In today's competitive environment where companies are merging, consolidating and striving to uncover new growth opportunities, savvy business leaders are recognizing the value that comes from working more closely with IT professionals.
Driven in large part by the growing adoption rates of a service-oriented architecture (SOA) strategy, more and more organizations are realizing that the alignment of IT and business delivers tangible results and significant returns in terms of productivity, competitive advantage and cost savings.
However, to seize these new opportunities and realize the benefits that can be derived from an SOA, companies need to streamline their business processes and eliminate the re-creation of the wheel that too often happens when an organization and its technology resources are locked into silos.
For example, these business processes can include such functions as ordering supplies, reimbursing expenses or booking business travel. When each department or team within a larger organization has its own system to handle these types of business processes, it may prove effective for a smaller subset of the company but is largely ineffective for the entire business. Consider the advantages that can be reaped in terms of productivity and cost savings when there is an agreed-upon approach to filing an expense report or automating travel requests.
Addressing these issues and uncovering ways to automate and improve business processes without requiring additional resources is top of mind for today's organizations as they aim to more effectively and efficiently compete in an ever-changing marketplace. This growing need has led to the rise of the business process management (BPM) market.
The Growing Demand for BPM
BPM is a discipline combining software capabilities and business expertise to accelerate process improvement and facilitate business innovation. One could argue that BPM is based on the principles of SOA, with both aiming to empower the organization to more quickly respond to changing market conditions that result from planned events such as mergers and acquisitions or external influences such as competitor moves.
Several factors are driving the increased focus on BPM. These include the need to:
- Ensure consistency throughout the company, especially with regard to compliance;
- Optimize processes for maximum efficiency;
- Automate manual processes to reduce time-consuming administrative tasks;
- Integrate complex, redundant processes; and
- Mitigate risks through a single, unified view of the organization.
A successful BPM solution will take existing processes, streamline them to meet business goals and, ultimately, impact the bottom and top lines in a positive way. The value of BPM is further evidenced by the results that can be realized from business and IT working more closely together. One of the most significant benefits is the fact that BPM helps to put business process control in the hands of business managers. By providing decision-makers with up-to-date business information, BPM allows them to make better decisions immediately without relying on IT support.
BPM is growing in popularity and is complementary to SOA due to its ability to help make business processes more efficient and effective while enabling an organization to more easily adapt to changing business requirements. BPM based on SOA is technology's response to the growing demand for a flexible business environment that is not hindered by application silos.
When business processes are automated, streamlined and supported by a strong SOA governance framework, BPM can deliver on its promise of transforming IT processes to dynamically adapt to business needs. For these reasons, BPM is being widely embraced. In fact, analysts at IDC state that the BPM tools market will reach $3 billion by 2009.1
The powerful combination of BPM to streamline business processes within an SOA strategy will help position companies to become industry leaders while ensuring they are poised for continued success. For this to happen, however, business processes must become independent of specific information resources and specific task automation applications. The integration technology must loosely couple the applications and resources that make up the process, otherwise the logic of a process will get hard coded into a particular technology platform, which may be expensive to change and therefore defeat the entire purpose of BPM.
The need to model business processes before they are deployed in an SOA is becoming increasingly important, especially as the demand for BPM continues to rise. First, however, let's understand that BPM is both a management discipline and a technology platform and that modeling is a complementary and critical aspect within a larger BPM strategy.
As a management discipline, BPM replaces traditional views of business based on discrete functional organizations, systems and metrics with those based on cross-functional core processes aligned with high-level business objectives. As a technology platform, BPM provides the set of software tools needed to optimize performance, make abstract performance goals concrete, connect them to process data, automate and monitor process activities and provide a platform for agile performance improvement.
One of the most enticing benefits of BPM is the fact that it delivers greater flexibility throughout the organization while using and reusing existing technology investments. Once you realize this, you gain a greater understanding of how modeling complements the management and technology views of BPM while helping to drive greater business results through an SOA.
Organizations realize that the role of BPM in an SOA cannot be overlooked. Just as modeling business processes before deployment is a vital first step in an SOA, BPM is equally important because of its capabilities to evolve business processes from merely hard-wired automated functions to delivering the much-needed business flexibility within those business processes. The added benefit of BPM is that by eliminating the hard wiring, business processes can be continuously improved and easily shared throughout the organization.
As companies look to the power of SOA to drive business results, they're realizing the value of modeling is one of the most critical steps to SOA success. This is primarily due to the fact that modeling helps ensure that internal processes are directly aligned with strategy and goals before they are implemented.
More specifically, modeling helps organizations fully visualize, comprehend and document business processes in order to close the gap that exists between an organization's lines of business and IT's understanding of the business drivers. Given that a business process is a defined set of activities leading to specific results, modeling provides the added assurance that best practices are well documented and communicated throughout the organization before deployment.
For example, business analysts can use modeling to define alternative scenarios, differing in resource allocation, branching assumptions at decision points in the flow, and other parameters, and see which alternative results in the lowest cost, fastest average cycle time, lowest percentage of service level agreements violations or other optimum business measures. In addition, this simulation can help reveal bottlenecks in the process, allowing new alternative scenarios to be analyzed - resulting in significant time and cost savings before they are implemented throughout the SOA.
Together, BPM and SOA help facilitate the next phase of the business process evolution. The evolution is occurring now because of the heightened need for enterprises to compete more effectively by adapting to market changes faster, continuously improving efficiencies and streamlining collaboration across traditionally siloed departments. This business process evolution is resulting in a wider adoption of best practices throughout the company while eliminating costly redundancies. For example, once an organization shares business processes beyond a team or even a department, the processes can't help but improve because there are a greater number of parties focused on overall productivity and organizational excellence.
For BPM to be successful and valuable to the enterprise, the speed and agility of IT organizations implementing and integrating the process automation components must match the speed and agility of business analysts redesigning the process.
Just as BPM capabilities needed to evolve over time to add flexibility to process design, so too do application integration systems need to evolve to automate the new flexibility processes in the real world. This integration evolution requires the ability to create independence between process and service implementation, and to remove the tight coupling between a specific integration technology and individual business applications. This is where SOA comes in because it provides the technical ability to create that process implementation independence.
Making those value changes to processes requires integration between existing and future applications that automate specific business functions. Automation only becomes flexible if it can be reused and reintegrated in a dynamic manner. A standards-based SOA infrastructure is designed to deliver the automation flexibility, and Web services is designed to provide the technology standards to make dynamic integration a reality across departmental and enterprise boundaries.
SOA assumes that IT portfolio items will change over time. SOA infrastructure assumes that business processes dictating how and when those items will be used and communicate with each other will change over time. This process independence from how specific automation components are implemented helps make technology resources as flexible as the process models provided by the BPM solution. Enterprises may then fully merge process improvement efforts with technology resource management. When both are done together, enterprises may achieve dramatic improvements in market capture, cost-effectiveness and profitability.
- Kathleen Wilhide. "Worldwide Business Performance Management Applications 2006-2010 Forecast and 2005 Vendor Shares." IDC Market Analysis Report, September 2006.
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