BPM as an Engine for Growth

Executive Summary

BPM is traditionally known as a discipline to optimize an organization’s business processes and save costs. But a good consideration is to view BPM as an engine for growth. A recent Mckinsey & Co study on “Measuring the full impact of digital capital” views processes as digital capital that can drive the growth of the global economy. This article explores some of the possible ways in which BPM can contribute to an organization’s growth strategy. The reader is expected to have a basic understanding of the principles of BPM.

Need for growth

As the global economy slowly recovers from the financial crisis of 2008, the organizations are seeing sluggish growth in consumer demand. There is a wide window of opportunity open for any innovation that can kick start the demand for future growth. One way organizations can look for new growth avenues is by looking at their business processes.

BPM for Growth and Expansion

Increasing market share through BPM and data analytics:

Having good visibility into existing processes and sound data analytics capabilities can give new insights into unexplored markets. By analyzing the market share data and taking the help of predictive analysis, future demand can be identified and business processes tweaked to cater to the new needs.

A retailer gathering info on sales of certain product in a market segment, can analyze & predict the future surge in demand and modify their supply chain processes to fulfill increased demand in that area.

A commercial bank tracking the consumer data on its financial products, can spot the demand for a specific product early and quickly change its product fulfillment processes and market strategy to offer more of that specific product. The key to quickly responding to the change in demand is to have a good visibility into the fulfillment business processes and updating them accordingly.

A healthcare insurer can track the policy holder data and identify the consumer need for a flexible health plan and be the first to market in offering that health plan. This will enable the insurer to capture the market for the new health plan and grow its market share. The important factor here is to have a flexible & centralized “eligibility and benefits” defining business rules that can be updated as per the market demand.

Spawn new processes where none exist:

An additional aspect to achieving growth is to identifying areas of business where no processes currently exist or hardly exist. Implementing a standardized BPM enabled business process will give the strategy formulators the power to implement growth enablement strategies in those areas.

An IT services company might have a process for identifying new sales opportunities and tracking the opportunities till revenue realization. But a lack of sales opportunity tracking process from social media or services resulting from existing work carried out at client might make it difficult to capture the sources of revenue. Building new processes or extending existing processes to the untapped areas of business helps better decision making and additional revenue generation.

A financial services company that is not geared with processes to cater to a mobile enabled customer is losing out on the additional revenue.

A commercial bank might have a standard customer on-boarding process for its entire market segment such as small businesses, mid-size businesses, financial product & services but might not have a similar process for its mortgage division. Extending its customer on-boarding process to the mortgage division will provide greater control & make it easy to implement changes in the bank policies across all market segments.

As companies grow inorganically, BPM becomes relevant

In order to overcome the sluggish post recession recovery, Organizations are looking at not only organic growth but also inorganic growth via Mergers & Acquisitions (M&A). This results in a significant overlap of functional processes. Implementing a solid, managed business process suite helps to overcome this challenge and optimize the operations post M&A.

An e-Commerce organization that acquires an order fulfillment company in a new market could see overlap in the order processing and sales divisions. Having a BPM process for order processing and sales tracking will enable the e-Commerce organization to seamlessly integrate with the order fulfillment company.

When a multinational bank merges with a regional bank, there might be a significant overlap in sales, customer relationship management, product fulfillment and post sales service. Standardizing the processes across the new merged entity will give better control & flexibility to the organization.

BPM to manage complexity that comes with growth

As organizations grow, so does the complexity of operations. Standardized business processes help to manage complexity effectively.

When a retailer debuts into new markets, the new markets present their own challenges in supply chain & order fulfillment. BPM enables retailer to overcome them.

As financial companies add new products & services, the overhead to manage the business rules that encompass all of the existing product & services as well as the new ones goes up as well. Having a centralized business rules enables the company to manage this complexity challenge.

BPM does not mean heavy bureaucracy

A normal tendency to view BPM is as multiple layers of human interventions for approvals before completing a business task. That is not the reality. While BPM provides the capability for business users to intervene in the process at crucial junctures, a majority of the repetitive and data intensive tasks can be automated. Only those tasks that require human diligence and judgment can be made available as a human task. So BPM fits very well with nimble organizations that like to innovate and intend to have a short turnaround period. In fact BPM enables short turnarounds times by automating repetitive tasks and leaving the creative part of the process with business users.

Conclusion

Organizations looking to accelerate their growth should embrace BPM for achieving their targets. BPM not only helps in cost optimization but only in achieving market growth.