The Importance of a Business Process Organization (BPO)

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Editorial Director and current Faculty Member,
Tom Dwyer is the Editorial Director and current Faculty Member of He writes, presents and consults on topics that include Business Process Management, Business-to-Business, Enterprise Application Integration, and Service-Oriented Architecture. Mr. Dwyer has conducted primary research and published extensive reports on the Application Software Infrastructure markets. Before becoming an industry analyst in 1998, Mr. Dwyer spent 28 years in the computer industry in various engineering, marketing, professional services, and sales functions. He was a co-founder and general manager of a new software venture at Xerox, which became a wholly owned subsidiary. Mr. Dwyer has held senior management positions in marketing and engineering at Wang Laboratories and Prime Computer and has developed and launched more than 15 software products.

Attendees at the 2004 Business Process Management conferences held in Chicago and San Francisco indicated their company’s desire to transform themselves into process-centric organizations and considered this transformation to be critical to the company’s future success. Furthermore, attendees agreed that effectively architecting and managing a process-driven enterprise required strategic planning of business goals, identification of mission-critical business processes and specification of desired process improvement outcomes — and these efforts must be completed before serious investments in technology should be made. That said, a BPM Institute study in August revealed that one-third of the enterprises had not established a formal business process organization (BPO) and only 19% were involving the BPO at a strategic level of process improvement. Our quick poll question is seeking to update this research question as we head toward New York City in November.

A BPO is responsible for:

• ensuring the explicit definition of all major processes in a company’s value chain and how these major processes fit together,
• assigning major processes to executive process owners and facilitating a formal dialogue between the owners and business process management professionals,
• establishing a disciplined and measurable process management program,
• communicating throughout the company a shared understanding of the key business processes that deliver value to customers, and
• facilitating a cultural change to a process-driven enterprise.

To complement the answers from our quick poll, we are soliciting opinions from our readers as to the value and importance of a BPO within your companies. Is it being investigated, has it been implemented, has it been successful or unsuccessful? Are their alternatives ways to accomplishing the five goals identified above? If so, what are they? Should the BPO be given final approval over all business process improvement initiatives? Should they control the budget for these initiatives? Please email us at and we will publish the opinions in a future newsletter.

The BPM Institute study also identified the following strategies common to enterprises currently achieving the greatest return from their BPM initiatives:

• Identify high-value business processes in areas such as compliance and risk management, customer service, and supply chain operations
• Develop metrics for achieving measurable, quantifiable results through improvements in operational efficiency, process visibility and control, and business agility
• Establish long-term goals to evolve from process improvement to process excellence

BPM practitioners agree that today’s mission-critical business processes are complex, dynamic, widely distributed and customized across different business units and companies. Their business is supported by hundreds of business applications and they cannot easily change a business process because the process cannot be untangled from the logic of those business applications. Companies are actively exploring the promise of BPA, BPM and BRM solutions to alleviate the bottlenecks and barriers to modifying the business processes embedded within business applications.

BPA, BPM and BRM as technology layers reside outside of individual application domains, spanning a reach across organization and business application silos as well as within self-contained business units. As companies look for ways to make operations more dynamic and responsive across organizations and their extended value chain, an emphasis on business process management and process-driven integration rises in significance. The result of this drive is a heightened industry interest in BPM as a comprehensive suite of technology offerings and new business solutions. However without a BPO organization to standardize on technologies and methodologies, the risk is high for implementing yet another technology island and embedding the process in a new proprietary infrastructure.

A BPO acts a center of process excellence to help understand and resolve the following important issues and questions:

• What is a ‘process-managed’ organization? How does it differ from other organizational models?
• How do you manage in a process-centered organization?
• What process-related technologies and standards exist and where are they heading? What are the essential differences exist between these technologies and standards?
• What is the state of the art in process modeling, analysis and design techniques and tools?
• What process improvement approaches have worked well for industry leaders and what have not?
• How should the company define and manage a program of change?
• How should one establish alignment up and down and across the organization?

Creating a process enterprise is an enormously complex undertaking. A BPO can provide a company the focal point for marshaling the benefits of key technologies into a comprehensive and flexible infrastructure framework for designing, implementing, deploying, and maintaining process management solutions for both the enterprise and the extended enterprise. The technical functions being provided by such an infrastructure include enterprise process design and execution, application and data integration, automated decision making, business document transformation and exchange; transaction processing and management, cross-application metadata management, and business activity monitoring. It can also 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 of exploration, experimentation and education toward business operations excellence.

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