Business Process (BPM/BPR & BPA) : A Primer

Note from the author: As this is my first blog post I not only apologize in advance for any inaccuracies but I welcome and appreciate any reader feedback. You’re welcome to address anything, whether it is false information or you just want to criticize and yell in disgust at my writing style

BPM (Business Process Management), BPR (Business Process Reengineering), & BPA (Business Process Automation) are three acronyms which have been prevalent “buzz terms” in the world of business for over twenty years. Aware of it or not, whether a large retailer, small mom & pop shop, or a non-for-profit, process is embedded in the veins of your business organization. Although “business process” may no longer be the buzz-worthy business jargon, it was during the 1990’s, it is in today’s economy of e-commerce, social networks and congruence of customers channels, in which the understanding of and mastery of business process management can have its greatest ROI.

Before getting to the meat and bones of this topic, in which we will explore ways to leverage business process automation in today’s economy, let us take a step back and provide a basic overview of the different terminology.

As all of the above 3 acronyms above (BPM/BPR/BPA) are in regards to Business Process, it is often easy to get confused and use each synonymously. However, each has a different time and place for appropriate usage.

Before we dive into these concepts let us look at the general term “business process”. A Business process, as defined by Wikipedia is:

“A collection of related, structured activities or tasks that produce a specific service or product (serve a particular goal) for a particular customer or customers”.

There are a few different schools of thought regarding the detailed definition of what a business process is. Most simply vary, in regards to the degree of importance in which transformation occurs, as a result of the “process”. For example, from a high-level perspective, business processes can be grouped into three possible areas, based upon output:

1. Management Processes (i.e. Corporate Governance)
2. Operational Processes i.e. Operational)
3. Supporting Processes (i.e. Accounting)

For the sake of this topic, we will be sticking with the generic definition. Most activities, present in an organization, can be defined as their own standalone process (such as marketing and sales). With that said, they can usually be further defined into a subset of processes. For example, Sales could be defined as an Operational Process, which actually a grouping of well defined process, and can then be further fragmented into smaller sub-processes.

BPM & BPR

Business Process Management

Now that we understand the bird’s-eye view of what a business process is, BPM (business process management) & BPR (business process reengineering) can be thought of as the method and approach to defining, organizing and analyzing ones business processes.

Business Process Reengineering & Business Process Management are, indeed, very similar, with the main difference being, BPR is thought to focus more heavily upon the technology components of a process and less on the human tasks. BPM (business process management) can be thought of as the evolution of BPR, as this recognizes all of the human interactions, and places importance on taking these into account during the Design phase.

The benefit in BPM & BPR is that it provides a baseline of being able to analyze your organizations current level of effectiveness. When used correctly, this methodology is an enlightening tool for identifying inefficiencies.

There are 5 basic steps which comprise both BPM & BPR

1. Design

The design stage is where you actually document and define your process. This is usually done by utilizing tools, such as work-flows and swim-lane diagrams.

Items to look for when actually documenting a process include not only the process flow itself, but the parties involved, alerts & notifications, escalations, SLAs (service level agreements), and handovers.

Once you have mapped the current process, this is where you can then make changes and layout your new proposed process for comparison.

2. Model

The Modeling stage is where the fun takes place. This is where you incorporate any changes you mapped out in the design process and tweak any variable changes to predict and see the impact. (Examples of such variables can be cost of goods, tools used, time of performance, etc.)

3. Execute

The execution stage is exactly what it sounds like. This is where you put the process into action. This can be done through technology application, human interaction or a combination of the two.

It is important however during the execution stage to implement exactly what has been set up in the initial design phase for proper monitoring.

4. Monitor

During the monitor phase, you track the high-level and detailed-level performance of the defined process.

Any variables you specifically identified during the modeling stage should be tracked along with any other information the business wants to evaluate. Often, the variables have been identified prior to determine, criteria of success, as being the catalyst for the process management in the first place.

5. Optimize

The Optimization aspect involves analyzing the data that has been obtained during the monitor phase and then identifying any areas for improvements (bottlenecks, costs, etc.).

It should be noted, although it may sound confusing, BPR/BPM, in itself, is an ongoing process. This is not an instance that is carried out once and then be left alone. Business Process Management is an ongoing lifecycle, which encourages a healthy efficient running org.

As many organizations do not have time to manually maintain the BPM lifecycle, we are seeing more and more attention and broader scope of solutions in the domain of BPA.

BPA

Business Process Automation is an interesting area and has more relevance in today’s’ wired economy than ever before. BPA refers to a subset of Business Process Management.

“BPA consists of integrating applications, cutting labor wherever possible, and using software applications throughout the organization.”

BPA is often thought as a subset of BPM, due to it primarily employing the usage of IT to automate any defined process. Some believe that until a process is completely automated, there is no true value in measuring and optimizing it due to the human variables of process which impede on truly being able to predict optimized efficiencies.

Most importantly, process automation does not need to be mutually exclusive thought from BPM. Most online businesses already have many of their sub-processes automated, which provides a rich new landscape and opportunity for Business Process Management initiatives.

So now the basic terminology has been covered. In the next posts we will explore the history of BPA tools and look at some current platforms and solutions in the market, and how it’s greatest return on investment can be experienced in today’s online landscape.