Speaking to the C-suite about BPM

What’s at the top of the C-level agenda and how does BPM add value to strategic vision?

Business Process Management, or BPM, can be seen in different ways. “BPM” can refer to both a methodology to improve efficiency through better day‐ to‐day processes, and also to an IT tool to automate and monitor those processes

What BPM can achieve

When done right, BPM involves business process analysis (methodology side) together with the implementation of business process management software (tool side).

In this article, the term BPM refers to both — the methodology and the IT tool — to enable a global approach. This tight interconnection is the key to answer to the core needs of business activities.

What’s at the top of the C‐level agenda?

Governance & sustainability

Quality of service & customer satisfaction

Operational excellence & productivity

Business agility

Employee motivation & collaboration

Risk management

This is why BPM is known as the game changer — it can provide a real competitive advantage.

BPM implementation in a company can be imposed from the top down, from upper management, but it can also begin and grow locally. BPM is an empowering tool for workers in all levels of an organization. The middle and lower rungs of an organization gain direct benefit and are often pushing the BPM agenda.

Yet wide‐spread adoption needs the buy‐in of top management.

How to talk to the C‐Suite about BPM?

By addressing the issues that the CEO, COO, CMO, CFO, CTO, CIO, and other top managers are concerned with: the ways that BPM can be specifically applied in an organization to improve governance and sustainability through improvement of operational performance.

In this paper, we’ll look at the following and provide examples of the strategic value of BPM.

• Quality of service & customer satisfaction

• Operational excellence & productivity

• Business agility

• Employee motivation & collaboration

• Risk management

1. BPM provides powerful company-wide governance capability

Value from BPM implementation comes from continuously planning, doing, measuring, learning and improving. It’s an iterative process, where your company can repeat cycles as required.

You can compare it to the PDCA (Plan Do Check Act) management method made popular by Dr. W. Edwards Deming, and widely adopted in many industries, or the DMAIC (Define Measure Analyze Improve Control) cycle in the Six Sigma methodology.

Like these approaches, BPM as a methodology can be applied to any organization or process within the company, from the smallest to the largest, from the simplest to the most complex, from technical to business. The difference is that BPM can also be applied directly as an IT tool.

The company can imply BPM incrementally to make the entire organization lean. As process after process improves, your company saves costs and improves operational performance, bottom line; but also top line, with increased quality of service leading to higher customer satisfaction and more sales. BPM solutions provide the means to actually monitor efficiency of all the processes in an organization, to identify bottlenecks, and to report the improvements made in efficiency, easily and clearly with actual measurements.

BPM gives employees the right tools to be more efficient. They can focus on added‐value, hence more interesting activities and projects. They feel more empowered and engaged. Return On Investment is maximized, leveraging all three dimensions of cost, revenue and motivation.

2. The company ERP can’t cover everything!

Today, your company may have an ERP (Enterprise Resource Planning system), a CRM (Customer Relationship Management system), a CMS (Content Management System), an HRIS (Human Resources Information System) and other — sometimes many other — software applications that support its business.

Some of these are complex software systems that require expertise, time and money to be deployed and additional time and money to be fine‐tuned after first release. Most of them, when not from the same software vendor, don’t even communicate together without a lot of adjustments and modifications, if at all.

Large, globally deployed systems can also encounter challenges addressing specific or local needs that are not widely shared in the industry or worldwide. For example, locally relevant information missing from the company workflow may result in holes that people have to fill with other locally created or purchased systems, or with home‐made spreadsheets.

While it is not an issue to have both ERP and stand‐alone systems coexisting, getting them to communicate is often challenging. Implementing yet another module or developing customized changes in your company’s ERP would probably be costly and time‐consuming; stand‐alone systems are often single purpose and may not be easily leveraged to support other tasks.

After a few years, the company is dependent on many different applications and databases. Employees start complaining that the various systems do not communicate smoothly and they need to complete more and more manual steps and data extracts and compilation.

This is where Business Process Management comes into play

BPM is a business management approach that helps your company gain visibility into how your company truly operates in the field. You can quickly see:

• what’s covered by current systems like the ERP and CRM,

• what is addressed through stand‐alone systems, and

• where the “holes” are.

This overall knowledge of operating processes allows top management to make shrewd, prudent decisions more quickly, increasing business efficiency and operational results.

What if you don’t have an ERP? This doesn’t mean that BPM isn’t useful to you. See Section 10, What if you don’t have an ERP?

3. BPM helps fill gaps

Through BPM, all stakeholders work together at mapping processes. Some tasks will be handled within existing tools like ERP, CRM, and so on. Some tasks can be automated. Some tasks will continue to be done manually — because your differentiation, where it depends on unstructured processes, is also key to improving business results.

But they will all be linked and will start communicating together, enabling end‐to‐end traceability and continuity. C‐level management keeps control of what is happening in the company.

4. When operational excellence helps your company differentiate

When an organization is achieving results — good or bad –you can retrace how those results are obtained by using BPM. You can easily replicate successful processes in other organizations or subsidiaries. Where there are issues, you can quickly identify bottlenecks, understand root causes and apply fixes.

Thanks to this continuous improvement loop, your company’s processes can be optimized to best serve your markets at any time, leading to great operational efficiency and higher customer satisfaction.

CMO and COO teams can review, simplify and structure processes, focusing on value delivery and removing everything else. At the same time, they can identify the processes that lead to business differentiation and increase customer knowledge.

Replicating the company’s best practices ensures internal coherence and consistent delivery to the customer, whenever and wherever it happens. This is the path to operational excellence.

In addition, your company becomes a learning and agile organization, able to quickly adapt to the changing environment we all live in today.

5. When agility is a key success factor for development

In our global economy, new competitors are popping up everywhere with new business models. This can happen seemingly overnight, breaking former rules and habits and changing the paradigm. To remain competitive and survive, your company needs to be able to anticipate these changes and act before competitors. If your processes are clear, robust and efficient, your company will be better prepared to tackle tomorrow’s market challenges.

With its solid framework and clearly‐defined steps, owners and interactions, BPM puts you in an ideal position to catch new business opportunities.

Business Example

Imagine your company is the leader in high-end cars.

Your company’s vision is to “provide elegant, safe, high quality cars to our customers” and to “provide excellent customer assistance in case of any problem.”

In the event of a break‐down, customers call your help line. You have management directive to act quickly; for example, to figure out that a tow truck is needed and to get it out to the customer as fast as possible.

However, despite consistently fast service, top management has learned that customers are not finding the after‐sales service for problems to be very satisfactory at all. This is now driving down sales. A shift in vision is needed.

The company’s new vision is to “make the customer’s life easier while taking care of their car if something happens.” You now have to align the help line call center’s processes to match the new strategic vision for your company.

You propose to shift focus to making help line calls the best interaction possible with your brand, whatever the duration. Before sending assistance, the service rep can find out more about the specific situation, which better pinpoint a better solution than an automatic call to a mechanic– perhaps the rep can explain some action that the customer can take to get driving again, without the need to wait for a tow.

The rep can empathize with stranded customer’s plight, give them real‐time status on what help is coming and when it will arrive, and offer additional services and perhaps a gift to compensate for the unpleasant experience.

How easy will it be to implement these changes?

Mapping inter‐related processes — internally with sales, after‐sales, the call center, and with external partners such as tow services and mechanics– allows you to collaboratively design a process that the company can execute quickly. For example, after the tow service has electronically accepted the service call, they can also confirm the dispatch and arrival of the tow truck. BPM will allow you to implement the processes with all involved stakeholders, to collect data from tracking each customer event and supplier commitment, and to report results. All this can be done in incremental steps, to aid adoption by building on success. Change is made easier.

BPM provides a good way to make the company’s vision clear and understood. It makes strategic decisions meaningful and concrete to employees and partners who then feel involved and committed.

6. Boosting employee motivation

Study after study around the world has shown that motivation has a positive influence on financial results. However, companies encounter more and more difficulties to maintain a high level of employee engagement, at a time they most need to drive strong performance in a more and more volatile, complex and global environment.

When engagement starts to decline, company performance and customer satisfaction inevitably drop. Most of the time, things are going wrong inside the organization. People may be less confident because they don’t perceive enough interest coming from above; or they may think management does not provide them with the right support and structure, clear roles and responsibilities, processes and tools. At first, people tend to compensate for the organization’s lack, but beyond a certain level, they often just … disengage. When they don’t feel their company (or department) is the best place to work, they start looking around for other job opportunities

BPM is a motivation enabler

BPM addresses organizational gaps, making operating processes clear, simpler and automated. It makes work easier and saves time, for employees and for their line of management. And with more efficient processes and higher customer satisfaction, managers will have fewer problems to deal with.

Time freed up from “meaningless” tasks performed in an information vacuum can be used wisely to create the energizing and caring environment employees expect from their management.

With BPM, people know clearly what’s expected from them and understand how what they do impacts company goals and performance. It gives their job more meaning, while also helping them to manage their time and their daily tasks.

Employees:

• can serve customers more efficiently with less stress and more ownership, thanks to clear processes, computer‐aided task management and reminders,
• have time freed up to do productive activities such as leading a project or task force, adding value and interacting more with their coworkers and managers, and
• have better visibility on what others are doing in the company, improving collaboration.

Managers:

• understand and show interest in what their employees are doing, provide more accurate job descriptions and fact‐based performance evaluation metrics,
• can balance workload in their team, and
• save time that they can reallocate to spend more time with their employees and make their company a better place to work.

7. If risk management, risk mitigation, and tracking/audit is at the top of the CFO’s agenda

Depending on your industry, your company may be subject to more and more complex regulations. By bonding systems more tightly together, BPM formalizes processes, all of them, even the ones between two existing systems. It ensures complete traceability, hence better compliance with your industry’s standards and regulations.

But risk is not only about legal compliance. If your company’s processes are clear, well‐established, automated and secured with electronic signature for approval, it considerably reduces the risk that any employee might not follow correct procedure, or forget steps like asking for an approval. Companies have gotten into trouble because they failed to monitor and control their activities and processes: materials ordered without proper authorization that are contractually obligated and can’t be returned; accounts payable surprised by the amount and number of purchases affecting cash flow, and other such familiar situations.

We all remember the Deepwater Horizon disaster and oil spill on the Gulf Coast…

Companies have gone under because of quality and liability issues. Others have been working very hard for years to rebuild their brand after a bad experience, especially on the social or environmental side.

The company is also better protected against fraud, corruption or ethics violations. What everyone does is recorded and electronically signed when needed, making it more difficult for someone with bad intentions to bypass validations and controls.

Another point to consider: when describing, formalizing and automating processes, the company also ultimately depends less on individual knowledge.

If key employees happen to leave, general expertise stays in the company and you don’t need to recreate what they knew that wasn’t captured. New hires can build on past experience and make their contribution from there. This saves time, preserves core competencies and enables new expertise acquisition.

8. Do employees collaborate or are they “silo-ed”?

Maybe teams used to collaborate well, but after several years of growth or changes, it looks like their collaboration has been reduced to the bare minimum. People are working in silos, not seeing the big picture any more, generating duplication, rework, or bottlenecks.

Does IT need to be closer to your business challenges?

When it comes to IT, the gap may be even bigger, with misunderstanding between IT and business functions. Business develops requirements and hands them over to IT, who then buys or develops an application that seems to fit. When it is released and business teams start using it, they report issues nobody talked about before. Thus begins a ping‐pong match between business and IT.

The way BPM software has been designed invites and reinforces direct collaboration: business and IT teams work on the same tools, in nearly real time, with graphical tools that make it much easier for them to talk the same language and avoid misunderstanding or omissions. Feedback is incorporated as they go along together.

More feedback may arise at a later stage, once a specific case is encountered. BPM systems are flexible enough to let you implement changes afterwards without mobilizing a full IT project team.

On the IT side, there is a common architecture for all the company’s specific applications, instead of many independent stand‐alone systems. This homogeneity makes it possible to leverage successful processes and applications consistently and across the entire organization, including subsidiaries, locally or abroad.

9. When your business demands flexibility

BPM allows top management to implement change quickly and smoothly.

Radical changes and big IT projects take time and always carry some risks. With BPM, you can start from current processes, improve, implement and automate to achieve first outcomes. This allows a quick win, even while preparing the next steps. You see results early and validate that things are going in the right direction.

You can then iterate as much as needed. Those multiple iterations are not disruptive as BPM software is highly flexible and can deliver fast and frequent changes.

10. What if your company doesn’t have an ERP?

Depending on many criteria, among them size, complexity or volume, your company may not need to invest in such a large and expensive system. Not all businesses need a sophisticated ERP, especially if the company is small and doesn’t manufacture products.

But this doesn’t mean you don’t have to formalize and structure the way you operate and deliver to your customers.

Your company just needs a more simple, yet expandable, tool. A BPM suite can be that tool. You first describe and refine your processes with all stakeholders collaborating. Then, you define what needs automation, validation and tracking. This applies to many processes, such as:

• Quotation to a customer that need to be validated by technical staff for feasibility and management for pricing. It may also involve several versions before reaching an agreement and these versions need to be tracked and archived
• Employees’ vacation, with management validation, system recording and linked to payroll
• Invoicing automation, validation, recording and archive

Without having to invest in an expensive and heavy ERP, your company still gets what’s needed to structure and monitor the business:

• Operational performance and cost reduction
• Quality of service and customer satisfaction
• Visibility, Control and reporting
• Agility and Adaptability
• Team and individual productivity
• Traceability and Compliance

Conclusion

BPM improves the company’s overall efficiency today, so executive management can focus on the future.

As we’ve seen, BPM can have a positive impact on many aspect of a company, from governance and sustainability to motivation and change management, to agility and collaboration, to compliance and risk management.

All these aspects have an influence on business performance and contribute increasing Return on Investment. It’s not just about cost savings. With BPM the entire company gets much more.

It gets happy employees, happy customers, and a well‐oiled operational machine, optimized for the best outcomes, not the lowest costs. This is a positive feedback loop where satisfaction leads to more success, which leads to more profits that can fuel company expansion and stakeholders satisfaction, and so on.

Is this something that can be quantified? Definitely.

Classic ROI calculation builds upon:

• efficiency models measuring cost savings, lost productivity, rework and duplication, and
• statistical and probabilistic model for risk evaluation.

The good news is there’s a very good chance your company will get a higher return than your calculations will anticipate. And you will be able to show this with process measurements.

When done properly, with all stakeholders’ involvement and empowerment, and strong management support, a BPM project — whether company‐wide or at department level — will help people understand business goals and strategies and mobilize energies towards a common project serving common purposes. Engagement and motivation will naturally get boosted, and by rebound, customer satisfaction will increase.

This is the human factor effect. People engagement and motivation are complex and difficult to link directly to a saving or performance increase, as are word‐of‐mouth and referrals among customers.

But we all know it works and can produce real results.

Once the company’s processes are structured, optimized and automated, management can focus more on defining and implementing strategy and less on logistics. Teams have time to get customer insights, and to anticipate and get ready for the next challenges.

The C‐suite and the Board of Directors are better prepared to work on their vision of the future.