As we start the new year I wanted to pose a question that will hopefully make you think a little about the topic I want to discuss today: Why should your company be looking at BPM? What is the benefit?Well, let’s look at a few statistics to see if there is a financial/economic/ business driver for doing this.
'A recent research report from AIIM,“Business Process Management - are we making the most of content-driven processes?” reported that 72% of organizations using BPM received a 100% payback in their BPM investment within 2 years, with 50% of those surveyed receiving a full payback within 18 months'.1
Gartner and CO also posit (via Jim Sinur) that ‘BPM generates sure fire benefits and we keep seeing the fruits of BPM investments at a 15%+ internal rate of return’.2
With a relatively low investment in technology and resources, huge gains in process efficiency, productivity, control, and business agility can be achieved.
So what is stopping you from doing it?
One of the key drivers for failure of process projects is ‘lack of senior management buy-in'. I have already discussed this in my posts ‘Tone from the top’ and “The Chicken or the Pig’ so this is preaching to the converted as far as I am concerned. But it is important to understand that this is - in effect - a profit centre for your organisation. Again, quoting Jim Sinur from Gartner, ‘15% will likely be as high, or higher than an organizations hurdle rate (the rate at which a company can invest their money in the current market). Both returns are before expenses, but BPM benefits are not taxed. Some BPM projects can cause displacements, so there could be some “one time” costs where “skill-fits” usher some people out the door. So the savings are there, but I had to pay for the BPM technologies and the salaries of the people who implemented the BPM process,” you say. Well, if you picked a BPM project with significant savings over the price of the software and people, then buddy, it’s free. ".3
Of course one main problem is that execs don't understand what is meant by 'BPM' 4 - a fact made even harder by the fact that BPM definitions are sometimes loose themselves.
The general consensus with BPM projects is to go for something fairly small as a teaser (this could also link in to trying to implement a process capability in your organisation by stealth) and, once the benefits have been determined you can then start to ramp up the size and complexity of the organisation. There are numerous examples of where simple changes to a process have reaped great benefits for the organisation (see 'The way things have always been done' Part 1 and Part 2 ) so my question would be - why, as an organisation, would you not be considering this?
Let me see if I can identify some reasons why and some counter arguments for this.
1) Don’t have the cashflowThis is assuming that implementing a BPM capability is going to take time and money. Not so. You don’t HAVE to implement the latest whizz-bang solution from one of the Gartner top-right magic quadrant vendors. BPM can - at its basic level- be boiled down to a couple of individuals having authority and responsibility for looking at how things are done in your organisation and how this can be changed.
2) Don’t have the knowledge or expertise
Most companies when they start on this path are clueless about how to do this. I think it is common sense to say that if companies already had a BPM capability in the organisation they wouldn’t need to look at ‘doing’ BPM. Therefore there will be a learning curve for your employees. Again the trick is to start small. Assign responsibility to one or two players (but give them the authority and the senior level management backing) let them start small and work up. Once the benefits have been seen the resistance will decrease, the knowledge will grow and the capability will become entrenched in your organisation. As a business process consultant I am bound to also mention the fact that you can bring in someone like myself to help you kick-start your project. It won't cost the earth and, as we've seen above, it will pay for itself fairly quickly.
3) I don’t want to implement another software package. We’re a manufacturing company not a software house
The presumption here is that you need to implement a large scale application to do your process work. This is just not true. Of course there are major, enterprise-wide, robust BPA/BPM systems that can help you to manage your internal and customer facing processes - even to the point of automating them through BPMS. But to start with you don’t need all this. There are numerous free/low cost solutions that are web based and don’t even need implementation. Take Lombardi’s Blueprint solution for example. It is incredibly simple to use, works as designed and can be implemented almost instantly for a nominal cost of dollars per month. The software should not be a barrier to the work. At the very least you can ('shudder') use Visio to ‘map’ your processes. With the Microsoft select agreement it costs somewhere in the region of $40 per license. (But see my post on Visio - The Devils tool) 4) We want to focus on our core capabilities right now, not expanding these. Times are tough!
In my mind this is both the most difficult and the easiest argument to counter. Of course things are difficult. The economic crisis - although weakening - is causing many companies to retrench, draw in their claws and try to weather the storm. Companies like this don’t want to focus their time and energy on implementing a new capability, they want to focus all their efforts on doing what they know how to do as well as they can do it. This is totally understandable. Maybe this is the one reason for not doing BPM that actually holds up to scrutiny. However the flip side of that argument is that now is the absolute best time to get something in place when you are not distracted by lots of thoughts of expansion etc. With bottom lines being scrutinised more closely than ever surely anything which will reduce costs or increase sales has to be good for the company?
Summary
I would go back and look at the things that Gartner and AIIM have said. In the current environment a company cannot afford to NOT implement some sort of BPM capability in their organisation.
It’s a no brainer.
Feel free to add your thoughts and comments below.
1. BPM Don't be the last without it. Because Process Matters 3/12/09
2. Should you double your bet on BPM? - Jim Sinur, blogs. gartner.com 2/12/09
3. Process is Free - Jim Sinur. BPMenterprise.com 15/01/08
4. Execs draw a blank on BPM - Network world 03/12/09
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