Tuesday, July 18, 2006

Dear Mr CIO - please fix my business processes

Over night Neil Richardson has written a nice little post about starting the BPM journey, which approaches the issues of selecting projects suitable for BPM in organizations that don't yet have a background with the technology. Neil talks about two classes of projects that may be used to introduce BPM to an organization:
(1) under the radar, low cost-low value, administration/HR style processes
(2) pick a strategic process involved in delivering high cost services to an important client
The watercooler discussion he relates is in contrast to my post yesterday that discussed how a seasoned BPM organization could struggle to extend the value of its BPMS beyond its original high-profile efficiency goals, into smaller risk mitigation projects. I suggested that the risk-management and admin based projects are a hard entry point for the traditional BPM or imaging and workflow vendors, since the usual ROI models no longer apply. So I don't believe that these vendors would typically be drawn to an organization requiring HR as a proving ground for the technologies, trying to demonstrate success on risk mitigation and audit issues.

This of course may be dependent on the organization. Back in a post a couple of weeks ago Thomas Otter talked a little about the internal HR systems at SAP. He highlighted these stats:
17 different languages
77 company codes
40 productive payrolls (32 different country versions)
55 countries
32,000 active master data
17,500 ESS users/month using absence ESS
In that type of environment maybe there is something about the scale of the operation that would be appealing to a BPM vendor and may allow them some creativity in building out a strong ROI. For example, the consolidation of numerous disparate systems and processes into a centralized instance provides benefits both in terms of IT management and Sarbanes-Oxley documentation and audit.

I still believe that it is unlikely that BPM would make it into this environment, despite the renewed ROI. The admin/HR/finance space is owned by the ERP vendors (and yes, according to Thomas, SAP do run their own systems). But there is still a play for BPM in this ERP owned ecosystem.

A BPMS provides the ideal mechanism for tying together a range of underlying systems with a consistent business process. For typical corporations with various ERP systems, abstracting the users from the underlying ERPs through a consistent BPM process enables consolidation at the level of business process. This simplifies usability, reduces SOX issues, etc. The corporation can delay ripping out the back end systems, an expensive and risky task, while still showing significant progress towards a more unified organization.

Maybe BPM can make it in the HR and financial departments. If so, it will need a business leader with a strong head for creating an ROI on more than efficiency and risk mitigation, but someone with a real feeling for the importance of unifying IT systems. This may be one business process improvement project that needs to be led by the CIO.

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