viewpoints: people and/or technology.

BPM or Business Process Management is often referred to as 'Management by Business Processes'. The term "business" can be confusing as it is often linked with a hierarchical view (by function) of a company. It is therefore preferable to define BPM as "corporate management through processes". By adding BPM the second meaning of 'Business Performance Management' used by Pr Scheer in his article "Advanced BPM Assessment", BPM can therefore be defined as "company performance management through processes". And it's this resolutely performance-oriented definition which is chosen here. Dominique Thiault, in Managing Performance Through Business Processes defines BPM as a management-through-processes method which helps to improve the company's performance in a more and more complex and ever-changing environment. Management through processes is a management method based on two logical levels: process governance and process management:

  • Process governance is all of the company's governance activities which, by way of allocating on the processes, work towards reaching its objectives, which are both operational and progress-related.
  • Process management is all the management activities of a given process which work towards reaching the objectives allocated for this process.

Roughly speaking, the idea of business process is as traditional as concepts of tasks, department, production, and outputs.The management and improvement approach as of 2010, with formal definitions and technical modeling, has been around since the early 1990s (see business process modeling). Note that the IT community often uses the term "business process" as synonymous with the management of middleware processes; or as synonymous with integrating application software tasks. This viewpoint may be overly restrictive - a limitation to keep in mind when reading software engineering papers that refer to "business processes" or to "business process modeling".

Although BPM initially focused on the automation of business processes with the use of information technology, it has since been extended to integrate human-driven processes in which human interaction takes place in series or parallel with the use of technology. For example (in workflow systems), when individual steps in the business process require deploying human intuition or judgment, these steps are assigned to appropriate members within the organization.

More advanced forms such as human interaction management are in the complex interaction between human workers in performing a workgroup task. In this case, many people and systems interact in structured, ad-hoc, and sometimes completely dynamic ways to complete one to many transactions.

BPM can be used to understand organizations through expanded views that would not otherwise be available to organize and present, such as relationships between processes. When included in a process model, these relationships provide for advanced reporting and analysis. BPM is regarded by some as the backbone of enterprise content management.

Because BPM allows organizations to abstract business process from technology infrastructure, it goes far beyond automating business processes (software) or solving business problems (suite). BPM enables business to respond to changing consumer, market, and regulatory demands faster than competitors creating competitive advantage.

As of 2010 technology has allowed the coupling of BPM to other methodologies, such as Six Sigma. BPM tools allow users to:

  • vision - strategize functions and processes
  • define - baseline the process or the process improvement
  • model - simulate the change to the process
  • analyze - compare the various simulations to determine an optimal improvement
  • improve - select and implement the improvement
  • control - deploy this implementation and by use of user-defined dashboards monitor the improvement in real time and feed the performance information back into the simulation model in preparation for the next improvement iteration
  • re-engineer - revamp the processes from scratch for better results

This brings with it the benefit of being able to simulate changes to business processes based on real-life data (not just on assumed knowledge). Also, the coupling of BPM to industry methodologies allows users to continually streamline and optimize the process to ensure that it is tuned to its market need.

As of 2012 research on BPM has paid increasing attention to the compliance of business processes. Although a key aspect of business processes is flexibility, as business processes continuously need to adapt to changes in the environment, compliance with business strategy, policies and government regulations should also be ensured. The compliance aspect in BPM is highly important for governmental organizations. As of 2010 BPM approaches in a governmental context largely focus on operational processes and knowledge representation. Although there have been many technical studies on operational business processes both in the public and in the private sector, researchers have rarely taken legal compliance activities into account, for instance the legal implementation processes in public-administration bodies.