Value-driven Business Process Management –
From Strategy to Execution at Pace with Certainty

By Mathias Kirchmer

Business strategies and operations are driven by scores of ever-shifting factors: from demographic changes and capital availability to technological innovations and increasing regulation. Static business models are rarely able to keep pace with such dynamic change; and this is why companies need a management approach that fits to this environment. In effect, they need to know how and when to modify or enhance their business processes, which processes are optimal candidates for intervention, and how to move rapidly from business strategy to execution.

Business Process Management (BPM) helps organizations master change successfully and create immediate as well as durable competitive advantage. BPM has become a management discipline that delivers significant business value by converting strategy into people and IT based execution – at pace with certainty. It is implemented through the “process of process management” which creates the necessary transparency to enable outcomes like cost and time efficiency, service quality, business agility, compliance with legal regulations and company standards, internal alignment of people towards the market and customers and external integration in partner networks. In order to stress the focus on outcomes and values I like to talk about “Value-driven” BPM [1].

What does it mean to create value through BPM? It means to identify and focus on the key issues and to fix them in a business process context. Let me give you an example. A major industrial organization decided to launch a process initiative to save cost. They had heard about the power of the Six Sigma method and made that basis of their approach. Within a year they had hundreds of individual Six Sigma activities and projects up and running all across the organization. But another year later the CFO got concerned since he couldn’t report any substantial cost savings. What happened? An analysis of the individual projects showed that 80% didn’t deliver any quantifiable results at all and most of the others created benefits in one area but issues in another so that there was basically no net effect. Does that mean Six Sigma does not really work, had the company just chosen the wrong approach? No, not at all. Six Sigma can be a powerful tool if pointed to the right target. And this is where Value-driven BPM comes into the game. It is the overarching management discipline that helps identifying based on an organizations strategic goals the high impact low maturity processes that have to be targeted to produce best value. And it helps identifying the right methods and tools for the various issues. This may be a traditional improvement approach using Six Sigma in one area, a next generation automation approach in another and a combination of both in a third project. Value-driven BPM helps addressing the right targets using the appropriate methods and tools.

The set up and roll out of this BPM discipline can be simplified and industrialized by treating “process management” as a process by itself: the Process of Process Management. It can be organized as a “Process Factory” [2] supported through the right infrastructure, organization, data and control. This leads in more and more organization to the definition of a new top management position, in some cases already called a “Chief Process Officer”. Business Process Management as a Management Discipline – an exciting development that enables organizations to be successful in the exciting times we live in.

[1] Franz, P., Kirchmer, M.: Value-driven Business Process Management – The Value-Switch for Competitive Advantage. New York and others 2012.
[2] Kirchmer, M.: High Performance through Process Excellence. From Strategy to Execution with Business Process Management. 2nd edition, Berlin, New York, and others 2011.

 

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