Business process management aims at adding value

BPM is a continuing exercise to analyze existing business processes and improve them. The improvements can take different forms such as using technology for better performance and/or quality, removing bottlenecks or reducing costs. Delivering better value at lower costs keeps a business competitive, and this is the basic objective.

What Exactly Are Business Processes

A business process consists of a series of related, structured activities that achieves a predetermined goal. The goal can be getting a customer order, producing a certain quantity of products meeting required quality standards, or even producing an accounting report. In a typical business, a large number of processes will be taking place at the same time.

There are management processes such as strategy development that focus on governance, operational processes such as production and marketing to execute the core business operations, and supporting processes such as maintenance, accounting and HR that are incidental to the core operations. Managing all the processes to work together to provide customer value at optimal costs is the overall business objective.

Businesses start with a customer need, develop processes and sub processes down to activity level to meet that need, and complete the overall process on fulfilling the customer need. It is this focus on customer needs that helps design and implement best practice processes. In the absence of such a focus, businesses tend to get compartmentalized into ‘functional silos’ with each functional department trying to further its own priorities.

Well-designed business processes eliminate activities that do not add customer value.

Business Process Management in Operation

Systematic BPM involves Designing, Modeling, Implementation, Monitoring and Optimizing.

  • Design: All elements of the existing business process such as process flow, human actions, standard procedures, alerts and handovers are mapped. New designs that seek to improve the process are developed.
  • Model: Alternatives are evaluated by checking how they are likely to operate if implemented. “What if” scenarios are simulated. Tools like graphic flowcharts, data flow diagrams and PERT charts, and computer simulations of complex scenarios are used to help analysis and evaluation.
  • Implement: The trend these days is towards automation. Computer applications use business rules to automate tasks wherever possible. Provisions are made for human input where the task is too complex for automation.
  • Monitor: Monitoring has two dimensions. It checks the current status of a process and generates alerts in real-time or on an ad hoc basis. Secondly, it mines data logs to compare performance against the model and generates reports.
  • Optimize: Performance reports and observations during the implementation and monitoring stages are reviewed to identify bottlenecks and the potential for performance improvement or cost reduction. The findings are used to revise the design and the cycle of value improvement starts again.

Formal approaches such as CMMI have been developed for improving business processes.

BPM and Business Competitiveness

It is the continuing exercise of business process management that keeps a business competitive by creating better performing products, marketing it more effectively or reducing costs of operations. BPM seeks to exploit the potential of new technologies for improving business processes. BPM also seeks to manage continuing changes effectively by attending to the people aspects involved.

Business processes are the groups of activities and tasks that, together, keep the business operating. In typical businesses, numerous processes of managerial, operational and supporting nature will be taking place simultaneously. The task of coordinating all these processes becomes more efficient when the common goal of adding customer value governs all the different processes. Elements that do not add value for customers are eliminated from processes. Business Process Management (or BPM) is an exercise that seeks to improve customer value addition and cost reduction on a continuing basis.

Managing Customer Data is Key to the Future

A key challenge to business today is implementing an information infrastructure that enables rapid responses to competitive pressures and the capability to survive into the future.

Corporate strategies which impact customer relationships and the management and application of customer data to s business operation- CRM for short- are dependent on an information superstructure comprised of various technologies that enable organizations to store, access, analyze, and manipulate vast amounts of customer data.

Major Contributing Technologies

The four major contributung technologies to CRM are:

  • Data warehousing
  • Database management systems
  • Data mining
  • Business analysis software

Within each of these major technology areas there are subsets of system and application software to handle a range of CRM-oriented functions, such as:

  • Data storage
  • Database queries
  • Value analysis
  • Mathematical models for predictive analysis
  • Analytics

All of these applications contribute to the CRM solution by enabling organizations to collect, store,and analyze data based on a wide range of parameters.

Existing and New Data

An effective data warehouse design and implementation will enable users to mine the vast amounts of data that has been and will be accumulated within the enterprise, to make the most of existing data and collect new data on an on-going basis. It will enable organizations to gather, store, manipulate and analyze large volumes of customer transaction data to provide valuable business information on the customer database.

Data warehouses have become well-accepted in many business sectors and in companies within these sectors, as a core component of doing business, as well as building blocks for a corporate CRM strategy. This technology is a prerequisite for the level of one-on-one customer relationships that can turn information into a company’s most important resource. Melding all of the related technologies into a comprehensive CRM infrastructure that will meet a corporations’ s business needs, is the challenge faced by the project team charged with the responsibility for developing the CRM strategy, and this challenge begins within the data warehousing project.

Data Warehouse Benefits

Many companies that have successfully implemented data warehouses have discovered that the use of this technology has resulted in millions of dollars in savings, as well as increased profitability, not to mention improved customer relations, once it has been deeply integrated into their business processes to become a mission-critical system, and even before it has become part of a full-fledged corporate CRM strategy.

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Author: knowledge herald

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