W6 - Basics of BPR (2)

Source / Reference:
1) "Making the Case for BPM: A Benefits Checklist" by Jim Rudden 2007
http://www.bptrends.com/publicationfiles/01-07-ART-MakingtheCaseforBPM-BenefitsChecklist-Rudden.pdf
2) "EXPLORING THE RELATIONSHIPS BETWEEN CORE ELEMENTS OF TQM IMPLEMENTATION" by Rashid Al-Jalahma and David Gallear 2010
http://www.iseing.org/emcis/EMCIS2010/Proceedings/Accepted%20Refereed%20Papers/C94.pdf
3) "Nexus Account Management Case Study" by BPTrends 2005
http://www.bptrends.com/publicationfiles/04-05%20CS%20Nexus%20-%20Ultimus.pdf
4) "Casual Male's Distribution Center Case Study" by BPTrends 2005
http://www.bptrends.com/publicationfiles/04-05%20Casual%20Male%20Case%20Study%20-%20CommerceQuest.pdf


Subject:
In Lect 6 - Keys for successful BPM projects
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Response:

Abstract

Nowadays, firms tend to use BPM instead of BPR or TQM as the management approach to align with their business. The main reason for BPM technique becomes so popular is that the successful rate of implementing BPM project is about 90% while the failure rates of implementing BPR project and TQM project are relatively higher.

Furthermore, the return of implementing BPM project is also a tempting factor. A recent study from Gartner found that more than 70% of successful BPM projects delivered an internal rate of return greater than 15%, some firms even can achieve 100% rate of return.

Since the successful rate and the rate of return are so high, firms have greater expectation on BPM project. However, is BPM really applicable to all organizations and ? In my opinion, the answer is NO. Although the successful rate of implementing BPM project is very high, there are still risks that needed to be considered, otherwise, the project will be doomed to failure. Therefore the most important thing to understand before implementing BPM project is to know about what BPM really is.

Brief description of BPM

BPM is a management technique that includes method and tools to support design, analysis, implementation, management and optimization of operational business processes. It emphasizes the use of IT to manage incremental process changes and improve business efficiency, effectiveness and agility.

Those business process management includes:
- work flow management
- business process modeling
- quality management and measurement
- change management
- tools for standardizing business processes
- process monitoring and analytics

Things to be considered on implementing BPM project

BPM technique covers all aspects of business but many firms misunderstood it as a technique that only emphasizes on using IT to manage the incremental changes in business processes. Although IT takes an important role in BPM project, organizations should not just rely on IT as BPM is not all about IT.

The main reason for BPM project failure is firms tend to heavily invest on IT without acknowledging their true business problems. Those companies invest large amount of money on purchasing IT software which turnout fail to align with other businesses aspects like the business objective, organizational culture, project timescale, etc. IT should only be the BPM enabler but not the driver.

If firms want to carry out BPM project, they should define clearly what is the project scope and objective. Without a clear scope, firms may implement IT software that cannot address business problems and hence suffer loss. With a clear scope, firms can have a better control over the project and prevent over-budget. Like Nexus Bank, it chose the right BPM suite and define a clear vision on what process needed to be change and how to be changed. Hence achieve a big succeed, which is able to manage over 1 million credit card accounts without increase in staff by 50%.

Select the most suitable IT software to align with firms' business strategy and have more understanding on how to use the software are also very important in BPM project. Thus firms should conduct feasibility study on implementing the BPM project to estimate the benefits and cost of implementing the project. This can help firms to adjust the project objective and hence improve the business. Casual Male Retail Group, an top man's clothing retailer in America, carried out a detailed study on how new system will affect the business before implementation. Eventually, the improved process saved Casual Male $1.3 million annually.

Firms should provide training and educate their staff about the new business processes as BPM change the ways people work. People always resist changes and turnout result in delay of BPM project. Therefore if businesses want to implement BPM solution, they should have plans on how to manage the staff and provide enough training to them to help them fit in the new business process.

Conclusion

To conclude, business need to define clear project objective, conduct a detailed research and provide enough training to staff in order to achieve satisfactory result in implementing BMP project. Otherwise, firms may halt the project before completion due to over-budget and other managerial problems.