Tougher regulations such as Basel 2 are driving uptake of business process management strategy, says Rod Perry
Business process management (BPM) is no longer being viewed as just another three-letter acronym. In fact, the business case is driving uptake.
Analyst group McKinsey confirmed recently that companies are recognising the importance of BPM in helping to meet corporate governance requirements such as Basel 2 and Sarbanes-Oxley by providing enterprise-wide visibility of processes and giving firms control over core functions. Toughened regulations will drive this whole industry for the next few years.
There are also strong strategic reasons why BPM has become a £291m market. Businesses clearly need to change the way they use IT. Organisations have built up a mixture of bespoke and packaged applications in response to changes in business structure and strategy.
A combination of corporate restructuring and mergers, together with market forces, means departments and processes have to become automated. This has created a largely disconnected spaghetti of systems and applications. BPM was born from a need to streamline internal processes and connections between internal and external functions.
BPM is not an order to "rip and replace" - quite the opposite. It enables companies to get value out of existing IT investments, such as enterprise resource planning and customer relationship management systems, and to monitor, manage, and manipulate processes quickly in response to changes in strategy and market forces. This saves on costs, generates revenue and improves service and delivery to customers.
Good BPM systems provide inbuilt enterprise application integration (EAI) capability, as with Metastorm's implementation at Fiat, where it is tightly integrated with purchasing systems.
Unlike EAI, BPM is flexible and easily changed by non-technical business people. Putting the processes back into the hands of the business rather than being solely the domain of IT is a key selling point, particularly because business leaders have become cynical about software suppliers' failure to deliver on function-specific enterprise promises.
BPM suppliers are focusing more on selling the business case and approaching the heads of business units, although it is still crucial to the success of a BPM system to have understanding and collaboration between IT and business leaders during the earliest stages of implementation.
BPM promises to not only change the way in which we work, but also to fundamentally change the way companies buy and use IT.
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Rod Perry is global head of technology at 3i