BPM: The DNA of Business and Crucial for Innovation

Companies need to fully embrace business process management (BPM) as being the core of their operations if they are to compete effectively in today’s challenging and fast-changing business environment, seize the opportunities presented by new business models and innovate.

Business and technology leaders attending the recent SAP Signavio Business Process Transformation Forum in Orlando, Florida were told that simply paying lip service to BPM is not enough.

“Business process is the DNA of any enterprise,” said Darwin Deano, a McKinsey partner and panelist during the event. “You can talk about data and insights and all you want and you can talk about metrics, but what drives all of that is the business process.”

That’s particularly important today because, as SAP Signavio Co-General Manager Gero Decker noted during his keynote, “We are living in a period of constant and extreme change.” The unexpected has become part of the expected and to succeed in this volatile environment, companies need to be innovative and excite customers and detect potential risks and priorities for improvements — all while being able to change things on the go, faster than ever.

Gero Decker at SAP Signavio Business Process Transformation Forum Orlando
Gero Decker

Deano and fellow panelist Mathias Kirchmer, founder and co-CEO of consulting company BPM-D and affiliated faculty at the University of Pennsylvania, also had strong views on the relationship between business processes and innovation. Asked by Colleen Speer, senior vice president of Global Go-to-Market for SAP Signavio, who chaired the panel, whether there was a danger that BPM might stifle innovation, Deano said: “Nothing could be further from the truth.

“A structured approach to process management provides a robust foundation for innovation and actually drives the full value of innovation,” he said. “Innovation without process management is service level and does not have a true north. So in my mind, it’s actually a requirement to drive innovation with process management.”

Kirchmer was in full agreement. In principle, he said, there are two ways that process management drives innovation. Many of the new digital native companies like eBay and Amazon have been founded based on new business processes. “To invent those processes in a systematic way, process management plays a key role,” he said; for example, by operationalizing design thinking.

“So process management enables process innovation, but process management also helps to improve the performance of your innovation process. That’s the second way BPM really drives innovation.”

During the forum, speakers also discussed how SAP Signavio gives business experts visibility into all business processes and potential bottlenecks, and provides suggestions for improvement based on industry benchmarks and best practices. Organizations benefit from having a detailed understanding of their business processes, which they can then optimize with agility to succeed and thrive.

More generally, Kirchmer described BPM as “the management discipline that moves strategy into people and technology-based execution and does that fast and reliably.” At the end of the day, he told the audience, “it creates the transparency necessary to take fast, but well informed decisions and set the necessary actions.”

For any transformation, especially digital transformations, that discipline is key for two reasons, Kirchmer said. “First, every transformation delivers the value at the end through new and enhanced processes. To make that happen, you need the discipline of process management. Second, such a transformation is normally not just a project that ends at a certain point. It is a real journey, and the discipline of process management helps to navigate through that journey.”

Traditionally business process management has been about making business processes better, said Kirchmer, but he noted that in recent years the impact has become much broader. “In the last five or six years, I get almost more requests to talk about process standardization and harmonization than just about process improvement.”

“Process management can play a key role in identifying the right degree of standardization. It also plays a key role in prioritization — figuring out what are the high-impact processes and which of those are of a low maturity level — and process management not only helps during the project, but afterwards in value realization and in keeping those processes on track.”

Finally, Kirchmer noted that integrated process and data governance have become very important and a key component of the discipline of process management.

Echoing the same sentiments, Deano added that although business process optimization is viewed as the piecemeal application of technology, it is much broader than that. Implementing business process management means taking “an end-to-end holistic look at what is the true essence of the business,” he said. “That includes the end-to-end process knowledge, and it includes the alignment to the operating model required to actually execute that process because ultimately you can design the best process, but if you are not organized for success, it’s not going to yield the benefits you want.

“When positioning process management in an organization, it is important not just to discuss the required tools and techniques, but to stress the outcomes, the value it delivers,” said Kirchmer. “I always give the example if somebody asks you for the time, you don’t explain how the watch functions. You just tell them the time. And when you position process management at an executive level and you want to get people excited, you need to get them excited about what value it really brings – the quality, the efficiency, the agility, compliance and innovation.”

“To focus on outcomes and value, that is a very important first step to establish the discipline of process management,” he said.

To hear more, listen to session replays from the Orlando forum here. The SAP Signavio Business Process Transformation Forum Berlin takes places November 9-10. Register here.