Why Is BPM Important? (Business Process Management)

Do You Even ERP

Updated on January 10, 2021

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ARTICLE TABLE OF CONTENTS

BPM (Business Process Management) is important to any business.

You’ll learn:

What a business process is
What business process management is
And why exactly business process management is important for any business
Lots more

Let’s get started!

Business Process Management Is Important to Any Business

Without even knowing it, you’re probably using business process management, or BPM, in the workplace already.

But of course, you want to know: Why is business process management important to any business?

Or perhaps a better question would be, why is good business process management important to any business?

After all, anything worth doing is worth doing well—and you’ll learn why that’s the case with BPM here.

Understanding the Basics of Business Processes

No matter what kind of business you work for (or run), the goal is to produce a product or deliver a service.

But getting there is half the battle.

That’s where business processes come in.

“Business process management” can sound intimidating, so we’re breaking it down to the basics here.

You’ll have a foundation in the essentials before moving on to more complicated questions about how BPM works—and why it matters for every business.

So, What’s a Business Process?

A business process is almost exactly what it sounds like: a process that leads to a specific business goal.

To reach your goal, you need a plan—or a process—that involves small steps toward the bigger picture.

The business process definition can also include specific sequences of actions or tasks.

In short, the process is smaller steps toward a large end-goal. All the steps are related, and they build on one another.

You could also call a business process a business method or business function, though there are differences among them.

These processes can happen at every level of an organization.

In fact, while you may not have the details on paper, business processes are happening in every department as we speak.

Types of Business Processes: Human vs. System

It’s worth noting that there are actually two types of business processes, though they can all be categorized together, too.

The biggest distinction is between human versus system processes.

There are human-centric processes (person to person) and then application to application.

However, there’s also a person to application element that ties everything together, and the chain is less of a chain and more of a continuum.

That said, there are distinctions in each category.

For example, person to person, or P2P, processes require a person to engage them. This could involve project management and job tracking, among other steps.

Person to application, or P2A, processes involve both humans and technology.

Information systems often depend on integration between machine functions and human input.

Finally, A2A is automation, that lucrative and time-saving element.

Applications communicate post-P2A, and things happen automatically (at least, from our outside perspective).

What is Business Process Management?

Business processes are happening all over your organization already, and that’s great. But managing those methods, functions, and processes is also an essential part of daily business.

Sure, you’re doing things at your company every day.

The question is, are you maximizing your efforts? Do you understand how changes in your processes affect the outcomes in your organization? Is there a clear plan in place to oversee processes—and improve them?

Of course, managing business processes goes beyond creating a flowchart or making a bunch of rules.

Business process management also requires that you:

Analyze
Automate
Discover
Improve
Measure
Model
Optimize
Organize
Predict
Track

your business processes.

It’s a dynamic method of addressing processes from an improvement standpoint.

After all, there’s always room for growth, even in successful companies.

Business Process Management: The Definition

If you want a textbook definition of business process management, you might be out of luck.

In fact, there’s been a lot of argument over the exact meaning of BPM, and of course, every organization applies the concept in a different way.

But according to BPM.com, they and other “industry experts” worked together to develop the following definition:

Business Process Management (BPM) is a discipline involving any combination of modeling, automation, execution, control, measurement and optimization of business activity flows, in support of enterprise goals, spanning systems, employees, customers and partners within and beyond the enterprise boundaries.

In non-business jargon?

BPM is anything your organization does to make your biz better.

Easy enough, right?

Not necessarily—there are many facets of and layers to BPM, so it’s worth investigating more in-depth than just to outline common business practices and processes.

Who Came Up with Business Process Management?

BPM was born from computer and business science, one scholarly review of the subject explains, with roots back in the 1700s.

Of course, today’s technology and other innovations have significantly changed things since Henry Ford’s initial approach to mass production assembly lines.

And there’s no way to credit a single person with creating BPM, especially when the approach looks different for every company or organization.

Who Handles Business Process Management?

What’s great about BPM is that everyone in an organization can contribute. But not everyone is actively “doing BPM” in a company.

And, as the owner or even the manager, your role is vital. Outlining your company’s values, motivation, operating guidelines, and business processes falls to you.

Or, you could ensure that it falls to a specific group of people.

Regardless, someone, or a team of someones, must take a closer look at your business processes and focus their attention on tracking, interpreting, and improving them.

At the same time, once you establish your business process management strategy, everyone in the organization can offer feedback and suggestions.

All Team Member Insights Matter with BPM

Workers in factories may be handling a specific task in the chain of processes, but they can also offer insight on how to improve that task.

A salesperson or customer service rep who interacts with clients can offer a unique perspective on the company’s product or service.

An employee who stocks the inventory could have an in-depth understanding of supply and demand, even if they’re not formally tracking the figures.

So, how do these insights translate into better BPM?

Business Process Management Means Distilling Good Ideas

Your BPM leader or team essentially acts as a business process sleuth and a siphoning channel to carry good ideas to the implementation stage.

Not only do you need to diagnose, model, analyze, and adjust processes, but you also need to take everyone’s input and funnel it into actionable steps moving forward.

Of course, that might be easier said than done, especially if your employee insight is limited to what type of beverages workers want to see in the break room.

What Kinds of Things Does BPM Involve?

We know what you’re thinking: Great, more work. So, what do I actually have to do to improve BPM?

The short answer is, a lot. The longer answer is, it depends on your business—and who you work with, the product or service you offer, and more.

BPM is a “discipline,” BPM.com explains, so it’s a collection of things you do, and it’s more of a practice than a philosophy. Those specific tasks and projects will vary widely, even throughout the organization.

Nearly anything can be part of business process management, as long as the goal is to improve your organization’s final product (or service).

What’s the Most Important Business Process?

Your business does a lot of things—but which process is the most important? You may not want to hear this, but here we go:

Sales is the most crucial business process.

It’s not glamorous or customer-centric to say that sales matters more than any other process. But it’s the truth: sales are what carry your business, so an effective process is vital.

And as Sales Management explains, you need a strong sales process and plenty of training to achieve top performance.

In fact, their survey found that organizations with defined, managed (adoptive), or adaptive sales processes performed far better than ones without a consistent process.

Focusing more on sales may feel intuitive for many companies, and there’s a reason for it.

Of course, you can’t lose sight of other essential business processes that support your organization’s long-term goals.

What Are the Benefits of Business Process Management?

The most significant benefit of business process management is learning how your company operates and then making it run better.

Now, this is what you’re probably thinking:

What specific, measurable difference will I see if my company implements BPM?

Here are a few examples.

Productivity

You can save time. Whether by automating processes or cutting out time or unnecessary steps, you can make your organization more productive.

Plus, taking the burden of improving processes off of front-line workers lets them focus on their respective roles.

Adaptability

You learn how to be flexible. BPM will involve change, but when an exterior force pushes your industry to adapt, you’ll already be ahead of the game.

Sustainability goes hand-in-hand with adaptability, as your organization’s innate flexibility will mean an easier transition, no matter what the future of your industry holds.

Compliance

You’ll ensure compliance.

Looking closely at processes means you’re bound to find areas that need work.

Especially when it comes to ensuring compliance from staff, it’s easier to keep everyone on the same page when the expectations are clear.

Transparent business processes, laid out in an organizational chart or via technological means, can help curb shortcuts.

Measurability

You’ll learn ways to measure your business success.

By inspecting your business processes closely, you’ll figure out what’s working and what’s not.

But you’ll also be able to measure impact on your profitability, efficiency, and more, in quantifiable ways.

How is Business Process Management Different from Project Management?

It’s worth noting that the term business process management instills confusion in both laypeople and businesspeople.

Though we’ve broken it down to basics here, the question of how BPM is different from project management is one worth addressing.

In short, project management can be part of process management.

But differentiating the two requires taking a look at the intent and outcomes.

For example, work that is unique in both sequence and structure constitutes a project.

The outcome might be different every time, and there likely isn’t a progression involved. When the project is done, it’s done.

In contrast, BPM involves a longer chain of processes, and they repeat.

Sequences can change, but process management is predictable and has its own roadmap that defines each avenue and offshoot.

Why Is Business Process Management Important to Any Business?

What you really want to know is, why is BPM used?

The answer is that it’s nearly impossible to run a business without process management. Doing it effectively, however, can involve a host of benefits.

You know the business process definition includes an array of methods for managing a business.

That definition also encompasses efforts to streamline and improve those methods.

BPM never ends.

So, why is BPM important to any business?

The short answer is that the focus is improvement in all areas of the organization.

Forward momentum is a must for companies of all sizes, and effectively managing your business processes can help you achieve growth.

Let’s explore further by looking at specific ways BPM can help any business, regardless of size, industry, or any other factor.

BPM Gets You Organized, First and Foremost

If you’ve never taken a look at your company’s business processes from an operational standpoint, now is the time.

As BPM Institute explains, you can arrange the elements of BPM into four main checkpoints:

Document
Assess
Improve
Manage

Breaking it down further, different activities and processes can be grouped together, but it’s totally variable.

Even Wikipedia’s description of the life cycle of business process management includes the term “arbitrary,” likely because there’s so much still being argued over with BPM.

The thing is, the fact that you can outline your organization’s life cycle in a way that suits your industry and business goals is what makes BPM so effective.

Business Process Management Makes Improvement a Company Goal

No brand wants to stagnate, but it can happen if no one wants to rock the boat.

With BPM, you’re constantly evolving the business model to reach goals and become more successful.

BPM Combines Viewpoints for a More Dynamic Interpretation of Business

When you implement BPM, you’re getting a more dynamic view of your entire business.

Specifically looking at ways to uncover, analyze, and improve processes is bound to disrupt your perception of the company and how it functions.

Business Process Management Boosts Organizational Improvement

Doing better is always better, right?

And what business owner doesn’t want to save more money, land more clients, and boost profits?

Without BPM, you can’t guarantee any of those things.

BPM Pushes Teams to Collaborate and Communicate

While only a small number of people will spearhead the BPM in your company, it’s not a single-person job.

So, business process management spurs collaboration and communication—because it’s necessary to hammer out the details.

Business Process Management Leads to Innovation

A huge part of business process management is diagnosing and interpreting data and outcomes so that you can improve them.

That’s innovation and it could be mind-blowing for your organization.

BPM Can Spur Companies to Embrace Automation

Plenty of companies assume that BPM means automation. While it’s true that BPM can involve automation, that doesn’t mean it’s the end goal.

That said, embracing automation might be a logical next step after focusing on BPM.

Business Process Management Requires an End-to-End View

When you start looking at business process management, it’s clear that everything in your company is connected. But it’s more than that:

BPM requires an end-to-end view, one that involves predictions, process tracking, and routines.

As BPM Institute explains, looking at a single piece of the puzzle won’t provide the necessary insight for BPM.

You need to follow each process to determine where it starts and ends and discover how it fits with other processes.

BPM Moves Beyond Acquiring Tools and Buying Solutions

Plenty of companies claim to sell BPM solutions and tools that will make business owners’ lives easier.

But BPM isn’t just a set of tools, an app, or a one-time training session (although training could be helpful, depending on your company and level of expertise).

If you want tools and solutions, by all means, go for it.

But simply purchasing an application won’t get results with BPM—though it could make it easier to follow the flow of processes and document changes.

Business Process Management Works with Other Methodologies

While it’s possible to pit methodologies against one another (what the difference is between Six Sigma and Business Process Management is a surprisingly common question), there’s no need with BPM.

In fact, the ideology of business approaches like Lean Six Sigma is very in-tune with BPM.

A focus on the customer and a hard analysis of data are what spurs the adaptation of this model.

Integrating a methodology like Six Sigma with BPM means fewer gaps in your problem-solving.

It can earn you a better ROI (Return of Investment), too.

BPM Makes Your Company More Competitive

We’ve touched on sustainability, ROI, and adaptability so far, but let’s be clear:

BPM makes your company more competitive.

Improving your business in any way, whether on the customer experience side, the sales angle, or through employee satisfaction metrics, makes you more competitive.

While other organizations are ignoring their processes and doing what they’ve always done, you’ll be evolving.

And the thing is, you don’t necessarily have to compete to be competitive.

Looking inward at your internal processes is usually much more effective than trying to imitate another organization’s successes.

After all, there are always things you can’t see from the outside looking in.

How Do Organizations Use Business Process Management?

While plenty of organizations keep their BPM strategies under wraps, none seem averse to discussing how the approach has impacted them.

In 2018, Redhat and Signavio sponsored BPTrends research on the impact of BPM for companies of all sizes.

The survey also asked specific questions about how organizations implement BPM.

Here are some of their key findings:

Organization Attitudes and Practices with BPM

65% of organizations surveyed said that BPM processes and technologies boosted efficiency, versatility, and customer satisfaction.
52% of respondents said they don’t always model or document company processes.
Most organizations have a process manager (27%), followed closely by ones with a BPM (24 percent) group, while the rest have senior executives (20%) handling business process management.
93% of respondents confirmed they were mid-process improvement projects. This one is somewhat ironic, as all companies should be mid-improvement, all the time, as that’s the nature of BPM.
Only half of companies using a BPM tool were happy with it.
36% of organizations were spending over $500,000 on process work.

Why Organizations Rely on BPM

The BPTrends survey found that organizations’ primary motivators for implementing BPM were profitability and productivity (54%).

The secondary reason organizations focused on business process management was due to a desire to remain competitive (28%).

But the researchers also asked open-ended questions, such as inquiring about the ways in which business process management has impacted the businesses.

Regardless of industry or region (respondents were based in both the US and Europe), organizations said things like:

BPM helps get people talking about how to enact change
It helps standardize how things are done—and gets people on board, highlights organizational values for new employees, aligns corporate goals with day-to-day activities, and otherwise just brings everyone into the company culture.
Adaptation means survival, and BPM is a necessary vehicle for that adaptation.
Monitoring is crucial for every aspect of the business, and BPM provides a means for tracking things.
BPM gives a long-term view of the company’s path