Benefits strenghtened by low cost of solutions
BPM helps to dramatically improve productivity, efficiency and customer satisfaction. But in addition it provides an excellent Return On Investment (ROI) by significantly reducing the cost and time in which these solutions are delivered.
In this section we are presenting extensive benefits that your business can gain from using BPM.
Depending on your goals and requirements you can use BPM to achieve different types of benefits. We chose to group them in the following categories:
- Reduction of operating costs and increasing of revenues
- Improvements to decision making, collaboration and knowledge sharing
- Advancing the company’s mission
Here is how these types of improvements are achieved.
Increase revenues and reduce operating costs
The key strength of BPMS is the ability to automate simple, repetitive processes (Low Value-High Volume). Even minor improvements to such activities may yield substantial cost savings for the business:
Reducing the cost of processing annual leave application by £50 per employee will result in total saving of £1mln for a company employing 5000 people (based on four submissions per person per annum).
But the advantage comes not only from reducing costs. Equally important is to implement changes that increase revenues or prevent loss of revenue opportunities:
Reducing the average duration of calls to a Call Centre by few a minutes increases overall efficiency of the unit and at the same time increases customer satisfaction and therefore loyalty.
Savings of this type are achieved through:
- Better access to supporting information (integration with databases and applications)
- Automation of repetitive, low value tasks (employees can be moved to manually handling of high value exceptions)
- Reduction of cycle and wait times (enforcement of business rules, utilisation of alerting and escalation techniques)
- Execution of activities in parallel (better structure and co-ordination of processes)
Here are examples of processes where improvements to efficiency can be achieved:
Improve collaboration and knowledge sharing
There are many processes that are executed infrequently but have a critical impact on the business (Low Volume-High Value). They are characterised by the need to make quality decisions in the early stages in order to avoid costly re-works later. BPM enables quality collaboration between people, departments or even businesses, better sharing of past knowledge and experiences:
In the New Product Development process facilitated collaboration between the company and external agencies leads to a better utilisation of experiences from previous campaigns, reduced timescales and increased quality of delivered product.
In the Operational Risk Management process operational events can be captured more effectively through integration with enterprise applications and better provision for manual user input. Through strict enforcement of business rules (escalation, information routing) secured by BPMS, these events can be dealt with differently depending on their meaning and potential risk.
These improvements are achieved through:
- Improved decision making processes through better access to supporting information
- Reduction of cycle and wait times through enforcement of business rules, utilisation of alerting and escalation techniques
Examples of such processes are shown below.
Advance your company’s mission
Every company relies on a set of mission-critical processes that define its business. These processes may have similar names in two organisations operating within the same industry. But the make-up and performance of these processes determines the difference between winning and losing. BPM helps to build, manage and enhance unique, mission critical processes that help to gain competitive advantage.
Here are examples of such processes and possible benefits.
Below you will find other benefits which plasces BPM ahead of other apporaches when building business solutions.
Improve management capabilities
Alignment of processes with company goals. A business process is a set of activities that companies carry out to achieve their objectives, the company will do only as well as its processes are aligned with the company goals. With BPM it is possible to measure in near real-time performance of processes and to accurately establish how closely they support the organisation’s objectives.
Effective process management. Availability of near real time process measurements enables application of management techniques like Balanced Score Card, Six Sigma or Activity Based Costing.
Increased business agility. The ability to rapidly change business processes enables greater responsiveness to changing business circumstances.
Competitive advantage through processes. Most companies operate around packaged applications (ERP, CRM, etc.) that are exactly the same for all businesses and so they do not provide any competitive advantage. BPMS allows departing from this model and creating a company’s own unique processes that are the source of true competitive advantage.
Better utilisation of skilled personnel. Automation of mundane tasks will free up key employees to do more valuable jobs. The human involvement can be reduced to only handling exceptions.
Enforce best practice and demonstrate quality
Traditional process improvement initiatives make it impossible to ensure that the new process is carried out as designed. Ten different people will do things in ten different ways no matter how much training they are given.
With BPM it all changes. As the process is driven by an electronic application the users have no other way but to follow it rigidly. This truly enables introduction of best practices.
BPM also natively provides support for activities tracking and audit trails and therefore it allows demonstration to auditors or Quality Assurance organisations of adherence to working procedures.
Help IT to deliver effective solutions
Better understanding of business requirements. BPM fosters true involvement of business users in the definition and specification of requirements. This in turn increases the quality of requirements and helps the IT development teams to better understand what is needed and to deliver truly valuable systems.
Easy integration between systems. BPM facilitates easier integration with databases and enterprise systems. Therefore, it provides an ideal platform for integrating disparate technologies and fragmented systems into one coherent solution (e.g. integrate company’s web site with back office systems).
Use best-of-breed systems. Thanks to the integration capabilities of BPM businesses can use IT systems that are best suited to perform a specific function. This allows for planned introduction of advanced applications without affecting working practices and structure of the processes.
BPM delivers excellent ROI
Many of the improvements presented so far could arguably be delivered with other technologies. But BPM has been designed specifically to address many shortcomings of other approaches. As a result it produces much better return on investment (ROI) for implemented solutions. Here is why:
Shorter cycle for building and deploying solutions
With BPM the main effort goes to the high-level business process modelling rather than IT development. In fact most of the functionality is automatically generated as a result of the modelling (user interface, To-Do lists, etc.). This increase in productivity results in:
- Shorter implementation cycles compared with traditional development
- Reduction in IT cost
- The solution still addresses the original problem – business hasn’t significantly moved on
Staged implementation – lower risk and quicker wins
When building solutions with traditional technologies, the designers try to include as much functionality as possible first time round in order to keep the development costs to a minimum. This wide scope increases the initial costs, increases time of returning the benefits and increases complexity of switching to the new system.
BPM on the other hand allows for implementation of the solution without incurring hefty overheads. You can start small and easily add more functionality as time and resources permit. This brings the following benefits:
- The scope of the staged solution is highly reduced and therefore, the development and migration process is much more manageable.
- The ROI can be realised much quicker on smaller chunks
- The business environment is less likely to move on significantly in a shorter time reducing the need for re-defining the projects.
- The risk of failure is significantly reduced.
Recommended reading …
Many businesses have already benefited from using BPM to improve their performance and gain competitive advantage. The next section demonstrates specific improvements and benefits achieved by others. We hope that these case studies help you realise how powerful and effective BPM is. Please read on …