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The term Business Process Management (or BPM) refers to activities performed by businesses to optimize and adapt their processes.
Although it can be said that organizations have always been using BPM, a new impetus based on the advent of software tools (business process management systems or BPMS) which allow for the direct execution of the business processes without a costly and time intensive development of the required software. In addition, these tools can also monitor the execution of the business processes, providing managers of an organization with the means to analyze their performance and make changes to the original processes in real-time. Using a BPMS the modified process can then be merged into the current business process atmosphere.
Where Business Process Reengineering (popular in the 1990s) dealt with one-off changes to the organization, Business Process Management deals with the continuity and embedding of process orientation in the organization. Business Process Management has evolved as technology has caught up with management processes to the point that technology should no longer be the limiting factor in BPM.
Business Process Management encompasses other process elements, such as Total Quality Management (TQM), Six Sigma, Performance Management, etc..
Business process management activities: The activities which constitute business process management can be grouped into three categories: design, execution and monitoring.
Process design: This encompasses either the design or capture of existing processes. In addition the processes may be simulated in order to test them. The software support for these activities consists of graphical editors to document the processes and repositories to store the process models.
An emphasis on getting the design of the process right will logically lead to better results as the flow on effect of problems at the design stage logically affects a large number of parts in an integrated system.
Evolution of business processes requires a change to the process design to flow on into the live system. Integrating business process is also a current research area. Integration of software for process design to be used both for creating graphical representations of workflows and implementing and maintaining these workflows makes evolution of business processes less stressful, given that requirements are not as static as information systems.
Process execution: The traditional way to achieve the automatic execution of processes is that an application is developed or purchased which executes the steps required. However, in practice, these applications only execute a portion of the overall process. Execution of a complete business process can also be achieved by using a patchwork of interfacing software with human intervention needed where applications are not able to automatically interface. In addition, certain process steps can only be accomplished with human intervention (for example, deciding on a major credit application). Due to the complexity that this approach engenders, changing a process is costly and an overview of the processes and their state is difficult to obtain.
As a response to these problems, the Business Process Management System (BPMS) category of software has evolved. BPMS allows the full business process (as developed in the process design activity) to be defined in a computer language which can be directly executed by the computer (see Business Process Management standards). The BPMS will either use services in connected applications to perform business operations (e.g. calculating a repayment plan for a loan) or will send messages to human workers requesting they perform certain tasks which necessitate a human attribute such as intuition as opposed to automated processes. As the process definition is directly executable, changes in the process can be (in comparison to the traditional approach of application development or maintenance) relatively quickly moved into operation. In order to work effectively a BPMS often requires that the underlying software is constructed according to the principles of a service-oriented architecture. Thus, it is often difficult to make a suite of existing legacy systems fit with a BPMS.
The commercial BPMS software market has focused on graphical process model development, rather than text-language based process models, as a means to reduce the complexity of model development. Visual programming using graphical metaphors has increased productivity in a number of areas of computing and is well accepted by users.
Business rules are a growing area of importance in BPMS as these rules provide governing behavior to the BPMS, and a business rule engine can be used to drive process execution and resolution.
Process monitoring: This monitoring encompasses the tracking of individual process so that information on their state can be easily seen and the provision of statistics on the performance of one or more processes. An example of the tracking is being able to determine the state of a customer order (e.g. ordered arrived, awaiting delivery, invoice paid) so that problems in its operation can be identified and corrected. In addition, this information can be used to work with customers and suppliers to improve their connected processes. Examples of the statistics are the generation of measures on how quickly a customer order is processed, how many orders were processed in the last month etc.. These measures tend to fit into three categories: cycle time, defect rate and productivity.
Although such functions may be within the scope of current applications, the use of a BPMS is expected to ease the development of such reporting. Manufacturers of BPMSs will often offer process monitoring software as well as MIS and execution.
Future developments: Although the initial focus of BPM was on the automation of mechanistic business processes, this has since been extended to integrate human-driven processes in which human interaction takes place in series or parallel with the mechanistic processes. A common form is where individual steps in the business process which require human intuition or judgement to be performed are assigned to the appropriate members of an organization (as with workflow systems). More advanced forms are in supporting the complex interaction between human workers in performing a workgroup task. In the latter case an emerging class of BPM software known as the Human Interaction Management System is used to support and monitor these processes as well as to permit their ongoing redefinition at runtime.
BPMS can be used to understand organizations through expanded views that would not otherwise be available can be used to organise and present. These views include the relationships of processes to each other which, when included in the process model, provide for advanced reporting and analysis that would not otherwise be available. BPM is regarded to be the crucial backbone of enterprise content management.