What is BPM? The Practical Application of an Abstract Discipline
What does a Business Process Manager do 🧩 What is Business Process Management 🧩 How to scale an activity or a business 🧩 Business Process Management in organizations
Imagine you’re throwing a party. There are so many things to take care of: arranging the space, cooking the food, buying drinks, organizing people, etc. By the time the party comes, you’re so tired of it all that you just want it over with. You can’t wait for everyone to come and, even more importantly, to go so you can sleep for two days straight.
Why does this happen, and what can you do about it?
Keep reading 👇
💲 What a Business Process Manager Does for a Living
When I see my mom, sooner or later we touch on the topic of what I do for a living. Our conversation usually goes along those lines:
Mom: “The other day I met with a friend from high school. I haven’t seen her for so long! Among other things, she asked what you did for a living. I couldn’t say.”
Me: “Why couldn’t you say?”
Mom: “Because I don’t know.”
Me: “How come you don’t know? It’s not a secret. Plus, I’ve explained it to you so many times.”
Mom: “Yeah, I know, but I still don’t understand it.”
Me: “It’s really not that complicated. I do management.”
Mom: “Yeah, right… Well, I’m a Civil Engineer. I build houses and install water pipes. What do you do with that management of yours? Is there a tangible result?”
Me: “Yes, in a way. The tangible result is a well-organized company.”
Mom: 😐
Me: “OK, let’s start from the beginning. You know how in school, and later university, we learn the theory, and then we find ourselves a job and we implement that theory in practice?”
Mom: “Yes…?”
Me: “So, my theory is management - as a science. I constantly study it and implement it into practice - in organizations.”
Mom: “Why do you keep studying it? Why can’t you finally learn it?”
Me: “Mom, it’s science - it keeps changing!”
Mom: “OK, but then, how do you implement it in practice? Do you become a manager?”
Me: “I am a manager.”
Mom: 😐
Me: “Right… I’ll explain in another way: So, you build houses, right? But, before you even start, you need to make designs for everything. Then you have to approve these designs with the authorities. Then you have to get the materials, the people, decide on the time frame, etc. Only then you can start building. Correct?”
Mom: “Yes…?”
Me: “Well, someone has to organize all of this work. It’s not only about building the house; there’s a lot of organization happening before, during, and even after building it. Correct?”
Mom: “Yes.”
Me: “OK, so now imagine a company: It’s not only about producing a product or delivering a service. There are a lot of things happening at a company before, during, and after producing that product or delivering that service. And someone has to organize all of that work. That’s what management does - it’s the organization of all company activities. That’s what I do.”
Mom: “But you don’t work at a company - you’re an external consultant.”
Me: “Yes…?”
Mom: “So, if you organize the management of the company, what do the actual managers at that company do?”
Me: “Yeah, my thoughts exactly…”
Mom: 😐
Me: “I mean, yes, you’re right! It’s the managers’ job to manage the company. But they are too busy fighting their everyday fires. They don’t have the time to stop and design a long-term strategy, and then use their scarce resources to implement it. But without that long-term strategy, their daily fires keep popping up - and even increase in number. So the managers have even less time and energy. It’s a vicious circle! So I come in to help them by designing and implementing that long-term strategy that will ease everybody’s work.”
Mom: “Ah, now I get it! Thanks, I’ll explain it to my friend when I see her next.”
On the following day, I’d ask my mom randomly: “Do you still remember what I do for a living?”
Mom: “No, it was too complicated - I already forgot.”
🙈
⏲ What Business Process Management Means in Practice
I’m sure all the F1 fans out there have already noticed how the time for pit stops kept improving through the years (and if you’re not an F1 fan, watch Formula 1: Drive to Survive and you’ll become one 😉).
Take a look:
What we’re seeing here is process improvement in action. The overall process is the same - changing tires - but there are many little steps inside this process. When each of them gets tweaked ever so slightly to produce a better result, we end up with a huge overall process improvement. The business domain responsible for such improvements is called Business Process Management (BPM).
In order to add value, BPM has to do the following (in that sequence):
Order the chaos by implementing processes and systems.
Increase efficiency and performance by streamlining the processes, removing waste, and automating.
Continuously improve the processes by monitoring, measuring, and analyzing.
To break this down, let’s start with an example.
🍲 From Home Cooking to Running a Restaurant Business
Let’s say we want to cook dinner. We have to decide what we (incl. our family) want to eat and when, find the respective recipes we’ll use, go shopping for the ingredients, get all the needed utensils and/or kitchen devices, plan backward when to start cooking (not too early before the desired dinner time and not too late either), and, only after all of this, proceed with the actual cooking.
Now, let’s say we want to eat a home-cooked dinner every evening. In this case, we have to decide in advance (and agree with our family on):
what all the steps in the dinner-cooking process will be,
who will do which step (we’ll probably rotate), and
how (including when).
Also, we might consider:
what will happen when there are variations to our process (e.g. someone wants something more sophisticated for dinner, which will require specific ingredients, or tools to make, or more time; someone wants to dine out on a particular evening; and so on).
The above example shows how every activity has two sides of the same coin: On the one side, it’s the actual activity - cooking dinner, in this case. On the other side, it’s all the organization we have to do prior to beginning (and during, and after) the actual activity. Regardless of what activity we take as an example, we can always split it into these two parts: thinking vs. doing, planning vs. executing, managing vs. working, organizing vs. producing, etc.
This split is not random, nor is it new. It’s called Scientific Management and it was created during the Second Industrial Revolution by Frederick Winslow Taylor - hence, sometimes referred to as Taylorism. What’s striking is that we still use his very same principles today, in the 21st century, in the Fourth Industrial Revolution, after they were proven inadequate a very long time ago.
If we decide we want to scale our dinner cooking further and make a business out of it, we’ll find out that:
the dinner is the product we deliver,
whoever eats it is our consumer,
whoever pays for it is our customer (in this example, customers and consumers are typically the same),
whoever cooks it is our employee,
we are the employees’ manager,
and whoever invests in our first dinner(s) is our sponsor.
Our business model is quite simple:
We take the money from our sponsors,
pay with it for food ingredients, kitchen utensils/tools, and employees,
our employees use the utensils/tools to convert the food ingredients into dinner,
our consumers eat it,
our customers pay for it,
we take the money from the customers and reinvest some of it into tomorrow’s dinner and the rest we split between our sponsors and us.
Then we repeat a few times, until we don’t have to take money from our sponsors anymore (we’d still need to give them a cut at the end, though).
Notice how cooking the actual dinner (pt.3 from above) is a very small part of everything else happening inside our business.
Notice also how many people are suddenly involved.
What happens when we decide to scale up our business and have a chain of restaurants?
We end up with a gazillion managers in a complicated hierarchical structure who help us carry out all business activities by managing within their respective domains (e.g. Finance, Accounting, Marketing, Sales, Cooking Operations, Restaurant Management, and so on).
Who oversees all of these domains simultaneously and ensures they integrate and work seamlessly?
We do. Well, at least we should, given that we are literally and figuratively on top of everything and everyone. Or, if we’re too busy envisioning new products and services, meeting with potential new investors, partners, and big clients, and marketing our business, we can choose to delegate the organizational responsibility and hire a Business Process Manager.
According to Michael E. Gerber in his book The E-Myth Revisited, there are three personas needed to run a business successfully:
Technician - the person who does the job,
Manager - the person who organizes the job to be done, and
Entrepreneur - the person who envisions where the business can go and takes it there.
Naturally, each of us is the strongest in only one of these domains, maybe two at best, but never all three of them. Therefore, we need to know our weak sides and surround ourselves with people who can help us.
NOTE: The Manager in Gerber’s book is the Business Process Manager in my book 😉
More on the main takeaways from The E-Myth Revisited here:
🧮 Business Process Management in Organizations
BPM Scope
As discussed in a previous post, everything is part of a bigger system. Companies are no exception. They produce a product or deliver a service to customers/clients in an open market, outside of the company boundaries. That’s why we can informally split the company activities into two types:
externally-facing, such as Marketing, Sales, Business Development, Brand, Public Relations, etc., and
internally-facing, such as Human Resources, Operations, Communications, Information Technologies, etc.
Business Process Management is internally-facing. It does need input on the business model and the product/service the company produces/delivers, however, this is not the main focus. The main focus is the internal processes and operation, and, consequently, structure and organization. More specifically, Business Process Management ensures that the internal processes, operation, structure, and organization support the company business model in the best way, i.e. deliver the chosen product(s)/service(s) in an optimal manner.
Depending on the internal scope of Business Process Management activities, companies call the responsible person:
Operations Director, Vice President of Organizational Development, Head of Processes & Culture, or similar (if the scope is the whole company);
Quality Manager, Quality Assurance (QA) Manager, Maturity Champion, Process Analyst/Designer, Process Improvement Specialist, or similar (if the scope is a department);
Agile Coach, Scrum Master, or similar (if the scope is a team);
Project Quality Manager, Project Scrum Master, or similar (if the scope is a project);
Product Operations Manager, Product Agile Coach, or similar (if the scope is a product);
and many other names (e.g. Chief of Staff).
Whatever we call this person, they are responsible for ensuring that:
there are living and breathing processes for everything within the assigned scope, and
these processes integrate and work well together, as one (process) system.
Irrespective of the scope, I call this person a Business Process Manager.
BPM Deliverables
Processes
There’s a lot of talk about processes, but what is a process?
A process is a set of several interrelated steps/activities, which take something (input) and convert it into something else (output).
Moreover, the process is always repeatable - if it’s not repeatable, we can call it a one-off activity, an initiative, a project, a whim, or whatever else, but not a process. We need the process to be repeatable so that we can improve it. We have multiple iterations of a process, and with each iteration, we learn something new and make improvements in the next iteration. Without iterations, we can still learn but we cannot improve. Moreover, without iterations, we cannot guarantee that we’ll produce the same output (product/service) for our customers/clients every time.
As already explained, the Business Process Manager ensures that all required processes are in place, but it’s important to note that:
they don’t create the processes by themself, and
they’re not the one executing them either.
The Business Process Manager knows Business Process Management and its tools and related processes - that’s what they execute, not the processes from other “technical” domains (to use Gerber’s terminology). The “Technicians” - also called Subject-Matter Experts (SMEs) - and the Business Process Manager work together to create the company processes. The Business Process Manager cannot create alone the technical processes, because they won’t know the technical specifics. In the same way, the SMEs cannot create their processes alone either, because they won’t know a) all elements and tools needed to define a process, and b) all relations to and from other processes.
System
Business Process Management not only takes care of the individual processes but also ensures there’s a system of processes. According to MIT, who created the discipline of System Thinking, a system is a set of interrelated entities and their relationships, all of which enable a function that is bigger/better/more powerful than simply the sum of the parts.
More on System Thinking here:
In a process system, the processes are the entities, but how do they relate to each other?
As already explained, a process takes inputs and converts them into outputs. However, these inputs come from somewhere - usually, they’re produced by another process. And the outputs go somewhere too - typically, to another process as inputs. This is how we end up with interrelated processes, but for them to become a system, they all must have a common function that is bigger than the sum of the parts. Therefore, the Business Process Manager has to ensure that:
the processes are in place (i.e. system entities),
the interrelations between the processes are in place (i.e. entity relationships), and
all processes together work seamlessly and better than each of them individually (i.e. emergent function of the system).
Part of the process mapping/discovery/design activity is creating a SIPOC (Supplier, Input, Process, Output, Customer) diagram for each process step:
Supplier: process/person that provides the input
Input: deliverable used
Process: activity that converts the input into the desired output
Output: deliverable produced
Customer: process/person that consumes the output
Having this information at hand is invaluable for the visibility and transparency of process relations.
More on how to create a SIPOC diagram here:
BPM Methodology
Finally, how does a Business Process Manager do what they do?
When put into practice, Business Process Management is in fact a process on its own. This process is the Continuous Improvement Process (CIP), also defined by Dr. William Edwards Deming as the PDSA/PDCA Cycle (Plan - Do - Study/Check - Act):
Plan: Define/design the process.
Do: Execute the process.
Study/Check: Monitor the process, analyze the findings, and identify the Opportunities for Improvement (OFIs).
Act: Correct the output(s) of the process iteration, if possible; then go back to Plan to implement the OFIs into the next process iteration, thus, closing the cycle.
On a closer look, we’ll notice that every process, not only CIP, follows the PDSA/PDCA cycle:
We plan and organize our activities before we do them.
Then we do them.
Because we want to improve, we need to learn how and what to improve, therefore, we study the execution of the process.
Because we have a process, it is repeatable, therefore, we have a next iteration in which to implement our lessons learned from the previous one.
Summary
Based on all of the above, the SIPOC diagram of the BPM process looks like this:
In other words:
Business Process Management is the process of organizing and continually improving the operations of a company (or department, project, product, team, if the scope is smaller) in order to achieve and support its business model, vision, mission, strategy, purpose, goals, values, beliefs, culture.
The person who executes this process is the Business Process Manager.
And that’s how we use Business Process Management in practice - in our organizations or in everyday life. And, by doing so, we ensure that we stay on top of all activities and people needed to achieve our goals.
Next, see here the benefits of BPM in more detail:
Thank you for reading 💝
Till next time,
Irina
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