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Home > CIO News > Business process management new focus for CIOs |
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There is a fundamental shift occurring. Business process management (BPM) is the new focus of companies, and if you haven't thought about how you will handle your processes, you need to right now. However, before tackling the question of "how companies become more process-aware," it makes sense to examine why this is happening now. History of automation The initial automation movement was designed to make the processes companies used to run their businesses more efficient and faster. The goal was to simply do more by implementing new technology than could be done without that technology. Today, more cars can be built on a production line with fewer people. Companies can process more invoices with fewer resources. Yet at the same time, companies also have fast access to the information needed to run the business faster than before and with greater accuracy. The very nature of business -- how business is done -- is changing as a result of the automation of the past four decades. A business used to make things or provide services. Most businesses were vertically integrated in that they owned some end-to-end process. A single company or department received an order and managed that piece of the process, while some other company or department managed its piece. But that's not the model any longer. New business models As businesses and governments are beginning to ingest the Internet, there are two fundamental outcomes. First, the supply chain is less about physical goods and more about integration of process, information and logistics than ever before. The second major outcome is that distribution is scaling around the globe, well beyond previous geographic boundaries. Channel partners -- like supply chain partners -- are becoming more reliant on each other's information, process and logistics. Companies are integrating with their distribution channels now more than ever. These factors combined make it more complex than ever to run a business, even as the old costs of doing business are going down. It's less costly -- on a direct basis -- to build something in China and ship it here than it is to build it here; however, it is a lot more complicated. And if companies don't get a handle on these new complications, added costs and poor service will erase everything they were trying to save. Defining process Process, then, is the word used today to describe understanding the business challenges, putting programs in place to reduce their complexity, and scaling a company's ability to consume the supply chain and deliver to the channel in the easiest way possible. The companies that are able to do this -- scale the integration and complexity -- will win. The winners will have the best mechanisms for attaining products and selling them globally, in a very complex but low direct-cost world. Because of this, "process" becomes the business. A business is no longer defined by its goods and services as much as it is defined by its capabilities. Is Wal-Mart in the, um, what business is Wal-Mart in? What do you call a business that provides retail hard goods, medical services and banking? In the end, the products don't define Wal-Mart as much as their capabilities define them. Business models of the future will be about "core competencies" -- across traditional product areas -- and less defined by specific products. And process will define how successful those companies become in their core competencies. Role of a chief process officer So is it time for a chief process officer? Absolutely. This new role could be a bigger job than that of the CIO. CPOs are ultimately responsible for developing the methodology that enables companies to maximize investments in technology, people and partnerships. Phil Gilbert is the executive vice president and chief technology officer at Lombardi Software, a business process management company. He is also on the board of directors of BPMI.org. You can contact him at phil.gilbert@lombardisoftware.com.
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