Developing the BPM business case

Johannesburg, 26 Aug 2009

Business process management (BPM) is something everybody buys into on a conceptual level; however, when it comes to implementing the solution, companies are hesitant.

This is because the decision-makers are business executives who are not primarily concerned with business processes, according to Julian Labuschagne, associate director at PWC Advisory SA. Labuschagne spoke on the business benefits of BPM at the ITWeb BPM Summit and Awards event, held at Montecasino in Johannesburg, yesterday.

“For BPM to succeed, we need to develop a business model that speaks to the business executives,” explained Labuschagne. He advised companies to address the following questions: Why does the company want this? What are the alternatives? And, where does the company start?

According to Labuschagne, companies require BPM because it improves efficiency, effectiveness, and agility. The efficiency benefits relate to business operational improvements, while improving effectiveness relates to the ability to manage the business.

The efficacy factor of BPM leads to better decision-making, as well as better compliance, noted Labuschagne. “BPM will improve the agility of your business by improving the business' ability to be flexible as the business environment changes,” he continued.

When building a business model, one needs to consider what the alternatives are, said Labuschagne. He offered the following as alternatives to BPM: buying an application, extending existing applications, or developing a bespoke application.

Labuschagne stressed the disadvantages of these options, saying: “These alternatives do not account for the business needs for change; it creates an inability to build on the existing business scope, and future upgrades become increasingly complex. The notion of BPM is intrinsically linked to the technology that manages every aspect of business process.”

Focus on ROI

To achieve successful BPM initiatives, Labuschagne advised the following key considerations when pitching to business executives: “Identify the right process and pain point targets for the BPM initiative, analyse the specific benefits for this process, and, most importantly, offer a return on investment (ROI) model.”

Labuschagne argued that companies need to follow an iterative method when mapping out a BPM initiative. “Iterative continuous improvement is a key value proposition of BPM, especially when you consider the incremental ROI that will be realised beyond the first process iterations.”

Lastly, Labuschagne told companies to stay focused on the business goal. “Do not try to boil the ocean. Begin with small initiatives and gain momentum from the success of the project,” he concluded.