This month I’m looking at a 2006 book on a current hot-topic in business terms – Business Process Management (BPM). As there seem to be as many definitions of business process management as there are business process books, Jeston and Nelis offer the following definition: “The achievement of organisation’s objectives through the improvement, management and control of essential business processes”.
The book takes a holistic, organisational approach to BPM; automation via IT projects is rightly treated as one of only several possible mechanisms for change. The key point made is that the organisation’s business processes have to be improved prior to automation, otherwise all that automation will do is magnify the inefficiencies within the processes.
In discussing this topic, the book also touches on a number of other business hot-topics, such as service-oriented architecture; process improvement frameworks such as Six-Sigma; compliance directives such as Sarbanes-Oxley; and outsourcing.
Framework
Jeston and Nelis provide a ten-phase framework to BPM and suggest ways of customising these to match the primary method of commencing a BPM project: a strategy-driven approach (top down); or an operational-initiative approach (lower level).
- Organisational Strategy. This phase allows the business to reaffirm
its vision, mission and goals, and what methods the business is going
to use to reach its objectives – all of which are included in a
business case. This is important as in subsequent phases, the processes
that will be (re)designed must align with the business’s strategy. The
authors make a strong case for planning to build in real-time
measurement gathering for a Balanced Scorecard (Kaplan and Norton) to
provide a feedback loop.
Interestingly, from an Agile perspective, the authors state in a case study that one of their clients found that their main strength was in market agility – the client selected this as being the central tenet of their strategy. - Process Architecture. This phase establishes a process framework that is aligned with the Organisational Strategy. In addition, in this phase the company starts to list its end-to-end processes. The authors strongly advocate looking at process reference models for best practise, such as SCOR for supply-chain management, ITIL for IT service delivery or eTOM for telecommunications.
- Launch Pad. This phase determines which stakeholders are to be involved in the project delivery, a prioritised list of processes to be considered and an agreed implementation strategy. One of the key aspects to be agreed is the scope of the project, which can range in scale from a small departmental improvement, through to the redesign of the whole industry value chain.
- Understand. This phase allows the team to understand the current (“as-is”) end-to-end business processes, as scoped in the Launch Pad phase. The key aspect here is not to over-elaborate but to stop as soon as it is clear how closely (or otherwise) the as-is process fits the business purpose for which it was designed. In this phase, the metrics are gathered for measurement purposes and quick wins are identified – we have found the latter is essential, as most BPM projects have to show quick return on investment.
- Innovate. This is the phase where processes are redesigned or created (“to-be” processes) to match the output from the Organisational Strategy. A gap analysis is also completed in this phase to show any disjoints between the as-is and to-be processes. Importantly, future process metrics are projected and tested for feasibility.
- People. This phase aligns the business’s people to the new or changed processes. It involves analysing people’s skill-sets, potential organisational structure change and training needs analysis.
- Develop. This phase covers the automation of the improved business process via technology. It is an optional step, as a BPM project could succeed without any technology change. The authors give a good up-to-date overview of the BPM automation technology landscape. This aspect of BPM is moving very fast at the moment and the authors have done well to provide a snapshot of the technical landscape and provide some useful pointers as to where the market is heading.
- Implement. This is where the action happens! The staff are trained, any technology changes are made and the process changes rolled out. Again, the authors reveal their real-world experience by advising that that a fallback/backup strategy be planned.
- Realise Value. The authors correctly stress that key part to successful BPM projects is to ensure that the benefits identified in the business case are baselined, tracked, monitored and maximised.
- Sustainable Performance. This phase “wraps up” the project by evaluating the results, ensuring the benefits continue to be tracked and that these measures are embedded into management via process governance.
This brief summary really does not do justice to the sheer amount of detail provided – for each phase there are list of outputs, detailed action steps and a list of risks that can be lifted directly into a project risk log.
There are several useful chapters on the essential governance elements of a BPM programme, namely: project management, people change management, stakeholder management, leadership and the embedding BPM for ongoing performance gain.
In addition, there are many appendices covering:
- Templates and checklists for workshops.
- Checklists for modelling tool selection.
- Typical components of an automated BPM solution, such as rules engines and activity monitoring.
- A list of BPM methodologies and a comparison of these approaches to the authors’ own, such as ISO 9001, Six Sigma and Lean.
- Suggested process notation.
- Business process outsourcing (BPO).
Verdict
This is a very thorough, detailed and up-to-date book. It provides a step-by-step guide to the baselining, improvement and management of business processes in a methodology-neutral and technology-agnostic way, and filled with real-world case studies. Every serious practitioner will want to keep this book close to hand.