Business Process Management (BPM), as a management discipline has been around for more than twenty years. In the 90’s, the concept of Business Process Reengineering (BPR) was introduced by Michael Hammer in Harvard Business Review. A few years later, Hammer and James Champy published their best-selling book “Reengineering the Corporation”. The primary message of their publication was that organizations need to re-design their core business processes and eliminate inefficiencies in order to meet business goals like increased competitiveness, improved service quality and higher productivity. This laid the foundation for BPM as we know today.
The discipline of BPM urges organizations to treat and manage their business processes as assets just like employees, customers and inventory. It is only with this change in thinking that organizations will start to incorporate BPM into their overall corporate strategy..
While BPM, in its earlier avatar as WFM (Work Flow Management) was popular even a decade ago, it has really earned its fair mindshare in the corporate world only in the last five to eight years. This is largely driven by the globalization of the world, need for product innovation, access to larger customer markets and need for differentiation due to product commoditization. For example, take the case of mortgage financing. This product has become so mature and regulated that mortgage providers struggle to differentiate themselves with respect to their offerings. The only way they can attract customers is through improved service quality – closing a loan quickly and in a hassle-free manner, uniform customer experience across multiple channels and being a knowledgeable source during their customer’s decision making process. This involves understanding the steps involved in closing a loan, where the current inefficiencies are and eliminating them, and automating them. Similarly, take the case of the food services industry. Whether it is a fast food restaurant, casual or fine dining, one of their objectives is to introduce new items to their menu on a regular basis. This again requires a solid understanding of all the steps from menu conceptualization to recipe design, vendor selection, procurement of ingredients, marketing to final roll out. In both the above scenarios, process management plays a key role in determining success or failure.
In the next of the series of BPM primer, we will explore the approach organizations need to take to implement BPM.