BPM and Business Integration – Coming Together for the Customer
Business Process Management (BPM) is a systematic approach of streamlining tasks and activities in order to achieve a specific organizational goal, typically to deliver value to customers and drive more revenue. I like Forrester’s definition, which states the discipline of BPM strives to coordinate people and process information and technology to streamline and continuously improve business processes that create customer value while raising the overall quality of the work.
From those definitions, it’s clear that BPM is a lofty goal. It requires close coordination between IT and the business sides of the house, and alignment and interoperability across multiple systems, processes and applications. And, at this time, there are no silver bullets. So not surprisingly, Forrester warns that the goals of BPM and today’s BPM solutions are, unfortunately, not at the same stage of maturity.
Instead companies should also look beyond the narrow focus of BPM to align this initiative with related processes, such as business integration and Service Oriented Architecture (SOA). Business integration provides the interoperability and real-time exchange of information related to the business process, while SOA enables centralized services and access. In fact, I would say these three areas are merging not only within enterprises but within the solutions designed to address the related challenges. While no one solution does it all yet, an enterprise should look for vendors that are moving in this direction through either organic growth or partnerships.
Let’s dig in a bit more on this mash-up of business process management and integration by providing a simple example of an e-procurement process. One set of tasks in this process involves accepting a purchase order from a customer’s procurement system. The business process steps involved could include: receiving the purchase order (PO) via e-mail or mail or file transfer, forwarding this information to a clerk that would put the information into a standardized form or enter it into a system, sending this form to another worker who would check the pricing information and product availability, and then giving this information to another worker who would actually process the order, as well as somewhere along the workflow obtaining approval for the order. You’d also need a separate process to make sure that the customer has an updated supply catalogue in his or her procurement system from your company.
This is a typical process workflow experienced by companies of all sizes. If that sounds like an inefficient process to you, then you’re starting to understand why BPM is important. Inefficient processes can severely delay the completion of business-critical tasks, in addition to introducing the risk for multiple points of error and, not to mention, the potential for a poor customer experience at a time when customers expect seamless, fast responses to orders.
The first step to circumvent these would-be issues is to automate and streamline this process by moving as much as possible to a procurement system that centralizes the information and automates the work flow. However, that would not resolve the issue of automating the PO delivery or transaction from the customer. Here’s where business integration comes in.
Business integration allows you to send and receive POs electronically, working directly from both companies’ procurement systems. The integration solution does the transformation of the purchase order to align with the required standards and formats for each company.
Let’s take the example above but fold in a comprehensive integration process. First, rather than ordering from a printed catalogue, the buyer accesses your online catalog directly from his company’s procurement system, via a process called “punchout.” The employee adds items to the cart and checks out, triggering the next stage in the automated process. A purchase order is then sent from one procurement to the other, with the integration solution mediating between the two systems. As the PO moves through the automated approval workflow, the integration system does a real-time inventory and price check. With the two processes working together, an invoice is automatically sent to the customer once the products in the order are shipped.
As this market matures, business integration is also folding in many aspects of business process management, enabling companies to dictate sophisticated business rules or security policies. For example, if a company must adhere to strict compliance mandates such as HIPAA or PCI DSS, a business integration process should be able to maintain that compliance with data protection and encryption, security auditing, access control rules and other orchestration throughout the integration transaction.
This is perhaps nowhere more evident than in the evolution of Electronic Data Interchange (EDI). While simply defined as the transfer of structured data, EDI quickly becomes complicated when a multitude of standards must be enforced across multiple trading partners performing diverse transactions. I have heard from multiple enterprise IT teams and analysts that interoperability and tying an EDI implementation to a broader business process are the biggest challenges with legacy EDI processes. This pain also worsens as your business grows and relationships expand with customers and trading partners. What’s needed is a way to extend legacy EDI processes and formats to operate in today’s Internet era. So this expansion of integration is really a natural extension of EDI. The best part is that companies can implement integration incrementally, allowing them to predict budgets and minimize risk.
As business processes continue to increase in complexity and customers demand faster, more seamless services and solutions, the convergence of BPM and business integration may reach a point where the line of distinction between the two is no longer visible or even relevant. In the end, what matters is that together they are all allowing you to “interact” with applications, users and information in a more systematic, aligned way that delivers value to your customers and drives revenue.
By: Margaret Dawson
About the Author:
Filed under Business by on Nov 16th, 2010. 