On the surface, the name really does say it all: Business Process Management software helps organizations manage their business processes. It’s a deceptively simple concept, however, because there is no single accepted definition of BPM, a hodgepodge term that seems to encompass everything from workflow to Enterprise Resource Planning (ERP) to Enterprise Application Integration (EAI). This lack of a uniform understanding has created confusion in the marketplace and has made buying decisions incredibly challenging, as purchasing managers are forced to compare apples to oranges when selecting which BPM suite to buy. Fortunately, there is a straightforward way to eliminate much of this confusion by segregating business process management into its three major classes.
The initial step in understanding BPM is defining it. While experts may quibble about the scope of its functionality, META Group characterized it as “an integrated management approach that includes Web-based analytical applications (to gather and analyze data), business plans to achieve desired metrics and the necessary reporting and forecasting to ensure performance goals.” On a more theoretical level, process guru Howard Smith, author of Business Process Management: The Third Wave, says that BPM is “a synthesis of process representation and collaboration technologies that removes the obstacles blocking the execution of management intentions.”
Whichever definition one chooses to use, it makes sense to think of BPM as an approach to, rather than an application for, managing work. In this conceptual framework, business process management systems codify the sequence of activities needed to:
- Move data between applications to change status in "systems of record"
- Present documents to clerical workers along with a predetermined set of rules to assure completeness and accuracy before taking actions
- Facilitate interactions between knowledge workers as they use their expertise and judgment to decide upon actions in uncertain situations
Each of these functions forms the basis of the three distinct types of BPM software in use today. The first major class is comprised of system-to-system packages that allow disparate software and hardware devices to integrate with each other without human involvement or intervention. For example, a distributed global enterprise such as Amazon needs to allow its inventory and delivery systems to work together to ensure that products are properly sent to customers. All of this information must then be relayed to a variety of departments within the company, including accounting, shipping, and inventory, as well as outside parties such as UPS, that all rely on different technology infrastructures. Without a good system-to-system BPM tool to manage these interactions, it would be almost impossible for the company to function effectively. In the financial world, a common use of this technology can be found in straight through processing, in which all aspects of a stock transaction can be conducted without re-entering data manually. This is critically important to ensure that trades cannot only occur instantaneously, but will have lower error rates and reduced risks.