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BPM tools keep SMBs competitive

James M. Connolly, Contributor
Take a list of the highly touted success stories for business process management (BPM), and most likely it will read like a roster of multinational giants with the world's biggest banks, oil companies

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and consumer products manufacturers.

At least, that's how it used to be. "There's plenty of evidence that midrange companies are starting to pick up on it. To be honest, they have to. If they don't, they are just going to be left behind," said Derek Miers, an analyst and CEO of Enix Consulting Ltd., a London-based BPM research and consulting company.

BPM is generally defined as a systematic approach to improving and automating an organization's business processes and workflows. In practice, it starts by using what was once called workflow software for automating tasks involving multiple employees and departments. Examples include purchasing requests and order processing. But BPM also includes tools such as analysis, dashboard and simulation features, which extend outside the company to support new forms of collaboration with business partners. BPM vendors that target midsized to large companies ($1 billion in revenue) pitch a variety of tools, including template-filled vertical market frameworks, service-oriented architecture-based platforms and workflow and document management software.

Smaller, midsized companies take a different approach, however. Large firms have leaned more toward platform strategies in which the user companies buy core tools to develop their own applications, whereas midsized companies tend to favor vertical industry applications, according to Peter Fingar, executive partner at Greystone Group Inc. in Tampa, Fla., and author of the recently released book Extreme Competition: Innovation and the Great 21st Century Business Reformation.

Companies in the midrange are also more likely to stick with familiars such as Microsoft Windows for their applications, while larger companies lean toward Java 2 Platform, Enterprise Edition, according to Connie Moore, BPM analyst at Cambridge, Mass.-based Forrester Research Inc. Smaller companies are likely to focus on the basic workflow components of BPM suites -- at least in their initial implementations -- Moore said, while larger companies are better candidates for more advanced analysis features.

SMB threat?

Miers added that BPM actually presents a threat to small and midsized businesses (SMBs). "With midrange companies, one of their advantages is that they can be flexible, nimble and adaptive. What BPM is doing is allowing the big companies to become nimble. They have the ability to change and catch up, to overcome any innovation that happens in the marketplace." Miers noted one large manufacturer that once needed six to nine months to bring a new product to market. Today, BPM helps that company deliver a product in weeks.

As with other IT projects, ROI is a factor in any BPM implementation, but not necessarily in the sense of labor savings. "ROI stories are generally pretty easy," Fingar said. "It's basically about productivity. It's not something you do to automate people out of the system. You do it for collaboration."

Such BPM projects are likely to flow out of the business side of an organization, with IT getting involved at a later stage, according to Moore. "The way it normally happens is that one business group or one cross-departmental group will pick a vendor that works best for that process. Then another department may go along with that same product or one from another vendor. Eventually, IT becomes aware that BPM is coming into the organization and they step in and get some degree of standardization," she said.

Where to start

Your first BPM project should be visible to upper management, Miers said. For example, an expense reporting project might please employees, but it's not very visible. "If you are focusing on processes that impact your customers and suppliers, and you are, for argument's sake, reducing your cycle time from 30 days down to five days, that's visible. Customers are going to like that; you're going to make a lot of noise about it; and you'll probably get new customers," Miers said.

Take Tetra, an aquarium products manufacturer in Blacksburg, Va. Tetra, an 800-employee subsidiary of Spectrum Brands Inc. in Atlanta, touts several years of success with BPM. The midsized company has applied BPM to 17 processes using Columbia, Md.-based MetaStorm Inc.'s e-Work software. The company was able to cut purchase-order processing time from 10 days to three, according to Charlie Lisanti, information systems consultant at Tetra. Now when Lisanti's application specialists set out to automate a process, it calls for as little as two days of work if the process involves only data collection and routing, or as much as a month for complex integration work.

"A lot of users come back to us to talk about their ability to focus on things other than where a form is and whether it's getting to the right place. They were baby-sitting these things before," Lisanti said. Data quality is another benefit. Data is loaded and validated at the start of a process, eliminating the need to re-key it at other stops in the workflow, which limits errors, he said.

Tetra's automated processes, many of them in the engineering and finance groups, are slated to be rolled out to international facilities in the near future.

BPM success is rooted in starting with the right process, and taking an iterative approach to fine-tune the project, perhaps on a weekly basis, Miers said. He said the initial project needs executive sponsorship, a good business case for automation, and to be suited for completion within three months. "Focus on the 20% to 40% of functionality that will give you 80% of the value," he said. The rest of the value will come through ongoing, interactive development.

James M. Connolly is a contributing writer based in Norwood, Mass. Let us know what you think about this tip; email editor@searchcio-midmarket.com.


This was first published in April 2006

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