9 Steps for Implementing Business Process Management

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The benefits of business process management (BPM) implementation are enormous in any economic environment. But achieving business agility in a turbulent, competitive global market is all the easier with BPM tools, as success stories of BPM-driven companies show. Spread across industry sectors, these companies stand out for their nimble response to change, efficient cost structures, enhanced revenue models and optimal growth levels. By providing an adaptable framework to make key corporate decisions, BPM helps organizations optimize both work and revenues.

How to implement BPM

BPM implementation involves a step-by-step approach that encompasses all of the following phases:

1. Identify BPM goals in line with corporate objectives.
2. Evaluate and document existing processes.
3. Design and document new BPM processes in line with BPM goals.
4. Simulate new processes using a BPM model and break them into components.
5. Set up a core BPM expert group to plan, oversee and monitor implementation.
6. Plan for organizational change, introducing culture changes slowly.
7. Identify a pilot project to assess BPM benefits.
8. Involve other key departments and extend implementation to other departments.
9. Establish key performance indicators (KPIs).

Step 1. Identify BPM goals in line with corporate objectives.

Before documenting processes, companies must identify what they expect to achieve by answering the following questions: What should the system be capable of doing? How does BPM tie operational efficiency with transactions? A finance company might look at BPM to enhance customer contact, process savings and loan documents faster, expand the handling of transactions online, speed up loan approval, prepare financial and statutory reports, handle detailed analyses for management information, or overall improve decision-making.

Step 2. Evaluate and document existing processes.

To document existing processes at current service levels, companies need to determine why and how processes are performed, using flowcharts (Figure 1). Process charts deal with those functions that add, create or change value, for example:

• The processes involved in claim authentication in an insurance company.
• The processes that define business rules like discounts on purchase orders.
• Quick shipment delivery processes for preferential customers.
• Processes for diverting urgent incoming calls quickly to a counselor in a crisis center.

To document processes, analysts need to ask the following questions:

• Why perform the process? What is the objective?
• What are the present processes and why are they in place?
• How does the company perform them at present and why?
• When or how often does the company perform them and why?
• Where do the process inputs originate and why?
• Who performs the process tasks and why?
• What systems exist to measure process performance? Are there better process-measurement systems?
• How well is the process performed?

Figure 1. A production flowchart

Source: BPMEnterprise.com

Step 3. Design and document new BPM processes in line with BPM goals.

Once "as is" process documentation is complete and non-value adding or redundant processes considered for elimination, new processes can be mapped out taking the following factors into account:

• Underlying corporate goals: issues of quality, customer satisfaction, profitability, environment and safety standards.
• Underlying operational goals: flexibility, cost, timely delivery, throughput time and error rates.
• Value of competitive considerations: brand and performance values.
• Consider all alternative processes.
• Account for non-standard or customized processes.
• Ensure process inputs, outputs and users (i.e. customers) are clearly documented.

Step 4. Simulate new processes using a BPM model and break them into components.

Simulation models help improve process efficiency and identify process bottlenecks. Simulation also maps the impact of process changes in real-world situations. Companies can analyze system response to tax tariff changes, for example, or determine how quickly waiting calls of preferential customers are rerouted and answered.

Separating existing process activities into smaller work breakdown structures helps define the smallest work unit for a given task; charting their flow and documenting how they inter-relate with other work breakdown structures, companies can represent relationships between process tasks and activities to determine:

• Estimated time to complete processes.
• Critical tasks involved in completing a process cycle.
• What the process costs.
• What the risk is for non-completion of a given process.

Step 5. Set up a core BPM expert group to plan, oversee and monitor implementation.

This core group of personnel from IT departments, systems integration staff and organizational business users will:

• Oversee BPM implementation from the start to finish.
• Monitor BPM progress.
• Perform process evaluations.
• Address implementation problems.
• Assess progress and issue reports.
• Introduce BPM changes.

For BPM to be successful, the input of middle management, which is largely responsible for timely and accurate process completion and team communication, is vital throughout implementation.

Step 6. Plan for organizational change, introducing culture changes slowly.

Companies need to analyze and assess the level of change, map out how to implement it, define new systems and allow employees time to adapt to process changes, introducing them slowly. Some experts believe that breaking changes into smaller units and introducing them piecemeal helps employees acclimatize, reduces the natural fear and resentment of change, and provides a visible and measurable platform of its positive effects, thus making it easier to bring in more and bigger changes. Others espouse introducing all changes regarding a particular function wholesale, so that people recognize the drama of the situation and aren't constantly being bombarded with yet one more modification to the way the work gets done. With either approach, constant communication is crucial.

No matter how difficult to adopt, changes once implemented must nevertheless be followed. Companies need to introduce checks to confirm compliance company-wide, across departments from CRM and inventory to finance to integrating services.

Step 7. Identify a pilot project to assess BPM benefits.

Start with a department that meets overall company goals as a test run. Use its experiences to help identify and correct teething problems, introduce organizational change in a steady and phased manner, and assess benefits from BPM implementation to the organization as whole.

Step 8. Involve other key departments and extend implementation to other departments.

Apart from middle management, key personnel from other departments can:

• Benefit from the same solution.
• Access inter-departmental process efficiencies.
• Cut implementation, support and training costs.
• Start introducing the concepts of coming changes to departmental staff.

This cross-departmental effort additionally ensures the company allocates similar resources and effort into enterprise-wide BPM implementation.

Step 9. Establish key performance indicators.

How is success to be defined? What KPIs and reports are expected from the system -- taking account of management structure, organizational style and industry? A financial services company might seek industry-specific metrics like sector-specific loans, profitability and growth rates and overall ROI on its total client portfolio as compared to the industry, as well as management metrics like risk analyses, customer profiles, sector-specific exposure on loans or depositors, return per client portfolio, profitability per client, budgets and forecasts, simulations, cost of funds, average rate of interest on loans, and complex models that handle trending, risk analyses and quick impact studies of proposed industry and legal changes.

You're Ready!

Implementing business process management in a phased manner yields numerous benefits during and after your first implementation. The entire effort should provide a valuable, flexible framework for operational, financial and organizational efficiency and strategic decision-making.