Business Process Management has become an important aspect in the development of the organization and the result reflects in the business growth and profitability of the firm. There have not been any specific processes of implementing BPM in an organization as BPM seems to be industry and organization specific. This report gives a brief on the understanding of BPM as a concept and then shows its relation with a Business Process Management Systems as technology has become an integral part of BPM implementation. A research methodology has been followed in this project to get an industrial outlook and understanding of BPM and the critical factors related to its success. The research data has covered almost 1000 companies spanning across all industries and shows the relation of different BPM methodologies with the various forms of technology. A literature review has been carried out on the critical success factors to get a general overview and check their dependencies in the success of BPM implementation. The case study mentioned in the article is then analyzed to check the consistency of the critical success factors (CSF's) in getting a successful BPM implementation. The report ends with a series of findings drawn after carefully analyzing the research done on CSF's for business process management improvement plans and then a set of conclusion is drawn that will also serve as recommendations for organizations while implementing BPM at their work place.
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Business Process Management (BPM) is associated with different terminology in the modern world like business process re-engineering, business process change and business management concepts. It has been many years that organization and its related technology, business environment, infrastructure and processes have been a key area of research. The reason is that the economy keeps on changing over a period of time and that increases pressure on the organization to survive and enhance their operational and financial performance (Ranganathan & Dhaliwal, 2001). Business process management is identified now as one of the important challenges faced by organizations across the globe (Vergidis, Tiwari, & Majeed, 2008). The knowledge of Information Systems (IS) and Information Technology (IT) has become more important in business process management concept as they lead to the making of BPM-systems which help in the improvement of business performance of the organization.
The software applications that enable business process management use a service oriented architecture (SOA) and this also have become a topic of severe research among the scholars (Hill et al., 2006). There has been an increase in the professional and business publications on BPM-systems after Smith and Fingar came up with their publications known as Business Process Management - The Third Wave (Smith and Fingar, 2003). Software firms have also exponentially increased their BPM related consulting services seeing the growing importance of it in the management world.
Business process management and their systems are now as a result of development of the business and information technology together. The influences exerted from the business perspective are business process re-engineering and total quality management (Hammer and Champy, 2001). The information technology concepts that are now integrated with business process management are enhanced planning systems, enterprise resource planning (ERP) and workflow management systems (van der Aalst et al., 2003). Getting initiated at the general development level, business process management initially kick-started the automation of the internal processes of the organizations which gradually spread to their external processes through the digitization of the supply chain processes (Davis and Spekman, 2003). The favourable conditions have been provided to the business process management through the exponential growth of internet technologies, applications, network standardizations and increasing trends towards web services integration.
Most of the research works available on BPM shows that it is a re-constitution of several old processes in a new manner and used primarily by the management consultants to drive growth in the organizations. This paper will give a theoretical approach to BPM and its related faces. Different underlying and controlling factors of BPM will be discussed so that the successfulness of organizational efforts in achieving high business performance through BPM will be established. Critical success factors (CSF) will then be identified and analyzed with the help of different examples. The idea is to use the analysis of critical success factors as reasons for further research in exploring business enhancement options within an organizational context to achieve optimum business performance (Terziovski, Fitzpatrick, & O'Neill, 2003).
BPM, BPM-SYSTEMS AND NEED OF CRITICAL SUCCESS FACTORS
Always on Time
Marked to Standard
The implementation of business process management is generally regarded as a simple implementation of a software application thus creating system architecture. As a result of this there is enough scope of identifying various factors that stand critical in the formation of the architecture of business process management. There has always been a question on whether to continue with the existing implementations of BPM or come up with new suggested methodologies. BPM-systems implementation is considered to be following software development life cycle (Krafzig et al., 2004). Some examples of software methodologies to mention are rapid software development process, waterfall process and rational unified process.
It has been observed that around 70 percent of business process re-engineering, a business management process, initiatives fail to capitalize on the resources offered (Hall et al., 1993). This is because the strategic business unit expenses increase and profits tumble even though it can be assumed that there is minor decrease in immediate cost reductions, fifty percent decrease in the processes and a twenty-five percent improvement in the total quality. Smith (2003) in his research found that a success rate of twenty-three percent was achieved while invoking a business process management initiative. It means that the critical factors responsible for the success of business process management have to be analyzed so that the success percentage goes up for the organizations who undertake the initiative. Critical success factors are considered to be those key factors which have to go in the correct direction for the BPM to happen successfully in the organizations. CSF's have now been an actively researched topic and is generally defined as limited areas of interest whose results have to be positive to make the organizations deliver successful performance (Lee & Ahn, 2008). The general critical success factors that can be thought for BPM are support of the management, project management, communication, training, resources and cooperation between different functional teams. It is also seen that critical success factors for BPM differ organizations to organizations. It is an area of debate that CSF's applicable for BPM in a country is also applicable to similar kind of organizations in a different country and the research work behind this is still inconclusive (Lu et al., 2006).
Due to this reason critical success factors will be based on general, technology and dynamic capabilities of the organizations. The diversified combinations are considered as it is difficult to analyze and work on a single theoretical framework of business process management. CSF's will try to create a link between business environment, business processes and organizations sustained efforts in improving their business performances. The in-ability in identifying CSF's that provide linkages between all business elements of the organizations leads to failure of BPM projects.
The introduction of business process management with information technology shows the enterprise analysis and their commitment for performance monitoring and continuous improvement. A research methodology has to be followed to know the extent of BPM implementation in the organizations and their know-how at the management and consultant levels. Data is collected from a survey done to know the importance of BPM and their related success factors in almost 1000 companies in a particular country. Organizations considered are diversified and not necessarily belong to BPM forums. The participants considered in the survey are the group of developers and implementers who design the entire business process management and the end users of BPM like customers, management, suppliers and the general resources. The central focus point of the survey is mentioned below:
What is business process management and BPM integrated with technology also called as BPM-systems?
To identify the critical success factors behind the successful implementation of business process management in an organization.
The survey is more of an inductive approach that will also help in establishing a successful framework for business process management and its systems. The structure of the survey can be known with the points mentioned below:
Questions are asked on general perspective of the employees to know their degree of responsibility in the design of a system related to BPM.
Stakeholders are asked about what is BPM and how a complete system can be designed incorporating BPM in their working infrastructure. This is done to know their level of knowledge of business process management.
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Questions are designed to cover certain tools and applications of BPM to know the design, operational and strategic view on BPM.
Survey is also done to know what software architecture is followed to implement business process management at the organizational level.
There are questions which are linked to the functional and technical competencies of business process management.
The know-how of business process management and the factors related to its successful implementations are designed with the following pointers in the survey data:
The degree of involvement of management concepts and information technology in BPM.
BPM implementations are considered to be a new software application deployment in the organization.
BPM is said to be a new management concept but was in practice in invisible state and the management was not having a transparent approach to it.
BPM are seen to be an integration of IT applications and different functionalities in which organizations operate.
The importance of BPM in continuous growth and enhancement of business performance of firms.
BPM implementations make organizations processes and IT infrastructure more flexible and adaptive to industry and economy changes.
From the survey the relation between business process management components and information technology can be drawn into a snapshot diagram provided below:
Database ------>ERP --------------------->WFM (IT)
TQM ---->BPR ----------------->BPM
BPM - IT
Business process management can be defined as "is the domain of knowledge that lies at the intersection of business and technology and comprises of methodologies, techniques and applications that research, analyze, innovate, improve, design, implement and control business processes involving all stakeholders of the organization like customers, suppliers, management, resources and various other forms of information" (Van der Aalst et al., 2003).
The integration of business process management and technology can be summed up as "a system made up of various software applications that make it possible to model and execute the operational and technical monitoring through user representation of all possible business processes and related rules" (Ravesteyn and Versendaal, 2007).
LITERATURE VIEWS ON CRITICAL SUCCESS FACTORS
The survey data gave a very good idea on the exposure of business process management and its integration with technology. The literature study performed by Ravesteyn (2007) will also help in segregating the domains of BPM and then accordingly come up with the critical success factors. The different domain categories that are a part of end-to-end BPM implementation are total quality management, business process re-engineering, monitoring of business processes and activities and applications that integrate enterprise data. It is found that CSF's is linked to the implementation of a BPM and relate directly to the information, services and the integration of services with modern IT applications. The dimensions of business process management are as follows:
Organization, management and the hierarchy
Integration of IT
Critical success factors are treated as five cluster areas of a business process management system thus building the entire BPM framework and can be described as below:
The current domain of the organization in which the business is operated
The measurement of control factors of the operations.
The project domain of the implementation of business process management
Architectural problems occurring in the project domain
Development activities that are to be carried out in the context of project.
So it is seen that organization has to understand their business environment before implementing the business process management. The success or failure of a BPM initiative depends on the fit between the features of the organization and its environment with the designed business processes integrated in their working infrastructure. It is quite risky to assume that the success of a BPM implementation in one business domain of an organization can be easily copied and replicated into a different strategic business unit of the same organization. Factor such as product development and services, joint-ventures, strategic business initiatives, budgeting and alliances play a critical role in BPM implementation. Business processes have to be continuously improved to survive over a period of change and drive the business growth. So it is understood that BPM is not a one-time implementation and the improvement program have to keep on happening within the organization. There is a need to integrate technology with the improvement programs so that the business processes can be enhanced regularly. Due to regular need of Informatization the business processes need technology to be its integral part. So it can be said that the coupling of IT functions into the business processes is also treated as a critical success factor. The sub-critical success factor in BPM-IT use is the ability of the organization to effectively deploy technological applications within the business infrastructure and the level of IT investments done to pull in the latest technology in streamlining the business processes (Karim et al., 2007).
The general success factors for BPM implementations are the ambitious set of planned goals, forming a creative team that will enable efficient problem solving, processes oriented approach and the integration of electronic data systems (Peppard and Fitzgerald, 1997). The other general elements considered to be critical in implementing a business process management program are as follows:
Culture of the business environment and the organization
It is equally important to discuss on the factors that can lead to failure of BPM. Some of them to mention are the arrogance of the management, resistance exhibited by the employees, crisis management, costing and the vision envisaged while initiating BPM (Aggarwal, 1998). To summarize certain critical factors which can be a reason for failure of BPM are written below:
Failure of the management in defining processes
Processes which are not flexible enough to meet the changing requirements of the organization
Not adopting a bottom-up approach where employees are involved in strategic decision making process
Giving responsibility of BPM implementation to resources who do not have sufficient knowledge to understand the intricacies
The information technology limitations
Designing BPM program with the intentions of cost reduction and downsizing
Lack of communication skills and proper communication channels
CASE STUDY APPROACH
A study has been done on the operational aspect and BPM efforts at a Slovenian bank. Banking sector is considered to be quite relevant to analyze the critical factors of BPM implementation as the banking industry is very competitive and there is a continuous need to revamp BPM efforts to improve the business performance (Nikolaidou, Anagnostopoulos, & Tsalgatidou, 2001). Banks generally work as specific functional business units for each of its products and services offerings which have further necessitated the incorporation of BPM (Homann, Rill, & Wimmer, 2004).
The CSF's of the bank are segregated into three business perspectives and they are the contingent abilities of the bank, their dynamic abilities and the fit between their technological infrastructure and the operational tasks. Summarized views on the CSF's after analyzing operations at Skybank are described below:
The efforts of BPM have to be aligned with the strategies of the organization. This will help in optimizing the value creation from the business improvement programs. The business processes management has to take care of core and non-core customer centric business activities (Rhee & Mehra, 2006). There was a dilemma at the Skybank as whether to give importance to the creativity and innovativeness of employees or just concentrate on cost reduction measures. Another important point to note was to just improve the basic investment banking process or add advanced processes with efficient management systems. Another important CSF was to understand the alignment of technology strategies with the business strategies as it helps in achieving competitive advantages. Investments done in IT brings rationalization and effective cost management in the banking operations. It has become necessary for Skybank to determine a perfect mix of investments in IT and the projects in which BPM initiatives have to be undertaken. It is necessary for the bank to assess the performance regularly as that will enable them to drive their business growth. Skybank has to implement BPM efforts that should help in measuring customer services offered and the satisfaction they derive from the services provided to them.
There are certain critical success factors of BPM which depends on the changing capabilities and nature of the organization. BPM implementation at a bank often requires a thorough analysis of the organization and also a possible change in its structure. It is difficult to establish a process oriented approach in banks as professionals have to report to many bosses (Ross, 1999). To initiate BPM implementation at Skybank a suggestion was provided to create a separate office that will take care and control of business processes. The primary task of this department was to provide un-conditional and methodological support for any process management initiatives and will also help in the coordination of those initiatives. The idea was to gradually grow the new office to unique department that will own the responsibilities of future processes improvement, organization and information technology. There have been instances where BPM efforts have failed because of lack of ownership within the organization. Assigning ownership while implementing BPM brings a high level of commitment from the middle managers as their lack of motivation and involvement also lead to failure of BPM. The challenge at the bank was to face the reluctance from the resources to change and also identify the correct group of employees on whom ownership will be entrusted. One of the suggestions put forward was to involve one employee from each department so that an understanding of BPM is achieved while the change management process is also invoked.
It was found that some critical success factors relate to the kind of technology adopted in fulfillment of the assigned goals and tasks. It was felt that processes need to be standardized while carrying out the business management programs. This lead to the creation of standard goals which can then be suitably solved with the help of information technology (Helfat & Peteraf, 2003). The same process of work is conducted in a different manner at Skybank. A simple example to mention is the distribution of credit cards to the customers at the bank. Some branch offices of the bank send the credit cards by post while some branches prefer to call the customers by telephone and tell them to come up to the bank and pick their credit cards. However there are also some branches of the bank which prefer the customers to come on their own and pick up their cards. So it has now become a necessity at Skybank to implement such BPM tools or applications that will invoke standardization in their operational systems. It is found that the information system at Skybank is not facilitated with the latest technology systems. Approval process of credit cards is an example which shows the in-efficiency of the information systems. The cashier has to check the manual information stored in paper as the existing information system do not give sufficient information on the credit rating of the customers. The lack of automation processes at the bank is also a cause of in-efficient business processes. Analysis of business processes at Skybank revealed that there were many tasks which were not automated. The bank can think of putting a workflow management system (WFMS) to improve their business processes. Many critical tasks can be automated and the banking employees can also be sent a timely reminder of their pending tasks through warning signals available in WFMS (Mentzas, Halaris, & Kavadias, 2001). Bringing automation will make the employees free from monotonous works and concentrate more on processes that will bring enhancement in the customer services. Another important CSF identified at Skybank was the kind of investment done in providing regular trainings to employees and consequently empower them with more power and privileges. It has also been found that the business performance is directly proportional to the kind of investment done in providing trainings to their employees (Beccalli, 2007).
LIMITATIONS AND CASE OF FUTURE RESEARCH
It is found out that the research data presented on various theoretical aspects and the CSF's are closely related. The degree of changes in the organization and the business process management improvement initiatives have now become a necessity for proper level of IT investments. The CSF's which are identified in this project do not lie in a sequential order and are considered more as inter-connected pointers which the organizations try to incorporate in their BPM improvement programs.
The framework on the CSF's behind a BPM implementation looks more general as there seems to be a very large list of the factors because of the involvement of multiple industries in the economy. Creating a fixed list of CSF's for any organization is bound to fail the BPM initiative as there are lots of contingent variables associated with the firm. This project has thrown light on bringing various possible types of success factors that are involved in a BPM implementation. The research data taken from the research methodology followed in this project varies to some degree from the success factors that are involved with the Skybank. Another important point to be considered is that the organizations have to continuously evolve themselves with new processes with the changing demand of time, customers and industry. So it means that there is a continuous and open scope of research for identifying CSF's while implementing BPM in an organization.
FINDINGS AND CONCLUSIONS
It is seen now that there are several critical success factors which directly influences a business process management program in an organization. Analysis through literature reviews, research methodologies and studies at Skybank show that there is a wide range of CSF's and varies to some extent depending on the organization where BPM will be implemented. On the whole a mapping has to be done on the business strategy of the organization, business process management and the degree of technology integration. It is not an easy task to invoke a business process management and its success or failure lies on various critical factors. The following description will give a general concluding view on the CSF's of a BPM implementation:
Egalitarian culture: Culture of the organization plays an important role in a successful BPM. An organizational environment is said to be innovative and conducive when there is a high level of cooperation and coordination between the employees along with empowerment. Egalitarian culture depicts all these characteristics in the organization and should be inculcated within the organization before initiating BPM.
Integration of Information Technology: BPM and IT are considered to be an integral part now and a successful BPM cannot be imagined without the use of latest technology. The importance can be understood with the findings from research, literature reviews and analysis done on BPM requirements at Skybank.
Involvement of the customers: A business process can be declared effective only when the customers are satisfied and happy with the services provided to them. Introducing e-banking is a relevant example of a BPM program which shows the necessity of involving customers in their innovative solutions so that the business performance can be increased.
Overcoming change management: It is obvious that employees and customers will be reluctant to adapt to changed business processes. Due to this reason change management planning has now become a critical role in the success of BPM. Managers have to be skilled to deal with the internal and external stakeholders while implementing changed processes for the betterment of the organization.
Commitment of the mid-level and top management: Top management is supposed to provide a transparent vision on incorporating a business process management initiative. This will develop clarity between the employees of the organization, will make them feel more secure and in return gather their support and trust. Making the mid-level management committed during the BPM implementation will overcome the obstacles during the change process.
Project management: An efficient project management in the organization will make it easier to implement any new business process management initiative. Regular trainings should be imparted to the employees so that they have adequate skills to perform the tasks allotted to them.
Adequate funding: It is important for the organization to have ample financial resources before starting BPM implementation. Generally the integration of latest technology and training needs of employees need funds in the organization to manage it effectively.