Business process management (BPM) is a systematic approach to enhancing organizational workflows to better serve customers and create business value. A business process is a series of actions that help an organization achieve its objectives, such as boosting profits or encouraging workforce diversity. BPM leverages various methods to refine business processes through analysis, scenario modeling, change implementation, monitoring, and continuous improvement to achieve desired business outcomes.
BPM is inherently dynamic, adapting to evolving organizational roles, rules, strategies, business goals, and other elements. Over time, it has integrated diverse optimization methodologies, from Six Sigma and lean management to Agile practices.
As business processes grew in scale and complexity, BPM software emerged to facilitate large-scale change. These technologies are now driven by advances in AI, machine learning, and other intelligent technologies, providing innovative ways to discover, design, measure, improve, and automate workflows. With the rise of digital business, BPM’s focus has expanded from back-end processes to optimizing customer and employee engagement systems.
Understanding BPM
BPM can be a complex discipline. Its application varies widely based on organizational size, process maturity, technical capabilities, culture, and resources. BPM can range from managing a single process, like onboarding a new customer, to driving major business transformations that require entirely new processes. The success of BPM relies on an organization’s ability to recognize the value of process improvement.
This guide explains BPM, its benefits, challenges, and best practices. It also covers business process automation and improvement projects, BPM tools, and the future of BPM.
You will find links to related articles for in-depth information and definitions of key BPM concepts like business process mapping, Business Process Model and Notation (BPMN), and workflow management.
Why Business Process Management Matters
Effective business processes are critical for enterprise success. Common business processes that help companies achieve their goals include:
- Developing and launching new products
- Fulfilling customer orders
- Managing customer service
- Onboarding new employees
These operations can involve hundreds or thousands of tasks and approvals. They typically involve people, IT systems, and machinery and can also include business process outsourcing providers. A well-designed business process breaks these tasks into structured, repeatable steps, leading to consistent results.
Repeatable steps help organizations predict resource needs, reducing the risk of over- or under-allocation. Measuring these steps identifies weak links and bottlenecks, highlighting potential improvements.
Michael Rosemann, a BPM expert at Queensland University of Technology, likened business processes to an organization’s lifeblood.
“Like blood vessels, they fill it with life and determine its way and speed of value creation as well as the cost to serve its customer base,”
A poorly conceived or managed process can damage a company, hindering productivity and efficiency. Automating an ineffective process can amplify poor performance.
BPM’s methods for discovering, modeling, improving, automating, and monitoring processes help prevent this. Effective BPM helps companies deliver products and services efficiently at lower costs and aligns processes with business goals. A BPM approach helps companies adapt to changing needs.
The rapid pace of change in the 21st century requires organizations to respond quickly and effectively. The ability to facilitate cost-effective, low-risk, and rapid business process change is BPM’s key value. It enables continuous business reinvention and innovation.
The five phases of business process management.
The BPM Lifecycle
Many BPM experts describe a BPM project in five phases:
- Design: Analyze the existing process to identify areas for improvement. Then, redesign the process using standardization and automation.
- Model: Examine how the redesigned process works in different scenarios.
- Implement: Execute improvements, including standardization and automation.
- Monitor: Track improvements to assess their performance.
- Optimize: Continuously improve the process.
Some include a sixth step – business process reengineering (BPR) – for when adjustments no longer drive desired results and require radical reinvention, often involving automation. Other schemas include separate phases for analyzing, automating, and managing processes.
While the lifecycle seems straightforward, each phase requires careful planning. Business processes often span multiple systems and departments. Onboarding an employee, for example, could involve HR, IT, Finance, and training programs.
Improving a business process also involves many groups, including executives, BPM specialists, process owners, employees, and IT professionals. Discovering and analyzing workflows, generating and testing models, and optimizing processes can generate thousands of documents, so failure is possible if BPM is not managed well.
BPM Best Practices
As BPM has matured, best practices have emerged to keep process improvement on track. Understanding that BPM is a business project, not a technology project, is key.
A management and operations focus “ensures that direct, measurable business improvement can be continually delivered in a controlled manner as the business evolves.”
Establishing a BPM Center of Excellence is a best practice for midsize and large companies. Other tips include:
- Creating interdisciplinary teams
- Using a formal BPM methodology
- Using simulation modeling
- Adding performance measurement with clearly defined KPIs
Assess your BPM initiative by rating yourself on these 16 BPM best practices.
Benefits of Business Process Management
BPM improves work quality and operational efficiency. A well-executed program can eliminate waste, cut errors, save time, reduce costs, improve compliance, increase agility, support digital transformation, and deliver better products and services.
“BPM allows organizations to streamline workflows by automating tedious tasks, such as data management, data flows, data entry approval processes and report generation,”
BPM can be an effective management tool because:
- Standardizing processes reduces the risk of human error
- Embedded analytics provide visibility into process performance
- Automation increases efficiency and allows employees to focus on complex tasks
- All of the above give employees more time to identify other process enhancements
Well-executed BPM permeates practically every aspect of operations.
The benefits of BPM permeate business operations.
Challenges of Business Process Management
Challenges arise in any initiative involving change. This is especially true of BPM, where process improvement spans different roles, systems, and ways of working.
To maximize BPM’s benefits, organizations must prepare for challenges and have a plan to address them.
Common reasons for BPM failures include:
- Lack of executive buy-in and support
- Unclear business goals and objectives
- Inadequate testing infrastructures
- Confusion about the right tool
- Hidden processes vulnerable to breakdowns
- Poor process visibility and traceability
- Inflexible third-party contracts and incentives
Business Process Management Certifications
IT certifications boost professional credibility. Programs requiring recertification help you stay current. Check out “Top 10 business process management certifications for 2024” for a guide to BPM certification programs.
Categories of Business Process Management
Because BPM is broad and involves various tools, experts categorize it as:
- System-centric: Focuses on workflows in business systems that operate with minimal human intervention, integrated into enterprise applications. Examples include automated processes in customer relationship management and enterprise resource planning systems.
- Human-centric: Focuses on process flows that people handle, including those in business applications with features for human interaction, such as user interfaces, alerts, and notifications.
- Document-centric: Centers on documents, such as formatting, signing, and verifying contracts. BPM tools often specialize in document-centric tasks.
“Levels of Concern” in BPM
In Business Process Change, Paul Harmon distinguishes between the enterprise, business process, and implementation levels. “Projects or activities at different levels require different participants, different methodologies, and different types of support,” he wrote.
For example, a BPM project focused on supply chain management might be triggered by an enterprise-level BPM group that initiates a redesign of the process. The redesign team recommends changes, which must be approved by senior management. The redesign involves acquiring a new ERP system (IT department) and creating new job roles (HR).
BPM Examples and Applications
BPM applications are used across organizations to improve processes. Examples include:
- Human Resources: BPM software streamlines HR tasks, such as timesheet reviews and new hire onboarding, cutting paper use.
- Finance: BPM platforms process employee travel requests faster and streamline purchasing processes.
- Sales: BPM tools coordinate sales quotes and invoices, shortening sales cycles.
Types of BPM Technologies
Business process management software (BPMS) automates business process improvement. BPMS includes technologies like:
- iBPMS: Intelligent BPMS uses real-time analytics, machine learning, complex event processing, and business activity monitoring to make automation data-driven and dynamic. These products also offer social and collaboration capabilities.
- LCNC: Low-code/no-code (LCNC) technology enables business analysts and users to model new processes, reducing reliance on professional coders.
- RPA vs. BPM: Robotic process automation (RPA) and BPM are complementary partners. RPA automates manual, repetitive tasks. BPM aims to improve processes using methodologies like Six Sigma.
RPA tools are improving at scaling automation, and BPM platforms increasingly offer RPA as part of their toolkit.
Hyperautomation tools are transforming business improvement.
BPM Tools and Vendors
The number of BPM tools is growing. Traditional vendors have evolved their platforms to use modern architectures, LCNC development, RPA, process mining, holography, and AI capabilities.
Top BPM vendors include:
- Appian
- Agile Point
- Bizagi
- iGrafx
- Kissflow
- Microsoft
- Newgen
- Nintex K2
- Oracle
- Pegasystems
- Progress Software
- Trisotech
The cost of a BPM initiative varies widely, depending on project scope, number of users, transaction volume, and number of locations.
The Future of Business Process Management
BPM is an evolving discipline driven by the dynamic nature of work and business. The need to operate in a digital marketplace, the shift to remote work, and the integration of AI have pushed companies to reassess their processes.
BPM and its technologies have evolved to meet these needs. Recent trends include:
- Citizen developer tools enabling more users to improve processes.
- Intelligent business process automation improving efficiency with AI and RPA.
- Inclusion of BPM functionality in business applications.
- Automated process mining tools for accurate process mapping.
- Adaptive process management for real-time iterative modeling.
- Innovations in process modeling for better understanding and improvement.
- Process simulation for testing changes.
- Balancing LCNC development and custom development.
- Generative AI to reimagine processes and workflows.
- Convergence of BPM tools, AI, and early BPM implementation in application design, making continuous transformation more attainable.
