Business Process Management

Top 10: Why Should You Care?

Pic taken from jobsnhire.com (Jun 2012)

Dell to Cut $2 Billion Within 3 Years
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 Why BPM? (I)
Value for the Customer

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 Why BPM? (II)
Traditional Approach selected over BPM Approach

“Almost70 percent of the identifiable reasons why

customers left typical companies had nothing to do
with the product.”
Based on research conducted by THE FORUM CORPORATION

The Paradox… Traditional Management thinking (‘if you build it, they will come’) focusing on results is still
selected over Business Process Management approach (the service, the process) of getting the process
right.

‘Get the Process Right, the Results will also be Right.’

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 Pic courtesy of http://www.jakartapost.com

Why BPM? (III)

Root Cause Problem Solving versus ‘Fire fighting’

Managers are spending less time on the value-adding activities that they are supposed to
be doing.

Process Improvement requires everyone to become a “fire preventer,” rather than a “fire
fighter”

Solving the problem at the

Source

versus

“Fire fighting”

The focus is on improving a process over the long term, not just patching up procedures and work routines as problems occur.

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 Why BPM? (IV)
Core Processes as Strategic Weapon

“As the economy changes, as competition becomes more global, it’s no

longer company vs. company but supply chain vs.
supply chain.”
Harold Sirkin, VP Boston Consulting Group

There are only 3 ways to increase earnings: increase price, lower cost, or increase sales
BPM can equip any organization to achieve all three

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 Why BPM? (V)
A Key Factor for Business Growth

There are really only three ways to improve the bottom-line in any organization:
increase price/"lower cost, or increase sales (e.g., innovation)

Sales Volume Cost Management

Innovation

SALES VOLUME GROWTH, COST MANAGEMENT, and INNOVATION

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 Why BPM? (VI)
The Fundamental Cost-Price Relationship has changed

The Paradigm has shifted, but not many has yet to fully caught up to it. When they
do, it is too late.

Price
Margin % Price
(and margin) Margin %
customer
Cost willing
Cost
to pay

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Key Highlights :

• The old paradigm is price is calculated based on cost plus margin we want. The paradigm that ‘if we
build it, they will buy’

• The new paradigm is price is how much the customer thinks the ‘product’ is worth and is willing to pay

• Either innovate (give more value and increase sales volume) or cut cost

In the new paradigm, either we innovate to increase sales volume or we cut costs

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 Why BPM? (VII)
Efficiency and Effectiveness are keys to market
supremacy

The diagram below is a good picture of the advantage of being Process Excellent to
become highly competitive.

Key Highlights :

• Dr. Edward W. Deming invited to Japan to build

manufacturing industry
• The US auto industry experienced multiple
periods of layoffs every time there is drop in the
production volume

• Japanese cars outlast US cars on the road, thus,

in demand
• Japanese global car production overtakes the US’
in 1979

You cannot improve what you don’t measure.

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 Why BPM? (VIII)
Industry Innovation is Linked to Product Evolution

Every company with its core product(s) is subject to the usual Life Cycle. It is the
company’s ability to not only adapt but renew itself, to be able to survive and thrive in
their industry.
The chart below gives good illustration of what happens to companies that fail to
innovate, playing with the old notion of ‘if you build it, they will come.’

Key Highlights
No. of U.S. major companies

• Industry innovation attracts new

companies

• Companies with the best business

models survive the longest

• Companies must be innovative to not

only survive the current industry, but
also be able to transition to the next
industry

Year

Source: National Academy of Science for Aerospace, “The Aerospace Industry”, Encyclopedia Britannica

You cannot improve what you don’t measure.

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 Why BPM? (IX)
BPM answers many business requirements at all levels

Enough with complexity. Keep it clean, keep it managed. BPM provides business
benefits at all levels.

Perceived/Expected Benefits:

Top-line • Increase sensitivity to market needs

Agility • Improve reaction times to consumer and market
Focus
changes
• Strategic
• Operational • Improve worker f ds delolw| to respond to changes
Flexibility • Faster education (training) of resources
• Adaptive organization to transformations

• Organization-wide is behaving as one and is

Effectiveness vision, mission, and and objectives-focused
Benefits

• Optimal use of resources and assets

Productivity • Improve access to information and expertise
• Increased sales/turnover as well as in
Bottom-line marketshare
Focus • Elimination of wastes and non-value-added
Cost
Efficiency activities
• Financial

• Commitment to long-term thinking

Other
Sustainability • Commitment to lasting
Benefits competitiveness

Going ASAP (as simple as possible) is the best choice in any environment.

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 Why BPM? (X)
BPM is the answer to the coming AFTA 2015

Ask what you can do for your country

Business Process Management is a great career

catalyst.

But more importantly,

Indonesian needs you to prepare for the coming
of AFTA 2015.

It’s coming in 1 year. Are you and your company prepared?

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 The Modern Organization is run on BPM. Is yours? (I)

Business Process Management (BPM) is about creating process solutions on a broad,

cross-functional, organization-wide scale to drive overall peak performance. Processes
provide a source of sustainable competitive advantage by:

ü Enabling companies to focus on the customer, critical outcomes, and results.

ü Empowering customers by providing them with more choice and control over their experience.

ü Enabling a faster, more efficient time-to-market.

ü Providing a framework to measure and highlight high value areas.

ü Breaking down intra-company thinking/"lqvwhdg"ir f xvlqj "r q"

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ü Facilitating process ownership and helping align responsibility

and accountability with outcomes.

ü Providing a means for coping with change.

ü Becoming a source of innovation.

Establishment of BPM system keeps organizations at peak performance.

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 The Modern Organization is run on BPM. Is yours? (II)

ü Save money – do things better with optimized processes

- Build better new processes faster

- Know what you are doing (right or wrong) through current process understanding
- Get control of redundant processes by consolidating and sharing processes (shared services)
- Get non-value added work through automation of manual processes
- Business process outsourcing

ü Implement large software systems better

ü Stay ahead of compliance

ü Move faster and more agile to stay ahead of the market or respond to competitor moves

ü Process optimization: BPM teams can quickly examine processes and suggest changes to eliminate
waste

- Good BPM teams can almost always identify some quick changes that will save 10-30%

Establishment of BPM system keeps organizations at peak performance.

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 Who needs to know BPM?

To become a Process Excellent-Lean Organization, BPM should be understood by

everyone in the organization

ü Process Analysts and Managers The organization defined in

ü Heads: Process Management each of the different levels is
one entity.
ü Business Analysts
Ultimately, everyone must be
ü IT Professionals / Architects
involved, moving towards the
ü Systems Analysts and Managers same vision
ü IT Managers
ü Operations Planners / Managers
ü Project Managers
ü Change Management Specialists
ü Quality Analysts
ü Quality Managers
ü Business Strategy Managers
ü Procurement / Acquisition Managers
ü Risk and Compliance

Understanding of the BPM concept and the adoption of Process Excellence

must be present in every person in the organization (internal and external)

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