MPM701A Business Process Management: BPM Implementation

Discusses the benefits of the BPM, provides an analysis of the client's business process flows and cross-relations within the organization.

Answer:

Introduction

Business organizations of all sizes seek to increase their profitability and increase their market share. The business process management (BPM) requires alignment of the business processes with the organizational strategy. In order to succeed, organizations should have the implementation capabilities of the BPM in the long term and the short term (Nicholds & Mo, 2016).

There is a risk associated with the BPM implementation, this risk could be linked to internal or external factors. These factors cause various degrees of changes that influence the success of the BPM implementation. BPM is complex and its success could be measured by monitoring the organizational performance and the performance of the changed business processes (Jurisch, et al., 2016).

The high competition that exists in the markets because of the technological advance requires organizations to adopt new business models (Batocchio, et al., 2016). A more structured approach to improving the business processes is required to enable organizations to create competitive advantages (Nicholds & Mo, 2016).

BPM is very important to help organizations understand their current business processes and decide the required changes to achieve the organizational goals. The following section analyzes the importance of the BPM and strategy implementation to organizations. Also, it provides a detailed analysis of the client's current business problem by using different analytical tools. The solutions to the problems are introduced and recommendations are provided.

First: BPM and strategy

The business process management

The BPM improves the business process in the short-term and the long-term as well. BPM involves several activities, including modeling, identification, monitoring, implementation and improvement. According to Lehnert et al. (2017) as cited in (Emerald Publishing Limited, 2017), the processes involved are divided into three types:

• Core:Integrated events and decision points that involve actors and objects in order to produce valuable outcomes.
• Support:To ensure the continuity of the core processes.
• Management:Its role is to organize, plan, communicate and monitor and control the business activities.

The BPM has two core objectives, it aims to improve the business process and develop BPM capability at organizations. BPM results in enhanced performance and goal achievement. Capability improvement and infrastructure development are likely to sustain the future business process (Emerald Publishing Limited, 2017).

According to Goldkuhl and Lind (2008), Lee and Dale (1998) and Zairi (1997) as cited in Nadarajah & Kadir (2016), management and improvement represent the central theme of BPM. The key elements of BPM are as follows:

Processing documents.
Creating horizontal linkages between departments.
Systems and procedures are available to maintain the performance consistency.
Creating performance measurements.
Continuous improvement and problem solving techniques.
Adopting necessary culture change towards process management.

Process redesign has a central role in the BPM life cycle, it aims to improve the process.  It could be in the form of process re-engineering that involve radical changes or it could be a continuous process that involves incremental change (Tbaishat, 2017). Capability development is also important to the business. It could be operational that focuses on improving the business basic functions, or dynamic that assists in integrating, building and reconfiguring the business operational capabilities (Emerald Publishing Limited, 2017).

The importance of the BPM approach as a part of the way the organization operates

Organizations that could successfully transform from the functionally driven to process-driven achieved several benefits, according to Sever (2007), as cited in Nadarajah & Kadir (2016), as follows:

• Achieving a clearly defined process, including inputs, processes and outputs.
• Improved internal communications.
• Better knowledge of the end-to-end flow of business activities.
• Create an informed decision making, capable of tracking the performance of the process activities and improving people management.

The BPM techniques are capable of dealing with a wide range of domains. Also, it could adapt to changes in the dynamic environment. Organizations should consider the BPM in their strategic planning, maintain continuous improvement and control over the business process (Bisogno, et al., 2016).

Ohlsson, et al. (2017), argue that there is no standardized methodology to be used in process prioritization. The currently used prioritization criteria focuses on the process strategic importance, its performance and the organizational readiness for process improvement. They also, argues that quantitative methods are recommended to measure and assess the process performance in terms of quality, quantity, cost and flexibility. Moreover, the BPM capabilities are necessary for creating value to meet the customer needs in the changing environment.

The value of BPM

The value-based BPM approach offers a long-term integrated view of the process performance. It involves the organizational values and considers the stakeholder value approach (Emerald Publishing Limited, 2017).

The BPM creates value for the organization from different scopes. The integration– networking value is created with the organization's ability to integrate its employees in the process design and networking with external resources. Figure (1) shows how the transparency in process management leads to internal efficiency and external quality. Also, it allows integration and networking with other resources that create value for the organization. The agility and compliance represent the value of being adaptable and flexible in response to the changing demands. Moreover, it assures that the operations are done according to the compliance standards (Franz, et al., 2012).

Applying BPM to your organizational structure, as shown in figure (2), enables you to analyze your business process. Your business needs to adapt to the changes in the environment. Considering your organization as a system, it should adapt to the super-system that represent the ultimate performance context of the organization (Caulliraux, et al., 2012).

Problem analysis

Identification of the problems associated with business processes

The major problem of the business is represented in the deterioration of the business growth in the last two years after a steady growth for 10 years. The company product "Digilathe" witnessed low demand because of the impact of the global financial crisis. It resulted in increased cost of materials and decreased economic prosperity. The competition in the market is increasing because the competitors could produce a similar innovation to Digilathe with equal quality, while the company could not add more innovative features during the last three years.

The financial ratios of the business provide additional insight into the business financial performance. The current ratio shows that the company has 5.4 times current assets more than the current liabilities. This indicates a good position that the company can make current debt payment (Blanchette, 2012). The long-term debt ratio is 23% that should be carefully monitored in order not to weaken its financial position. The debtors hold $80,916 and $20,229 of them could be collected for two months. If the company could shorten its debtors' outstanding period for less than the two months it will be better (Nadarajah & Abdul Kadir, 2015).

The business communication process seems to create a big problem. It begins with the CEO, Mr. Wang, who lacks the effective communication capabilities. Also, the procurement manager clashes with the accounting manager, the marketing manager clashes regularly with the sales manager. Corporate communication practices suggest that the business leaders should over-communicate with the team and use the informal communication (Belmiro, et al., 2000). Moreover, when a customer payment is made only the sales and accounting department know. There is no official reconciliation between the outstanding invoices and the payments received.

Another problem occurs due to the lack of experience of the procurement manager, Mr. Ding. It represents a miscommunication issue with the suppliers, he cannot maintain a good relationship with the suppliers. This problem affects the delivery time of the component parts and leads the suppliers to demand their payment before the delivery. It is important to fully understand the supply market and the different suppliers that are really capable of delivering the materials to the company. The business process should be aligned to ensure that products, services and money smoothly flow through the supply chain to the end customer (Procurement Leaders, 2013). Also, it is obvious that Mr. Ding does not make the required effort in getting the best prices, which lead to the increase in the procurement budget by 28% in the last year.

The sales manager, Mr. Lock caused a problem to the business in the last two months. He could not achieve the required sales target. Low sales volume means low profitability and losing market share. It seems that the sales manager is in high need of innovative ideas to help him. Mr. Lock has to change his sales strategy according to the market competitive analysis. He has to realize the available distribution channels. Knowing these channels is likely to push up the sales volume (Dragusha, 2016).

A problem exists in the accounting department because of the aging software package used in making the required calculations. The accounting software needs to be updated to facilitate the job of the accounting staff that consists only of two employees. This upgrade should be done depending on the company strategic direction. Also, the full process needs to be automated to save time and efforts and ensure accuracy (CPA Australia Ltd., 2015).

The marketing manager Mr. Hick is accused by Mr. Lock and the R&D manager, Mr. Alford of not enhancing the marketing activities. He lacks the innovative ideas required to promote the Digilathes. The marketing strategy that considers the customer needs has to be aligned with the innovative Digilathes (Dragusha, 2016). The marketing materials are not updated in a timely manner.

Project Scoping 

The scoping diagram of the business is represented in figure (3), it provides an overview of the examined process and the problems associated with it (Harmon, 2012).

As-Is process diagram

Studying the current business process helps in tracking and documenting the process for performance improvement and efficiency creation. Figure (4) represents the current business process diagram that shows the issues that need to be related to the current mode of operation (Logizian, 2012; Fossland & Krogstie, 2015).

The Gap Model

The performance quality and capabilities gap in the business is represented in the Gap Model, as shown in figure (5). The current business issues and associated problems (As-Is) are represented versus the required business situation (To-Be). It reflects the gap either positive or negative (Sekulová & Nedeliak, 2013).

The proposed solution

Business process architecture

BPM must be embedded in the company structure. It has to involve all of the stakeholders, including the customers, employees and suppliers in order to contribute to the strategic value creation. The BPM process has to be economically efficient and make use of technology (Ohlsson, et al., 2017). Implementing architectural efforts in your business should consider the current business process architecture. It represents the core of the organizational architecture while jobs, policies and IT represent the supporting elements to the process. Also, the creation of the architectural model needs the processes to be aligned to the business strategies and performance (Brocke & Rosemann, 2010).

Your business process architecture syntax represents a collection of business processes and linkages among them. According to Barros & Gal (2012), it includes:

• Composition:Each business process is composed of a number of sub-processes. The customer online quotation is considered the main process, its subprocesses include, the purchase order and the sales order, check inventory, stock requisition in case there is no available stock or shipping the order to the customer in case of the product is available. Then, the customer receives the product and the invoice and makes the payment.
• Specialization: Any business process interacts with another. When the customer places an online quotation, the sales department places the purchase order and a sales order. They are considered among the specialization of the sales department.
• Trigger: Each business process initiates another business process. The online quotation initiates the operations to check the stock for the availability of the product.
• Information flow: It goes from one business process to another. A problem occurs when the information is not disseminated within the whole business process. We find that any information not stored on the e-commerce system is kept within one department, for example, filing many paper based records in a couple of old filing cabinets in the accounting department. Also, when a customer payment is made only the sales and accounting department know. There is no official reconciliation between the outstanding invoices and the payments received.

Proposed model of BPM support group

The business is advised to form BPM support group within the organization. Its main function is to support the business departments to implement process change. It is recommended to be a 'virtual group' that consists of employees from the organizational department. The support group should work under the supervision of the R&D manager. This group will be responsible for providing BPM standards, guidance, governance, quality assurance, training and technologies. This group is expected to facilitate the BPM implementation. In order to avoid any problems, the group will not be responsible for sustaining and improving the specific process, but it will focus on the process performance within departments.   

There are two proposed models for the BPM group, according to (Boots, 2011). The first is concerned with the BPM function for capability development, standards, competency requirements and technical methods practiced then applied. The second is for the BPM function that influences the process improvement. It is recommended that the business uses a hybrid model that enables the BPM support group to develop capabilities and provide recommendations for process development. Figure (6) shows the three options regarding the BPM support group mission within the organization.

Implementing the hybrid model

The selected hybrid model should create a balance between the time and cost required to implement the BPM changes. According to Hakim, et al. (2016), the role of the support group should go through the following steps:

Step 1. To identify the current business processes and categorize them in an appropriate way: It has to consider the problems associated with each process as discussed before. This could be done by interviewing managers and employees. Tasks are to be clearly defined and allocated between the support group members.

Step 2. To consider the business goals: the support group should achieve the goals depending on the To-Be process. The business should achieve a high rate of business growth and high sales volume. In order to retain its position in the market.

Step 3. Evaluation of the impact of each business processes on goals: The effectiveness of high rate business growth and high sales volume should be evaluated. This could be done by calculating the level of satisfaction that each process creates for the organization.

Recommendations

• BPM must be embedded in the company structure. It has to involve all of the stakeholders, including the customers, employees and suppliers in order to contribute to the strategic value creation. The BPM process has to be economically efficient and make use of technology.
• The analysis of the financial position of the company shows that the debtors hold $80,916and $20,229 of them could be collected for two months. The company should do more effort to shorten its debtors' outstanding period for less than the two months.
• Corporate communication practices suggest that the business leaders should over-communicate with the team and use the informal communication. Moreover, the procurement manager should improve his communication skills with the suppliers.
• Information should be circulated within the whole supply chain and not be kept within certain departments to enable process improvement, ensure on-time delivery of parts and maintain flexible payment system.
• Training and development are necessary for the procurement, marketing and sales managers to build their capabilities and enable them to deal with the changing environmental conditions and push up the sales volume. The business needs to bring fresh and innovative ideas.
• The accounting software needs to be updated to facilitate the job of the accounting staff that consists only of two employees. This upgrade should be done depending on the company strategic direction. Also, the full process needs to be automated to save time and efforts and ensure accuracy.
• The business is advised to form BPM support group within the organization. Its main function is to support the business departments to implement process change. It is recommended to be a 'virtual group' that consists of employees from the organizational department. The support group should work under the supervision of the R&D manager.

References

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Belmiro, T. et al., 2000. Corporate communications within a BPR context. Business Process Management Journal, 6(4), pp. 286-303.

Bisogno, S., Calabrese, A., Gastaldi, M. & Ghiron, N., 2016. Combining modelling and simulation approaches: How to measure performance of business processes. Business Process Management Journal, 22(1), pp. 56-74.

Blanchette, M., 2012. Financial ratios and related tools, Canada: University of Quebec.

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