What is Business Process Management (BPM): A Complete Guide

Here is a completely comprehensive guide to Business Process Management for the success of your organization:

Business Process Management (BPM) is a systematic way of examining the existing business processes of your organization and helps to implement enhancements to improve the effectiveness and efficiency of your workflows. It is an organizational discipline where the company looks at its processes in total and individually, taking one step back.

What are the business processes?

They are nothing but a set of business activities that help you achieve the business objectives, such as promoting workplace diversity or increasing profit. An example to cite is a business process that settles a credit card dispute.

This helps the organization not only minimize the cost but also helps to increase customer satisfaction and resolve the same dispute in an efficient and accurate way. The process includes all the steps required to achieve the business objective. BPM is often looked upon as an intersection of people, technology, and processes.

Understanding Business Process Management

BPM has an iterative approach, never to be implemented at once. You can test and monitor the process and receive feedback. This results in continuous improvements in your organizational workflows. You can evaluate your existing processes and find out ways to improve efficiency, reduce costs and errors, and support digital transformation efforts with a BPM.

BPM is dynamic and has a broad discipline regarding how the organizational roles, business goals, tactics, rules, etc encompassed by it are changing from time to time. The various optimization methodologies, such as Six Sigma, lean management, and Agile fall under BPM. BPM is a continuous process that leads to better business outcomes over a period of time.

With the large and complex business processes of big enterprises, there arose a need for BPM software products developed in such a way to support large-scale business changes. This was because the size and complexity were not manageable without an automated tool.

BPM is evolving with the help of technologies like AI, Machine Learning, etc to offer novel ways for designing, measuring, improving, and automating workflows. It has now shifted its focus in the age of digitization to include the optimization of employee and customer systems of engagement, far from the traditional backend processes.

Why Business Process Management

The importance of BPM lies in the fact that they are critical for the success of your organization. Some examples of processes that drive the business goals are creating a new product, managing customer service, or incorporating new employees.

These business processes involve people, machinery, and IT systems and may require the services of business process outsourcing providers. When the business process is well-designed then it splits these tasks into steps – organized and repeatable to be followed by workers to produce consistent outcomes.

Organizations can predict the resources required and also lower the risk of under or over-allocating resources with these repetitive steps. Measuring the steps is important to expose the bottlenecks or weak links that lead to the ways for business process improvements.

Furthermore, a poorly managed business process is a headache for your organization that impedes productivity and efficiency, causing damage to the organization. If not automated, such ineffective processes result in poor performance and undermine business goals.

BPM resorts to a systematic way so that the above conditions may not arise for your organization. BPM aligns processes with business goals and improves the efficiency of delivering services and products.

Finally, since organizations must respond quickly and efficiently to stay above the competitors, the rapid business process change, which is low-risk and cost-efficient adds value to BPM. Innovations get you the desired outcomes combined with a continuous improvement of business processes.

What Are the Stages of the BPM Lifecycle

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There are five phases in the BPM project as shown in the above figure and which are:

1. Design: This stage involves analysis of the existing process and then detecting the improvements. Then build a business process that uses automation and standardization.
2. Model: Find out how the newly redesigned processes work in various scenarios.
3. Implementation/Execution: The improvements along with automation and standardization are implemented.
4. Monitor: This is a stage that helps to track improvements based on performance.
5. Optimisation: This stage is about continuously improving the process.

Some go for a sixth step called Business Process Re-engineering (BPR).

Business Process Reengineering (BPR)

This stage occurs when changes in the existing process fail to produce the desired outcome. So reinvention comes into the picture, and that involves automation too.

Each of the above stages may take months to complete, but with careful planning. Business processes usually run across multiple departments and systems. The entire process may involve thousands of documents. If not managed well, they result in failure.

Benefits

A properly implemented BPM helps your organization to deliver better products and services for the clients by reducing errors, saving time, bringing about digital transformation, etc.

The benefits are as follows:

• Improve operational efficiency and quality of work.
• Reduce the risk of human errors due to BPM’s focus on standardization.
• Increase employee efficiency with automation tools and allow the employees to concentrate more on work that requires human expertise and interventions.
• Ensure continuous improvements in business processes with additional time to identify automation and other process enhancements.
• Identify bottlenecks with embedded analytics for increased visibility in process performance.
• Streamline workflows by automating tedious tasks.

Challenges

Organizations must be well-prepared to face the challenges and plan a well-run and well-executed BPM strategy to overcome them. This way, they can maximize the benefits of BPM.

The common challenges faced by an organization are:

• Lack of clarity on business goals and objectives.
• Less buy-in from leadership.
• The dearth of testing infrastructure.
• Lack of a clear KPI
• Doubtful about the right tool for the job.
• Presence of hidden processes susceptible to breakdowns.
• Poor visibility and traceability of the process.
• Lack of flexibility in third-party contracts and incentives.
• No understanding of BPM as an end-to-end business process, not just technology.

Types of Business Process Management

The three types of BPM are:

1. Document-Oriented
2. Human-Oriented
3. Integration-Oriented

#1) Document-Oriented

This is a primary mode of BPM for most businesses. It is used in processes based on paper or digital documentation. Here, the goal is to provide accurate and current documentation to certain parties. This approach focuses on documents, such as the formatting process, and signing and verifying contracts.

Reducing the correspondence for completion of an approval process by automation of certain aspects of processes is one benefit. It provides a centralized workspace for storing current and relevant documents with the help of workflow management software. It is easier for the parties concerned to access and ensure that all are working with the latest updated information.

#2) Human-Oriented

This is suitable for all those tasks and processes that are handled partially or fully by people, as the name suggests. It requires human inputs so less suited for automation. It is user-friendly and relates to decision-making.

It is possible to automate the collection of information and notifications. The processes include features of business applications designed for human interaction, such as user interfaces, alerts, and notifications.

While choosing software like this, it helps the people in the organization to get benefitted with no prior technical know-how. Features like drag and drop and a visual interface make it more accessible than when compared with code-oriented software. It affects the productivity level, job satisfaction, and job perception of your workforce.

#3) Integration-Oriented

Streamlining the information flow and data between networks, different software tools and people is served by this BPM. This is more important for businesses with complex operations and with the combination of human- and data-oriented processes.

When you use integration and automation tools, there is a considerable reduction in manual data entry. This, in turn, saves time and reduces human errors. This increases the productivity and efficiency of your workforce.

Best Practices for BPM

As BPM has evolved over the years, best practices have emerged to keep complex process improvements right on track.

#1) Stay Realistic

If you want to improve efficiency with modeling or redesigning the process, then it is important to find out how you work. When you process modeling with a realistic view and not an idealistic one, then you find actual progress over time.

#2) Granularize the Topic

As you embark on your BPM journey, you often forget to deconstruct into smaller steps, with priority for the bigger-picture goals. In deciding how granular your steps are, prioritization and finding areas of automation leave a huge impact on automation.

#3) Set the Right KPI

As you implement the new process, expect a reasonable ROI from it. So it is critical to set up Key Performance Indicators (KPIs) right at the start. Without proper monitoring of these metrics, presenting relevant results becomes complicated.

#4) Involve Your People

It is a common pitfall when you cannot understand the internal problems and do not involve the people. Providing solutions to the challenges faced by them increases the likelihood of the process running smoothly.

#5) Measure Changes at Regular Intervals

Working for iterative gains is one of the best practices. You must measure changes at regular intervals rather than concentrating on them.

#6) Stay Aligned

You must understand the differences between customer satisfaction and process efficiency. It is important to understand the factors that improve customer satisfaction and work on them during the process modeling stage.

#7) Interview Customers

Efficient processes lead to customer retention and the growth of your customer base. You understand the expectations by reaching out to existing customers and target audiences. While redesigning the existing process, interviews and surveys prove beneficial.

#8) Appoint a Champion

A champion is appointed to take the responsibility of overcoming the resistance of the people to new processes while implementing the BPM. The Champion and the Project Manager must work in tandem to deliver the results expected by CXOs, acting as a bridge with other performers of the process.

#8) Check whether BPM Tool is Suitable or Not

Consider technological requirements, organizational capabilities, process requirements, and availability of financial resources before deciding on an effective BPM tool. The tool must fit your organization’s requirements.

#9) Make a Compelling Case

It is challenging to get a nod from top management and the team and this becomes easier with presentations and new ideas, in the form of demos, data, and prototypes to make implementation a compelling case.

What are the Different BPM Technologies

BPM automates the improvement of business processes. BPM is a collection of various technologies which are as follows:

• Workflow engines automate the flow of tasks to complete a business process and support workflow management.
• Process Mining tools help discover, represent and analyze tasks that drive business processes.
• Business Process Modelling Notation (BPMN) tools, which are graphical notations for business process diagrams, are used for diagramming processes.
• Business Rules Engines (BREs) enable end-users to bring a change in business rules without any programmer’s help.
• Simulation and testing tools make note of process behavior without writing code first.

A Business Process Management Software solution automates repetitive tasks, manages fundamental processing, and handles process logic.

BPM software helps to focus on automating repeatable business activities and services, unlike workflow management systems that can automate business tasks to allow work to be routed efficiently to the concerned workforce with the best capability to handle it.

Here are some new developments in Business Process Management Software:

• Intelligent BPMS
• Low-code/no-code
• RPA Vs BPM

#1) Intelligent BPMS

This was introduced by Gartner Inc. and combines BPM with Artificial Intelligence(AI). It states how technology has made process automation dynamic and driven. These technologies are real-time analytics, machine learning, etc. They also possess social collaboration capabilities.

#2) Low-code/No-code

The increasing use of LCNC technology by BPM is equivalent to less reliance on professional developers for the optimization of the business process. Business users and business analysts work in tandem with the programmers the modeling new business processes.

#3) RPA Vs BPM

Robotic Process Automation (RPA) works as a complementary partner with BPM. The software tools and bots programmable by RPA help to automate repetitive, manual tasks by simply copying the human way of clicking and typing the business applications, utilized by them.

It helps in the automation of access to legacy software applications that lack modern application programming interfaces or APIs. RPA scores are best for the automation of discrete over complex business processes. However, this type of limitation is disappearing with the evolution of software.

However, BPM uses a set of principles and techniques to improve the processes. These are derived from total quality management, Six Sigma, and lean management.

Companies adopting BPM add value by opting for a process approach for the fulfillment of business goals and continuous process improvements. The enabling technologies of BPM have evolved over the years to serve continuous improvement as well as agile transformation at scale, as they address business needs much better.

Since RPA offers better scaling of process automation, the BPM software has offered RPA as an integral portion of its toolkit.

What are the Different BPM Tools

Traditional BPM vendors have evolved their platforms with the help of modern architecture like LCNC development, process mining, AI, and RPA. BPM tools are used in the design of a systematic approach to optimize business processes. They are used to model, implement, and automate business workflows.

The goal is to improve corporate performance by minimizing errors, inefficiencies, and miscommunication. The benefit of these tools lies in organizations availing BPM advantages through these BPM tools like cost savings, reduced errors, and faster processing time.

Here are the top 5 BPM tools to design a systematic approach to optimize business processes:

1. Agiloft
2. Appian
3. ArrayWorks
4. Bizagi
5. IBM

#1) Agiloft

Agiloft offers many common chores for running your business. There are many standard workflows that can run on-premises or hosted in Agiloft’s cloud. AI is used to accelerate workflows by using automated classification and clause extraction.

It allows you to go live quickly with minimal effort with its out-of-the-box templates for help desk, contract and document management, external customer support, etc.

#2) Appian

It is a low-code platform from Appian designed to create workflows for businesses to capture the decision-making process of your organization. The sophisticated process-mining tools appear in the beginning to analyze the existing dataflows and speeding them up.

Then low-code functionality gets used to incorporate new data feeds and update the process. Others may use AI options like Optical Character Recognition (OCR) since Appian has capabilities similar to RPA.

#3) ArrayWorks

It is a low-code platform to solve complex business problems and automate them intelligently. It offers a combination of all in a single, unified platform – process, AI. digital integration, IoT, and many more.

It has an embedded, multidimensional analysis tool to find process bottlenecks, and unearth opportunities and emerging trends. It helps you create apps faster to continuously innovate, iterate and transform.

#4) Bizagi

Bizagi is used by professionals like supply chain people for automating workflows to track the movement of parts and goods towards manufacturing. Studio, the no-code process modeler tool that can track all types of business events through more than 60 widgets to model any business process. The tool actively supports compliance along with regulations for privacy.

#5) IBM

There are two types of IBM Process Manager – Express and the Full version. Express is low-cost and simpler. They use the low-code Process Designer and the Operational Decision Manager to design the information path through the Process Portal.

It is possible to run the code locally or in IBM Cloud. There are plenty of opportunities for integrating the software with other IBM applications, such as IBM Blueworks, which is a process mapping solution.

Future of BPM

BPM is an evolving discipline and is driven by the dynamic nature of business and work in the modern age. During the Covid-19 pandemic, companies were forced to access the digital marketplace and shift to a remote way of working. So, businesses of all sizes have reassessed the processes used by them – to meet their business goals.

Some of the trends that are shaping the future of BPM are:

• Intelligent business process automation is helping to improve process efficiency by using AI, machine learning, and RPA in workflows.
• Bots have entered process automation. The repetitive processes which are driven by rules are automated. The bots replicate human activities and AI allows the tasks to be carried out without any errors.
• BPM democratization is driven by Citizen developer tools to enable more users all over your enterprise to detect new ways to improve processes and implement and measure them.
• The flexibility of process automation to a great extent is improved with Adaptive Process Management and the ability to carry out process modeling iterative in nature, in real-time.
• Many employees perform tasks with a known end, but the path may vary due to unpredictable work patterns. BPM manufacturers have started to include the ability to deal with adaptive cases (Intelligent BMPS).
• There is an increase in demand for low-code systems as businesses want ready-made solutions personalized in a few days. BPM Vendors will start updating products with process-focused low-code platforms.
• It becomes a lot easier for organizations to get a precise picture based on activities creating a process and the way we can optimize them with automated process mining tools. As more process steps go online, the work in the past done manually by human beings, and captured in BPM through interviews as well as observation, are possible to be mapped and optimized more easily.
• Chat and data sharing are important for the effective running of your business today, and these are useful for BPM solutions data. Features like integration and process-related alerts in the BPM system help to reduce the number of emails and other communication that pulls down workplaces for all industries.
• Improvement and optimization of the front-end business processes engaging with employees and customers are achieved with BPM, which differentiates competitors.

Applications and Examples of BPM

BPM serves the objectives of various departments in your organization in the following ways:

#1) Human Resources

BPM helps to make the HR department more efficient and one of the areas in which it becomes beneficial is the onboarding of new hires as it speeds up and improves the process. BPM ensures you never miss critical steps. The HR department spends a whole lot of time in document management but cannot afford to do so.

BPM helps automate all document management. Also, with the automation of document-centric HR, the use of paper reduces considerably throughout the organization.

#2) Sales

BPM helps to reduce the sales cycle workflows, since the BPM software helps in the coordination of the interchanging of invoices and sales quotes.

#3) Finance

The finance department receives a huge number of emails and forms based on the internal and external financial processes of the organization. BPM helps the finance department to process employee travel requests faster than before and streamline the financial processes.

#4) Publishing

Publishing is a hectic process. But when you choose the right BPM tool, it enables you to make this process right. It makes the process of publishing a well-structured one.

#5) Customer Service

Customer service reps also use the BPM tool for managing clients, and traffic and prepare the team to handle higher volumes of services. The processes are automated by transcribing data from chatbots and call centers using the BPM tool.

#6) Content Management

Automated content creation and delivery are made possible with BPM software, as done by various media companies. BPM helps in process management and automation. This way, the designer can interact with content management, content traffic management, and rights reserved.

#7) Banking

Better management of the banking system happens through a BPM. It can evaluate potential customers for possible credit risks. This process includes gathering data from disparate sources, credit rating agencies, and employers. This helps in the reduction of errors in the documentation process.

Features That Every BPM Tool Should Have

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The features of BPM are:

• Visual Process Diagramming Tool
• Drag and Drop Form Designer
• Role-Based Access Control
• Mobile Support
• Powerful Administrator Features
• Single Sign-On (SSO)
• Integration with Existing Software Systems
• Reports and Analytics
• Performance of Large User Bases
• Process Performance Metrics

Business Process Management Jobs

Frequently Asked Questions

Q #1) What is a business process management? Provide an example.

Answer: BPM is basically a discipline or practice, but it is also used to describe tools. A good example of BPM is for posting a job notification. It starts with reporting a job opening and completes with the posting of the job advertisement.

Q #2) What are the three types of BPM?

Answer: 3 types of BPM are:

• Document-Centric BPM: This is used in processes based on paper or digital documentation. Here, the goal is to provide accurate and current documentation to certain parties. This approach focuses on documents, such as the formatting process, and signing and verifying contracts.
• Human-Oriented: This is suitable for all those tasks and processes that are handled partially or fully by people, as the name suggests. It requires human inputs so less suited for automation. It is user-friendly and relates to decision-making.
• Integration-Oriented: This is more important for businesses with complex operations and with the combination of human- and data-oriented processes. When you use integration and automation tools, there is a considerable reduction in manual data entry. This, in turn, saves time and reduces human errors. This also increases the productivity and efficiency of your workforce.

Q #3) What are the four stages of business process management?

Answer: The four stages of BPM are documenting, assessing, improving, and managing.

Q #4) What are the 6 phases of business process management?

Answer: The six phases of business process management are Assess, Design, Model, Implement, Monitor, and Modify.

Q #5) What is meant by the BPM tool?

Answer: The BPM tool is nothing but a process automation tool. It helps in mapping your everyday processes to find and reduce issues, helps in controlling the costs incurred by your company, increases the efficiency of your daily processes, and ensures the effectiveness of the people included in your processes.

Q #6) What are the components of BPM?

Answer: There are three main components of BPM and these are management approach, methodology, and technology.

Q #7) What is a business process?

Answer: A business process comprises tasks that are linked with each other. Each process has an ending with the delivery of something offered to the customer, an employee, or a partner. It can be a service or a product.

Q #8) What are the key business processes?

Answer: The key business processes are the same processes that leave a maximum impact on your customers, employees, and your bottom line.

Q #9) What is no-code BPM?

Answer: No-code BPM is a BPM software solution that requires no programming. It is a self-service tool that anyone in your organization can use. It helps in the empowerment of your entire team to understand processes and automate them in a flexible way as well.

Q #10) What are the stages of business process management?

Answer: The stages are as follows:

• Design: A good design helps to remove many problems. Businesses use an efficient design for the improvement of processes.
• Identify Stakeholders: The next step is to identify all the stakeholders and their needs.
• Definition: It is about defining the existing process to find areas for improvement.
• Measurement: It tells us about how the existing process is performing and what all are the qualitative and quantitative measures.
• Find bottlenecks: Here you should find the impediments that hinder improvement.
• Analyze the root cause: Here you find the problem, the cause, and the best solution for it.
• Implement solutions: After developing solutions, it is time to prioritize and then implement them.

Q #11) What are the KPIs for BPM?

Answer: The long-term KPIs are as follows:

• Average time for completion of the process.
• Average time is taken for completion of each step in the process.
• Number of process instances.

The short-term KPIs are as follows:

• Time required for each step.
• Number of processes created/completed per hour.

Q #12) What is the business process life cycle? What are the phases in the BPM lifecycle?

Answer: The business process lifecycle is a cycle for implementing continuous improvement in an organization. The steps are modeling, implementation, execution, monitoring, and optimization.

The four phases are as follows:

• Design
• Execute
• Monitor
• Optimize

Conclusion

There arose a need for BPM software products on account of the large and complex business processes of big enterprises to support large-scale business changes. Because the size and the complexity were not manageable without an automated tool.

A poorly managed business process is an impediment to your organization that reduces productivity and efficiency. Such ineffective processes without automation result in poor performance and undermine business goals.

BPM resorts to a systematic way so that the above conditions may not arise for your organization. BPM aligns processes to business goals and improves the efficiency of delivering services and products.

Business Process Management (BPM) is a systematic way of examining the current business processes of your organization and helps to implement improvements. The purpose is to improve the effectiveness and efficiency of your workflows.

BPM allows you to evaluate your current processes and find out ways to improve efficiency, reduce costs and errors, and support digital transformation efforts.  BPM is dynamic and has a broad discipline with respect to how organizational roles, business goals, tactics, rules, etc. encompassed by it are changing from time to time.