Business Process Management is an umbrella term for the continuous ways a business aligns, integrates, replaces or optimises the processes that drive work. There are many different approaches to BPM, such as Lean, Agile and Six Sigma to name a few.
Similarly there are many different approaches to applying software tools when changing business processes or improving them.
Although each company has its unique features, only a portion of the competencies needed to operate are unique to an industry or organisation. Others like customer engagement, performance management, administrative management and request servicing are mostly generic.
To drive the effectiveness of these competency domains, businesses enable the processes within them with software platforms to increase efficiency. These software platforms are typically further extended by adding layers of complementary applications on top of them.
In recent years, this created what are known as “enterprise technology stacks.” For example, a company might enable customer engagement with a CRM platform, which includes integrated applications for sales force automation, service, marketing and Configure, Price, Quote (CPQ) capabilities, therefore creating a “CRM stack”.
All businesses operate in one way or another on this “technology stacks” approach. However if these become overly fragmented, it will put pressure on overall system stability, scalability, and resilience.
In response, leading software companies will try to address multiple business functions and combine them into one coherent system.
However no one system or approach can satisfy all needs within a business. Every business is different and their customer, supplier, competitor, technology, legal or economic contexts are always changing.
The question as to which is better: the tradeoffs in choosing a single integrated ERP solution or the risks of implementing and interface multiple best-of-breed packages, cannot be answered easily.
Many companies need fundamental changes to their business processes and technology tools. These may be as part of a broader transformation strategy, as a result of a merger or acquisition, or their current processes and tools have simply become obsolete.
Large-scale technology replacement represents a significant investment and risk for companies. This often means planning, implementation and payback periods stretch over many years.
Confronted with this challenge, many companies will choose to invest in digital transformation consulting. In 2018 the very largest consultants made over 25% of their fees from this type of work, or around USD$44bn. Overall, organisations are anticipated to invest USD$382 billion by 2025, according to a new study conducted by Grand View Research, Inc.
In addition to these fees, SAP, Oracle and other enterprise resource planning (ERP) software vendors alone are forecast to generate revenue of USD$97billion in 2023.
Service Automation is a relatively recent approach that quickly improves business processes using robotic and cognitive technology. It successfully overcomes process shortcomings and maximises the full value of technology tools, while reducing both low value and difficult work for humans.
Service automation is centred around the processing of data, aiming to convert it into actionable information, gain insight from that information and apply knowledge. It is typically undertaken in the back office of organisations.
This includes departments such as human resources, procurement, finance and I.T technology where a lot of administration work is completed, but increasingly in the front office where organisations connect with customers.
Service automation tools are designed to increase business performance, reduce costs and improve customer satisfaction. Unlike large technology transformations and software products, service automation tools can be deployed quickly. Implementation and payback periods are often measured in weeks or months.
Professor Leslie Willcocks of the London School of Economics describes service automation technology as “taking the robot out of the human, and allowing people back to what they’re much better at, which is more interesting work, using more of their skills and their cognitive capabilities”.
The global market for Service Automation is smaller at around USD$3 billion in 2022.
Q. Can my new enterprise software or BPM solve all my process issues?
New software is an enabler, not a panacea. BPM is about improving processes, and begins with business users modelling business rules at an operational level, often to create replacement processes.
Enterprise software reduces friction within processes and eliminates bottlenecks between business functions. However software does not typically address all parts of all business processes, and will leave gaps that need to be addressed by people or other systems.
Q. Can new enterprise software eliminate human work?
Yes and no. New software and processes can reduce work involved in errors, duplication or delay. Humans are still needed to introduce data, manage data and deal with exceptions. Often exceptions are a function of variable data quality, deviations introduced by third parties, or a mismatch between anticipated circumstances and actual outcomes.
Enterprise software may have automatic features that need to pause and cannot proceed until a specific condition has been met, or a human has intervened to complete a task.
Humans are also required to undertake some processes separately to ensure governance, risk and compliance obligations to regulators, authorities and partners are met.
Q. My enterprise software has lots of add-on options, why do I need additional solutions?
In endeavouring to optimise business processes, there are significant benefits in using fewer, coherent software solutions. Using software that has been developed for a specific sector or for similar businesses increases scope and reduces risks.
Unfortunately no single software solution can address everything required, or be good at everything it does. Similar businesses may have different operating conditions, cultures or legacy systems that may not unlock the full value of a sector specific solution.
Enterprise software is often itself an amalgam of separate technologies, acquired or integrated over time. Not every individual function or technology within a software platform will be best-in-class or first-class, nor fully coherent with other functions.
Q. My Enterprise software has automation features, is it “intelligent”?
Enterprise software is designed to streamline most (but not all) unexceptional or routine work, including automating the transfer of data in and out. However it cannot understand unstructured data, correct data shortcomings, locate additional data to address exceptions, or learn by experience to exercise judgement.
These remaining “intelligent” tasks require cognitive skills and judgement based on experience as they become relatively more complex, higher value, higher risk, and higher cost.
Repetitive tasks, such as those related to data quality management can be automated using machine learning. Cognitive tasks, such as those related to capturing and bringing data into the system can similarly be automated to eliminate delay and errors. Decision making tasks that require judgement of risk or outcomes can be addressed using all relevant data, all of the time.
All organisations can benefit from secondary intelligent service automation systems as part of managing business processes, especially organisations investing in brand new solutions.
Q. Does intelligent service automation deliver the same ROI as enterprise systems?
Enterprise software such as ERP is designed to achieve a Return on Investment (ROI) over the long term. Changing business processes and adopting new software is a significant undertaking for most businesses. The typical ROI horizon may be many years.
This is a function of high upfront and ongoing software and change management costs, undertaking lengthy risk mitigation processes, changing business circumstances over time, disruption to business operations during implementation, and not fully realising benefits to the business.
Conversely, automation software often has low entry costs and achieves ROI in months, not years. This is partly due to the simplicity of implementation and adoption, easily measurable benefits, and the immediate opportunities to create new value for employees and customers.