Bpms
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BPM (Business Process Management) uses automated systems and tools (BPMS - Business Process Management Systems) to model, execute, monitor and optimize business processes. A BPMS helps achieve benefits like increased efficiency, visibility, agility and cost savings. Case studies on BP and Nextel Mexico show how a BPMS reduced transaction costs by 80% and 300% ROI for BP, and reduced activation time from 5 to <3 hours with 71% lower costs for Nextel Mexico. Overall, a BPMS can impact both revenues and costs to provide quantifiable value to organizations.
Bpms
- 1. BPMS Business Process Management (System) By: PT. Sinergy Putra Persada By: Sudiro 26-Feb-14
- 2. Content Executive Overview What is BPM? Why BPM? What is BPMS? How can BPMS help? What benefits have others achieved? Today’s Business Challenges How Can BPM Help? BP Nextel Mexico Conclusion
- 3. Executive Overview Improving business processes has been the number one priority for CIOs and IT executives for the past few years1. Studies indicate that corporate managers have higher expectations from their CIOs to be more of a business leader by helping to improve business processes2. Improving business processes isn’t something new in the corporate world, and we have seen many different variations of it over the years – Total Quality, Business Process Reengineering, Six Sigma, etc. 1 2 Gartner – “Making the Difference : The 2008 CIO Agenda” (Jan 2008) InformationWeek Analytics 2008 Tomorrow’s CIO
- 4. What’s BPM? Business Process Management: the Third Wave (Smith, Fingar, 2003) Internet Globalization Governance Outsourcing
- 5. Multidiscipline of a combined knowledge of both business and technology Source: Dr. Michael Porter, Dr. Michael Hammer, Rummler, Petter Fingar – “Business Process Oriented Organization: Business Process Management” (M2MSysonline.com)
- 6. Why BPM? …IT investments deliver more value to a company’s top and bottom lines – by creating new efficiencies and increasing revenues – than any savings gained from traditional IT cost cutting…3 McKinsey, September 2008 Today’s Business Challenges Today’s organization has to be able to compete in this global economy with both small and large players around the globe as the barriers to entry in many markets get lower. The ability to compete successfully requires success on many fronts: 3 Operational efficiency Customer intimacy Product and Service Innovation Managing IT in a downturn, Beyond cost cutting, McKinsey, September 2008
- 7. While many CFOs see BPM as an initiative that can cut costs, there is also clear evidence to indicate that BPM also affects the top line of a business.4 How Can BPM Help? Supporting text should contain benefit/solution information such as which business problems exist and how they are solved, the ROI/value produced by addressing the problem, and which solution(s) or pieces of the solution BPMS provides. Agility BPM can provide the agility needed in today’s rapidly changing business environment. Process automation is one way that BPM can help an organization become more nimble. Business processes organized within a BPM framework are well-documented with clearly-defined steps. Visibility In this fast paced world, executives need information in real time. Without automated processes, it is very difficult to gain real time insight into the execution of business processes. Efficiencies BPM can bring tremendous cost savings and cost avoidance to an organization. Optimizing and automating business processes can lead to a reduction in redundancies. Most manual tasks can be eliminated and thus considerably decreasing the risk of errors and rework in the process. Gartner claims that by simply “making the current-state handoffs, timing and responsibilities explicit”, productivity improvements of more than 12 % are typically realized5. 4 5 http://economist.com/specialreports/displaystory.cfm?story_id=9928154 (accessed July 30, 2008). “Business Process Management’s Success Hinges on Business-Led Initiatives”, Gartner, 26 July 2005
- 8. BPM benefit grouped by benefit category Efficiency Visibility Agility Delivering more with less Consistently knowing the current status and outcome of your processes Adapting quickly to changing business conditions Reduced process cycle time Decreased risk in process execution Reduced time to market for new products Reduced process execution cost Increased regulatory compliance Reduced time to react to market changes Increased throughput Reduced process exceptions Increased new revenues Increased user productivity Faster proactive decision making Increased existing revenues Increased cash flow Increased customer satisfaction Reduced development, deployment, integration and maintenance costs Decreased working capital Enhanced exception handling Reduced time to take new projects live Source : www.oracle.com
- 9. What’s Business Process Management (System)? History: TQM BPR General Workflow Interface Layer BPM Web Service Presentation Presentation Process Layer An y Process Calculation Business Rules Layer Mana geme nt Co ncept s Inv oices Business Lev el Obj ects General Workflow System and User Inter actions BPMS AFE’s Business Level Objects Production Business Level Objects Anything Business Level Objects Business Level Objects IT on vati Inno s EAI WFM Back end Systems Layer Self-Generating Integration API API API Web Service XML SAP using java API MSMQ using com or java API API Excel using com Databases using jdbc ERP Databases ‘85 Source : Ravesteyn 2007 ‘90 ‘95 ‘98 ‘00 ‘05 time
- 10. View of processes and organization Act. Based costing webservices EAI Value Chain TQM CASE Workflow UML Rules management engines Java ERP Balanced Scorecards Cont. process improvement Kaizen ISO9001 Six Sigma B2Bi IT organization Business organization So ..... BPMS A new Software category that supports the entire lifecycle of modeling, executing and monitoring business
- 11. How can BPMS help? We use a proven methodology which is flexible and customized to individual company objectives. Modeling Deploy Execution Monitoring Analyze Optimize
- 12. What benefits have others achieved? Case study summary: BP British Petroleum (BP) is one of the world's largest energy companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items6 The Challenge BP’s Accounts Payable process involved over 30,000 non-recurring transactions, over 10,000 vendors and 2,500 Accounts Payable approvers. The challenge was to automate this process and streamline the hodgepodge of invoicing systems and approval processes. The Solution The project resulted in a more streamlined the Accounts Payable interaction and approval process by implementing Oracle BPM Suite. The invoices are now automatically assigned to the appropriate approver using email notifications. 3,000 primary vendors were provided a self-service portal. The Result The Accounts Payable process saw increased turnaround, improved data accuracy and consistency, better audit trails and quality assurance. Data reentry was eliminated, personnel costs were reduced and cash flow improved. The cost per transaction was reduced by 80% and BP realized a 300% ROI over two years. 6 www.bp.com Source : www.oracle.com
- 13. Nextel Mexico Sprint Nextel offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users.7 The Challenge Nextel acquired seven different companies in six countries, all with different customer activation processes that involved significant manual entry. Each of the processes had different regulatory requirements. The Solution Nextel created a common of process services using the Oracle BPM Suite. This solution reduced the manual order entry into provisioning, customer care and billing systems. Business rules were embedded into the automated process to ensure that all regulatory requirements were met. The Result The customer activation time was reduced from 5 days to less than 3 hours, while costs associated with the activation was reduced by 71%. This project realized savings of US$2 million to US$3 million per year. 7 www.sprint.com Source : www.oracle.com
- 14. Sample Cost/Benefit Analysis for BPM/ECM Note: Determining the ROI for a significant outlay like ECM or BPM technology can be a complex task. Ensuring that all variables have been captured accurately, validating current costs against existing budget data, and accurately projecting the costs of new technology require diligence. Once developed, cost/benefit analysis should be probed thoroughly to determine how valid the underlying assumptions are8. 8 The Information Management Journal May/June 2007
- 15. Conclusion “…IT investments deliver more value to a company’s top and bottom lines – by creating new efficiencies and increasing revenues – than any savings gained from traditional IT cost cutting” - McKinsey, September 2008 BPM is a strategy and technology that delivers value to the organization by impacting both the top and bottom lines of an organization. However, this value has to be quantified for the organization to show the specific impact that will be delivered. This technology will not only bring quantifiable value to the organization but will do so without a corresponding increase in investment.