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The Function Of Business Process Management Management Essay

Business process management is an unambiguous way to analyze organizations' business processes. The function of BPM is to formulate processes within the business more elastically, efficiently and most essentially, effectively. The Technological advances and fast changing business environment in information provision have forced organizations to endeavour to build up IS strategies which correlate with their business strategies and sustain their missions. Peter Trkman makes an effort to tackle this subject. Peter Trkman in this research article suggests a unique combination of three theories namely, Dynamic capabilities Contingency theory, and Task–Technology Fit theory to answer the question of the nature of competitive advantage and the BPM role in it .In addition providing the answer of question whether consistency or change is better to get competitive advantage and how to get sustainable results by adopting it. Applying these theories in a case study of Sky Bank, 10 critical success factors are determined. The following paper remarks on the importance of this study and communicate why the problem of conducting business process management for information systems is significant. This paper also remarks on the level of originality of the work reported in this study. The suitability of the research methods adopted by author is also discussed. The final part of the report concentrates on the key findings and their implications. The research limitations are identified after understanding the whole concept and ideas. Future recommendations originating from his study and research are also highlighted.

Introduction

Since the creation of industry age man has been analyzing how efforts can be carried out more efficiently. With the help of business process re –engineering managers began to analyze their business in provisions of their interior business processes. Regarding to process improvement point of view, BPM has developed into an essential topic in many organizations (Pritchard & Armistead, 1999).Now the changing economic environment, traditional business operating strategies, global competition and Technology advances in information provision have compelled organizations to improve organizational business processes to be successful and to enhance performance. All of these pressures have opened new Horizons that how businesses can operate more effectively and flexibly. That signifies a call for to make available a framework of how to perform successfully to maintain competitive capability.

Business process management is promising as a preferred approach to soften all these challenges. Business Process Management is considered as a best practice management law for the companies to uphold competitive lead. (RICHARD YU-YUAN HUNG, Total Quality Management January 2006). BPM combines management approach and supporting technology that can renovate organization performance.

Now, The question is that how to achieve success oriented results while adapting Business process management (BPM).The answer of this question is given by Peter Trkman in his article “The critical success factors of business process management” Peter Trkman establishes a root for the Explanation of (UN) successfulness of BPM efforts with the help of a theoretical framework based upon three theories and a case study of a bank is used for identifying and understanding of critical success factors of BPM. Suggestions are also derived to get beneficial from the results. These bases can be used to study CSFs in general.

The Importance of the Case Study

Peter Trkman research on “The critical success factors of business process management” seems to be very determined. The research intention is unambiguous; thesis is well investigated and well-argued. The in detail literature review shows that the author is well knowledgeable about the topic.

A variety of practical researches signify that there is a Positive link among process management and business Success. More and more, research has centred on originating concepts within BPM and in describing the operational and strategic significance of business processes (Elzinga et al., 1995; Hammer, 1996; Zairi, 1997). However, the majority of research documents futile to put their research within a theoretical framework and that the uncertain character of BPM has motivated an in depth exploration of its critical failure and success factors (Abdolvand et al., 2008). In fact the changing economic environment has compelled Organizations to enhance performance

That why, Peter Trkman research is of crucial importance as he attempts to tackle this controversial subject. More specifically, he introduces 11 critical factors for the successful Business process management with the implementation of a case study of Bank.

This paper is of crucial importance because it enlightened on the need of CSFs for BPM and IT use and also the key factors of BPM failure in the service industry despite of huge investments. The important contribution of this article is to provide a theoretical basis for BPM which seems to be missing in the previous research papers. In fact, the main reason for BPM failure is the misunderstanding and misapplication of the BPM concept (Attaran, 2004). This paper has provided a theoretical explanation of an organizational change and improvement with respect to evaluation of CSFs for BPM. In addition correct relation between IT investment and BPM programs is discussed.

According to author literature review, both opponents and proponents of BPM exist. Some claim that BPM is a repackaging of old ideas (Newell, Swan, & Galliers, 2000; Terziovski, Fitzpatrick, & O’Neill, 2003). Others argue that a “business process is a

Complete, dynamically coordinated set of activities or logically related tasks that must be performed to deliver value to customers or to fulfil other strategic goals” (Guha & Kettinger, 1993; Strnadl, 2006).

According to author “In order to sustain a competitive advantage and to face the rapidly increasing global competition, companies must continuously implement best practice management principles, strategies and technologies” (Carpinetti et al., 2003). “Business Process Management (BPM) is a best practice management principle that helps companies sustain competitive advantage” (Kilmann, 1995). According to Gartner research, BPM is immediate access to information that drives real time performance. (Gartner research, April 2006)

The findings of this research article may help companies in future to get beneficiary with BPM.

Degree of Contribution and Originality

As discussed previously, huge researches were carried out to define a framework to find out critical success factors for business process improvements so it has great contribution to enhance organizations performance. This article has immense importance on business performance and valuable for those companies those want to reengineer and examine their process to boost their business by applying critical success factors. In this article theoretical and practical approach of CSF’s for BPM is illustrated and this is first time to cover this topic theoretically so it has vast contribution in BPM studies and this study tells about the methods that are helpful to find out CSF’s for a specific business.

The main contribution of this article is to provide a theoretical base for the BPM field. An original combination of three Underlying theories, namely contingency, dynamic capabilities and Task–technology theory is anticipated. It establishes a root for the Explanation of (UN) successfulness of BPM efforts.

In this article frame work for a business is general because each business has different nature and each business has different CSF’s, based on business nature, So this article does not list definite generic CSF’s for different business due to many conditional factors. Theoretical guide lines and frame work can be applied to find out CSF’s for different industries or organizations that is the main contribution of this article in BPM improvements studies. It brings the strategy content along with the link to the performance outcome into realm process strategy. While linking process characteristics to process outcomes is important to understand how to manage the process, there are further opportunities to explore the additional link between the process and firm performance in a commutative context (chakarvarthy and white, 2002).This study also identify that CSF’s change as changes happen in environment with the passage of time as seen in current crisis situation (main concern shifts to reduce costs).

This study includes a multiplicity of theories, researches references and self conducted case study on bank issues and find critical success factors for that bank to improve its process in a suitable way so that’s why originality of study is undeniable. Three different theories are applied in this study to find out CSF’s for business process management upgrading. For the first time in this study tried to define BPM critical success factors theoretically. So comprehensive style is adopted to find out required result that also shows the originality of this article.

Theoretical Argument

This research examines the primary aspects of business process management in a quite acceptable way and has tailored a concise and clear-cut approach to the topic with appropriate examples and referencing. The further theoretical arguments comprise critical success factors of BPM, which are based on three theories namely, dynamic capabilities theory, contingency theory and task–technology fit as it is very tricky to observe the research questions with the help of a single theoretical framework.

According to author, a variety of practical researches signify that there is a Positive link among process management and business Success However, the majority of those documents futile to Put their research within a theoretical framework.

Below is the review and comments on these theories used for the evaluation of critical success factors of BPM implementations.

The contingency theory states that there should be an exact match between the business environment and business processes. To perform effectively there should be a fit between organization strategy and structure regarding to competitive environment (Rogers, Miller, & Judge, 1999).The best organization style is dependent on a mixture of internal and external factors and there is no general or superlative way to handle or manage. The design of an organization must fit with the environment but also between its subsystems.

The fit between the business processes and environment affects the implementation of failure or success (Morton & Hu, 2008). Therefore, each organization must cautiously study their contingencies and properly ally their BPM programs.

The achievement of sustainable competitive benefits in the search of the BPM described by dynamic capability’s theory. It is temporary memory between the company resources and modification business environment and help a company to regulate its resource mix and thereby maintain the sustainability of the firm’s competitive advantages (Vaidyanathan & Devaraj, 2008). The significant appearance is the identification of difficult to imitate internal and external competence to support valuable products and services (Teece, 2007). Business process is taken account the competence (Hafeez, Zhang, &Malak, 2002; Moller, 2006) and the performance is determined by dependent variables (Ray, Barney, & Muhanna, 2004; Scheepers & Scheepers, 2008). It is essential prerequisite (Sher & Lee, 2004).since a course of action perspective, BPM is often regarded as a best-practice management principle to help companies sustain cutthroat benefit (Hung, 2006). The procedure sight allows analysis, design, management, and optimization of the dynamic structure of a business (Strnadl, 2006). Therefore, BPM is not only time project but should be a continuous effort within firm with the stable improvement in business processes. Moreover, it is vigorous between the business process and technology which is needed. The restoration of the process and regular improvement needed exact information.

The function of Information technology could be best described with the aid of Task technology Fit theory. According to alignment theory “IT implementation is a component of organizational performance” (Davenport, 1993; Hammer & Champy, 1993; Ostroff, 1999; Spector, 1999; Thompson & Strickland, 1999)

“IT facilitates the integration of business functions at all levels in an organization by making corporate-wide information more readily accessible” (Scott-Morton,1991) various studies have exposed that only IT systems can not produce long term results, but have to to be carefully incorporated with organization’s business processes (Gagnon & Dragon, 1998; Powell & Dent-Micallef, 1997). The fit between IT systems and end-to-end processes is required to attain bursting benefits from IT investment (Sohal & Ng, 1998). “Successful implementation of Business Process Management involves executive commitment and empowering employees to perform strategic action under suitable structure and use of IT”. (Semler 1997). Numerous studies suggest that effectual configuration of strategy and IT requires fit with respect to vibrant and tentative organizational structures. (Burns & Whole, 1993; Pyburn, 1983)

Some seems to focus on effective IT infrastructure development only while other seems to focus on strong IT and business alignment.

“Ensuring that organizational IT is in alignment with and provides support for organization’s business strategy is critical to business success” (Bleistein, Cox, Verner, & Phalp, 2006). In such way this theory is used to underline the often claimed: “IT does not matter, business processes do” (Smith & Fingar, 2003).

Any remote consideration of the above-mentioned theories will defer suboptimal results. “The sole focus on processes in the context of other equally important factors (e.g. technology) being ignored (or vice versa) is one of the main causes of failure” (Grant, 2002)

With the help of “SWOT Analysis”, which stands for Strengths, Weaknesses, Opportunities and Threats we can conclude the followings.

Strengths:

As discussed above, the use of the unique combination of multiple theoretical frameworks in BPM is to have competitive advantage with proper IT implementation in today’s market.

Weaknesses:

The foremost weakness of this approach is that the majority of the methodologies are arguable because they are based on informal indications in spite of being analytical or scientific.

Opportunities:

The changing economic environment is compelling organizations to enhance performance for competency and survival in the global age since 40 years .Effective BPM is one of the fields dealing best with these challenges.

Threats:

Due to the several conditional variable factors concerned, any effort to make available an ultimate list of generic CSF’s is bound to not succeed. For example current financial crisis.

Methodology

There are two methods of research, one is called applied research and other is called as pure research .In this paper author used pure research method that means researcher aimed to contribute some knowledge in the particular area. This paper comprises mainly primary data like semi structured interviews to develope detailed business models which is further refined in the light of previous bank documents (secondary data) etc on the same project and recording the views of employees performing the same task. However, data helpful to the researcher depends upon mainly its nature and relevancy .Like in the case of sky bank, first it is a middle size Slovenian bank and case study was conducted between June 2007 and March 2008 secondly managerial philosophy of the company and thirdly employee’s attitude towards work and working environment. Author also recquires a number of realistic stuff that will search out from secondary data. (Sekaran, U, p33). In this paper, the research considers contingency theory, dynamic capabilities theory and Task–technology theory as a theoretical framework and conceptual sample to study the interaction between the different factors, which are being considered as prerequisite to the problem. (Sekaran, U, P63-73). It will be an evident to discover good solutions like the success factors of BPM in the case study of sky bank are evaluated.

In this paper a well methodological approach based upon three theories as discussed above is used .For this purpose, author has prepared a case study Database which included several tasks for example the questions used for research, the relevant data which he is going to use and examination of the data. The author had also noted the basis for the interview, business process model and the records in the case study. Data analysis guidelines were prepared to assure reliability

A project team was selected which included researchers and managers from sky bank. A workshop was conducted for the middle level employees of sky bank. Then Two groups of processes are sorted out, one which was directly related to provide customer value like account management and investment Banking etc. Second providing an important strategic value like liquidity management and human resource management etc.

Semi structured interviews were conducted with bank employees for the execution of business process models and individual tasks. There is one further thing which could be discussed. The researchers could merge structured interviews and unstructured interviews, because unstructured interview are open-ended, employees are placed on different position in an organization and more general types of questions, after that, concluding from those universal answers, and then should bring together some more distinctive questions from different persons, and then set off for structured interview part. In this way, a more perfect, ample and convincing result could be found.

IGrafx Process software was use for the preparation of business process models these business models were refined with the help of employees performing the same task in bank. In addition, the help of previous bank data was conducted to assure reliability as much as possible.

The postulations of three theories and suggestions of employees were also taken account in the modelling phase. All the developed process models are analyzed with the management of bank assisted by an external consultant and finally identified CSF’s are presented in the workshop assisted by all management to further refine the process model.

Literature analysis is another technique to research, provide further comprehensive reviews to researchers, and facilitate researchers to spotlight on related elements through structured interview or unstructured interviews, that will abolish the unawareness if made at any stage because some points might not be cleared well .That why it is recommended that Literature analysis should be considered as another one research method. (Sekaran, U, P37-40)

Face-to-face interview enable researcher to collect more reliable and precise data but in this paper this technique is not seems to be used. This type of interviews provides more flexibility to new researcher with respect to researcher adoption and adaption. “Face-to-face interview is the best way during the exploratory stages of research, especially when the researchers are planning to get a grip on concepts or an appropriative factor”. (Sekaran, U, p197-p220).

Key Findings

The changing economic environment like recession that has suffered all countries and globalization has led an interest of organizations to increase the performance to get survival in today’s market. BPM is one of the fields covering such challenges and since a decade there has been a rush of practioners and researches. (Rhee et al., in press; Vergidis, Tiwari, & Majeed, 2008).

This paper anticipated a much-needed fundamental theoretical framework for Business process management and used it for identifying case-specific CSFs. This is critical for BPM to make possible the scientific exploration of the function of BPM in attaining a competitive advantage.

The study showed that a success of BPM arise in identifying the dependent variables that affect the strategy of the business and the important critical areas for success. Then it should initiate continuous improvement, while promising the fit among business processes and the information systems used. Both are namely crucial for success—BPM should also set off the essential organizational changes needed for continuous improvement .Generally such improvements are confirmed and supported by IT. However, IT should not be considered a magic potion but as a tool to uphold improved processes.

Either the research opened new horizons regarding the question change or consistency is better. According to author “The Company should embrace change to enhance its competitive advantage; however, it should carefully align its business processes (supported with the proper implementation of IT)”

CSFs based on contingency theory

Strategic alignment:

Organizational strategy must be concurrent with the BPM in order to get continuous improvement and long term success, so there should be strategic alignment between top and low management to maximize process value and to get competitive advantage.

Level of IT investment:

IT must compatible with organizations strategies to get utmost performance. Importantantly consider the investment on IT system if investment is necessary and observe the out puts either investment is rewarding or not, as some times IT does not bring competitive advantage and management has to reengineer their core process.

Performance measurement:

If a process has to replaced it must be measured for productivity, capital cost and quality with the new one then decide which one has to adopt on the basis of result. Put the customer’s needs on top and make process reproducible, reduce errors, increase productivity and cycle time

Level of employee’s specialization:

Employees should be specialist rather than generalist as specialist can do a task with profound knowledge and in quick way with better quality. As in example of bank they need specialist peoples for preparation of contracts for withdrawal approvals.

CSFs based on dynamic capabilities

Organizational changes:

Operational complexity and functional expertise increases when organizations process has potential problems, which can result rise in cost and inconsistency in execution of functional decisions made by management. In that case, changes in process are better to make organization successful

Appointment of process owners:

All process should have owner who is responsible for all the working related to this process like continuous improvement and for training of workers and to achieve company goals. Mostly companies follow this factor to meet with success and to enhance process performance.

Use of a continuous improvement system:

Organizations must follow continuous improvement system to boost efficiency and to make process effective. Improvements can be made when top management is authoritative key supporters and middle management has driving force. For continuous improvements different system are used like TQM and most important is the workers feedback.

CSFs based on task–technology fit theory

Informatization:

Technology and process should be renovated with the passage of time to get the competitive advantage. Considerations of cost are also important when adopted these technology like it reduce the cost of printing and postage expenses.

Automation:

Automation is closely related with informatization. Manual works can be replaced with automation as automation improves the business activities; execute process faster with better result and low cost. Automation can reduce the employees cost and enhance accuracy.

Training and empowerment of employees:

As employees are the asset for any organization, so more funds and time should be invested on employees with their proper training and empowering them. Like the sky bank invests more on employees to show it distinctive and to heighten the loyalties of employees as they have direct relation with customers. This is the main success factor in task technology fit theory.

Limitations and Arguments

Several limitations are discussed in this paper. Practical results showed that business process management was not successful in projects and other programs. Several papers have recognized the critical success factors of BPM but none of the papers succeeded in putting their research in theoretical structure. According to the author there was very less research conducted for the success factors of BPM. There has been lot of capital invested for the research and finding the critical success factors of BPM but it was of no use as most the results were unsuccessful. A single case study of sky bank was chosen to identify the critical success factors of BPM. Instead of that, the author could have taken various case studies from different fields to identify the success factors which differ from one another. This information would be of more use if the study would have involved more organizations which differentiates from each other in their size, potential and structure .There were several problems which the paper has highlighted which can act as a important information for the managers for example the requirement of the participation of higher level managers, relationship between BPM and firm policy and careful link of IT and business approach. There is no statistic data recorded/taken based on all the three theories in the case study of sky bank .The main source of collecting data were semi structured interviews which were restricted to only employees of the bank. The data cannot be considered as ‘appropriate sample’ as it involved employees of only one organization. A statistical data for the three theories would have been beneficial for the success factors of BPM. The paper also failed to give a standard list of critical success factors. One more problem was addressed in this area is the information systems flexibility to meet the alterations in the chaotic environment.

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