Business Process Management (BPM) Part 1

It becomes every company's objectives that it can do its operation to meet business objectives with more agility. In order to achieve that a company has to manage the interaction between human and application that support the business so that it drives business results and create value. A redundant, overlap and island of applications often create difficulties to meet this target. This is where Business Process Management (BPM) discipline can fit, as it refers to activities to optimise the business process in a company by automate manual process based on rules. BPM coordinates interactions between systems, business process and human interaction. Having BPM in place, then tasks can be routing to employees taking away non-value adding activities such as routines decisions, extracting data, filling up the forms.

To support a company in managing various aspects of BPM, Information Technology vendors develop an application suite. The application provide tools so that a business process can be visually design and model, simulate and test business process, automate and control the process as well as provide monitoring and reporting. This apps commonly understand as Business Process Management Systems.

One important key aspect is that the system must be able to talk to external systems, so that is not a stand alone system. Industry has come up with a standard technology which is called Web Services. A common framework of how this technology is deployed is called Service Oriented Architecture.

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Business Value - Performance Metrics (2)

If Delloite defines various aspects of Shareholders value that can be increased, however to measure it we also need its metrics. Gartnerin this Research provides what they call as The Gartner Business Value Model. This model helps a business to align Business Metrics with business aspects. The Business Value Model provides metrics that we use for several dimension. While this discussion doesn't compare in detail each value in Delloite's table with each metrics however we can see a coorelation between the two models, which always link to business.

Quoted from Gartner - The Gartner Business Value Model

Gartner defines three business aspects i.e.

• Demand Management - which consist of Market and Sales Responsiveness, Product Development Effectiveness, which much related to revenue growth and operating margin
• Supply Management - which consist of customer and supplier effectiveness, and operational effiency
• Support Management - this aspect consist of Human Resources, IT and Finance & Regulatory Reponsiveness.

So using these two maps - we are much help to be more structure to understand how the business is measured and how actually each of them able give value to shareholders.

Business Value - Performance Metrics (1)

Shareholders expects returns to its business investments. The challenge is how do you define the returns terms. What are the ascpect that we can use to explain returns that businesses have created to shareholders. This is also related to how do you can generate performance metrics to provide a clear explanation about business operation result that supposed to create the returns.

To discuss this topic, two major consulting firm approach are quoted in this edition. Deloitte provide as what is called as Enterprise Value Map. This Value Map defines shareholders value into four VALUE DRIVERS cateories i.e. Revenue Growth, Operating Margin, Asset Efficiency and Expectations. This model then drill-down each value into a more detail to support the value drivers into these steps :

• Level 1 : It show areas that you can do to improve each value.
• Level 2 : It triggers us to change what we have done - which looking at what we have provide, whom is the target, how do we compete, how we do our operations.
• Level 3 : It asks you to do better in each aspect by reviewing our business processes, aligning resources with strategies, improving control/reduce risk, collaborating more effectively

This model also have another dimension about where the improvement must be done in order to achieve higher business value. There are six key business process dimension in this model i.e :

• Business Strategy and Management
• Customer Strategy, Relationships and Interactions
• Product Strategy, Development and Production
• Human Capital Strategy and Management
• IT Strategy and Management
• Other shared services

By navigating the enterprise value map by Delloite, then we can also map how we want to go about for Shareholders Value Improvement.