Business Process Management and the Benefits of Automation

Transcription

1 Business Process Management and the Benefits of Automation

2 Business Process Management and the Benefits of Automation The Difference between Business Process and Business Process Automation All companies rely on Business Process Management (BPM) in order to run their operation effectively. These business processes are generally made up of a series of repetitive tasks performed by employees. This includes anything from ongoing reporting, authorizations and approvals, to manually tracking stock levels, contract renewals and key performance indicators. Automating these repetitive tasks will not only save significant amounts of time and reduce overhead costs; but will also provide for more efficient and reliable information organization-wide. Business Process Automation (BPA) is achieved through the implementation of the appropriate business process management software. This technology provides the capabilities necessary to have the computer system handle tasks that were traditionally performed by employees. Automating certain processes gives an organization the ability to streamline operations and reporting, not to mention free-up staff members to focus on more important tasks. Business process management technology is capable of much more than organizing simple static flows, such as task options with multiple choices and contingencies. Rather, it can define, execute, manage and refine processes that involve human interaction; work with multiple applications; and handle dynamic process rules and changes. Business Process Management technology is the IT industry s response to problems created by employeedependent applications. The resulting Business Process Automation allows directors, managers, suppliers and customers to receive instant responses to commercial interactions by leveraging all IT systems across an organization through a real-time, responsive infrastructure. Which business processes should be automated? Like any savvy business owner -or- manager, you are likely considering your bottom line. Will the automation of your business processes really save your organization time and money? The answer is: absolutely. The types of processes listed below are most likely to yield a high return on investment once automated. Dynamic These are processes that change frequently such as those that must be regularly adapted in order to abide by regulatory compliance changes. For example, retailers who are required to regularly modify how customer information is managed due to changes in federal privacy law and Credit Card Company mandates. Inter-departmental This category covers any processes that involve people and/or typically cross multiple business units, divisions, or departments. Complex Complex processes are those that require the collaboration of a variety of people from different departments, who may be using different software applications. An example of this would be an organization s Order-to-Payment process, which covers each step of a product purchase. From an order placed (via phone, web, , etc.) to the sales rep, to fulfillment by your shipping department and payment to accounts receivable. Measurable & Mission Critical This covers any vital processes that directly impact business performance. 1

3 Legacy This category includes any processes that rely on one or more legacy applications to be completed. Additionally, this also covers those that require a significant additional capability such as HR functionality for employees. Manual Research Manual research processes are those that are currently handled by a staff-member. An example would be a furniture retailer s reliance on physical discovery, and/or research into inventory aberrances. Exceptions These are any processes with exceptions that require quick turnarounds. Sometimes however, the most important part of a strategy is in knowing what not to do, especially with a fairly horizontal capability like BPA. Areas that are not good candidates for automation include: Legacy application replacement High-volume transaction processing (such as a point-ofsale application, although crosschannel returns might be a good target) Processes with little or no user interaction Processes that can be simply and cheaply automated with other tools For a first BPA initiative, select a process from your organization that is important, but not mission-critical or overly complex. A good first step is to focus on a specific and quick solution where a visible business process improvement will foster momentum for broader and more sustained BPM conversions. The Benefits of Business Process Management Automation Software As a technology, Business Process Management software can deliver endless benefits to any organization, no matter the size. Converting your business processes from managed to automated reduces operational costs and frees up employees to concentrate on other activities that are important for the success of your business. Tasks such as report creation and distribution, not to mention monitoring and/or reporting on your company s Key Performance Indicators (KPI s) can now be easily handled by your computer application. Some of the direct benefits include: Stronger Revenue Streams Operational Savings Reduction in the Administration Involved with Compliance and ISO Activities Greater Company Agility Higher Customer Satisfaction Levels Eradication of Data Entry Errors Critical Failure Avoidance Business Process Automation: Up Front & Hidden Costs A typical Business Process Automation project requires licensing software from a vendor, training internal staff and Automation Examples that Improve Business Key customer approaching credit limit Inventory nearing minimum levels Notice of upcoming contract renewal date Purchase order authorizations Delivery schedule approvals Data entry update approvals Publishing of realtime product availability, and key performance indicators (KPI s) Publishing of employee holiday entitlements Detail of orders placed Stock availability Distribution schedules Creation and distribution of financial statements, delivery notes, and sales reports Application and web services integration Data migration 2

4 hiring outside assistance for your first initiative. Like other software platforms, there are many different types of licenses available including enterprise wide; per processor; per process; per developer; per user; etc. Now that the concept of automation has gained traction in many large enterprises, vendors are pursuing midmarket companies and reducing license fees to match the budgets of the smaller organizations. Potential hidden costs include: The licensing and deployment of multiple development/test/production environments to support multiple BPA initiatives* Additional application and database server licenses* Staff to manage the servers Internal cost of direct involvement from business users to participate in process modeling, business rule definition, user interface design, testing and rollout activities Change management and training costs The Impact of Automation Similar to other implementations, Business Process Management software requires both business and technical resources and activities. Effective BPA is based on an ongoing iterative design/develop/deliver process improvement lifecycle. Although the usual cast of characters will be involved (executive sponsors; project managers; business users; business analysts; technical architects; software engineers; and quality assurance/ infrastructure specialists), the role they play may be different. In a typical software implementation, business users are generally included in up-front planning and requirements definition. After that, they don't necessarily get substantially involved until user acceptance testing. BPM software implementations, differ in that they require constant participation from key business users and analysts as process models are developed and application elements are implemented. Many business users and IT staff are not used to an ongoing collaborative approach to implementing software which can give the planning, training, and change management phases a higher degree of difficulty. However, one of the biggest challenges with the conversion from BPM to BPA is the behavioral change required by staff members in the process. The implementation of BPM software requires users to move from an event-driven to a task-driven work paradigm. Event-driven Employees "know" what tasks to do and in which order because that's the way they've always done them; they prioritize their work based on events as they happen, often using the "squeaky wheel rule". Task-driven The logic built into the BPM solution defines the tasks, their order and relative priorities; which employees must monitor and work from. For many employees, using BPM software will require them to monitor an inbox of tasks with prescribed priorities and work instructions, rather than concentrating on the task that seems most pressing. For some organizations, well-planned and executed training is enough to make the transition; but for others, implementing task-driven work processes can require a major cultural transformation. Calculating the Return on Investment (ROI) Many organizations are losing more money than they realize through lost productivity and redundant tasks. It may be a good idea to perform a thorough assessment of 3

5 your company s manual processes and the time your employees are spending on them in order to evaluate your needs. This is an important step in calculating the savings that can be made through automation. The costs associated with defining, scoping and implementing a business process management solution will be quickly defrayed as the savings is quantified. Take this example of a common business process: Each week, ABC Company distributes 10 different management reports from their Enterprise Resource Planning (ERP) software. These reports communicate the changes that have occurred in the previous 7 days in regards to cash flow, stock balances, sales, purchases and overall trading. Let s do a quick calculation of how much this process is going to cost the business over the period of one month: The employee that processes the reports generally spends 5 hours per day, Monday-Friday on report generation, restructure, and distribution. For the purposes of our example we will presume the employee s fully loaded labor rate (i.e. pay rate + taxes and benefits) is $15.00 per hour. Using these figures we can determine the following: Time spent per year = 1,300 hours (5 hours X 5 days X 52 weeks) Amount spent per year = $19,500 (1,300 x $15) Amount spent per month = $1,625 ($19,500 / 12 months) If this process was automated ABC Company would save $1,625 per month, and allow the employee to focus on other areas of the business. Business Process Automation ROI Metrics Success of Business Process Automation is almost always measured with a clear, simple business metric. Examples of these include: Increased dollars recovered from credit disputes Increased consistency of task completion/ improved productivity Reduced time required to onboard new employees Defining the right metrics will help keep the project team focused and the business owners engaged. Since converting from BPM to BPA requires an iterative approach, keeping everyone involved is crucial to working through the limitations of early releases and actually getting the staff to use the solution. Measuring and reporting actual results is imperative, especially when changing the everyday work habits of employees. For example, if process exceptions are being posted as tasks on a user portal, management needs to monitor the use and throughput of that portal. If users are not going to the portal often enough, the BPM solution can be modified to deliver tasks to the user's inbox instead. In summary, maximizing your return from Business Process Automation requires: Picking the right process targets Assembling the right team Following an iterative methodology Reduced number of returned shipments Reduced cycle time for special orders 4

6 Staying focused on the business goals to drive further improvements and user involvement Next Steps: Moving Forward with Business Process Automation Once your organization has developed a business case, identified the ROI and made the decision to move forward with an implementation, there are two very important steps to take. 1. Select a Business Process Management Solution Provider. Look for someone who can help you achieve your goals. You may ask your current software provider or other organizations similar to yours who have already gone through this process for recommendations. Be sure to choose someone who has thorough knowledge of BPM automation and software, and has installed systems at companies similar to yours. Further, it is crucial that you select someone with whom you feel you can work with. Consider the following: Do they listen effectively and communicate clearly? Are they a good fit with your company s philosophy and culture? Can they provide training and/or ongoing support should your company require it? Can they provide references? 2. Do Your Homework It is crucial that you chose the right system for your organization. It should not only have the natural capability to work with your company s current processes and existing software systems, but should also be scalable enough to grow with your company over time. How long have they been manufacturing BPM automation software? Do they have a vision and plan for the future? How do they handle product updates and new version releases? Do they have a help-desk available, and at what hours? Conclusion Business Process Management automation software can greatly enhance the day-to-day operations of your company. With increasing demands and fluctuating profit margins there s never been a better time to invest in automation capabilities that will enable you to maximize performance. Business process automation will provide you the leverage you need to reduce costs and increase efficiency, enhancing your organization s ability to remain competitive. Additionally you should seek to thoroughly vet the software manufacturer. Some questions you may want to ask: Is the software manufacturer respected in the software community? How long have they been in business? 5

7 About PositiveVision PositiveVision is a full service consulting firm specializing in the implementation and support of business management software for small to medium sized businesses. By leveraging out of the box technology PositiveVision assists our clients in streamlining inefficient processes, growing revenue streams and reducing costs. As a result, our clients are more productive, competitive and profitable. Our goal is to improve the performance of your business and be your long term partner by providing you with the resources and expertise you need along with exceptional customer service. 6

8 219 E Thorndale Avenue, Roselle, IL p f Contact@PositiveVision.biz Positive Vision, Inc. 219 E Thorndale Avenue, Roselle, IL p f Contact@PositiveVision.biz