The Importance of Business Process Management
All companies execute business processes; to process sales orders, to schedule production, to close the books, to measure product quality, and so on. And because enterprise performance is so dependent on the execution of well-designed business processes, practically all companies use some sort of formal approach for managing their processes. Some do it much better and more formally than others. Some have formal continuous improvement programs (e.g. Lean Six Sigma, TQM, etc.) and others have much less formal approaches.
SAP’s capabilities for Business Process Orchestration combined with the capabilities for Business Process Governance enable a complete digital foundation for a company’s continuous improvement and business process management programs.
During my previous life as a manufacturing operations manager and supply chain executive, I frequently led or participated in efforts to re-engineer operational business processes. Our focus on specific business processes was usually either to improve process effectiveness (i.e. to help improve a company performance metric) or to improve process efficiency (i.e. reduce the waste within the process).
Common Challenges of Business Process Management Programs
Sometimes our process improvement projects were rather simple and sometimes much more complex. Sometimes we succeeded in accomplishing our goals, and sometimes we fell short of the desired results. Regardless of process complexity or the achieved end results, we frequently experienced many of the same challenges as we attempted to manage our business processes.
The following are four of our most common challenges:
- Understanding the Actual Current Processes
It is necessary to understand how work is actually being executed in order to formulate a better process. Sometimes people will think they know how a process works only to be very surprised when they speak with the people actually doing the work. Then it can become apparent the user community is supplementing their computer system with manual tasks or offline tasks such as maintaining spreadsheets. Another surprise can be the number of phone calls that occur in a process to gather missing information and informally collaborate with others in order to complete a process. Making assumptions about how work is actually being performed will almost always result in an ineffective re-engineering effort.
- Addressing the “Squeaky Wheel”
I wish I could say we always focused our process re-engineering efforts on the biggest issues or biggest opportunities for improvement. But sometimes we focused on a particular process mainly due to an outspoken process owner who was adamant about his/her specific process improvement opportunity. Of course, it always helps to have process owner buy-in before the re-engineering starts, but sometimes the loudest person may not have a holistic interest in the enterprise as a whole. There were times when an appropriate fix to a process was obvious. But without some sort of quantitative approach for assessing process efficiency and effectiveness, it can be difficult to determine where the re-engineering efforts will yield the biggest bang for the buck.
- Limited Ability to Enhance a Process
The new desired process might be improved through automation, the addition or elimination of a task, a change to the user interface, the use of a new technology, etc. At that point, it is time for the IT team to make it happen. 15 years later, some of those process improvement requests I submitted are probably still on the IT backlog list of projects. Maybe this was due to the limited IT resources or lack of tools for higher IT productivity. Other times, the IT organization did not have the necessary tools or skillsets to make it happen.
- Reverting Back to the Previous Business Process
People can be resistant to change. Even when the best “change management” methodologies are used, people can revert back to their old ways; especially if the new process still has kinks, fails to fit the nuances of the business requirements, or if people are inadequately trained or not committed to the new process. If they executed a manual process parallel to their computer system previously, they just might continue to execute the same manual system along side the new system or processes. Without being able to monitor process execution, users might revert back to previous processes or may start altering the new processes without appropriate authorization. In these days of process standardization, being able to analyze actual process execution is crucial.
At this point, I suspect many people who have actually been part of business process improvement programs are shaking their heads in agreement. So what can we do to eliminate or reduce the impacts of these challenges?
SAP Solutions for Managing Business Processes
- SAP Process Mining by Celonis
Process Mining provides visibility for how transactions are actually flowing (or not flowing) through enterprise applications. This visibility allows process owners to see and understand how work is actually being performed. Process mining helps understand process inefficiency. This includes the ability to see the types of transactions that flow smoothly with little or no user interaction as well as potential opportunities for process automation. Process mining, along with SAP Analytics Cloud, provides quantified visibility of process effectiveness and efficiency.
These solutions provide “Business Process Governance” to help process engineers and process owners know how processes and application are actually being used throughout the organization, and help ensure that business process re-engineering efforts are focused on the best value opportunities. Process mining not only helps identify the best process improvement opportunities, but then also monitors and measures the impact of process changes, employee compliance to standard processes, and enables continuous improvement by detecting any new variations in process execution.
- SAP Digital Process Automation (SCP DPA)
Digital Process Automation tools provide “Business Process Orchestration” for tailoring end-to-end business processes across both SAP and non-SAP applications to the specific needs of the customer. Automatic workflows with user-maintained decision rules can be deployed with automatic alert notifications for “Live Processes” which proactively interact with users to keep them informed of circumstances and events as they happen – things that jeopardize performance or offer a business opportunity. The ability to take early and fast remedial action is crucial to being able to enable a smoothly run business.
Digital Process Automation also provides automation of process tasks through the use of Intelligent RPA to create “bots” that can be deployed in either attended or unattended mode. The use of Conversational AI and MyInbox enables enterprise applications to proactively interact with users to help ensure they focus on their highest priority tasks.
DPA process improvement technologies can be combined with other SAP Cloud Platform capabilities such as Internet of Things and Predictive Analytics to enhance processes and enable innovative customer-specific approaches to new business processes.
Business Process Management, or BPM, has been in practice for practically all companies for decades. Some people describe BPM as the “processes used to manage business processes.” So what has changed?
On the governance side, what has changed is the application of modern information technology to processes that have traditionally been mostly manual. Today, process engineers and process owners can use the analytics of process mining to understand how processes were used last month and how they are being used this month. They can monitor the positive or negative results of their process changes. They will see if users choose to use prescribed standard processes and applications, or if they use other means for completing their work.
On the orchestration side, processes can be re-engineered to be less reactive and passive, and become more proactive for quickly identifying business issues, quickly assessing the situation, digitally collaborating with stakeholders, and taking corrective action in accordance with company standard operating guidelines. Early awareness, automated intelligence, and guided action practically defines what the Intelligent Enterprise is all about.
Together, SAP’s capabilities for Business Process Orchestration combined with the capabilities for Business Process Governance enable a complete digital foundation for a company’s continuous improvement and business process management programs.
Any questions can be directed to email@example.com on SAP’s Platform&Technology Cloud Acceleration Team (CAT).