Optimizing the ROI from BPM

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Author(s)

Faculty Member, DBizInstitute.org and Managing Director, Spanyi International

Analysts widely agree that the growth rate of Business Process Management (BPM) software will continue in the double digits for the foreseeable future. Whether BPM deployments are making a significant contribution to a more customer-focused, process-centric management discipline, however, is far less clear.

The increasing interest in the successful deployment of BPM software is being driven, in part, by the promise of cost savings and the ability to address compliance requirements more effectively. These dual motivations have created momentum for any BPM solutions that will provide firms with a way to integrate applications, data, and business processes within an enterprise.

The anecdotal evidence for the benefits of BPM deployment is growing. In recent qualitative research, the majority of the 18 respondents who were surveyed reported solid progress in applying technology to improve business process performance. Yet, a dramatically different story unfolded when respondents were asked about the extent of progress in evolving to a more customer-focused, process-centric management discipline. Only six of the18 respondents answered all three questions in Table 1 in the affirmative.

Why do far more firms report progress in the deployment of enabling technology, while only a minority can claim progress in evolving to a more process-centric management discipline? An older model of thinking about the business stands in the way of a broad understanding and effective application of process principles and practices. It perpetuates a view of the business that is based on a traditional, functional, or departmental paradigm. As Terry Burnham describes in his book, Mean Markets and Lizard Brains, it is a backward-looking, pattern-seeking way of looking at the world. The lizard brain fixates on the patterns that were successful in the past and shifts into survival mode when threatened by the new and unique. The lizard brain was very useful in prehistoric times but not today, when the pace of change in business is so rapid that understanding past patterns may not provide much guidance for the current competitive landscape.

Process management professionals know that departments themselves create little value for customers. Departments focus on what will benefit the firm. The job of Sales is to get orders. Finance produces financial reports and pays suppliers and employees. Manufacturing produces the product. These are important activities from the company’s perspective, not the customer’s perspective.

Customers care about the efficient fulfillment of orders, which is the result of the effective flow of activities across all those departmental boundaries, from the initial order to the receipt of a product or service. Customers care about responsiveness, value for money, and hassle-free warranty or service promises.

In the absence of elevating process-thinking to the enterprise level, the success of BPM deployments will be limited to one-time improvements. We need to diminish the power of the “lizard brain” and open up the opportunity to see the business as a network of activities which cross departmental boundaries in creating value for customers — and, ultimately, for the company, too. Only then will significant progress be made towards greater process-centric management discipline, and only then will the ROI from BPM software be optimized.

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