Business Process Management The way we see itGlobal Business ProcessManagement Report
Contents    Foreword								                                                    3    About the study							               ...
ForewordWelcome to the Capgemini Global            BPM become an integral and                  barriers to success. Manage...
About the studyCapgemini worked with FreshMinds,       Only participants from firms with        The second, qualitative ph...
5
Global Business ProcessManagement ReportExecutive SummaryCapgemini’s Business Process Management research examinescurrent ...
Figure 1. There is a clear correlation between prioritization of BPM adoption within a                    The research hig...
The key to BPM success:BPM as a C-level concernThe more Executives know about BPM, the more likely they areto believe that...
“Improving process is vital for     Figure 4. Just 20% of respondents stated that BPM is currently an important agenda ite...
How may I help you?The key benefits of BPMThis research examines which business drivers are mostcritical in different sect...
56% of respondents anticipated      The application of BPM technology                    resources, or increase output wit...
Business AgilityIn uncertain economic times, business agility is important. Astechnology cycles move ever more quickly, bu...
“Taking the attitude that ‘it has Capgemini view                         Rules management                                 ...
ComplianceCompliance is at the forefront of the minds of businessdecision-makers. Large organizations face great pressure ...
Customer-centricityFor consumer-facing businesses, the advent of new technologyhas radically changed the way in which they...
“Self-service is generally           Figure 11. 78% of organizations who introduced BPM to improve interactions with clien...
Case Study – Business ProcessManagement and customer-centricityChallenge: A Dutch software business which sells book-keepi...
18
Social media strategyOne area that was investigated in our BPM researchwas the level of emphasis that companies are placin...
Staff satisfactionLarge organizations are engaged in a continuous effort to createand sustain a rewarding working environm...
Show me the money:BPM and Return on InvestmentThe research demonstrates clearly that investment in BusinessProcess Managem...
Figure 15. 96% of respondents calculated a positive ROI from investment in BPM. Examples of Return on Investment          ...
Speculating to accumulate:BPM as a counter-cyclical investmentThe high level of Return on Investment that BPM canpotential...
“Even with the current economic         46% of survey respondents identifiedclimate, middle and senior              a lack...
Barriers to BPM implementationThe research highlighted various practical issues which preventorganizations from successful...
“In telecoms, the new buzzword          Perception of BPM as an IT item                                                   ...
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
Global Business Process Management report
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Global Business Process Management report

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A report by Cap Gemini on the factors underpinning successful BPM

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Global Business Process Management report

  1. 1. Business Process Management The way we see itGlobal Business ProcessManagement Report
  2. 2. Contents Foreword 3 About the study 4 Executive summary 6 The key to BPM success: BPM as a C-level concern 8 How may I help you? The key benefits of BPM 10 Cost efficiency 10 Business agility 12 Compliance 14 Customer-centricity 15 Social media strategy 19 Staff satisfaction 20 Show me the money: BPM and Return on Investment 21 Speculating to accumulate: BPM as a counter-cyclical investment 23 Barriers to BPM implementation 25 Key conclusions and recommendations 29 Capgemini sector and country focus 32 Financial services 33 Public sector 36 Manufacturing, automotive and life sciences 38 Consumer products and retail 40 Telecommunications, media and entertainment 42 United Kingdom 45 United States 46 Australia 47 Germany 48 Italy 49 France 50 Spain 51 Nordic Region 52 Netherlands 53 Acknowledgements 542
  3. 3. ForewordWelcome to the Capgemini Global BPM become an integral and barriers to success. ManagementBusiness Process Management key part of this proposition. of change in such endeavours is a(BPM) Report. This report is an key part in enabling the appropriateexploration of key trends in BPM as Business Process Management is alignment of business and technologyseen by CXOs across a broad selection becoming ever more relevant to both to support their transformationof sectors and geographies. BPM large and small organizations in the efforts. I hope that you find this reportis perhaps at a tipping point – it’s current economic climate. At a time of benefit in the further adoption ofcertainly at an exciting stage in its when many different market sectors are Business Process Management.evolution. As both an engineer and facing slow revenue growth, customeran Operational Research practitioner churn and increased pressuresin my early career, and subsequently on costs, BPM becomes a criticalas a consultant, I have seen BPM weapon in the battle for efficiency Bob Scottthrough its development over the and effectiveness in processes. Senior Vice Presidentlast 26 years. BPM has its roots in Furthermore, in a challenging and Global Head of BPMmanagement practices such as Total changing business environment CapgeminiQuality Management, Business that is characterized by uncertainty,Process Reengineering & Model Based it allows organizations to adapt, beDevelopment; but the advent of the new more agile and fleet of foot. Capgeminigeneration of sophisticated modelling are seeing strong demand for BPMand process execution technologies services in markets such as USA,has greatly enhanced BPM’s power UK, the Netherlands and France;to truly transform businesses. This and there are clear signs of increasedhas created one of the most rapidly interest in other geographies such as,growing and attractive market sectors Germany, Sweden, Spain, Italy andfor both services and technology. We Australia. In sector terms, the financialsee BPM as a critical management services industry has led the way indiscipline that when executed against BPM adoption over the recent past,clear, cross organizational business driven by increased focus on customer-objectives, can deliver exceptional centricity and regulatory compliance.value to that organization. However, Other sectors, public sector, utilities,we also see that the potential for BPM telco, retail and manufacturing are nowis not well understood. Our decision to not only catching up, but are startingconduct this global survey was driven to use BPM in new ways to create newby our discussions with our clients, business models to serve customersto understand their current position, and outsmart the competition.their understanding, how its valuewas measured, how it is used and The research findings also showprioritized within their Business and however that this is a complexTechnology Transformation efforts. landscape, and we are not seeing adoption of BPM in a clear andThis research confirms our belief consistent way. This report also looksthat BPM needs to be a jointly owned at some of the barriers to adoption,Business and IT discipline. It also with organizational silos being ademonstrates that it is starting to gain major obstacle. Waters are furthersignificant traction in the market muddied by fragmented budgets, lackand investments are starting to pay of clear governance and ownershipdividends to the early adopters. At and internal politics. The objectiveCapgemini we are being asked by of our investment in this researchour clients to help them simplify project was to shed some light onand improve their business models these elements with a view to assistingand the technology that supports organizations to create strategies thatthem and we are already seeing avoid or at least mitigate some of these3
  4. 4. About the studyCapgemini worked with FreshMinds, Only participants from firms with The second, qualitative phase of thea UK-based research firm, to conduct more than 1,000 employees were research comprised a series of in-depththe primary research for this study. eligible for the survey. 55% of survey qualitative interviews with seniorThe research process consisted of participants were drawn from business and IT professionals drawntwo complementary phases. enterprise companies with 10,000+ from the networks of both Capgemini employees, 16% from large companies and FreshMinds Research. TheseDuring the initial quantitative phase with 5,001-10,000 employees and individuals were selected to representof the research, a 30 minute online 29% from mid-size companies a cross-section of geographies andsurvey was completed by over 1,100 with 1,001-5,000 employees. sectors, and were selected for theirCXOs, senior business managers, IT practical experience of Businessdirectors and managers, and other Respondents were drawn quite Process Management initiatives.senior business decision-makers. evenly from 11 markets: In each section of the report, ourAll major industries were • Australia insights are based on the quantitativerepresented in the study: findings from the primary research, • Brazil illustrated by graphical representations• Distribution and transport of the data. These are supported and • France illustrated by anecdotal findings• Financial services and quotations from the qualitative • Germany interviews that comprised the• Public sector secondary phase of the research. In the • India sections labelled ‘Capgemini view’ we• Manufacturing, automotive have added supplementary analysis and life sciences • Netherlands that is drawn from our consultants’ experience of working on BPM projects.• Education and science • Italy• Consumer products and retail • Spain• Telecommunications, media • Nordic Region and entertainment • UK• Utilities, energy and chemicals • USA• Professional services• Healthcare4
  5. 5. 5
  6. 6. Global Business ProcessManagement ReportExecutive SummaryCapgemini’s Business Process Management research examinescurrent practice in BPM, the benefits being achieved and thebarriers to success. A key theme is the relationship betweenexecutive-level sponsorship of BPM and its success.The purpose of our research is to survey respondents who have both say that their business processes arehelp organizations understand what knowledge and practical experience either “managed” or “optimized” − theis involved in realizing the benefits of the topic, 82% believe that BPM top two levels of process maturityof BPM, and avoid the pitfalls that should be treated as a C-level concern. as defined by our maturity model.many have already encountered. There is a correlation between processBPM has an increasingly high profile, maturity and treating BPM as a C-levelwith a growing belief among large topic. 68% of survey respondentsorganizations that BPM should who state that BPM is an importantbe sponsored at a senior level. Of agenda item at managerial level alsoThe Capability Maturity Model provides a framework for understanding where our clients fit in terms of their adoption of BPM, and thepotential roadmap for further development. The model was first developed by the Software Engineering Institute of Carnegie MellonUniversity. 1 Repeatable Managed The process The process is deliberately is at least managed in documented accordance with sufficiently agreed upon metrics The process Process The starting management point for use is defined / confirmed includes of a new or deliberate process undocumented as a standard business optimization / repeat process improvement process Initial Defined Optimizing 1 http://en.wikipedia.org/wiki/Capability_Maturity_Model6
  7. 7. Figure 1. There is a clear correlation between prioritization of BPM adoption within a The research highlightedbusiness and improved performance of processes. practical issues which must beWhich of the following best describes the level of process maturity within your organization? overcome in order to implement BPM successfully, notably: Total Respondents who indicated “Currently Business Process • Functional silo culture Management is an important agenda item at managerial level” • Fragmented budget • Perception of BPM as an IT matter • Resistance to BPM from IT staff who have responsibility for existing systems • A lack of readiness or willingness to tackle the change6.8% 1.7% 15.9% 11.4% 27.3% 18.8% 23.6% 38.9% 15.8% 28.8% 10.7% 0.4% management issues associated with BPM implementations Initial Repeatable Defined Managed Optimizing Don’t know To overcome these barriers, strongOverall, just 16% of respondents customers reported a positive impact leadership (including C-levelbelieve that their organization’s on the business. A similar proportion of involvement) plus a clear vision areprocesses are currently at the those whose objective was to improve needed. Another requirement for“optimized” level, but more than ever compliance and risk management successful BPM implementation is thatbefore, companies are recognizing observed a beneficial impact. Specific companies must be willing to breakthe opportunity that BPM presents benefits of BPM adoption which came with the past and embrace change.to improve process maturity. 45% of through strongly were improved staffparticipants in the survey anticipated satisfaction and greater efficiency. Positioning an organization forthat their organization’s interest in BPM requires some effort, but theBPM would increase over the next 12 positive experiences of those whomonths. This finding confirms that participated in the research suggestBPM is increasingly becoming a part of that it is a step worth taking.mainstream management thinking.There is compelling evidence that Figure 2. 45% of respondents anticipated that their organizations interest in BPM wouldBPM can deliver tangible business increase in the next 12 months.value. 96% of those who had tried How do you anticipate that the current level of interest in BPM within your organization willto measure ROI from their BPM change over the next year?investment reported a positive return,with 55% measuring a return of at The same amount Don’t know A lot moreleast twice their initial investment. emphasis of emphasisThis may explain the finding thatin challenging economic times, 13.8% A little more 19.9%investment in BPM becomes more, emphasisrather than less, attractive. 68% ofrespondents stated that a more difficult 28.0%business outlook than expectedwould lead to their organizationplacing increased emphasis on BPM. 3.0% 30.8%The benefits of BPM vary depending 4.6% A lot less emphasison the organization’s objectives, aswell as its level of maturity. More than A little less emphasisthree-quarters of those respondentswho had introduced a BPM initiativewith a view to improving relations with7
  8. 8. The key to BPM success:BPM as a C-level concernThe more Executives know about BPM, the more likely they areto believe that it should be regarded as a C-level concern. 82% ofparticipants who have both knowledge and practical experience ofthe topic believe it should be part of high level business strategy. This is in stark contrast to the 20% of BPM rather than being of respondents who say that BPM is hampered by the existing currently treated as an important technologies. Strong BPM agenda item at managerial level within leadership at a strategic and their organization. At present, a lack tactical level is essential for of senior sponsorship means that long-term BPM success. only a minority of companies are reaping the full benefits that Business It should be noted that while Process Management can bring. These strong BPM leadership is benefits are discussed in greater detail important, it is not sufficient. in the next section of the report. Programs often fail because of a lack of day-to-day governance. Capgemini view This can lead to an insufficient framework to address competing To be successful, BPM needs to requests for limited resources, address organizational silos. In differing objectives and timescales. order to allow this to happen, executive sponsorship at enterprise level is essential. It is important for C-level decision-makers to focus on the business outcomes Figure 3. Respondents who have the greatest knowledge of BPM are significantly more likely to believe it should be treated as a C-level concern. Do you consider BPM to be a C-level concern? “Percentage of respondents indicating ‘Yes’” 82.0% 60.6% Respondents indicating “I know a lot Total Respondents about Business Process Management and have plenty of practical experience of it”8
  9. 9. “Improving process is vital for Figure 4. Just 20% of respondents stated that BPM is currently an important agenda item atour business but can be a painful managerial level.process which meets resistance Which of the following best describes the current level of interest in Business Processin some quarters, hence the Management within your organization?need for C-level sponsorship.”IT Manager, enterprise level Our We are investigating Currently Business organization is the concept and Process Managementutilities business, UK small projects have is an important agenda not currently interested in been started item at managerial“Process improvements need the topic level and at least one strategic initiative into be embedded throughout this field is under waythe organization. The top 10.5%management’s time and 18.6%attention needs to be given tosuch a strategic and longer- 20.1%term value creating item.”Business Unit Manager,Federal government agency, USA 16.6% 17.4% We are interested in the subject 16.8% but there have One or more been no concrete departments are actions so far currently dealing with it at a more tactical level Don’t know9
  10. 10. How may I help you?The key benefits of BPMThis research examines which business drivers are mostcritical in different sectors and explores the application ofBPM in these aspects.To understand the benefits ofa BPM implementation for a Cost-efficiencyparticular organization, it makessense to consider first which Many organizations grasp that medium-term. Of those companiesbusiness drivers are most critical improving cost-efficiency requires surveyed that are currently planningfor the organization. The business more than simply slashing budgets. to launch a process managementchallenges that respondents identified Strategic investment is required in initiative, the area in which the highestas most important reflect the order to achieve material savings. proportion believed the project couldmacroeconomic outlook prevailing 56% of respondents anticipated that have greatest positive impact wasin many developed markets and their organization would increase in maximizing cost-efficiency.the pace of technological change. investment in efficiency over the next 12 months. Far-sighted companies are recognizing that effective implementation of Business Process Management technology and techniques can be a route to achieving significant efficiency savings in the Figure 5. 56% of businesses will increase investment in maximizing cost-efficiency over the coming year. How will your investment in the following business area change over the next 12 months: Maximizing cost-efficiency? 37.2% 30.1% 43.0% 32.8% 35.4% 30.7% 23.4% 29.2% 21.9% Invest a lot more Invest a little more Invest the same 5.6% 5.0% 4.4% Total 1.1% 0.0% 0.0% US UK Invest a little less Invest much less10
  11. 11. 56% of respondents anticipated The application of BPM technology resources, or increase output with thethat their organization would and thinking automates complex same resources. BPM can be an integralincrease investment in efficiency processes, reduces manual work and part of an intelligent cost managementover the next 12 months. eliminates duplication of effort. 74% strategy, which allows a business to of respondents who launched a BPM cut costs rather than cut growth. initiative with a view to reducing“With process improvement manual work reported a positiveyou’ll streamline and automate impact on the business. It is possiblebusiness processes, give to achieve the same output with fewereveryone in your company acomplete view of the customer,provide deeper analysis and Figure 6. The three areas in which businesses anticipate BPM could have the greatest impact are: Maximizing cost-efficiency, optimizing time-to-market, facilitatinginsight into critical sales customer self-service.and customer metrics, keepeveryone focused on getting In which of the following areas do you think process improvementnew customers while keeping could have the greatest positive impact on your business?the ones you already have.” Facilitating customer Maximizing self-service cost-efficiencyIT Consultant, enterprise levelprivate healthcare business, UK 29.7% Optimizing 55.8% time-to-market 38.8% n.b. Respondents were able to select more than one answer, so percentages sum to more than 100%. Figure 7. 74% of businesses that introduced BPM to reduce manual work and increase automation reported a positive impact. What impact has this BPM initiative had on your business from the following perspective: Improving process performance by reducing manual work and increasing automation? 43.1% 31.0% 15.5% 6.9% 1.7% 1.7% A very negative Quite a negative Neither a Quite a positive A very positive Don’t know impact impact positive impact impact impact nor a negative impact11
  12. 12. Business AgilityIn uncertain economic times, business agility is important. Astechnology cycles move ever more quickly, businesses are constantlystriving to cut cycle times: two thirds of respondents (66%) identifiedoptimizing time-to-market as an important business driver.5% of survey participants anticipated Figure 8. 78% of businesses believe their BPM investment improved the flexibility of thethat their organization would increase organization.investment in their ability to react What impact has this BPM initiative had on your business from the following perspective:to changing market conditions Improving the flexibility of the organization?over the new 12 months. Agileorganizations realize higher marginson their goods and services by taking 39.5%advantage of market opportunities: 38.6%two thirds of respondents (66%)identified optimizing time-to-marketas an important business driver.BPM enhances the ability ofbusinesses to react to changes in 12.5%the business environment. 78%of respondents who introduced 6.8%BPM with a view to increasing the 2.3% 0.0%flexibility of the organization reported A very negative Quite a negative Neither a Quite a positive A very positive Don’t knowa positive impact on the business. impact impact positive impact impact impact nor a negative impact12
  13. 13. “Taking the attitude that ‘it has Capgemini view Rules management always worked like this’ is no way to compete. We are a lean Any organization looking to Organizations manage their organization, constantly trying to achieve business agility must interactions with the external stay ahead of the competition.” embrace three key concepts that world through documented and we like to call “the agile agenda”: agreed policies and procedures: Customer Services Manager, medium- processes are just one example. sized manufacturing business, Sweden • Process management Business rules are explicit policies embedded within processes. • Rule management The ease with which these rules • Integration and automation can be adapted to comply with regulatory or market pressure can Process management often be a source of competitive advantage. Organizations that To be agile, organizations know the value of rules often use must also be in control of decision engines to find, update, their process assets. Processes deploy, and maintain rules must be documented and across processes in real time. understood. They must be visible and measured continuously – BPM is moving into an ideally in real time – to ensure unstructured, collaborative age. compliance with shifting market Rules management will be the and regulatory objectives. way to stay properly governed, visible, and compliant, while Business Process Management dynamically keeping processes on (BPM) solutions provide modeling track with changing and complex capabilities that make processes desired outcomes, goals and KPIs. explicit as models. These models are created by, or in collaboration It will become increasingly with, end users. More importantly, important to set rules properly they can be updated by users in order to manage BPM for without recourse to IT. increased agility. There will be a premium on managing Regardless of who makes changes, uncertainty, and on making better the agility comes from the fact that decisions about business rules. the changes are made to explicit Simulation and optimization models rather than changes to techniques can help, and so can lines and lines of arcane code. real-time analysis and response.13
  14. 14. ComplianceCompliance is at the forefront of the minds of businessdecision-makers. Large organizations face great pressure todemonstrate their adherence to rules in an ongoing fashion.More than 77% of respondents 70% of participants indicated thatwho introduced BPM with a view responding to changes to legislation implementation of BPM. Interestto improving compliance and risk is an important consideration for their in BPM is also growing rapidlymanagement reported that the business. If companies do not have in traditionally heavily regulatedinitiative had a positive impact an agile, flexible system for handling industries such as life sciences andon their business in this regard. compliance it can be a costly business. aerospace. Application of BPM can allow businesses a great advantage Within BPM systems, companies can in terms of accommodating new“In the past, there were stand- build compliance into their business legislation quickly and withalone systems followed in rules. Processes produce automated minimum disruption. BPM allowseach department and there reports, demonstrating adherence companies to isolate specific ruleswas no cohesive or effective to legislation in an immediate, cost- that may be subject to change andcoordination between these efficient way. More than 77% of treat them in a certain way, so thatsystems. For every purchase respondents who introduced BPM instead of having to rebuild anorder, for example, people from with a view to improving compliance application or process each timethree different departments used and risk management reported that legislation changes, it is possibleto be involved and there was a the initiative had a positive impact to retain the 80-90% of rules thatchance of violating commercial on their business in this regard. hardly change. For example, aor legal laws as compliance was BPM application can be adjustedonly taken into consideration Capgemini view to reflect new tax legislation atat the end of the process, the end of each tax year, withoutrather than at every stage.” Rafts of new legislation in sectors having to rewrite the entire system. such as banking and insurance areDeputy General Manager of Finance, providing the impetus for thelarge utilities business, India Figure 9. 77% of businesses that introduced BPM to improve compliance and risk management reported a positive impact. What impact has this BPM initiative had on your business from the following perspective: Improvement of compliance and risk management? 39.0% 38.1% 12.7% 6.8% 2.5% 0.8% A very negative Quite a negative Neither a Quite a positive A very positive Don’t know impact impact positive impact impact impact nor a negative impact14
  15. 15. Customer-centricityFor consumer-facing businesses, the advent of new technologyhas radically changed the way in which they engage withtheir customers. In the age of always-on, ubiquitous access,companies have to respond faster than ever before.43% of respondents 41% of respondents anticipated Companies are using Business Processanticipate that investment that their business would increase Management to support new waysin multi-channel access will investment in facilitating customer self- of interacting with customers. 78%increase over the next year. service over the next year. The figure of customers who introduced a BPM rises to 52% in banking, and 47% in the initiative with a view to improving telecommunications sector. Similarly interactions with clients reported 43% of respondents anticipate that that the impact on the business investment in multi-channel access was positive in this aspect. will increase over the next year, including 52% of respondents in the telecommunications sector. Figure 10. Half of banking and communications organizations anticipate increasing investment in facilitating customer self-service over the next 12 months. How will your investment in the following area change over the next 12 months: Facilitating customer self-service? Banking TME 1.8% 2.6% 8.2% 10.3% 38.2% 40.5% 33.6% 31.0% 18.2% 15.5% Invest much less Invest a little less Invest the same Invest a little more Invest much more15
  16. 16. “Self-service is generally Figure 11. 78% of organizations who introduced BPM to improve interactions with clientscheaper. The number of reported a positive impact. Improving the interactions with clients and / or CRM.people being employed in What impact has this BPM initiative had on your business from the following perspective:call centers can be reduced. Improving interactions with clients and/or CRM?Younger customers in particularexpect to be serviced through 41.8%emerging Web 2.0 channels.” 36.1%Systems Architect, enterpriselevel telecommunicationsbusiness, Australia“BPM combines business 10.7%processes, people and 5.7%technology to achieve one 4.1% 1.6%single goal: getting and keepingsatisfied customers. It’s an A very negative Quite a negative Neither a Quite a positive A very positive Don’t know impact impact positive impact impact impactoverall strategy to help you learn nor a negativemore about your customers impactand their behavior so youcan develop stronger, lastingrelationships that will benefitboth you and the customers.” Capgemini view BPM solutions are increasingly seen as CRM 2.0. BPM allowsIT Consultant, enterprise level Customers are demanding more streamlined process forconsumer products and retail more: More personalization and managing customer interactionsbusiness, North America customization, a broader range regardless of channel, all the way of engagement channels, greater through the front, middle and access to information and more say back office stages to resolution. in the buying process. Customers also expect recognition and a Example: Warranty consistent response, regardless management of what channel they are using. Organizations are increasingly One application of BPM that using BPM to respond to these benefits both vendor and changes. BPM is transforming customer is in the field of case management and moving warranty management in the into the traditional CRM space. automotive sector. Typically, Adding a BPM layer to existing administering warranties is processes helps address the clumsy and expensive, involving problem of case management by manufacturers, dealers, suppliers ensuring that all information is and customers. Information is integrated – stakeholders have a spread across myriad systems 360 degree view of all interactions and claims may be governed by with each customer. Companies different policies and procedures. are able to access the right data Application of a BPM solution in the right place and at the right unifies all information, allowing time. The appropriate response the streamlining of the full to different scenarios can be warranty management process. automated. Wherever customer care is involved, there is scope for BPM to make life easier for both vendor and customer.16
  17. 17. Case Study – Business ProcessManagement and customer-centricityChallenge: A Dutch software business which sells book-keepingand HR software wanted to improve customer retention.The company redesigned its complaints procedure, Benefits of the approachadopting BPM software and thinking to improveinternal communication between departments This rigorous complaints procedure has delivered tangibleand external engagement with customers. business value. There is a higher level of customer retention. Complaints are far less likely to result in the cancellation ofWhat the process looked like before subscriptions. In fact, the rate of subscription cancellation is actually 7% lower for customers who complained andFor years the company had no central customer service had their problem addressed than for those who did notdepartment. Customers were directed in an ad hoc fashion complain in the first place. Finally, there is a greater cultureto either sales or product departments, depending on of cross-departmental collaboration within the organization.the nature of their complaint. The lack of process ledto departments shifting responsibility for complaints.Employees gave inconsistent answers to customersposing similar questions due to lack of documented “Everyone in the organization was trying toprocedure, causing confusion and further complaints. avoid taking any responsibility, saying ‘it’s not our department, it’s their department whoWhat it looks like now should be dealing with it.’ That was a major issue – no one wanted to say to the customer,The company created a team dedicated to customer ‘I’ll take responsibility, I’ll make sure this goesservice. Customers are presented with a telephone menu well, I’ll make sure that you’re happy’.”as soon as they dial in so that their complaint can becategorized. Customer services representatives note Complaints Managerdown the details of problems in a case file. Cases aredivided into ‘dissatisfactions’ and ‘complaints’ (whichare more serious). Notifications are then sent to agentsin departments such as technical support and sales with “We now invest the time to make customersthe relevant expertise who follow up on the issues. The happy: a fundamental part of this is working as amore serious ‘complaints’ are dealt with at managerial company, not just as departments who are out forlevel. All agents have access to the same case file and themselves and care only about their targets.”all interactions are logged ensuring seamless sharingof information. The success of the execution of the Complaints Managercomplaints procedure is measured quantitatively.Issues encounteredStaff were initially resistant to this new process, whichwas perceived as bureaucratic. The sales departmentfelt that handling complaints management hinderedthem in meeting targets. Different departments wereunused to working collaboratively to solve problems.17
  18. 18. 18
  19. 19. Social media strategyOne area that was investigated in our BPM researchwas the level of emphasis that companies are placing onboth the threat and opportunity from social media.53% of respondents believe this “We need to introduce a systembusiness driver will become more technology has already had an to handle social media. At theimportant for their business over the impact on customer’s daily lives moment one team writes downnext 12 months. This figure rises and is here to stay. Through social mentions on post-its beforeto 60% in the United States, the listening and an effective Business handing them over to anothermarket which sets the pace in terms Process Management system, team to respond. You canof harnessing new forms of media organizations ability to listen to the guess how efficient this is.”to improve business processes. conversation and respond through changing business processes will Business Unit Manager, largeAnecdotal evidence from the research, become a major differentiator. insurance business, Spainillustrated by the quotations, It is essential to combine socialshows how some large businesses media data with unstructured “The power of social mediahave been caught off-guard by the and structured data from other is rapidly increasing, whichrevolutionary effect that social sources to provide a holistic means that it will become amedia has had, and in particular and representative picture of focal point for all mass marketthe way that B2C organizations what your customers are saying. businesses. Market trends willinteract with their customers. A social media strategy that is be dictated by social media supported by an organization that trends, and the public view of aThere has been some complacency is able to rapidly alter business company will be determined byin engaging with and investing in processes, listen to and identify its social media interaction.”social media. It is clear that businesses and manage risk early on, andmust develop a social media strategy. also provide sales opportunities Enterprise Architect, enterprise levelOrganizations can no longer dictate the will be an effective one. automotive business, Germanyterms of engagement with customers –it is now customers who are in controlof the conversation. In light of this Figure 12. 53% of businesses anticipate that social media strategy will become moreloss of control, organizations need to important over the next 12 months.listen to and respond effectively tocustomer-initiated activity. Customers Which of these drivers do you think are likely to become more or less important over the next 12 months: Managing the opportunities and threats of social media?now expect a greater level of attention,as well as a near-instantaneous Totalresponse. Businesses should also be USAaware of what a powerful asset thisrich real-time feedback can be. Capgemini view Organizations are traditionally used to being in control of customer interactions and have long built IT systems that push 2.3% 1.8% 5.9% 1.8% 39.2% 36.3% 31.6% 33.6% 21.1% 26.5% messages to the customer. It is Become much Become a little Stay the same Become a little Become much clear, however, that social media less important less important more important more important and the consumerization of19
  20. 20. Staff satisfactionLarge organizations are engaged in a continuous effort to createand sustain a rewarding working environment that mobilizes andmotivates their staff. An important benefit of improved processesthat emerged from this research is the impact on staff satisfaction.“The previous management 75% of those organizations withinunderestimated process our sample that launched a BPM but also in terms of improving jobdevelopment. Processes initiative with a view to improving satisfaction for the teams involved.weren’t documented. We staff satisfaction reported that the Alongside traditional ROI modelshad to repeat the same steps project had had a positive impact companies should consider theover and over again to reach in this regard. Strikingly, not one ease of use of resultant systems,a solution. Money and time respondent reported that the initiative the reduced cost of trainingwere wasted, staff weren’t had had a negative impact. and the improved retentionmotivated and customers were of valuable team members.frustrated. Now we’ve improved Capgemini viewour processes, all our staff are The quantitative researchconvinced of the benefits.” Enhanced staff satisfaction is an findings show that Business interesting ‘hidden benefit’ of Process Management initiativesDepartment Officer, enterprise process improvement. Enhanced can have a positive impactlevel insurance company, France staff experience is rarely built into on many different parts of an business cases for BPM investment. organization. The next section of However, removing laborious the research demonstrates how manual workflows, reducing the BPM ultimately delivers value in need for ad-hoc intervention and terms of Return on Investment. making it easier for staff to operate efficiently, can have clear benefits, not just in terms of productivity Figure 13. 75% of businesses who implemented BPM to improve staff satisfaction reported a positive impact on the business. What impact has this BPM initiative had on your business from the following perspective: Improving staff satisfaction? 40.8% 33.8% 19.7% 5.6% 0.0% 0.0% A very negative Quite a negative Neither a Quite a positive A very positive Don’t know impact impact positive impact impact impact nor a negative impact20
  21. 21. Show me the money:BPM and Return on InvestmentThe research demonstrates clearly that investment in BusinessProcess Management can yield tangible business value.Of those respondents who had tried to measure ROI fromBPM, a remarkable 96% reported a positive return, with 55%measuring a return of at least twice their initial investment.“We consolidated by centralizing In the past, businesses found it difficult Figure 14. Just 39% of respondents havethe IT infrastructure so that to quantify the Return on Investment attempted to measure ROI from BPM in a formal way.we didn’t have hundreds of from BPM programs as the benefitslittle silos everywhere. This were various and wide-ranging. Have you attempted to measurewasn’t a management power It can be a challenge to measure Return on Investment (ROI) from this BPM initiative in a formal way?trip, it was about saving a lot intangible but essential elements ofof money. Ultimately, from BPM, such as cultural change andan economic perspective, employee behavior. Indeed, our Yes No Don’t knowall the departments win.” research shows that businesses are still learning how to assess the valueSenior VP for IT, consumer of a BPM investment, with only 39% 38.7% 29.0%products and retail Business, UK of respondents stating that they have tried to measure ROI in a formal way. Capgemini view Setting the business case for organizations is often challenging. Getting the appropriate balance 32.3% between the different objectives across the organization is key and rarely an easy task. However once objectives are set, and measurements in place, we have seen BPM programs delivering significant ROI. In addition, it is important to measure quantitative and qualitative factors when implementing BPM, and to track those measures through to completion of the project. Those results in turn inspire further change.21
  22. 22. Figure 15. 96% of respondents calculated a positive ROI from investment in BPM. Examples of Return on Investment What level of ROI did you calculate for the BPM investment? Cost reduction and Negative Return on Investment 1.9% efficiency gains: No Return on BPM can help lower the cost Investment 1.9% of running, changing, and executing processes. Up to 1.5 times ROI 12.4% A North American Between 1.5 and 2 times ROI 24.8% insurance organization: Between 2 and 22.2% • Gained 40% cost reduction 3 times ROI over a five year period Between 3 and 12.0% 4 times ROI • Reduced training time from as long as two Between 4 and 9.0% 5 times ROI weeks to just one day Between 5 and 4.1% • Gained ability to execute the 10 times ROI First Notice of Loss (FNOL) process with greater efficiency Greater than 10 times ROI 2.2% and accuracy as a result of increased automation Don’t know 9.0% • Introduced real-time analytics of overall claims operations An automotive company: • Reduced FNOL Total Cost of Ownership by approximately • Improved their cycle $12 million over the four years time by 50% following implementation A worldwide engineering • Was able to offer its organization: customers a market-leading claims experience • Ran a global operation to optimize and harmonize the A public sector organization: leading business processes and support, leading • Used sophisticated case to precise supply chain management to achieve planning and processing a win-back time of 70 minutes per case • Achieved real-time, end- to-end transparency Increase in competitiveness and agility • Established a more accurate process, with accelerated BPM reduces time-to-market for supply chain performance and new products and services. improved competitiveness A global banking organization: • Reduced time-to-market for new product release from nine months to four months22
  23. 23. Speculating to accumulate:BPM as a counter-cyclical investmentThe high level of Return on Investment that BPM canpotentially deliver, discussed in the previous section ofthe report, perhaps explains why interest in BPM actuallyincreases in relatively challenging market conditions.“Growth via demand will be 68% of respondents who were seriously Figure 16. 68% of respondents consideringdifficult, so we have to improve considering investment in BPM state a BPM investment state that a more challenging economic climate overprofitability by enhancing that a more challenging economic the next 12 months would increase theour internal processes.” climate would increase the attention attention their organization paid to process paid to process improvement. In improvement to process improvement.Risk Manager, enterprise level theory this is a simple equation: at If the economic climate in your sectormanufacturing business, UK a time when it is difficult to acquire proved more challenging over the next 12 new business, process improvement months, what impact do you anticipate this would have on your organization’s offers a way to boost the bottom attitude to process improvement? line by making cost savings. We will pay a lot more attention However, challenging conditions can We will pay a little more attention create barriers to BPM adoption. If employees are concerned about job It will not impact on the attention paid security and their personal well-being, We will pay a little less attention BPM is more likely to be perceived as a We will pay a lot less attention threat rather than an opportunity. 44% Don’t know of respondents in the survey stated that resistance from staff responsible 6.4% for existing systems such as SAP and 2.5% 31.5% CRM within their organization was 5.6% a barrier to process improvement.2 17.9% Bottom line pressures can lead to a reductive focus on costs rather than an emphasis on the bigger picture. Money allocated to IT could be spent maintaining outdated systems that have no place in a modern technology environment. This is often a false economy. The BPM institute blog 36.1% uses an apt analogy to explain the likely consequence of trying to cut operational and process-related costs in the face of a downturn: “These organizations are just starving themselves, and it will likely come back to haunt them as the core infrastructure of the company – the corporate metabolism, is crippled to the point where it cannot function effectively.”323
  24. 24. “Even with the current economic 46% of survey respondents identifiedclimate, middle and senior a lack of change readiness ormanagement still find it difficult willingness at their organization asto embrace culture change, a barrier to improving processes.4move with the times and take Reactive companies that are notadvantage of the efficiencies ready to confront changing times willand cost savings that can not be able to introduce successfulbe delivered by BPM.” BPM. In order for a company to successfully deploy BPM, theProcess Manager, local company must be able to embracegovernment agency, UK change across the organization. In the following section of this report ways in which barriers“Companies in a defensive mode to BPM adoption can be brokensimply aim to survive. BPM will down are examined further.seem too daunting for them –rather than investing in new toolsand processes, they will cut IT Capgemini viewbudgets and try and muddlethrough with legacy tools in their BPM is not simply an out-of-existing format for a little longer.” the-box technological solution that can be introduced at will.Process Manager, enterprise BPM is a discipline that requireslevel telecommunications the adoption of a new culturalbusiness, North America mindset. In a downturn, BPM is attractive to companies that are offensively orientated, and looking to push their business to grow. In order to introduce effective BPM, an organization must be receptive to change, willing to break its mould and become something different. Executive sponsorship is key to driving this forward. One of the trends we have observed (though not suitable for all programs) is towards short term investments with fast ROI. BPM projects are often iterative – lasting 6-10 weeks per project, with each phase linked to a value based objective. In this context budget allocation is easier. 2 See Figure 21 3 http://www.bpminstitute.org/resources/white-papers/ bpm-ea-two-smart-investments-recession 4 See Figure 2224
  25. 25. Barriers to BPM implementationThe research highlighted various practical issues which preventorganizations from successfully implementing BPM.Five barriers in particular team all have their own targets and business domain. It requires willwere identified: priorities. It requires a different and impetus to transcend ways way of looking at processes to make of working that are constructed• Functional silo culture them end-to-end more effective. around existing bureaucratic structures. Vision and leadership• Fragmented budget from a senior level is essential Capgemini view for long-term BPM success.• Perception of BPM as an IT item BPM-driven ways of working BPM implementation renders the can then add value to a business• Resistance to BPM from IT greatest value when it is applied by linking functional silos and staff who have responsibility across organizations and across eradicating the inefficiency of for existing systems applications. However initiatives different business units working tend to deal with one subset of in competition with one another• A lack of change readiness processes because it is much easier on disconnected projects. or willingness to gain sponsorship for a process improvement initiative within aAll these internal barriers tocooperation must be addressedin order to achieve commonalityof purpose, which can directlycontribute to business value. Figure 17. 55% of businesses state that functional silo culture is a barrier to process improvement.Functional silo culture To what extent do you agree that these barriers to process improvement exist in your organization: Different parts of the organization tend to operate in functional silos?55% of respondents identifiedfunctional silo culture as a barrierto process improvement at their e greorganization, making it the most ly a eefrequently cited obstacle. Survey ong agr eerespondents who had experience of agr dis StrBPM initiatives explained how before htly norintroducing BPM, organizations were Slig re e ecompartmentalized into functional gre w r ag kno isaunits, with objectives and performance 6.6% lightly dee ithe n’t rmeasures broken down accordingly. sag Do NeThis method of working promotes 3.2% gly di S % % % %efficiency within a particular silo, on 23.0 24.7 10.3 32.1but undermines the possibilities for Strworking collaboratively and seamlesslyacross an organization. The attempt tointroduce cross-functional BPM canlead to internal politics. For example,when a retailer attempts to improvecross-channel access, addressingthe issue is immediately problematicbecause the online-channel owner,in-store channel owner, telephone-channel owner and customer service25
  26. 26. “In telecoms, the new buzzword Perception of BPM as an IT item Capgemini viewis an “integrated supply chain”,how to take everything from The survey findings indicate that BPM programs need to be drivenmanufacturing, procurement, there is little consensus across by a collaborative team of ITlogistics etc. and put that all organizations as to who should and business. Business shouldtogether under one ownership. take primary responsibility for drive the business case, theIn practice it never works like process improvement. In different process design and outcomes,that. At the moment we have organizations across the sample, this and IT needs to supply thean operations organization, was borne variously by IT, business infrastructure, core systemsa procurement organization, management, operations, or even and integration expertise. BPMa logistics organization dedicated process management brings the two – business and IT –and a delivery function all units. In many instances, budget together, to make those decisionsoperating in different silos. is fragmented across departments, jointly. It also creates a commonAll departments affected by a which can undermine the environment which serves toprocess should work together.” effectiveness of attempts to launch eliminate the communication coherent, cross-functional process barriers that traditional toolsHead of Logistics, enterprise management initiatives. and methods tend to amplify.level telecommunicationsbusiness, North America 48% of respondents identified the perception of BPM as an IT item as a barrier to effective process improvement. The figure is higher“Different departments in certain European markets suchwere taking decisions in as Italy, where it rises to 54%.their own way, with their own Perception of BPM as an IT item canphilosophies and objectives. hinder implementation as whileThis created a lot of tensions many of the costs and challengesand processes became stuck.” fall on the IT side, the principal benefits fall on the business side.Customer Services Manager, mediumsized software business, Netherlands Figure 18. Perception of BPM as an IT item is deemed a barrier to process improvement by almost half of respondents. To what extent do you agree that these barriers to process improvement exist in your organization: BPM is still seen too much as an IT item? e gre ee ee ly a agr agr ong htly dis Str Slig nor re e e gre r ag w isa kno re e ithe 10.8 htly d sag n’t Ne Do 4.4% gly di Slig % % % % 8.7% on 29.6 28.7 17.9 Str26

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