This may prove challenging, but I’m going to attempt to explain business process management in less than 500 words. So take your seat, pull out a pencil and hold onto your hat because this is going to be quite a ride.
Business Process Management Defined
Business process management is a holistic approach used to evaluate and improve an organization’s business processes. This is often performed before the organization implements new ERP software. With or without new technology, business process management can enable an organization to improve efficiency and reduce production costs. An organization pursuing digital transformation may use business process management to change their company’s entire business model.
The Importance of Business Process Management
When you automate an inefficient process, you only make an inefficient process faster. Many organizations implementing ERP software choose to improve their business processes before stuffing them into an ERP system.
Today’s ERP software is very flexible and can accommodate a process in a variety of ways. This is why so many organizations take the time to envision their future state processes before selecting enterprise software. These organizations save time and money by determining their software configuration requirements early in project. They also can more accurately estimate customization costs.
Areas of Business Process Management
- Business Process Improvement: An organization examines only its key processes – the ones that serve as competitive differentiators. The organization documents its current state process and defines key performance indicators. Then, the organization improves these processes to optimize efficiency while ensuring that controls are put in place to monitor efficiency on an ongoing basis.
- Business Process Reengineering: If an organization finds that no amount of improvement can make a process more efficient, they may completely remove the current process and redesign it from scratch.
- Business Process Optimization: An organization evaluates and improves all of its business processes, including those that are not a source of competitive advantage. This approach looks at the organization from a financial perspective to determine how to reduce production costs.
Business Process Management Essentials
- Business Process Mapping: This involves the outlining of current state processes, the identification of pain points and the gathering of business requirements. The result is a clear map between an organization’s current state and its desired state. Business process mapping facilitates requirements gathering and provides a baseline for developing a business case and outlining expected benefits. The business case is often used to gain executive buy-in.
- Business Blueprinting: This is the final step of business process management. Once an organization has improved its processes, they provide their chosen ERP vendor with a business blueprint. This details how the ERP vendor should configure each business process within the ERP system. The blueprint provides specifics on workflows, business logic, checklists, triggers and notifications.
There you have it. The basics of business process management in less than 500 words. Class dismissed!