BPM: Knowing the Future Means Knowing the Past (Part I of II)

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This article will address the topic of the origins of Business Process Management (BPM) relating its origins back to Darwin's Theory of Evolution. What has unfolded over the years is that BPM has evolved in two parallel paths namely Business and Technology. From a business perspective it has evolved from Total Quality Management (TQM), then Business Process Re-engineering (BPR) and finally Business Process Management, whilst from a technology perspective it has evolved from standalone applications (and here I have grouped imaging applications), to workflow applications and finally to Business Process Management Suites (BPMS).

These two parallel evolutions have finally been brought together by the missing link, model driven architecture, where we now find from a modeled business process one is able to produce a pre-configured application that meets 80% to 90% of the business requirements -- the other 10% to 20% requiring a leverage of existing assets and integration into the organizations line of business systems.

We will begin with the business evolution and start with TQM which had its beginnings before the industrial revolution when we had skilled craftsmen who conducted both the manufacturing and inspection roles. With the onset of the industrial revolution mass production was critical, and decomposition enabled production efficiency. As a result of this statistical approaches to quality control began being adopted with one of the outcomes being the separation of the manufacturing and inspection roles.

After World War II two of the pioneers of TQM moved to Japan where they were able to convince top managers of the importance of quality control. For the next 20 years USA focused on marketing, production quantity and financial performance, while Japanese managers improved quality at an unprecedented rate. Very soon Japanese products were preferred over American products -- started the quality revolution in the early 1980's.

The quality revolution gave birth to the term Total Quality Management with the integration of quality principals into organization management systems. In the early 1990's quality management principles started finding their way into the service industry with the Ritz-Carlton Hotel Company and FedEx being the early adopters.

TQM can be defined as the following:

  • Total - equates to involving everyone and all activities in the company
  • Quality - ensuring that customer requirements are met
  • Management - understanding that quality can and must be managed and is a continuous
    process of improvement

To conclude the TQM component of the evolution we will focus on the 8 TQM Principles and while these principles were developed in the early to mid 1900's they are still relevant today and should form the foundation of any BPM engagement and organizational strategy.

Principle 1

Customer-focused organization - organizations depend on their customers and therefore should understand current and future customer needs, meet customer requirements and strive to exceed customer expectations.

Principle 2

Leadership - leaders establish unity of purpose, direction and the internal environment of the organization. They create the environment in which people can become fully involved in achieving the organization's objectives.

Principle 3

Involvement of people - people at all levels is the essence of an organization and their full involvement enables their abilities to be used for the organization's benefit.

Principle 4

Process approach - a desired result is achieved more efficiently when related resources and activities are managed as a process.

Principle 5

System approach to management - identifying, understanding and managing a system of interrelated processes for a given objective contributes to the effectiveness and efficiency of the organization.

Principle 6

Continual improvement - continual improvement is a permanent objective of an organization.

Principle 7

Factual approach to decision making - effective decisions are based on the logical and intuitive analysis of data and information

Principle 8

Mutually beneficial supplier relationships - mutually beneficial relationships between the organization and its suppliers enhance the ability of both organizations to create value.

The next component of the evolution is Business Process Re-engineering (BPR) and can be defined as follows:

  • The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service and speed (Hammer and Champy).
  • The envisioning of new work strategies, the actual process design activity, and the implementation of the change in all its complex technological, human and organizational dimensions (Thomas Davenport).

The reason I have stipulated two BPR definitions is Hammer and Champy do not take into account the human component and do not cater for change management. Not taking into account the change management aspect, conducting engagements with a big bang approach and not carrying over the fundamental concept of TQM through to BPR in the evolution cycle has resulted in a bad stigma being associated with BPR engagements.

The core principles from TQM that were carried over to BPR are as follows:

  • Putting the customer first;
  • Adopting a process viewpoint;
  • Favouring partnerships with customers and suppliers;
  • Promoting teamwork through job decomposition.

Now that we have looked at the similarities of TQM and BPR, let's look at a comparison between the two management disciplines. If one had to compare the theme of the two one would find that TQM focuses on improving what already exists while BPR focuses on disregarding what currently exists and starting from scratch. The approach to TQM is of an incremental nature, which means breaking the engagement down into manageable pieces and tackling each one on a continuous improvement basis. BPR on the other hand adopts a radical approach with huge enterprise-wide or big-bang type engagements being conducted with little or no success. TQM's core assumption is that existing processes are sound and merely needs to be improved upon, while BPR's core assumption is that existing processes are broken and needs to be radically redesigned.

Within a TQM engagement change within an organization is a continuous occurrence and constant change should become part of the culture of an organization, while a BPR engagement regards organizational change as a once-off exercise.

The role of IT within a TQM engagement is incidental and no real automation is conducted, while within a BPR engagement IT is utilized as a core enabler to the organizational processes.

Consider IT enablement as compared to Business Transformation over the business evolution cycle as depicted in figure 1 below. As one moves from left to right the amount of business transformation that occurs increases and with it the degree of IT enablement.

Figure 1

What is becoming exceedingly evident with the maturity of Business Process Management Suites (BPMS) is that the role of business and IT are now merging and business platforms are being provided by these BPMS.

What we will now consider are the characteristics of a BPR engagement, the shortcomings of a BPR engagement and what should be considered to ensure a successful BPR engagement.

The core drivers from a BPR perspective are cost reductions and greater efficiencies which result in:

  • Combining several jobs into one;
  • Empowering employees to make decisions thereby alleviating unnecessary bottlenecks and hand-offs;
  • Performing work where it makes the most sense for example Walmart moved its replenishment function to its suppliers;
  • Ensuring that controls, checks and other non-value added tasks are minimized;
  • Customers are provided with a single point of contact to ensure consistency and end-to-end process management;
  • Organizational processes and operating model are redesigned;
  • A shift from mass production to mass customization;
  • The reduction of the amount of time it takes from the beginning to the end of a process.

Now that we know what the characteristics of a BPR engagement are let us examine its shortcomings.

One of the major shortcomings of BPR is its total disregard of people which caused substantial underestimations of the resistance to change within organizations. This coupled with the lack of management support and exaggerated expectations regarding the potential benefits of these engagements has resulted in BPR's poor track record.

Furthering BPR's poor track record are the implementation of generic so-called best-practice processes that do not fit specific company needs and an over trust in technology solutions and performing BPR as a one-off project with limited strategy alignment and long-term perspective.

Taking these shortcomings into account we will now consider what is required to ensure a successful BPR engagement. While we will be considering requirements for BPR engagements it is important to note that as with the TQM principles these requirements are also applicable to and should form the foundation of any BPM engagement. The following seven requirements will substantially improve engagement success rates:

  1. The first criteria to consider is top management sponsorship. Management sponsorship is key due to the nature of these engagements, both in terms of its radical nature and organization wide impact. If top management sponsorship is not obtained from the very beginning of the engagement the obstacles that will present themselves will ensure engagement failure.
  2. An alignment to the organizations overall strategy will ensure that through these engagements the organizations strategy can and will be operationalized.
  3. A strong and diverse team should be selected to perform the engagement. Ideally business people that actually perform the duties with operations should be members of the team.
  4. A business case clearly indicating return on investment and how costs will be reduced, additional revenue produced and/or capacity increased must be compiled.
  5. Use should be made of proven methodologies as these improve the ability to increase the success rate of the engagement by ensuring lessons learned prevent the mistakes of the past.
  6. Organizational acceptance to change needs to be managed as soon as engagements of this nature begin. One of the key issues that need to be addressed is that of job losses, frequent communication with staff is critical to ensuring organizational acceptance of these engagements. Within BPM engagements we find that there is a shift from gaining efficiencies through job losses to gaining efficiencies through increased capacity.

The last requirement that will be discussed is that of showing results quickly. One of the most common criticisms of BPR projects in the early 1990s was that they took too long to show results. Due to the iterative nature of engagements, in BPM results can be produced a great deal sooner -- keeping deviations from the business requirements to a minimum.

In the next segment we will move into our present state -- Business Process Management.

About the Author

Vickesh has consulted to all the major banks in South Africa, an insurance company, government and a mining company. While Vickesh initially started in the development space which has provided a firm foundation on which to build his process, business analysis and project management knowledge he has moved his focus over the last few years to the Business Process Management and Enterprise Content Management space where he has worked with the likes of FileNet, Tibco/Staffware, Microsoft SharePoint portal and IBM Websphere.

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