Business Process Management
June 11th, 2006In a previous post, I was making the case that viewing the supply chain as a network of processes is the basis for rapid performance improvement. The process centric view of the enterprise sets the stage for understanding the fundamentals of the flow processes that form a supply chain as well as identifying their performance drivers. Once the processes are analyzed and improved then execution can be automated to ensure consistently high performance.
This particular area has seen a lot of interest in the past few years from business executive sand IT professionals alike and the science of Business Process Management, or BPM has emerged to incorporate a methodology to understand, execute and improve business processes as well as the enabling technology to suport it.
In a recent article in Intelligent Enterprise, Jim Sinur, Gartner VP and highly regarded analyst described a BPM maturity model comprising five stages of performance as follows:
- process understanding,
- process control,
- enterprise execution,
- corporate performance management and, last,
- competitive differentiation.
Jim continues:“You start modeling and measuring in the process understanding stage. In the second stage, you’re doing more optimizing and tweaking. This is where you take advantage of rules management and optimization. In the third stage, you craft a cross-enterprise process architecture and maybe extend that to your trading partners. In the fourth stage, you instrument a framework of corporate performance management goals against the actual process.”
The bad news is that this is a lot of work but, the good news is that, according to Jim, most companies are in either stage one or two. There is a real opportunity to employ the BPM methodology to rapidly gain leadership over the competition. And truly, when we examine Jim’s model it becomes obvious that we have been working all along on pieces of the various stages in our drive to reduce costs, improve customer satisfaction, and gain market share. The true opportunity is to put all these pieces together and use the BPM approach to understand, analyze, and improve business processes and automate and manage their execution applying the enabling technologies that have emerged in the past several years.
This is what industry leaders such as Dell, Wal-Mart and P&G have been recently doing in adopting this approach to become true high-velocity, highly-effective demand driven networks with reduced operating costs, higher asset utilization, improved customer satisfaction resulting in consolidating their domination over the competition.
More on this in future posts. Until then you can check out the BPMI and BPM Institute websites for more info.