Implement Business Process Management to realize Cost Savings and High Return on Investments
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1 Implement Business Process Management to realize Cost Savings and High Return on Investments Business Process Management (BPM) was unheard of just a few years ago, but it has burst onto the global scene to become the hottest business and technology management trend of the decade. BPM within companies immediately delivers not only ROI, but also new levels of visibility, accountability, and predictability for the business. With this foundation, everything happens faster and easier with less wasted time and money. This paper is aimed at addressing the importance of BPM adoption, drivers and benefits of BPM and TCS approach to implement the same.
2 About the Authors Ankhi M, Mahendrababu Ramanathan and Spoorti Pandit Ankhi M, Mahendrababu Ramanathan and Spoorti Pandit works with TCS Consumer products practice specializing in Business Process Management. They have been instrumental in defining BPM strategy for a Fortune 500 organization and has delivered a mission critical BPM project. 1
3 Table of Contents 1. Introduction 3 2. Problem Statement 3 3. Business Drivers 4 4. Getting There from Here 4 5. Benefits of BPM 6 6. Best Practices of BPM 7 7. Conclusion 7 2
4 Introduction Business is constantly looking out for various ways and innovative means to improve performance, achieve its business goals and to react to ever changing market demands. The conventional system s process control is not capable of governing highly variable change requests in a situation-specific and purposeful manner that is, adapted to change request content and project context. Without standardized processes, controls, Organizations are in risk of trailing behind competition, a loss in market share and decreased savings and ROI. Business Process Modelling (BPM) is the activity of representing processes of an enterprise, so that the current process may be analyzed and improved in future. It is a structured, coherent and consistent way of understanding, documenting, modelling, analyzing, simulating, executing and continuously changing end-to-end business processes and all involved resources in light of their contribution to business improvement. BPM within companies immediately delivers not only ROI, but also new levels of visibility, accountability, and predictability for the business. With this foundation, everything happens faster and easier with less wasted time and money. Problem Statement Some of the major problems faced by the organizations across the globe because of non-existence of standardized business process management are: Disparate Existing Tools and Applications - The considerable heterogeneity of the existing tools and applications makes it difficult for any business organization to respond to any drastic change in market. The conventional systems may not contribute to business agility and the control is not capable of governing highly variable change requests in a situation-specific and purposeful manner that is, adapted to change request content and project context Identical Process Steps - Both the minor and drastic changes followed the same process steps, which place unnecessary strain on the organization and reduce overall process efficiency Lack of Data Consistency - Users have to capture the same information at several process steps, because of the isolation of the existing applications there is a lack of Data Consistency between the process steps Decentralized Documentation - The absence of a Centralized documentation base and a collaborative workspace disables users to share the knowledge across the enterprise and potential re-usability of assets, tools and frameworks is lost No single repository for various teams to model, access and analyze the processes, procedures, SOPs, control points Process knowledge exists in the minds of business users. Efficient translation of this process knowledge into proper process maps was a very critical challenge 3
5 Not able to assess the existing processes with industry standard processes and benchmarking and Monitoring the business and IT KPI s There is no single source of truth to assess the processes during Merger and Acquisition Speed to Market is low and the adherence to regulatory compliances is difficult Business Drivers Businesses across the globe are adopting BPM practices and technologies, which would address most of their problems and issues. Few of the key business drivers for adopting BPM are: Achieve lean operations and agility in the business Deliver more with less - Process mapping leads to efficient organization thus minimizing the resources used Effective and Efficient processes producing the desired results Bridge gap between Business and IT Holistic view of a standards based process framework to drive process definitions, design, execution and eventually monitoring Agility the responsiveness of enterprise to emerging opportunities and challenges Efficiency the cost-reductions due to optimized use of infrastructure including hardware and software solutions and process standardizations Business Process Governance Adaptability the resilience to change in delivering business-centric solutions so that risks associated with change impacts are well managed and minimized Speed to Market, Innovation and Compliance Getting There from Here TCS understands and realize that Business Process Management (BPM) is becoming an increasingly relevant option for the strategic and operational part of the business as it controls process lifecycles with support for process modelling, execution, monitoring and optimization. TCS will leverage BPM to develop a flexible platform that provides automation, visibility, audit ability and the ability to quickly respond to changes due to external market conditions; thus reducing the speed to market, increasing process efficiency and generating cost savings. TCS has end-to-end BPM expertise and have developed the breadth and depth of expertise in enabling technologies which are very important for BPM. TCS has carried out BPM exercise at multiple customer places across the globe and have delivered significant process improvements, process automation, business transformations and substantial savings and ROI. 4
6 For Consumer Products (CP) Industry, TCS has documented and modelled the End-to-End Industry standard processes in the Leading BPM tools. These processes which are captured and modelled by TCS are industry standard processes along with a combination of best practices, Key Performance Indicators (KPI s), Control points and etc. These tools, assets and artifacts helped TCS and its customers in Accelerating the BPM Implementation Accelerating the ERP Implementation Synchronization and Integration of the existing business processes with ERP systems Update/Migrate the ERP systems to the latest versions Delivering Value to customers in Outsourcing and Transformation Engagements Knowledge Transition in Outsourcing engagements, Consulting engagements Faster time to market Efficient Change Management and Program Management. TCS has a well defined approach and methodology for implementing BPM tools and the approach is depicted pictorially below. Iteration 0 Iteration 1 Iteration 2 Identification Pilot Process Identification Top-Down process model Level 0 to Level 2 Top-Down process model Level 2 - Level 5 Identification of Rule sources Task-level involved parties & role definition Inception Task-level input / output data object (message) model and service interface definition Task level process interfaces & system interfaces Decomposition into Rule Flows & Rule Sets Task-level attributes (normal / exception condition cycle-time, effort, cost, % exception etc.) Key Performance Indicators (KPI) for process measure to govern SLA Process variation multiple process model templates and implementation scenarios Solution Simulate process model under different implementation scenarios Process Cost Modeling within the AS-IS model Process Review and Analysis Process Integration and Identification of Reusability Process Costing and Benefit Analysis Process Integration and Reusability Process & Rules Repository Process Finalization Figure 1: TCS BPM Implementation Approach 5
7 Benefits of BPM By helping companies model, automate, manage, and optimize their business processes, BPM provides the framework for sustainable competitive advantage. BPM brings a radical approach in the business environment and it focuses more on the organization wide Processes rather then in bits-and-pieces. It increases cohesiveness among departments as well as clients, suppliers through rapid exchange of information & makes employees understand the need of information in complete business chain. Some of the benefits of BPM are provided below: BPM systems improve process efficiency BPM systems tie-together activities of the process and execute the process from start to end. Thus work moves from one desk to another without the performers of the task needing to pull the work from predecessors or push the work to followers. BPM systems can even automate work, eliminating need for manual intervention. Thus, BPM systems minimize delays, and waiting time improving process efficiency. BPM ensures optimum resource utilizations and improve productivity BPM can organize, schedule and distribute work based on process parameters such as performer skills, performer availability, performer workload, work-item priority etc. BPM systems identify and utilize resources optimally and also improve productivity BPM systems ensure process standardization BPM systems ensure that every instance of the process gets executed exactly as defined. There is never any deviation between two instances of the same Figure process 2: Service Order BPM systems improve process control Using BPM systems, supervisors can easily track and monitor the status of various instances of the process being executed. They can take corrective action wherever necessary. BPM systems can also maintain audit log of every small change in the status of the activity within the process and the actions of the performers BPM systems enable process improvement Using simulation tools, process designers can identify process bottlenecks and high waiting time activities. During run-time, process managers can easily monitor process performance and compare that with process performance measures and KPIs. Post execution, they can also query and analyze process data to identify and eliminate business issues. Thus, BPM systems provide tools, which can be used across the phases of the business process life cycle to improve business process performance. 6
8 Best Practices of BPM This section describes the best practices suggested by TCS for BPM. They are Cross-Functional Team: Identify and establish a cross-functional team in place to drive and sustain the process orientation. Process teams and process owners should plan together, meet regularly, and work collaboratively Executive Commitment: Get C-Level executive commitment for BPM. This will help to the big problems and hurdles and also during change management Pick a Right Methodology: Select the right process improvement and management program (LEAN or Six Sigma) that might fit for your organization. They will be an effective foundation for BPM and they will form a important milestone of your process architecture Measure First: Don t start designing to-be new processes until you understand the existing processes. After understanding the as-is use Business Activity Monitoring (BAM) to measure and establish the baseline metrics. After baseline, identify the opportunities for improvement, automation and like Right Technology: Choose the right technology that best meets your needs and requirements. Make sure the technology which has been selected fits the Enterprise Architecture and vet the same with various stakeholders in the organization Eye on Customer: Have an Eye on your customer. The basic agenda of implementing BPM is to create value to customers. Remember that everything you re doing should ultimately create more value for your customers Pilot Project: Select the right project that provides the high return to the business and can be completed in 10 to 12 weeks. Avoid Big Bang: Avoid Big bang approach of attempting to improve the end-to-end processes all at once and Boil the Ocean approach Change! Change!! Change!!! : BPM is all about changing the processes, systems and architecture and it will help you to identify where change is needed. Once identified, be ready and adopt to change. Manage change; implement policies for making changes, articulate change approvals, recognize change events, measure change, reward change. Transformation Partner: Choose the right transformation partner like Tata Consultancy Services (TCS) having rich experience and expertise in enabling business transformation thru BPM. Conclusion Before adopting BPM, Organizations need to align their business processes with IT and also need to streamline and standardize the same. Organizations need to adopt BPM to remain competitive in the longer term and to continuously innovate. BPM, applied and implemented in the right way, has the ability to transform an organization and can gain enormously from BPM. It is recommended that customers to implement BPM tools to align the business processes, metrics and KPI are to achieve and standardize the business goals. Simulation techniques needs to be used for process automation, process visibility, audit ability and quick response to market needs and change 7
9 About HiTech Industry Solution Unit About Tata Consultancy Services (TCS) TCS HiTech Industry Solution Unit comprises of Semiconductors, Tata Consultancy Services is an IT services, business solutions and Electronics, Computer Platforms & Services, Software industry and outsourcing organization that delivers real results to global Professional Services. At TCS, we leverage our experience in businesses, ensuring a level of certainty no other firm can match. Engineering Services, Business Process Transformation, end-to- TCS offers a consulting-led, integrated portfolio of IT and IT- end IT Solutions and Infrastructure Services to provide enabled services delivered through its unique Global Network comprehensive solutions that will help the High Tech firms and Delivery ModelTM, recognized as the benchmark of excellence in manufactures accelerate product innovation, achieve operational software development. excellence, attain greater profitability and maintain market leadership. Our proven consulting capabilities, Extensive engineering expertise, and in-house innovation labs provide breakthrough A part of the Tata Group, India's largest industrial conglomerate, TCS has over 143,000 of the world's best trained IT consultants in 42 countries. The company generated consolidated revenues of US $6 billion for fiscal year ended 31 March 2009 and is listed on the National Stock Exchange and Bombay Stock Exchange in India. transformation of product and service portfolios. Our recent investments include dedicated labs and infrastructure in support For more information, visit us at for convergence solutions, embedded printer solutions, storage optimization and High Tech Center of Excellence based in Eindhoven (The Netherlands). ankhi.m@tcs.com, Mahendrababu.r@tcs.com, spoorti.pandit@tcs.com Subscribe to TCS White Papers TCS.com RSS: Feedburner: All content / information present here is the exclusive property of Tata Consultancy Services Limited (TCS). The content / information contained here is correct at the time of publishing. No material from here may be copied, modified, reproduced, republished, uploaded, transmitted, posted or distributed in any form without prior written permission from TCS. Unauthorized use of the content / information appearing here may violate copyright, trademark and other applicable laws, and could result in criminal or civil penalties. Copyright 2009 Tata Consultancy Services Limited
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