Definition: Business process management (BPM) tools help companies design, optimize, automate and manage business processes. Key components of a BPM suite are a rules engine, graphical design tools and a process engine that automatically converts a design into code. Humancentric BPM suites, which this guide will focus on, tackle processes in which employees collaborate and interact with business applications, databases and documents. Examples of humancentric processes include claims processing, loan approvals, accounts payable and customer service.
Benefits
In his book The Workflow Imperative: Building Real World Business Solutions, Delphi Group president Thomas Koulopoulos states that "lag time" -- when tasks sit idle in queues or in baskets -- typically takes up 90% of the total duration of a business process, with 10% spent actually doing the task. Workflow management, a predecessor and key component of BPM, reduces lag time by automatically routing documents and tasks to the right people, and by implementing rules that address potential bottlenecks and delays.
Workflow management enables companies to shorten cycle time, increase productivity, improve customer service and reduce mistakes and administrative overhead, according to "Best Practices in Workflow," a 2002 report by Forrester Research Inc. BPM systems add the ability to monitor, analyze and optimize processes over time.
Some of BPM's greatest benefits center on customer-related processes. Cary, N.C.-based Ultimus Inc. reports that its BPM suite has reduced by as much as 90% typical cycle times for a sales application, with quotes delivered back to the customer in two days instead of 20. In addition, errors were reduced and pricing accuracy improved, resulting in greater customer satisfaction, the BPM suite vendor stated.
According to a 2006 Forrester Research Wave report, "Human-Centric Business Process Management Suites," BPM enabled a telecommunications company to reduce customer service cycle times by 65% and process leases 60% faster with the same staff. "BPM installations typically increase productivity by 25%, 50% or even more," Forrester analyst Connie Moore said. "Cycle time gets reduced from months or weeks to days, hours, even seconds."
BPM tools also increase agility, enabling businesses to quickly alter processes in response to business and market changes, resulting in improved competitiveness.
Lastly, BPM suites provide a formal framework for enforcing, auditing and proving company compliance with government regulations and best practices.
Technology trends
BPM suites have come a long way past simple workflow management in the last year or two. Most now provide the following features:
- Graphical, often Web-based design software. This eliminates technical complexity and streamlines process design, putting BPM within reach of business analysts and process owners. It also puts small and midsized business (SMB) IT managers with limited expertise in process design.
- Automated coding. Combined with scripts and wizards, automated coding minimizes IT involvement and streamlines deployment. Advantys' Web-based Smart Enterprise Suite, for example, enables companies to get processes running within two weeks.
- Collaborative tools. These enable business analysts and IT managers to work together on process design.
- Dashboards. Dashboards let process owners monitor, analyze and fine-tune processes in an ongoing fashion, ensuring that service-level agreements and cost parameters are being met.
- Support of existing user productivity tools. Tools such as Microsoft Word, Excel and Outlook Express help companies bring occasional or reluctant end users into a process.
Costs
Even modular BPM platforms, which let customers start with a basic set of functions, have fairly pricey entry points. Pegasystems Inc.'s SmartBPM Suite starts at $50,000 and increases according to amount of usage.
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Features like business intelligence and simulation ... are generally overkill for SMBs.
Connie Moore
analyst, Forrester Research
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A basic version of Global360 Inc.'s G360 Enterprise Suite starts at about $100,000. This includes "quick start" services, in which technical consultants work with the customer on designing, deploying and maintaining business processes.
Ultimus' BPM Suite starts at $50,000 and typically costs $100,000 and up.
Vendors claim that BPM systems pay for themselves quickly. "Most people get a [return on investment] within six to eight months," an Ultimus spokesman said. Furthermore, the suites provide ever-increasing returns as companies extend them to more and more business processes.
SMBs with small budgets might want to consider a simpler package, such as Advantys' workflow management system, which ranges from $13,900 to $39,000 based on number of servers, for unlimited users and workflows.
Tips and gotchas
Given that BPM is pretty much a catch-all term, make sure the suite you choose specializes in the type of processes you want to automate. These include the following:
- Document-intensive processes such as claims processing, accounts payable.
- Decision-intensive processes such as mortgage loan origination and sales promotions.
- Processes that integrate multiple applications and systems, such as supply chain management.
BPM often involves a major social change as well as systems changes, so getting end users to buy in can be tough -- particularly for SMBs. This is "because people are closer to processes; know and own them more rigorously and passionately," a Pegasystems spokesman said.
According to a customer survey performed by Ultimus, the trickiest part of BPM is identifying processes and the rules that govern them. Ultimus customer National Gypsum, a wallboards manufacturer, spent weeks coming up with more than 150 "if then" conditions for a rebate process.
Businesses often to need to change or add rules once a process is automated. This may happen once or twice, maybe once per week for months. Therefore, it's a good idea to find a BPM system that allows changes to be made without taking down the process.
Check out the vendor's library of templates, which can provide a jump start in designing common business processes such as accounts payable or claims management.
Product sample
Pegasystems
Ultimus
Global 360
Metastorm.com
Advantys.com
Expert viewpoint: Moore
"Features like business intelligence and simulation, which lets you test out a process design and even do several iterations before deploying it, are generally overkill for SMBs.
"One of BPM's biggest benefits is freeing up people from mundane trivia so they can do value-added work. Instead of tracking where things are and moving things along, they can focus on product design and other tasks that have real customer impact.
"You need someone who thinks in terms of business processes. If you don't have those skills, bring them in. You also need someone to sit between IT and business users: like a business power user.
"Low-hanging fruit isn't always the most rewarding. Choose a process that's meaningful to your business."
Elisabeth Horwitt is a contributing writer based in Waban, Mass. Write to her at editor@searchcio-midmarket.com.
