What is Business Process Management? An Introduction to BPM and its benefits

The incident could not have come at a worse moment: a 220,000-ton ship, longer than the Eiffel Tower is tall, blocking one of the busiest waterways on Earth. When the Ever Given ran aground in the Suez Canal in March of 2021, global supply chains were already stretched to the limit. A year of Covid-19 lockdowns had shuttered factories and led to shifts in consumer preferences which meant business processes around the globe were out of sync. Companies scrambled to deal with container shortages, congested ports, and a lack of key inputs like microchips. The Ever Given made a bad situation worse: in the six days it was stuck, nearly $60 billion worth of global trade was disrupted.

No business leader could have predicted that a global pandemic would challenge nearly all business processes overnight. When consumer behavior shifted suddenly and longstanding operations became no longer viable, it was the companies that understood and effectively managed their business processes—and that documented their processes digitally—who were far better prepared to embrace change.

This is an excellent example of how companies can harness business process management to improve efficiency, respond to unexpected market changes, and ultimately drive business transformation.  

Business Process Management (BPM) is an approach to improving an organization’s processes by aligning them with its strategy, with the goal of improving efficiency.

Why does BPM matter? What is true in the context of the global supply chain crisis is also true more broadly: in an era where success is defined by the speed of innovation, processes matter more than ever. At Software AG, we believe the best way to thrive in this ever-changing world is by embracing BPM, or Business Process Management.

Rather than a one-time project, process management is defined by continuous optimization and improvement—to detect and reduce operational bottlenecks, accelerate the development of new products, comply with ever-shifting regulations, fulfill customers’ expectations, and ultimately help your business thrive, ahead of the competition.

Is a BPM solution right for your company? And if so, how best to get started? In the following guide, we’ll introduce you to Business Process Management, its value to business, and the potential it holds to help your company unleash its process power. We’ll show how BPM can help you design operations that can quickly respond to change, ensure your IT reflects business reality, forge a more cohesive workforce, improve the management of risk, find and fix inefficiencies, simplify the customer journey to improve satisfaction, and utilize process mining insights to make intelligent, informed decisions. To start, though, we’ll dive a little deeper into a few of business process management’s core uses.

Types of Business Process Management

BPM systems (sometimes called BPM suites, thus "BPMS") are a collection of complementary technologies that include:

• Process mining tools that help you discover, represent and analyze all the tasks that underlie business processes
• Diagramming tools to visualize business processes
• Workflow engines that automate tasks that together complete a business process
• Business rules engines (BREs) that help users change business rules without requiring technical support from developers
• Simulation and testing tools to observe how processes behave without requiring coding in advance
  

Generally, BPM can be categorized as one of three types: integration-centric, human-centric, or document-centric. What are the differences?

• Integration-centric BPM focuses on processes require little human involvement. Instead, these processes rely on APIs and automated tools that integrate data across systems. Often, these types of BPM integrate enterprise tools such as Enterprise Resource Management (ERP), Human Resource Management (HRM) or Customer Relationship Management (CRM) suites.
• Human-centric BPM thrives in situations where humans must be in the loop, such as scenarios in which approvals are required. Human-centric BPM benefit greatly from intuitive user interfaces with low-code / no-code capabilities that enable non-technical teams to assign tasks and assign roles and responsibilities to individuals.
• Document-centric BPM is used for specific documents, such as contracts. Companies regularly purchase a product or service, and each time it must travel through rounds of approval and review before it is finalized.

Forging a supply chain that’s fit to withstand the most unforeseen of crises is an example of BPM at its best. Yet BPM’s utility extends far more broadly—to challenges impacting corporate, IT, and business. Are you seeking to improve cost efficiency, reimagine customer journeys, get in-depth business insights, quickly adapt to new laws and regulations, or optimize your processes to bring strategy to life? Is your company searching for a tool to embrace strategic change?

Operational excellence

To be to be successful in re-imagining and transforming your entire organization, you need to align your business vision (how to win in the market) with your operating vision (how you run your business). By aligning your organization end-to-end with an adaptive enterprise management system, you’ll gain greater visibility into your operations—and be able to make impactful, future proof business decisions. You’ll gain the ability to roll out your operating procedures and policies organization-wide in a shared, single source of truth based on automated process governance. Anyone, anywhere, anytime, can contribute to your transformation. By embracing process mining , you’ll be able to measure how your processes execute, and how this differs from their processes as planned. You can then go back and fix any discrepancies—before they impact your bottom line.

Sustainability

Not long ago, sustainability was a buzzword that had little to do with your bottom line. Today it’s at the heart of everything—from brand reputation, to innovation, to growing revenues and maintaining a thriving business. As a business leader, this new normal can feel daunting: no matter your industry, you’re likely to confront a growing number of policies, standards, laws, and regulatory frameworks designed to forge a greener, more equitable, and climate-friendly world. How to best navigate this sustainability jungle? A “Green BPM” solution allows your company to put processes at the heart of your ESG strategy to achieve your sustainability goals and secure your brand’s reputation—ahead of the competition.

Business continuity

Even before the Covid-19 pandemic put global production, distribution, supplier networks and demand out of sync, business continuity and resilience were of rising importance. Today, resilience means being able to react with flexibility to rapidly changing markets—emerging stronger after weathering a crisis. BPM can boost your business continuity by prioritizing risks and business impacts, defining and prioritizing measures to counter them, integrating lessons learned from past crises, and designing recovery strategies and updated controls to adapt your processes and to lead your company through the chaos.

Is your company ready to embrace business transformation? At Software AG, we’ve long believed the key lies in your processes. Our market-leading product suite, ARIS, has been there from the beginning: ARIS’ founder, Dr. August-Wilhelm Scheer, is a BPM pioneer, who developed the tool in the early 1990s as a way to diagram and model continuous process improvement based on actual process performance. For 30 years, ARIS has been the #1 business process analysis and management software solution for organizations seeking to embrace digital transformation. ARIS enables tightly managed and controlled business change—enterprise wide, across departments, hierarchy, systems, and locations. It gives stakeholders the tools and insights they need to make better decisions—and paves the way to operational excellence.

No matter what your business does or what size it is, ARIS can do it all: it’s the only BPM software on the market that supports your transformation from strategy down to operations, and throughout the six BPM phases—from understand, process design, implement & automate, rollout, execute & run, to measure & control. ARIS acts like a “one stop shop” for your one way of working. It’s the only solution on the market that combines modeling and mining into a single tool, unlocking advantages you’re unlikely to achieve in a standalone scenario.

What are the six phases of the Business Process Management lifecycle?

Business Process Management steps include:

Understand

A comprehensive set of capabilities enables you to measure and control the actual execution of processes and discover bottlenecks. It also allows you to automatically find end-to-end processes and connect them to designed processes for measuring adoption rates and assessing process conformity. Additional analytics and dashboarding help you make faster decisions based on accurate data. 

Design

Designing more efficient processes lets you respond quickly to changing business or market requirements. State-of-the-art modeling and collaboration accelerate the design of your processes, risk, policies and IT, so you can respond to change faster. Understand, document and analyze processes, and design more efficient processes, in the modeling language that best fits your needs (EPC, BPMN etc). 

Implement & automate

Efficiently implement and automate your business processes. Business automation provides a set of tools that help to automate business processes, ranging from RPA as a general approach to specific process-driven automations for SAP and IoT management.

Process rollout

Enable your entire workforce via change management rollout, and use-based information in a single source of truth to support successful transformation and operational excellence. Rollout and change management is a crucial aspect to every successful transformation. To succeed, operating procedures and policies—stored and shared in a single source of truth—must be rolled out to your entire organization.

Execute & run

Operating procedures and policies can be rolled out to the whole organization. Establish a shared, single source of truth based on automated process governance and digital confirmation management. Manage and govern daily operations while including all relevant stakeholders in the automated processes. This approach promotes transparency, collaboration and communication with a user-friendly portal that offers role-based access to information. 

Measure & control

Get a 360-degree view of your operations including supply chain, customer service, IoT, and any other business area. Gain in-depth business insights to find patterns, anomalies and opportunities for improvement. Measure and control the actual execution of processes in real time. Communicate process changes to the entire organization in real time and perform compliance checks and track adoption rates of those changes.

Real life examples and applications of BPM

Learn how ARIS can guide you through the business process management lifecycle—with insights from Software AG customers across energy, retail, food & beverage, healthcare, banking, and product development: 

What are the benefits of Business Process Management and ARIS?

Not only does ARIS master the BPM basics: it also helps companies embrace other business disciplines, from process mining to risk & compliance.

• Process Mining. Have you already invested time in mapping and designing your business processes? If so, perhaps you’ve wondered whether your colleagues working with these processes are doing so as you envisioned? Process mining, a method of analysis that “mines” all your process data for discovery and continuous improvement, can help you reach the next level of process maturity. With ARIS Process Mining, you’ll ensure both conformance and compliance by uncovering gaps that require adjustments to the design, the underlying systems, or the need for additional training for your workforce. You’ll gain critical insights that will allow you to understand how your business actually functions—and make the necessary changes for your processes to execute as planned.
• Risk & Compliance. No matter your industry, if you’re a business leader, you’re thinking about risk—from supply chains, to compliance with regulations, to the theft of digital resources and breaches of data security. In today’s digital world, where big data and IoT have created an entirely new information network, proactively managing risk matters more than ever. ARIS Risk & Compliance Management allows your company to take a process-focused approach to building, implementing, and operating an enterprise-wide compliance and risk management system. You’ll be better prepared than ever to identify and document risk, meet core regulations, manage incidents and loss, conduct enterprise audits, and confirm new procedures. You’ll have the peace of mind that you’re doing everything in your power to protect and preserve your company integrity.

The benefits of successful BPM initiatives are clear. To reach your business goals, harness the strengths of BPM to address and overcome thefollowing challenges.

Business resilience

Unforeseen events including cyber-attacks, natural disasters and critical infrastructure failures pose a meaningful threat to a company's success. As a result, more industries are now focused on enhancing business resilience and business continuity. BPM can help organizations develop and implement solutions as part of an integrated compliance system, which are a decisive factor in enabling action during crisis situations.

Supply chain optimization

Supply chains are facing evolving pressures, and companies that previously pursued just-in-time strategies for inventory management now see the need for greater resilience. BPM supports the creation of more efficient, resilient supply chains in several ways. By mapping out business processes in detail, companies can identify bottlenecks and inefficiencies in the supply chain. Through automation, companies can streamline tasks such as procurement, inventory management, order processing, logistics tracking, and payment collection, resulting in faster and more accurate order fulfilment. And through data analysis of factors such as inventory levels, delivery times, and customer demand, businesses can identify trends and patterns that can help build more efficient, more resilient supply chains.

Accelerated digital transformation

The pace of business change is accelerating.  In a dynamic digital landscape, past success is no predictor of future results. To survive, companies need to align their business model to new challenges on a continuous basis. BPM helps companies re-design their processes to take advantage of new technologies. It also helps businesses ensure their people have the skills needed for a world where humans increasingly collaborate with, and work alongside, capable and intelligent machine assistants.

Regulatory compliance

Compliance requirements, and the processes to satisfy these requirements, become more complex each year. Well-known aspects to compliance, such as quality and data security, are now joined by requirements focused on environmental protection, sustainability and social governance. This new raft of regulations presents companies with the challenge of establishing an efficient analysis and reporting system. Through process monitoring and process documentation, BPM can help businesses identify any areas where they are not compliant and take corrective action. In addition, BPM can also help businesses maintain a complete audit trail of their processes to demonstrate compliance in the event of an audit or investigation.

Increasing customer expectations

Customers expectations are growing every year for more immersive experiences and greater personalization. BPM can help companiefind ways to fulfill customers’ demands more quickly and completely. To enhance the customer journey, companies can map out their processes in detail, identifying pain points in the customer journey that can be removed to streamline processes and reduce customer frustration. BPM can support personalization by providing a structured approach to customer segmentation and targeting. By mapping out customer journeys and identifying customer needs and preferences,businesses can tailor their offerings to meet individual customer needs.

Sustainability

Customers value companies that pursue sustainable business practices. Sustainability can also help you spot efficiencies and opportunities for savings that can boost the bottom line. Use BPM to identify opportunities to reduce waste and increase efficiency. Automation helps businesses reduce their carbon footprint while also improving efficiency. In addition, BPM supports optimized inventory management, helping businesses reduce the amount of materials they use and avoid unnecessary waste.

Changing workplace requirements

Hybrid working, and the increasing collaboration of teams located around the world, put new demands on communication and the exchange of information between companies and employees. BPM can help organizations overcome challenges of collaboration at a distance with the creation of digital handbooks. Manage the role-specific rollout of process knowledge, work instructions and policies to keep everyone working in sync toward a common purpose.

Business agility

The world in which you operate changes constantly. Whether change comes from unforeseen events, or via new legislation or regulations, organizations must respond and adapt. How quickly you determines how long you will stay in business—or not. BPM supports change management by providing a single source of truth about all your business processes. Cut through the complexity of changing things in your organization (think about processes, applications, business rules, etc.) so you can improve you agility and stay ahead of the curve.

Can your processes handle the pressure?

Is your company ready to unleash your process power? To commit to continuous improvement that will help you put in place your strategic vision and weather the pressure of the next unforeseen global crisis? Get in touch to learn more about how ARIS can drive your business process transformation and operational excellence.