30 31
Freek Hermkens - The services sector and its environment are
changing rapidly. To withstand strong international com...
32 33
Compared to BPR, implementation plays a
far more important role within BPM proj-
ects. The story is well-known by no...
Upcoming SlideShare
Loading in …5

Bpm let it flow


Published on

Published in: Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Bpm let it flow

  1. 1. 30 31 Freek Hermkens - The services sector and its environment are changing rapidly. To withstand strong international competition and major changes, a higher level of organisational performance is required. Customers demand customization of services, and organisations must sharpen their service delivery speed. In ad- dition, adequate cost and risk control measures should also be implemented. All these factors have contributed to an increasing focus on the various aspects of process management within or- ganisations. Process management is not a new phenome- non. In the 1970s and 1980s, administrative organisation handbooks (AO handbooks), a means to record responsibilities and ac- countabilities, were popular. Then came Business Process Reengineering (BPR), which helped analyse and redesign the work- flow and processes within organisations. However, due to lack of results, BPR – and with it the focus on processes – started to fade into the background. These days, there is renewed interest in process management with Business Process Management (BPM), which is regarded as the way for improving internal control struc- tures. As it turned out, BPR did not achieve the success that many, including Hammer and Champy, predicted. So what is the dif- ference between BPR and BPM? Why will BPM be bringing home the bacon instead? Business Process Reengineering BPR was based on radically redesigning or- BPM: Let it flow 31 EnhancedbyCyrilHendriks ganisations’ process designs. The objective of many BPR projects was to achieve cost reduction on a short term basis. However, rigorously redesigning organisational pro- cesses could have tremendous effects, vic- timising employees who found it difficult to keep up with the changes. According to Hammer and Champy, BPR can be com- pared to shock therapy, enabling organisa- tions to downsize their staff. The thought behind BPR was a good one from a business economic point of view. But then why did so many BPR productivity projects fail? BPR focused on radical, ‘big bang’ change and achieving quick wins. Instead, it only im- proved company performance temporarily, or not at all. An explanation for this failure is that organ- isations thought they had found an all-em- bracing answer to all their problems. BPR: a promise for an immediate, quantum leap improvement. BPR proclaimed too ambi- tious objectives, thus increasing the chance Guest article
  2. 2. 32 33 Compared to BPR, implementation plays a far more important role within BPM proj- ects. The story is well-known by now: ac- cording to American data, 70-80% of the BPR projects failed, mainly in the imple- mentation phase. Early process innovation projects focused more on the redesigning than on the social and organisational aspects that followed the changes. Implementation is a change process that not only requires knowledge transfer, but also changes of atti- tude and behaviour. BPM also addresses the latter, contrary to previous methods. In other words, BPM combines doing the right things (strategy and effectiveness) and doing things right (efficiency) with a change implementation plan, making it possible to secure lasting productivity improvement. BPM: old wine in new bottles? I don’t think so. Having said this, BPM does build on existing concepts and has learned from past mistakes. The essential difference between BPR and BPM is that BPM does not focus on a ‘big bang’ change, but adopts an evolutionary approach, ensuring a higher chance of performance improvement than when radical changes are carried through at once. Is BPM a magic potion that will make each and every productivity project a success? Not quite. We must realize that BPM allows organisations to take the necessary steps to tackle the trends discussed in the introduc- tion. However, being successful requires taking the actual implementation phase into account as well. By applying the BPM cycle as the basis for process management in your organisation, you will ensure that imple- mentation is not overlooked. Like I said, a magic potion? Not exactly. I consider it a stepping stone for themes that present-day managers have to deal with, such as process optimalisation, quality man- agement, cost reduction, risk management and process standardization. Literature J. Tolsma en D de Wit (2005), Effectief pro- cesmanagement, Eburon, Delft. T. Hardjono en R. Bakker, (2001), Manage- ment van processen, Kluwer, Deventer. . Freek Hermkens studied in Maastricht from 1993 to 1999. During his study he was a board member of Argyris and chairman of the Management Consultancy Day. Freek has several years of experience in optimiz- ing processes, and is currently working as a consultant at O&i (www.oi.nl) in Utrecht. of failure. Failing BPR projects were also caused by: • solutions being too grafted to and depen- dent on IT solutions; • lack of a clear connection between strategic objectives and the ultimate implementation with BPR; • not recognising the effects of BPR chang- es; • underestimating the effects on legacy sys- tems; • the size and radical character of these costly projects that did not return their pro- jected benefits. In short, organisations set out to achieve objectives that were too ambitious for their companies and resources to handle. The preconditions for a process-oriented work method were not sufficiently defined and geared towards the objective that was to be achieved with BPR. Due to disappointing results, BPR was blacklisted. In some cases, short-term results were achieved, but in many cases these did not lead to structural solutions. Business Process Management Today, Business Process Management (BPM) is fuelling a renewed interest in pro- cess management. It is all about controlling, influencing, monitoring and predicting pro- cesses (Hardjono and Bakker, 2001). BPM is a management philosophy of process thinking that offers solutions to today’s prob- lems. One of the most important reasons to focus on an organisation’s process orienta- tion is to prevent sub-optimalisation, thus increasing the entire organisation’s perfor- mance. BPM is a valuable tool in a process of gradual change, advancing the chance of process improvement. BPM solutions influ- ence the way in which company activities are managed, directly and indirectly. BPM solu- tions can be applied for many reasons: • Increasing efficiency and effectiveness; • Increasing customer friendliness and cus- tomer satisfaction; • Increasing predictability and manageabil- ity; • Shortening throughput time; • Quality improvement; • Improved risk control and management. An important point of interest within BPM is: managing processes in such a way that customers receive products and services ef- fectively and efficiently. Thinking in processes, as opposed to tasks and product divisions, is at the core of BPM. The following elements are key: • Processes go from a point of departure to a point of arrival, they run from customer to customer; • Process organisation includes new work strategies; • Process improvement includes both adapt- ing existing processes and designing new processes; • Effective implementation of change, with all its complex technical, organisational and human dimensions, is of the essence. As discussed before, thinking in processes is not a new phenomenon, but it has cer- tainly taken up a more prominent place in organisations in the last few years. The BPM cycle supports process thinking in organisa- tions (figure 1). Using it as a methodological frame of reference will help organisations to work in a process-oriented way. By apply- ing the cycle, continuous attention is paid to improving the process organisation and making sure it meets the set demands. To achieve this goal, all aspects of management, integration, design, implementation and ex- ecution (process control and management) of the BPM cycle must be taken into account. The BPM cycle enables organisations to gain insight into the – often complex – reality of their own company, and to apply process management concepts across all aspects of their organisation, relating it to the desired organisation and direction. In addition, process-oriented organisation requires pro- cesses to be well-implemented. By applying the BPM cycle, implementation will get the attention it deserves, increasing the overall success of the project (see figure 1). How does BPM help to achieve the desired results? After having established that BPR has fallen short in obtaining the desired results, we will now discuss why BPM can deliver them. An important reason is that BPM does not aim for ‘renewal’, but for ‘improvement’. A char- acteristic difference between BPM and BPR is that BPM provides a path for evolutionary improvement, whereas BPR sought to bring about radical change. Another is that IT sup- ports BPM, whereas it pioneered with BPR. The organisational process is no longer writ- ten in stone, but is a flexible decision-making tool to determine organisational direction, strategy and suitable automation solutions. A number of important lessons and differ- ences can be distinguished between BPM and BPR (Smith en Fingar, 2002): • The BPM world is less IT driven than the BPR world; • By taking a top-down and bottom-up ap- proach to business processes, gradual (and possibly radical) process changes can be made; • Improving existing processes can be valu- able, maybe even more valuable than the clean slate approach promoted by Hammer and Champy. (figure 2) BPM uses existing processes as a starting point for improvement, and establishes a sound understanding of and insight into the present situation. BPR focused on process innovation, whereas BPM emphasizes pro- cess improvement. BPM occurs along on a more stable trend that is based on a whole new way of looking at organisations. To ef- fectively achieve objectives and provide good customer service, it is necessary to take the generation process into account and adapt it in such a way new organisational struc- tures do not inconvenience customers in any way. This is the core of process-oriented organisation and achieving desired results. If process thinking takes place on a strategic level, it will be followed by efficient execu- tion on an operational level in well organ- ised departments. The fact that department efficiency can lead to sub-optimalisation or problem shifting within the organisation, is one more reason for addressing the business from the BPM perspective. In fact, BPM cov- ers all aspects related to business processes in all process areas of an organisation. 3332 Figure 1 Business Process Management cycle Source: Effectief Procesmanagement (J. Tolsma en D. de Wit, 2005) Figure 2 From BPR to process management (Melao & Pidd, 2000)