Evaluating Business Process Management As A Tool For Improving Effiency

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Processes are the core of organisations. Business Process Management (BPM) argues organisations can gain competitive advantage by, improving and innovating their processes through a holistic process-oriented view. An organisation can be more or less process-oriented depending on their experience in applying process thinking for better results. The aim of this paper is to define a framework for identifying characteristics of Business Process Orientation and to provide a valid tool for measuring the degree of Business Process Orientation (BPO) of an organisation based on empirical research in 30 international organisations. A holistic view on integrated process management and change is taken as a starting point.

The purpose of this report is to discuss in detail the relevance, necessity and effectiveness of the Process-Oriented Organisation; developing a framework for business process orientation maturity. Processes are central to business competition. It is imperative that a business draws a conclusion that efficiency along with quality and service must be available in processes. As a result of this the Business Process Management (BPM) has become an appealing alternative to management solution for wide- spread organisational problems. As a business gains experience and accumulates process improvement, it develops a more process- oriented view; consequently, each business will mature at different stages. There are few frameworks and models to establish this in a business. Business Process Orientation: this paper aims to develop a holistic framework for measuring the degree of BPO within an organisation, based on research. This papers, highlights the relevance of the Business Process Orientation (BPO), followed by a holistic view on it. It is then tested by empirical research, conclusions are drawn and avenues for further research are discussed.

Cost reduction is commonly the primary concern for organisations willing to create a sustainable competitive advantage. Currently customer demands and environmental issues put pressure on the classic view of the organisational model. Organisations must come to realize and accept the fact of changing environments, and a way of handling this is through process management. Consequently, agility is mandatory for the success factor for modern organisations. An understanding of the process allows for the organisation to easily modify and proactively look for possible solutions to problems that may arise as a result of deficiencies in the process. The main challenge is to have a flexible and efficient value chain at the same time. Delivering value to the customer is fundamentally the aim of a core business process. The management of these processes critically improves customer satisfaction, compared to functional structures that form barriers to customer satisfaction. McCormack and Johnson, after investigating Business Process Orientation have evidence that supports the value of strategic processes. The study found that the development of BPO in an organisation results in positive outcomes from both internal and resultant perspectives. Other beneficial impacts on business performance have been revealed through the study. This study has found inspiration in McCormack's research along with others; its main aim is to elaborate the BPO concept by analyzing its characteristics and also to validate a scale for assessing a company's process orientation maturity.

"Business Process Orientation of an organisation is the level at which an organisation pays attention to The Process-Oriented Organisation and its relevant core processes." The definition implies that people in the organisation develop a process-driven mindset. According to these authors there are three dimensions to process orientation assessment: Process Management and Measurement, Process Jobs and Process View.

Changing an organisation's more pervasive habits of functional management into BPO will require knowledge of several aspects. A lot of management disciplines are involved in Business Process Management. This is often referred to as a holistic view on BPM. It embraces parts of Change management, IT management, Project management and deals with a lot of stakeholders such as suppliers, customers, employees and shareholders. Applying BPO in your organisation requires a holistic approach to the implementation and application of Business Process Management. The central aspect is a continuous improvement cycle or methodology to analyze, reformulate and measure processes in order to improve process performance. When applying this methodology, one has to be aware to broaden his view and take into account the company's environment, strategy, values & beliefs, information technology and finally the resistance to change from personnel working in the organisation.

The organisation's processes need to support the overall strategy of the business. In order to do so, introducing a "process" performance measurement system might be helpful in order to work out the organisation's activities and processes on the strategy. The most important driver is to make sure that people are being evaluated and rewarded based on 'Key Performance Indicators' (KPI) that contribute to the bottom-line strategy. Both internal efficiency and customer satisfaction must be reflected in the KPIs. Making a company process-oriented will not only influence logical relationships of the business processes, but on the long run employees also need to take responsibility for their process outcomes. A process-oriented organisation tries to organize responsibilities as much as possible horizontally, in addition to the more traditional vertical, hierarchical structure. Effective management of human resources is part of any process improvement initiative. The biggest challenge however is to keep this information up-to-date and accessible. In summary business processes need to be continuously evaluated, improved and implemented in the organisational structure within a supportive framework of human resources and process-oriented information systems.

Business Process Orientation (as measured by the respondent's perception) is represented by characteristics grouped in 8 dimensions. These dimensions are produced as a result of literature review, expert interviews, academic visions and case studies within several organisations. The more of these characteristics an organisation shows, the more it will be considered business process-oriented.

Customers are the reason of existence for every organisation and will serve as the foundation of BPO. Customers are valuable information sources for process improvement. Tonchia and Tramontano describe the 'visibility of the final customer' as the greatest achievement of process management. Understanding the customers' expectations allows an organisation to proactively search for improvements in processes to stay ahead of competition. Moreover customer satisfaction has to be measured in a correct way on a regular basis. It can deliver crucial input for process improvements.

Adapting the processes to the customer's requirements and wishes requires that everyone in the organisation has a clear view and understanding of the company's processes. In order to make process documentation, KPIs and people management useful organisations have to adapt their structure to this process view. Measuring process outcome is not sufficient if no one is held responsible for it. A vertically oriented company can take actions or initiatives to break through departmental boundaries to become more process-oriented. Typically multidisciplinary teams are assigned to integrate functional structures. The process owner is accountable and responsible for the outcome of the process, which has direct impact on the customer. The process owner role can be allocated to someone in the hierarchical structure, so it is not necessarily resulting in new managerial functions. Identifying the right KPIs, measuring them on a regular basis and analyzing the data in a correct way forms a basis for taking the right decisions and knowing where the problems in the processes occur.

Performance measurement involves defining the concept, selecting components and deciding on how to measure them. Process performance measurement can be a vital tool for strategy execution by signaling what is really important, providing ways to measure what is important, fixing accountability for behavior and results, and helping to improve performance. There is a strong link between work culture and organisational performance. Therefore process orientation has to be part of the organisational culture. The aspects of process orientation should be reflected in the beliefs, values, and principles that the organisation has publicly committed to. This relates to teamwork, innovative culture, awareness of mission and values of your company.

An important aspect of process orientation with cultural implications is inspiring leadership and executive support.

People are a company's most important asset. Human capital is a basis for improvement and innovation in processes. Process orientation implies the development of new skills for the employees and therefore they must be trained and informed to improve processes.

IT forms a core component of the performance improvement programs of companies. Most processes are enabled by a combination of IT, information and organisational/ human resource change. IT is both an enabler and implementer of process change. Attaran considers IT and process management as natural partners. IT systems should be flexible to facilitate process improvements. A process-oriented IT system supports information exchange across departments. Therefore IT will be even more indispensable in a process-centric organisation. In the end business process management is ultimately a matter of human resources where IT can play an important facilitating role.

Although there is more pressure on suppliers to anticipate needs, respond to them, and perform better than in the past, there are also pressures on customers to treat their suppliers consistently well and to cooperate in order to smoothen the processes. Sharing information and knowledge with suppliers is a characteristic of process orientation

Partnerships are arising everywhere on the global business community. The fast deployment of the internet has induced e-business and e-collaboration. Online platforms are shared with suppliers in order to manage processes in a much more efficient and faster way.