business process management and the benefits of automation...the difference between business process...
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Business Process Management
and the
Benefits of Automation
The Difference between Business Process and
Business Process Automation
All companies rely on Business Process Management
(BPM) in order to run their operation effectively. These
business processes are generally made up of a series of
repetitive tasks performed by employees. This includes
anything from ongoing reporting, authorizations and
approvals, to manually tracking stock levels, contract
renewals and key performance indicators.
Automating these repetitive tasks will not only save
significant amounts of time and reduce overhead costs;
but will also provide for more efficient and reliable
information organization-wide. Business Process
Automation (BPA) is achieved through the
implementation of the appropriate business process
management software. This technology provides the
capabilities necessary to have the computer system
handle tasks that were traditionally performed by
employees. Automating certain processes gives an
organization the ability to streamline operations and
reporting, not to mention free-up staff members to focus
on more important tasks. Business process management
technology is capable of much more than organizing
simple static flows, such as task options with multiple
choices and contingencies. Rather, it can define,
execute, manage and refine processes that involve
human interaction; work with multiple applications; and
handle dynamic process rules and changes.
Business Process Management technology is the IT
industry’s response to problems created by employee-
dependent applications. The resulting Business Process
Automation allows directors, managers, suppliers and
customers to receive instant responses to commercial
interactions by leveraging all IT systems across an
organization through a real-time, responsive
infrastructure.
Which business processes should be
automated?
Like any savvy business owner -or- manager, you are
likely considering your bottom line. Will the automation
of your business processes really save your organization
time and money? The
answer is: absolutely.
The types of
processes listed
below are most likely
to yield a high return
on investment once
automated.
� Dynamic
These are
processes that
change
frequently such
as those that
must be
regularly
adapted in
order to abide by regulatory compliance changes.
For example, retailers who are required to
regularly modify how customer information is
managed due to changes in federal privacy law
and Credit Card Company mandates.
� Inter-departmental
This category covers any processes that involve
people and/or typically cross multiple business
units, divisions, or departments.
� Complex
Complex processes are those that require the
collaboration of a variety of people from different
departments, who may be using different software
applications. An example of this would be an
organization’s Order-to-Payment process, which
covers each step of a product purchase. From an
order placed (via phone, web, email, etc.) to the
sales rep, to fulfillment by your shipping
department and payment to accounts receivable.
� Measurable & Mission Critical
This covers any vital processes that directly
impact business performance.
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Business Process Management and the Benefits of Automation
� Legacy
This category includes any
processes that rely on one or
more legacy applications to be
completed. Additionally, this also
covers those that require a
significant additional capability
such as HR functionality for
employees.
� Manual Research
Manual research processes are
those that are currently handled
by a staff-member. An example
would be a furniture retailer’s
reliance on physical discovery,
and/or research into inventory
aberrances.
� Exceptions
These are any processes with
exceptions that require quick
turnarounds.
Sometimes however, the most important
part of a strategy is in knowing what not
to do, especially with a fairly horizontal
capability like BPA. Areas that are not
good candidates for automation include:
� Legacy application replacement
� High-volume transaction
processing (such as a point-of-
sale application, although cross-
channel returns might be a good
target)
� Processes with little or no user
interaction
� Processes that can be simply and
cheaply automated with other
tools
For a first BPA initiative, select a process
from your organization that is important,
but not mission-critical or overly
complex. A good first step is to focus on
a specific and quick solution where a
visible business process improvement
will foster momentum for broader and
more sustained BPM conversions.
The Benefits of Business Process
Management Automation
Software
As a technology, Business Process
Management software can deliver
endless benefits to any organization, no
matter the size. Converting your
business processes from ‘managed’ to
‘automated’ reduces operational costs
and frees up employees to concentrate
on other activities that are important for
the success of your business. Tasks such
as report creation and distribution, not
to mention monitoring and/or reporting
on your company’s Key Performance
Indicators (KPI’s) can now be easily
handled by your computer application.
Some of the direct benefits include:
� Stronger Revenue Streams
� Operational Savings
� Reduction in the Administration
Involved with Compliance and ISO
Activities
� Greater Company Agility
� Higher Customer Satisfaction
Levels
� Eradication of Data Entry Errors
� Critical Failure Avoidance
Business Process Automation:
Up Front & Hidden Costs
A typical Business Process Automation
project requires licensing software from
a vendor, training internal staff and
Automation Examples that
Improve Business
� Key customer
approaching credit
limit
� Inventory nearing
minimum levels
� Notice of upcoming
contract renewal date
� Purchase order
authorizations
� Delivery schedule
approvals
� Data entry update
approvals
� Publishing of real-
time product
availability, and key
performance
indicators (KPI’s)
� Publishing of
employee holiday
entitlements
� Detail of orders
placed
� Stock availability
� Distribution schedules
� Creation and
distribution of
financial statements,
delivery notes, and
sales reports
� Application and web
services integration
� Data migration
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hiring outside assistance for your first initiative. Like
other software platforms, there are many different types
of licenses available including enterprise wide; per
processor; per process; per developer; per user; etc.
Now that the concept of automation has gained traction
in many large enterprises, vendors are pursuing mid-
market companies and reducing license fees to match
the budgets of the smaller organizations. Potential
hidden costs include:
� The licensing and deployment of multiple
development/test/production environments to
support multiple BPA initiatives*
� Additional application and database server
licenses*
� Staff to manage the servers
� Internal cost of direct involvement from business
users to participate in process modeling, business
rule definition, user interface design, testing and
rollout activities
� Change management and training costs
The Impact of Automation
Similar to other implementations, Business Process
Management software requires both business and
technical resources and activities. Effective BPA is based
on an ongoing iterative design/develop/deliver process
improvement lifecycle. Although the usual cast of
characters will be involved (executive sponsors; project
managers; business users; business analysts; technical
architects; software engineers; and quality assurance/
infrastructure specialists), the role they play may be
different.
In a typical software implementation, business users are
generally included in up-front planning and
requirements definition. After that, they don't necessarily
get substantially involved until user acceptance testing.
BPM software implementations, differ in that they require
constant participation from key business users and
analysts as process models are developed and
application elements are implemented. Many business
users and IT staff are not used to an ongoing
collaborative approach to implementing software which
can give the planning, training, and change
management phases a higher degree of difficulty.
However, one of the biggest challenges with the
conversion from BPM to BPA is the behavioral change
required by staff members in the process. The
implementation of BPM software requires users to move
from an event-driven to a task-driven work paradigm.
� Event-driven
Employees "know" what tasks to do and in which
order because that's the way they've always done
them; they prioritize their work based on events
as they happen, often using the "squeaky wheel
rule".
� Task-driven
The logic built into the BPM solution defines the
tasks, their order and relative priorities; which
employees must monitor and work from.
For many employees, using BPM software will require
them to monitor an inbox of tasks with prescribed
priorities and work instructions, rather than
concentrating on the task that seems most pressing. For
some organizations, well-planned and executed training
is enough to make the transition; but for others,
implementing task-driven work processes can require a
major cultural transformation.
Calculating the Return on Investment (ROI)
Many organizations are losing more money than they
realize through lost productivity and redundant tasks. It
may be a good idea to perform a thorough assessment of
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your company’s manual processes and the time your
employees are spending on them in order to evaluate
your needs. This is an important step in calculating the
savings that can be made through automation. The costs
associated with defining, scoping and implementing a
business process management solution will be quickly
defrayed as the savings is quantified. Take this example
of a common business process:
Each week, ABC Company distributes 10 different
management reports from their Enterprise
Resource Planning (ERP) software. These reports
communicate the changes that have occurred in
the previous 7 days in regards to cash flow, stock
balances, sales, purchases and overall trading.
Let’s do a quick calculation of how much this process is
going to cost the business over the period of one month:
The employee that processes the reports
generally spends 5 hours per day, Monday-Friday
on report generation, restructure, and
distribution. For the purposes of our example we
will presume the employee’s fully loaded labor
rate (i.e. pay rate + taxes and benefits) is $15.00
per hour.
Using these figures we can determine the following:
� Time spent per year = 1,300 hours (5 hours X 5
days X 52 weeks)
� Amount spent per year = $19,500 (1,300 x $15)
� Amount spent per month = $1,625 ($19,500 / 12
months)
If this process was automated ABC Company would save
$1,625 per month, and allow the employee to focus on
other areas of the business.
Business Process Automation ROI Metrics
Success of Business Process Automation is almost always
measured with a clear, simple business metric.
Examples of these include:
� Reduced number of returned shipments
� Reduced cycle time for special orders
� Increased dollars recovered from credit disputes
� Increased consistency of task completion/
improved productivity
� Reduced time required to onboard new
employees
Defining the right metrics will help keep the project
team focused and the business owners engaged. Since
converting from BPM to BPA requires an iterative
approach, keeping everyone involved is crucial to
working through the limitations of early releases and
actually getting the staff to use the solution. Measuring
and reporting actual results is imperative, especially
when changing the everyday work habits of employees.
For example, if process exceptions are being posted as
tasks on a user portal, management needs to monitor the
use and throughput of that portal. If users are not going
to the portal often enough, the BPM solution can be
modified to deliver tasks to the user's e-mail inbox
instead.
In summary, maximizing your return from Business
Process Automation requires:
� Picking the right process targets
� Assembling the right team
� Following an iterative methodology
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Staying focused on the business goals to drive
further improvements and user involvement
Next Steps: Moving Forward with Business
Process Automation
Once your organization has developed a business case,
identified the ROI and made the decision to move
forward with an implementation, there are two very
important steps to take.
1. Select a Business Process Management Solution
Provider.
Look for someone who can help you achieve your goals.
You may ask your current software provider or other
organizations similar to yours who have already gone
through this process for recommendations. Be sure to
choose someone who has thorough knowledge of BPM
automation and software, and has installed systems at
companies similar to yours. Further, it is crucial that you
select someone with whom you feel you can work with.
Consider the following:
� Do they listen effectively and communicate
clearly?
� Are they a good fit with your company’s
philosophy and culture?
� Can they provide training and/or ongoing support
should your company require it?
� Can they provide references?
2. Do Your Homework
It is crucial that you chose the right system for your
organization. It should not only have the natural
capability to work with your company’s current
processes and existing software systems, but should also
be scalable enough to grow with your company over
time.
Additionally you should seek to thoroughly vet the
software manufacturer. Some questions you may want to
ask:
� Is the software manufacturer respected in the
software community?
� How long have they been in business?
� How long have they been manufacturing BPM
automation software?
� Do they have a vision and plan for the future?
� How do they handle product updates and new
version releases?
� Do they have a help-desk available, and at what
hours?
Conclusion
Business Process Management automation software can
greatly enhance the day-to-day operations of your
company. With increasing demands and fluctuating
profit margins – there’s never been a better time to
invest in automation capabilities that will enable you to
maximize performance. Business process automation will
provide you the leverage you need to reduce costs and
increase efficiency, enhancing your organization’s
ability to remain competitive.
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About PositiveVision
PositiveVision is a full service consulting firm specializing in the
implementation and support of business management software for small to
medium sized businesses. By leveraging out of the box technology
PositiveVision assists our clients in streamlining inefficient processes,
growing revenue streams and reducing costs. As a result, our clients are more
productive, competitive and profitable. Our goal is to improve the
performance of your business and be your long term partner by providing
you with the resources and expertise you need along with exceptional
customer service.
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Positive Vision, Inc. | 219 E Thorndale Avenue, Roselle, IL 60172 | p. 800-559-1323 | f. 888-315-1176 | www.PositiveVision.biz | [email protected]
219 E Thorndale Avenue, Roselle, IL 60172
p. 800-559-1323 | f. 888-315-1176
www.PositiveVision.biz