Executive Briefings

BPM, A Great Lean Solution for Tough Economic Times

Business process management will continue to be a topic of interest to supply chain companies in 2009. Because process change can be implemented without significant cash investments, BPM will stay fashionable in lean economic times. Adoption will be compartmental for a number of reasons: the economy, organizational politics and the lack of any vendor solution that completely meets business requirements.

Business process management (BPM) can provide significant benefits. As a study done by the London School of Economics shows, organizations gain more from the introduction of process change than they do from implementing technology. Combining these two yields significant synergy, but it is clear that process change is the key lever to gaining value.

Because economic pressure will drive the demand for shorter-term benefits, solutions that support this will be favored. There will be little desire to invest in anything that cannot return a significant benefit in 12 months or less. This does not mean that organizations are not interested in strategic planning and more holistic solutions. Instead, it speaks to the prudence of carefully navigating a ship in rocky waters when no one really knows the true location of bottom.

Organizational politics, as they often do, will continue to play a role. Because the emphasis will be on the short-term, cross-organization governance frameworks that promote uniformity, and consistency will be tested. Organizations with strong governance frameworks will weather this better than those with more fragmented structures. Unfortunately, with the emphasis on the short term, this will not be a good time to introduce a pervasive organizational structure that does not have really clear benefits. So the idea of cross-organizational processes, while generally accepted as beneficial, will not gain traction because the benefits associated are longer in arriving.

Multiple vendor solutions will also feed the short-term nature of benefit achievement. These toolsets vary across two broad spectrums and no one tool does it all:

• Tools that model the complete business, including strategy, organization, events, metrics and architecture. These tools tend to be complex and require deep knowledge of the toolset to be used most effectively

• Tools that model a specific business area where the output can be used to execute a process. These less complex tools include workflow and rules and are often used by business analysts.

Software as a service will likely start to make its presence felt in this category. SaaS offers an organization the ability to introduce new capability while limiting organizational overhead and expenditure. Its tendency to centralize control should also be an attractive attribute to most business process efforts.

In a number of our writings, AMR talks about the concept of vitamins vs. aspirin. Vitamins, as we all know, are taken with the expectation that they will deliver longer-term benefits. On the other hand, aspirin is taken to relieve immediate pain. In 2009, it is reasonable to expect that more companies will consume more aspirin, perhaps at the expense of vitamins. Because the benefits of orchestrated BPO are more akin to vitamins than aspirin, this will make it harder to initiate in the short run. Smart companies, however, will not abandon their longer-term regimen of vitamins. They will implement the methodology, architecture, communication framework and governance-their process culture and community - needed to scale their initial efforts.

The Outlook

So what can you do to be most successful in 2009? First, do not overreach. Understand that any investment an organization makes will have to have clear business value that can be delivered in a relatively short period of time. Temper that desire to be a BPM zealot. Develop a big organizational view of BPM that can be executed in pieces. BPM can help companies survive tough economic times by increasing their return on process change, but in 2009, it needs to be applied in small steps with demonstrable benefits each step of the way.

Business process management (BPM) can provide significant benefits. As a study done by the London School of Economics shows, organizations gain more from the introduction of process change than they do from implementing technology. Combining these two yields significant synergy, but it is clear that process change is the key lever to gaining value.

Because economic pressure will drive the demand for shorter-term benefits, solutions that support this will be favored. There will be little desire to invest in anything that cannot return a significant benefit in 12 months or less. This does not mean that organizations are not interested in strategic planning and more holistic solutions. Instead, it speaks to the prudence of carefully navigating a ship in rocky waters when no one really knows the true location of bottom.

Organizational politics, as they often do, will continue to play a role. Because the emphasis will be on the short-term, cross-organization governance frameworks that promote uniformity, and consistency will be tested. Organizations with strong governance frameworks will weather this better than those with more fragmented structures. Unfortunately, with the emphasis on the short term, this will not be a good time to introduce a pervasive organizational structure that does not have really clear benefits. So the idea of cross-organizational processes, while generally accepted as beneficial, will not gain traction because the benefits associated are longer in arriving.

Multiple vendor solutions will also feed the short-term nature of benefit achievement. These toolsets vary across two broad spectrums and no one tool does it all:

• Tools that model the complete business, including strategy, organization, events, metrics and architecture. These tools tend to be complex and require deep knowledge of the toolset to be used most effectively

• Tools that model a specific business area where the output can be used to execute a process. These less complex tools include workflow and rules and are often used by business analysts.

Software as a service will likely start to make its presence felt in this category. SaaS offers an organization the ability to introduce new capability while limiting organizational overhead and expenditure. Its tendency to centralize control should also be an attractive attribute to most business process efforts.

In a number of our writings, AMR talks about the concept of vitamins vs. aspirin. Vitamins, as we all know, are taken with the expectation that they will deliver longer-term benefits. On the other hand, aspirin is taken to relieve immediate pain. In 2009, it is reasonable to expect that more companies will consume more aspirin, perhaps at the expense of vitamins. Because the benefits of orchestrated BPO are more akin to vitamins than aspirin, this will make it harder to initiate in the short run. Smart companies, however, will not abandon their longer-term regimen of vitamins. They will implement the methodology, architecture, communication framework and governance-their process culture and community - needed to scale their initial efforts.

The Outlook

So what can you do to be most successful in 2009? First, do not overreach. Understand that any investment an organization makes will have to have clear business value that can be delivered in a relatively short period of time. Temper that desire to be a BPM zealot. Develop a big organizational view of BPM that can be executed in pieces. BPM can help companies survive tough economic times by increasing their return on process change, but in 2009, it needs to be applied in small steps with demonstrable benefits each step of the way.