October 7, 2007 By Chandler Harris
In the old days of public-sector technology, it was known as "paving the cow path." A computer system would be dropped into an agency, turned on and the same number of workers would do the same process, just faster. Later on, to increase cost-savings and to make the process extra efficient, governments hired consultants who "re-engineered" how workers and computers processed transactions. But the brute force of change done in this manner often backfired. Workers were unhappy and re-engineering complex government processes with IT proved far more difficult than many people realized.
Today managers in the public and private sectors are increasingly turning to business process management (BPM), as a more benign methodology to implement process-oriented change.
Although there's no agreed-on definition, BPM is generally considered to be a process-oriented management philosophy enabled by a new breed of BPM systems that help manage the entire business process life cycle. This includes the discovery, modeling, executions and monitoring of business processes from beginning to end.
BPM is both a management discipline as well as a set of enabling technologies rooted in pre-established process management theories and practices, such as Henry Ford's assembly line and Frederick Taylor's industrial efficiency theories, said Tom Dwyer, editorial director of BPMInstitute.org, a peer-to-peer exchange for business process management professionals.
"The BPM philosophy is very much the same as earlier process management theories in terms of overall process thinking and the approach to doing process analysis, process management and process optimization based on collecting metrics that are process-oriented," Dwyer said.
The results have been significant for organizations that have implemented BPM. U.S. companies reported that using BPM to improve communication and collaboration reduced monthly inventory by $117 billion and increased sales by $83 billion, according to a study by the Yankee Group. Companies in the study also reported a 50 percent to 70 percent reduction in order processing time, between 40 percent to 55 percent reduction in new account processing time, 43 percent to 60 percent improvement in remote employee efficiency and a 45 percent to 65 percent reduction in the cost of customer service. Data entry errors were reduced by 30 percent to 45 percent.
BPM resulted from an evolution of previous process-based organizing solutions. In the 1980s, total quality management gained considerable attention from business leaders. In the 1990s, business process re-engineering (BPR) became the stratagem of choice. BPR is a management approach to improve organization efficiency and effectiveness through drastic changes at all levels of an organization's process. BPR philosophy was rapidly adopted in the 1990s by many organizations striving to compete in the emerging global economy.
Yet by the mid-1990s, some of the architects of the BPR concept admitted numerous flaws in it, including lack of management support for initiatives and thus poor acceptance in the organization.
"BPR was a radical approach to business change, involving big-bang, rip-and-replace disruptions to the organization," said Pete Fingar, a leading industry expert on BPM and author of Business Process Management: The Third Wave. "BPM is about incremental change and continuous process improvement."
BPM is considered a descendant of BPR, in response to organizations pushing for process efficiency supported by IT. Though BPM philosophies are hardly new, software tools that implement BPM solutions have made process-oriented change faster, cheaper and easier to implement.
"Current technology systems are much easier to use in helping to do a number of things, such as map out what a current process is, modify that process and produce what an ideal process would be, simulate the effects of a new process, imposing different loads on it, and how a process would perform," said Richard Harris, vice president of research at Gartner.
A major part of BPM is evaluating an organization's existing processes, people and policies, according to Dwyer. BPM evaluations can include:
* the number of processes being conducted in a certain amount of time;
* the length of time for each process;
* what level of exceptions occur in a process;
* how accountability is handled;
* potential improvement of individual activities that make up processes; and
* how to make sure one has the information needed to effectively execute the work and route it to the appropriate people.
"The idea is that anything repetitive and predictable should be automated as much as possible," Dwyer said. "BPM is a good way of reducing time by taking a manual process of sending paper around to different locations and replacing it with an automated way of doing the same amount of activities. You take paper and turn it into an electronic document, and take the manual process and turn it into an automated one."
The idea may sound simple, Dwyer said, yet many organizations still have an inordinate amount of paper transactions that can be automated.
An effective BPM system provides business managers visibility and control over all processes, requests and transactions, according to SMART Business Advisory and Consulting, a company that helps implement BPM solutions. Using BPM, an organization can instantly know the status of any given interaction, which yields improvements in operational efficiency, quality and cost-effectiveness, according to the company.
BPM puts the correct processes in order, which is helpful before purchasing new technology and software. Many organizations encounter problems when processes aren't effectively mapped out before buying technological solutions.
"To buy technology and superimpose it over a process that is not well organized or managed is a prescription for a train wreck," said Charles Woods, managing director and practice lead of the public sector group for SMART.
Government Processing, 21st-Century Style
The 21st-century mandate for government is "do more with less," making it imperative for government to implement business process management, according to Fingar's Extreme Competition: Innovation and the Great 21st Century Business Reformation.
Governments worldwide use technology to create cost-effective and efficient electronic services for their citizens. BPM practices are a key technology component to many e-government initiatives, since they improve efficiency and effectiveness by automating and optimizing an organization's business processes, according to BPMInstitute.org. BPM can help transform the labor- and paper-intensive inefficiencies of government into faster and more efficient processes, reducing paper use and administrative overhead.
More government processes are moving outside the central government offices, where field employees, private-sector partners and external government agencies initially collect and process information before it's sent to a central location for further processing. More than 50 percent of BPM projects involve extending processes outside the agency location to citizens, according to a survey of BPMInstitute.org members.
A report by the Aberdeen Group claims, "Business process management enables government agencies to dismantle obsolete bureaucratic divisions by cutting the labor- and paper-intensive inefficiency from manual, back-end processes ... The BPM category may arguably provide the greatest return on investment compared to any other category available on the market today."
The Pennsylvania Office of Attorney General is modernizing its investigation management and case management systems using BPM practices, which help make processes more efficient, and at times, automatic.
In the past, the Pennsylvania case management system required investigators to write long narrative descriptions for each case, which were then handed over to a supervisor. With the new system, investigators use existing templates for cases. Once completed, the templates are automatically routed to a supervisor for review and approval.
"Rather than generate a lot of paperwork and baggage that goes along with a manual, paper-based approach, we will be able to do this in an automated fashion and supervisors will receive an action in their inbox, review medications and approve case narrative," said George White, CIO of the Pennsylvania Office of Attorney General.
The new case management system will automate the lengthy process for attorneys involved in court cases and help eliminate the redundancies of the old system, where multiple lawyers would at times perform identical procedures, White said.
White is also looking into using BPM practices to modernize his office's human resources systems. With BPM software, the agency identified components that make up human resources procedures and mapped a new approach to improve processes.
"When you bring an employee onboard, it can become a somewhat complicated process," White said. "You need to know if they have an office allocated, necessary equipment, PC assigned, cell phone, BlackBerries, weapons, network access, e-mail accounts. All those things need to be in place before that employee comes onboard so they don't have lag time. So we took the whole process, automated it and made sure employees would be taken care of."
Arizona has been steadily implementing BPM strategies with its growth of e-government services, including Web-based car renewal registration and online licensing for state contractors and realtors. The Arizona 211 Web portal provides hundreds of state resources, including child care, housing and nutrition information. Arizona is also facilitating telemedicine collaborations between the private health sector and state to exchange electronic health records, based on federal e-health initiatives. The e-government changes were part of an "efficiency review" conducted at all levels of Arizona's government to determine how services can be made available online.
"I think there is an expectation that will continue from the present, that younger folks are going to expect more e-government service delivery," said Chris Cummiskey, CIO of Arizona. "We're planning for that and looking for opportunities to enhance that."
From Functional to Process Management
BPM is roughly a $1 billion industry, with numerous large and small vendors offering BPM software and services. And it's gaining momentum in the private sector, with major insurance companies, banks and manufacturers implementing BPM solutions.
The public sector has been slower to catch on, but with continuing pressures to do more with less, government should continue to greatly benefit from BPM practices in the coming years, Harris said. As it stands, however, BPM in the private sector is five to 10 times more prevalent than in the public sector, he estimated.
"The potential for trying to get more consistent, standardized processes put in place through well managed processes has a big impact in potentially improving the way government operates," Harris said. "I think the potential is very large, but it's not just the technology but also the thinking behind and the message by which an organization defines processes, improves processes and then has technology put it in place easily."
Implementing BPM processes can be difficult when an organizational structure is already in place, said SMART's Woods, adding that buying BPM software and attempting to adjust it to an established structure could be counterproductive, and even detrimental.
Primary BPM challenges are management issues that evolve from organizations with functional management and not process management, Fingar said. Functional management involves hierarchical organizations, turf boundaries and a "command and control" philosophy. Process management is "cross-functional" and "cross-company," requiring disparate organizational sectors to connect and collaborate, he explained.
"The former is about issuing orders, while process management is about coordination," Fingar said. "Management control in the process-managed enterprise is maintained by the visibility of all processes under the support of a BPM system."
BPM isn't the answer to all the inadequacies that may be found in the public sector. If applied improperly, BPM and its technologies, tools and techniques can lead to failed projects, wasted dollars, frustration and disaster, according to BPMInstitute.org. Many governments often have more difficulty implementing BPM since they must not only grapple with the same complex issues preoccupying the private sector, Fingar said, but they also face the pressures of accountability, privacy, politics and policy.
Chandler Harris is a regular contributor to Emergency Management and Government Technology magazines. He also writes for Digital Communities magazine and is the former editor of Shout Out newspaper.
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