A recent ebizQ question «What is the most important question to ask when starting a BPM project?» collected a record number of responses. Peter did not specify the role - which side asks the question? Since the majority of active participants (writers) are BPM vendors or consultants, they proposed the question as if they were asking a potential clients. The majority agreed that the most important questions are about the context, objectives and metrics of success of the BPM project and I totally agree with this.
But let us turned back to ourselves: what is the toughest question a potential customer can ask a BPM vendor?
For me, the most difficult question is “Where is the money?”
We should probably define who is “me” in the question first because there are many stakeholders in a BPM project, each with specific concerns that should be addressed differently. However it’d take us too far so let’s simplify the problem by supposing that the question is about company’s interests.
The honest answer: I don’t know exactly what you’ll get but I know how to get the answer.
The simplest answer is Gartner’s statistics of BPM projects’ ROI (regularly above 20%). Unfortunately this kind of arguments won’t impress a prospect strongly enough to launch the project.
Another approach is to discuss general benefits of management by end-to-end business processes: whole company will operate as a fine-tuned machine, thoughtful process design will increase revenues, reduce costs and provide greater agility. It’s all true indeed but how it will work in practice and what the gains would in digits?
Calculating economic impact of BPM
Answering the question “Where is the money” honestly means showing the positive changes in the company’s bottomline.
The list of potential BPM benefits is not a secret. But calculating each item isn’t a trivial task. It’d require a comprehensive analysis of the company including benchmarking - a comparison with average / best industry performance.
The key question of this analysis: where are major performance gaps within the company? Two issues should be addressed:
- Does the current system assist or prevent effective work within core business processes?
- Supposing that certain process is improved, would it mean a better performance of the company as a whole or just a sub-optimization? (In terms of the Theory of Constraints, does the process relate to a bottleneck?)
Unless such analysis is done, no one can estimate the utlimate effect of BPM inititative.
Immediate benefits vs. technology acquisition
But should we always chase for immediate benefits?
Let me give an analogy: the majority of moves in chess doesn’t produce material gains - they just improve the position. Only kids learning chess constatntly seek an opportunity to “eat” something, experienced players plan combinations that would produce material benefits after several moves.
With a BPM project the company gains advanced managerial technology. Technology in general and managerial technology in particular are the key assets of the company. Do you develop new products? Do you spend on R&D? If yes then be prepared to spend money on business processes development (BPM project) and process R&D (learning BPMN, process analysis, BPMS tools), too. Key business processes are key assets just like patents and know-how.
Will the new product currently in development be successful? Of course our engineers and marketing will do their best but no one knows for sure. What we do know is that the company will die without new products development. The same applies to business processes.
The Big Idea
But if the question “where is the money” comes from the top management then I’d take another course:
Do you have a dream? “The Big Idea” - one that will force customers to advertise you for free, employees to be proud to work for you and competitors to be depressed by you?
If your big idea is, for example, Toyota-style Lean production or bottlenecks utilization with the help of the Theory of Constraints - fine.
It happens too often though that routine business leaves little room for strategical development. In this case I’d recommend books by Michael Hammer’s “The Agenda” and “Faster Cheaper Better”. There are dozens of great ideas - delivering solutions instead of goods, building direct relationships with clients without intermediaries, deep cooperation with suppliers, a virtual business integration and more - just pick up what appeals to you.
Supposing the big idea is found, the company will enevitably hit the big issue - that is, implementation. This is the case for BPM professionals. We know that every business problem is related to certain business process. We have methodology to identify, analyze and optimize a business process, we have the right tool - BPM Suite, we know how to implement continuous improvement of business processes.
Getting back to the question, we’ll turn your boldest business ideas into reality. Are these ideas about the money? You should know better.