The Case for Establishing a BPO

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This article originally appeared in the members only BPM Strategies Magazine.  Join today to receive your own copy. 


Weak supply chain agility, poor management visibility and control, inefficient productivity and utilization of resources, and inadequate risk management are the results of poor processes. Slow delivery of IT solutions to improve these process problems results in lost revenue and delayed savings for enterprises. Employees are forced outside of the established systems to get things done, resulting in uncontrolled and unmeasured activities.

BPM systems re-establish a controlled and measurable environment. They accommodate continuous change while maintaining process compliance without any operational downtime. Enterprises can use BPM systems and methodologies to capture process innovations. This helps companies extend their goals beyond process improvement to process excellence and supports the long-term goal of becoming a more responsive, process-driven enterprise.

A process-driven enterprise is one that is organized, structured, measured, and managed in terms of its business processes. As companies look to make operations more dynamic and responsive across organizations and their extended value chain, BPM becomes more interesting as an enabling technology and methodology. IT enables a holistic, 360-degree approach to process collaboration and management throughout the value chain. Properly implemented, BPM can enable the continuous alignment of processes with business objectives, leading to a sustainable competitive advantage.

Creating a process-driven enterprise is a complex undertaking. Forming a business process organization ( BPO ) within an enterprise enables a company to marshal the benefits of key methodologies and technologies into a comprehensive and flexible framework for designing, implementing, deploying, and maintaining process management solutions for both the enterprise and the extended enterprise. It also can enable a company to organize around business processes as part of a strategic business transformation program. It provides a structured approach to keep the business constantly engaged in an evolutionary process toward business operations excellence.

Establishing a formal BPO brings strategic focus to becoming a process-driven and managed enterprise. It should be responsible for ensuring the explicit definition of all major processes in a company's value chain and how these major processes fit together. It can assign major processes to executive process owners and facilitate a formal dialogue between the owners and BPM professionals. The BPO should be responsible for establishing a disciplined and measurable process management program and communicating, throughout the company, a shared understanding of the key business processes that deliver value to customers. Finally, the BPO helps manage the cultural change to a process-driven enterprise.

A process-driven enterprise embeds process improvement in its business strategy. It fosters the belief that its competitive advantage is supported throughout its ecosystem. It practices process-driven budgeting and resource allocation. It strives to ensure that key processes flow seamlessly throughout the value chain. Finally, it understands that it must implement supporting technology to enable existing information technology to support the creation of new business models in order to sustain its competitive advantage.

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