Business Process Management (BPM) as Differentiator The Key to by jls43972

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									Business Process Management (BPM) as Differentiator:
The Key to Customer Satisfaction
By Mike Gilpin, Vice President, Covering Software Infrastructure for Enterprise Application
Development, Integration, and Deployment, Forrester and Ken Vollmer, Principal Analyst in Forrester’s
Application

Business process management (BPM) is a key differentiator between organizations in
customer-focused sectors. Because of its positive impact on customer loyalty, companies that
fail to take advantage of BPM will gradually lose market share to competition that grasps the
significance of this technology

Business process management is defined as event-driven integration characterized by orchestrated,
application-oriented workflow across multiple internal applications and/or between trading partners. At
the high end, BPM solutions include human-centric workflow, business analytics, use of business
process templates, and other features. These solutions are normally layered on top of an integration
platform, which today is often service-oriented.

Drilling down on some of these attributes:

       Event-driven: BPM processes are normally triggered by events stemming from internal
        applications or external requests.
       Orchestrated: The logic for the flow of processing has been predefined. This enables complex
        strings of processing steps to be completed without human intervention.
       Internal and external: While most BPM activity will normally occur inside the organization’s
        firewall, exchanges of process information with external groups are also supported.
       Human-centric workflow: BPM systems support both exception-based human interaction and
        human decision making that is a normal part of the business process flow.
       n Business analytics: Real-time business event processing through management dashboards
        is a common feature.
       Other features: BPM solutions are often coupled with related integration capabilities including
        extract, transformation, and load (ETL); multi-channel integration (Interaction Platforms); and
        support for enterprise mobility.

When companies require integration of complex systems to coordinate computer and human activities
across multiple touch-points, BPM solutions are frequently the best alternative. BPM delivers the
greatest value when the processes it supports are highly volatile and also high-value (such as
customer-facing processes), and have tended to be a source of high maintenance expense in the
past. By replacing programming code with metadata-driven processes that can be easily and flexibly
changed, BPM breaks the logjam of this process-change impact.

Many potential benefits of BPM

BPM can provide significant payback in several areas that will directly affect the bottom line. The most
important benefits are:

       Enhanced customer service: The most significant benefit of BPM is its ability to help the
        organization provide its customers with what they want, when they want it. This is
        accomplished through fine-tuning internal processes to minimize delays and wasted effort.
       Shorter cycle times: BPM reduces cycle times by facilitating more parallel processing, which
        eliminates delays in routing critical information for action. When coupled with rules-based
        systems that enable business policies to be embodied in the process, tasks that took days to
        complete can be finished in hours or minutes. For example, a large financial organization was
        able to reduce the time required to produce new wholesale financial transactions from three
        weeks to less than 30 minutes on average.
       Better management control: At a time when the Sarbanes-Oxley Act and Basel II drive
        compliance needs, BPM technology improves management control by automating processes
        and enforcing business policies. Management dashboards also assist executives in spotting
        problems earlier, through greater visibility of critical business information.
       Improved productivity: Higher levels of process automation reduce manual effort for many
        tasks. In addition, reduced human work reduces the potential for introducing errors into key
        processes.

2005 market drivers evolving

BPM technology continues to gain popularity among organizations looking to improve the
effectiveness of key business processes. As BPM systems’ functional capability continues to grow, the
expanding range of business issues that these systems can successfully address will result in
increased demand for this technology.

The most significant drivers in the BPM market of 2005 are:

       Increased pressure to improve organizational productivity. Many firms are aiming to improve
        business process effectiveness. BPM tools can provide the framework to support the
        coordinated automation of activities that include people, application systems, and processes.
       The need to leverage existing assets in the form of composite applications. BPM tools can
        support the creation of new composite applications based on the combination of legacy
        information assets with new business logic and/or user interfaces.
       Increasing need to coordinate business processes with key business partners. The effort to
        improve productivity does not end at the firewall but extends across the value chain to include
        key business partners. BPM tools are increasingly used to harmonize business processes
        between entities.
       Increasing numbers of BPM solution providers. As the sophistication level of BPM solutions
        from application platform, enterprise application, and application integration vendors continues
        to grow, the level of competition among them and the BPM pure-play providers is increasing.

BPM trends for 2005

       Most organizations will pursue business process improvements. Many organizations will begin
        formal process-improvement efforts for the first time, joining those that had previously
        undertaken BPM projects. Overall, a majority of larger firms will do BPM during 2005.
       Merging of infrastructure and application software will continue. As vendors support an
        increasingly diverse array of vertical industry processes and composite application
        development, the line between business applications and infrastructure middleware will
        become progressively blurred. Application vendors will support embedded BPM, creating
        applistructure.
       Vendor convergence will accelerate. TIBCO Software’s purchase of pure-play BPM provider
        Staffware is just the first shot across the bow. Platform vendors will deliver a full spectrum of
        integration functionality (process, presentation, application, and data). And further
        consolidation among application integration vendors can be expected.
       BPM will typically be part of an application or integration platform. Market convergence will
        drive consolidation into three types of infrastructure platforms.

The customer is the ultimate beneficiary of almost all BPM efforts, although companies using BPM
also achieve significant benefits. They do so by enabling delivery of products and services to
customers in less time and at a lower cost. Since customers will gravitate toward organizations
providing superior service, organizations in customer-focused sectors that do not aggressively
enhance customer-facing business processes will gradually lose market share to those that
understand the value of BPM.

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