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June 17, 2003

A Chasm Must Be Crossed

How will your organization get from where it is now to where it needs to be: dynamic, agile, and moving in real time? The answer could be an emerging technology foundation that supports true business process management

by Howard Smith and Peter Fingar

While the vision of process management isn't new, existing theories and systems haven't been able to cope with the reality of business processes — until now. By placing business processes center stage, corporations can gain the capabilities they need to innovate, reenergize performance, and deliver the value today's markets demand. Business process management systems discover what you do, and then manage the life cycle of improvement and optimization, in a way that translates directly to operation.

During the reengineering wave of the 1990s, all you had to guide the transformation of your business were books by management prophets full of stories about other companies. The prophets' underlying theories were based on age-old common sense and general systems theory proposed 50 years earlier — without any path to execution. By contrast, the process-managed enterprise grasps control of internal processes and communicates with a universal language that enables partners to execute on shared vision — to understand each other's operations in detail, jointly design processes, and manage the entire life cycle of their business improvement initiatives. The process-managed enterprise uses new class of mission-critical infrastructure, the business process management system (BPMS).

Today, the vast majority of employees in large enterprises rely on nothing more than email, spreadsheets, and word processing tools. Deep in the data center, expensive software applications provide automation and are maintained solely by the staff of the IT department. Yet, the majority of automation tasks needed each and every day in business are modest. For example, nearly everyone needs more visibility of and control over the myriad of activities around them as they interact with colleagues, partners, and customers. Business users need control of information flows so that everyone remains focused and coordinated. Such applications follow no simple pattern, so software solutions can't be packaged easily, but businesspeople themselves could probably handle 80 percent of their requirements, if they only had the tools. We're gradually seeing progress, but today, most software applications are hardcoded and maintained in the form of traditional software. Business intelligence and action lags behind.

Process management systems are helping organizations to break the business/IT divide by placing control of business processes in the hands of business leaders and in some cases, directly in the hands of front-line workers. Personal, workgroup, and departmental process management tools, akin to the commodity databases that form part of commonly used office productivity suites, are emerging as valuable new managed services. The role of IT is changing, away from custom development and toward the provision of process management systems. Imagine a Process Office suite, providing an integrated, process-centric approach to collaboration, computation, work management, process modeling, and simulation. For example, a global bank could empower customer-facing sales teams by allowing them to modify sales processes to respond to changing circumstances, instead of requiring sales teams to write requirements for the IT department to develop the sales software.

The Aberdeen Group elaborates: "The [business process management] category may arguably provide the greatest return on investment compared to any other category available on the market today. [Process management] gives organizations the ability to cut operational costs at a time when the economic downturn makes it increasingly difficult to boost revenues."

Aberdeen continues: "Business process management enables government agencies to dismantle obsolete bureaucratic divisions by cutting the labor- and paper-intensive inefficiency from manual, back-end processes. Faster and auditable processes allow employees to do more in less time, reducing paper use as well as administrative overhead and resources."