What is business process management?

Business process management: the complete process lifecycle

Is there chaos in your process? Do you wonder why people with the wrong skills try to perform the most demanding work? Or why that crucial step just before shipment is always a bottleneck?

Even the most well-designed processes need strategic planning, management, monitoring, and improvement to deliver results, especially in a world of increased competition.

That’s where business process management (BPM) comes in. Poking and prodding at random process variables won’t get better results. Effective BPM provides clear guidelines for designing, modeling, implementing, monitoring, and optimizing business processes, no matter how big or small.

Using the general principles of BPM, you’ll be set to design and implement better processes and improve your ability to achieve the desired business outcomes.

But where to begin? In this article, we’ll outline the basics of BPM, discuss the BPM lifecycle, and explore some supporting examples and tools that successful companies use daily.

What is business process management?

Business process management is the systematic practice of defining and improving the processes you use to run your business.

At its highest level, BPM can drive your business processes to achieve many of the objectives identified by your business strategy. (Think supply chain management with objectives such as optimizing logistics, reducing inventory cost, improving distribution, and improving product profitability). At a lower level, it is a flowchart or process flow diagram with ownership and execution responsibility. (Think employee onboarding and orientation).

BPM documents, measures, and improves processes that used to be informal and often dependent on an individual or small group. By formalizing an organization’s processes, BPM provides a structured framework for identifying, documenting, and understanding the end-to-end processes that drive an organization's operations.

Business processes are repeatable and you can refine them through systematic improvement methods. Business process management means continuously focusing on business process improvement to streamline workflows and enhance performance against process metrics, and business objectives. Increasingly, many of these workflows are now automated, part of the digital transformation many organizations are embracing.

What is a business process?

A single business process is a series of discrete steps performed in a predefined sequence to accomplish a specific organizational objective or goal. Designated participants who may belong to different parts of the organization perform each task. Participants can be people and equipment, but sometimes they’re automated workflows. Often, it’s a combination.

Types of business processes

Although there are other ways to classify them, most organizations can identify three basic types of processes: Core, Support, and Management. So here’s a little bit about them:

Core

Core processes are the ones that drive value in the business – they generate income and provide value to customers. On the product side, core processes include development, production, and distribution. On the client side, they include sales, marketing, and customer service. They’re what your business goals are all about.

If you’re planning a business process management initiative, these are the ones you’ll probably want to consider first. When you do, you’ll likely find lots of support activities critical to these core processes.

Support

Support processes are no less important than core processes. Although they don’t usually produce any revenue for the business, support processes make it possible to complete the core processes. They typically include HR, Finance, Procurement, and IT. Imagine being able to hire people with the right skills without HR, or manage customer relationships without your CRM system.

Specific steps and tasks in managing core processes will depend on stages in the support processes. The IT processes that manage cybersecurity may be purely support, but the IT processes that deliver customer support will be integral to core customer service activities.

Management

Management processes aim to ensure that the core and support processes deliver on strategic goals and objectives, and are running efficiently. They address opportunities and threats. They ensure regulatory compliance, and they ensure financial targets are met or exceeded. They focus on the long-term growth and longevity of the business.

BPM vs. business process automation and robotic process automation

There’s a lot of buzz these days about business process automation (BPA) and robotic process automation (RPA), so just a quick word here about them. While BPM can address ways to improve all of your business processes, BPA uses workflow management tools to automate manual processes, which may or may not be a part of your BPM initiative. It uses no-code or low-code tools so people without coding skills can speed up or replace manual processes. RPA can help deploy software robots to execute simple human-to-computer interactions.

A growing body of business process management tools and software is available to support BPM. This supporting software is classified into three types of business process management systems, depending on the kind of process they’re intended to support:

• Integration-centric – automating integration of legacy systems,

• Human-centric – assisting in processes that require human activity, and

• Document-centric – enabling the flow of documents, such as contracts, through a process.

Business process management vs. business process reengineering

Business process reengineering (BPR) is seen by some as just another name for BPM. Certainly, the objectives are similar – what is examined and the results may be similar, too.

To others, BPR means a more radical approach to business process management. BPR in this context doesn’t start by improving current processes. It starts with a top-down basic assessment of what work is required to deliver customer value, and then determining how to do that work or whether it should be done at all.

It often results in significant reorganization to streamline management. Like BPM, BPR also examines outsourcing as potentially a more efficient and cost-effective way to perform support processes.

Why is business process management important?

Why should your organization care about BPM? In a recent study, 70% of business executives believe BPM has helped them achieve their goals, including increased productivity, customer satisfaction, and profitability. So, effective business processes are the foundation for any business to achieve its strategic goals.

If an organization doesn’t manage business processes well, it likely won’t meet its short or long-term objectives, or at least not as well as it could. On the other hand, if your processes are right, the metrics are correct, and the execution rocks, your numbers probably will, too. Read on to find out more about how to implement business process management.

What is the BPM lifecycle?

The classic approach to the BPM life cycle has five major phases: Design, Model, Implement, Monitor, and Optimize.

Not all approaches follow these exact steps. For example, some begin with a separate step to review the current process. Others include business process reengineering as a final step when optimizing the current process no longer improves business results, and a complete redo is needed.

All of them show a control loop. Once designed and modeled, the individual processes are executed and monitored iteratively, and improvements are identified and used to optimize the process.

1. Design

During the design stage, analyze the current process if there is one to determine possible or necessary improvements. Then design the ideal new process that captures the business rules and defines metrics that align with business objectives for the process.

• Identify the milestones in the process

• Identify the tasks needed to complete each milestone, and for each step in the workflow, assign the task owner.

The steps should be clearly defined so the team can identify which areas can be optimized and which metrics will be used to track improvements.

2. Model

The purpose of modeling is to detail the steps in the process, usually by creating a visual representation of the flow. The process model should include details such as:

• Timelines

• Descriptions of tasks and who’s responsible

• Data flows

3. Execute (or Implement)

This step aims to test the new process as a pilot or proof of concept.

• Select, train, and apply the process with a limited group

• Incorporate feedback from the pilot experience

Once feedback has been received and incorporated, the process can be adopted in the broader environment.

4. Monitor

During this step, the team can assess how the process works and formulate how to improve it during the next and final step.

• Monitor the process

• Measure improvements in efficiency using the metrics or KPIs defined earlier

• Identify bottlenecks

5. Optimize

During optimization, the team makes “final” adjustments to improve the performance of the process and its metrics.

Of course, after Step 5, you’re not done yet! It’s important to foster a culture that adopts it as a way of life for continuous improvement. As with any new initiative, senior management involvement and effective change management practices can maximize adoption and minimize resistance. Done right, business process management teams will be enthusiastic about the results they are achieving.

Who needs business process management?

As companies grow and competition increases, business process management becomes mandatory. When organizations are small, they can get away with informal processes. But, when they begin to grow fast (or, with luck, exponentially), implementing business process management can dramatically sustain them, preventing chaos and supporting effective growth management.

No matter what kind of organization you have, everything it does should focus on optimizing or maximizing the results of your core processes. It’s not just rapidly growing smaller businesses that need effective business process management.

In well-established businesses, some of the activities that were crucial in the past may no longer be relevant. That status report manually created every week can now be seen by everyone on the data analytics dashboard. Business process mapping may identify islands of activity that may no longer be needed or even products and services that are no longer central to your strategy.

Some businesses look to outsource some of their processes. The most likely candidates for outsourcing are not the core business processes. They’re the lifeblood of your company. They’re also unlikely to be management processes since they are central to formulating and reformulating strategy and metrics. More often, to reduce costs, support processes are outsourced to firms whose core processes are to deliver the support functions, allowing you to focus more on your own core business processes.

So business process management and classifying and mapping your business processes can apply to any organization. You need to know how each business process works, who’s responsible for each step, and what the optimized metrics should be. Streamlining inefficient processes and eliminating activities that no longer produce value can increase efficiency and response times and reduce costs.

Example of business process mapping

Some business process management examples that most organizations, and probably your organization, have to do well include:

• Fulfilling an order

• Onboarding a new employee

• Developing and building a new product or service

• Delivering customer service

Take employee onboarding, for example. Let’s presume that the new employee has already been hired. In this example, that’s the result of a different business process called recruitment, to find and hire qualified applicants. Now the applicant has accepted an offer and has a start date.

The onboarding process aims to give the new employee the tools to become productive. Maybe in the past, employee onboarding has been slow because either the steps or the responsibilities for them haven’t been clear.

You want that employee onboard fast. After all, you hired the person to deliver critical tech skills to design a new product (a core process)!

Human resources will create an employee record and perform the tasks that enable the newbie to be paid, to select benefits, and be introduced to company objectives, culture, and behavioral expectations.

IT will likely provide access to the necessary systems, and security will grant building access.

Department management will welcome and introduce the new person, make the necessary training modules available, and assign the first activities. Each department will own some of the steps needed to accomplish the objective.

Getting started in business process management with Miro

Business process management can and should involve everyone in your organization, or at least the parts you want to focus on first for process design through optimization. It begins with strategic planning, which defines the goals and objectives of your organization. It ends with optimizing all the processes that contribute to achieving those objectives, whether core, support, or management.

Of course, business process management never ends because as your business grows and changes, so will the need for new and improved processes! To help you get started with business process management, try our process mapping templates to start mapping and visualizing your own processes.