Before trying to understand the importance of business process management (BPM), it’s important you learn concept basics. BPM could be interpreted differently by different people. For some people, BPM is technology. For a few others, BPM is optimization that comprises several methodologies like Lean, Six Sigma, TQM or CI. For several others, BPM helps facilitate communication within a business environment. And there are others who believe BPM helps get a clearer image of how things actually work.
The aforementioned definitions are certainly not wrong, but they are heavily influenced by a particular function or role’s narrow perspective. In fact, the various definitions represent a specific aspect of BPM. If companies or individuals stick to their interpretation, then they are not making complete use of BPM. Therefore, BPM’s definition must entail all the above enumerated aspects, but should also comprise a much holistic and results-oriented goal.
What Does BPM Deliver?
BPM empowers firms to align their functions with customer requirements, assisting executives ascertain the way to assign, oversee, and quantify firm resources. When executed right, BPM can enhance productivity and efficiency, decrease costs, and reduce risks and errors – helping optimize results. Putting the best practices in to play contributes to proper financial management and offers more clarity about the organization’s performance with regard to meeting goals.
Several companies in the past have demonstrated how BPM provides double-digit enhancements with regard to capacity, margin, capital utilization and resource utilization. According to a survey, close to 80 percent of enterprise firms carrying out BPM projects saw a 15 percent or higher IRR.
There have been significant improvements noticed in lead time, productivity, quality, space utilization, revenue and sales volume as well. BPM also helps derive more benefits from current investments, particularly IT investments. Businesses must be looking to increase value for the money expended on technology and systems.
Importance of Business Process Management
The business landscape has turned extremely difficult for almost every company. For a few businesses, the change is globalization-driven; for other firms, local market economy weaknesses are driving increased competition. As the industry entry barriers are becoming lower, more new companies are venturing in, making it harder for existing businesses to sustain and hold their lead. And an uncertain economy only adds salt to the wound. To successfully compete in the current environment, businesses should make ways for reaping the type of benefits delivered by BPM. If not, they are losing out on the profits and are also risking their position in the market.
Transformation agility and innovation are critical in today’s hyper-intense environment and BPM provides a path for achieving that agility.
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