Business Process Management

Business process management (BPM) is a method of efficiently aligning an organization with the wants and needs of clients.

The activities which constitute business process management can be grouped into five categories: Design, Modeling, Execution, Monitoring, and Optimization.

Design

Process Design encompasses both the identifying of existing processes and designing the "to-be" process. Areas of focus include: representation of the process flow, the actors within it, alerts & notifications, escalations, Standard Operating Procedures, Service Level Agreements, and task hand-over mechanisms.

Good design reduces the number of problems over the lifetime of the process; a real world analogy can be having an architect design a house. Whether or not existing processes are considered, the aim of this step is to ensure that a correct and efficient theoretical design is prepared.

Modeling

Modeling encompasses takes the theoretical design and introduces combinations of variables, for instance changes in the cost of materials or increased rent to determine how the process might operate under different circumstances.

It also involves running "what-if analysis" on the processes: What if I have 75% of resources to do the same task? What if I want to do the same job for 80% of the current cost?

A real world analogy can be "wind-tunnel" test of an aeroplane or test flights to determine how much fuel it will consume and how many passengers it can carry.

Execution

Put your design in to practice.

Monitoring

Monitoring encompasses the tracking of individual processes so that information on their state can be easily seen and statistics on the performance of one or more processes provided. An example of the tracking is being able to determine the state of a customer order (e.g. ordered arrived, awaiting delivery, invoice paid) so that problems in its operation can be identified and corrected.

In addition, this information can be used to work with customers and suppliers to improve their connected processes. Examples of the statistics are the generation of measures on how quickly a customer order is processed or how many orders were processed in the last month. These measures tend to fit into three categories: cycle time, defect rate and productivity.

The degree of monitoring depends on what information the business wants to evaluate and analyze and how business wants it to be monitored, in real-time or ad-hoc. Here, business activity monitoring (BAM) extends and expands the monitoring tools in generally provided by BPMS.

Process mining is a collection of methods and tools related to process monitoring. The aim of process mining is to analyze event logs extracted through process monitoring and to compare them with an 'a priori' process model. Process mining allows process analysts to detect discrepancies between the actual process execution and the a priori model as well as to analyze bottlenecks.

Optimization

Process optimization includes retrieving process performance information from modeling or monitoring phase and identifying the potential or actual bottlenecks and potential rooms for cost savings or other improvements and then applying those enhancements in the design of the process thus continuing the value cycle of business process management.