Business Process Management
Is Not Workflow Automation

(March 2004)

• Introduction
• Example 1: Restaurants
• The limitations of mainstream BPM conceptions
• Example 2: Call centers
• Product development
• Refocusing BPM
  • A routine
  • Recurrent
  • Consequential
  • Leveragable
  • Well-coordinated
• Conclusion: Why does the definition of business process matter for BPM?

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 Introduction

This article is addressed to professionals in the information technology and management and consulting fields who are involved in business process management initiatives. Its goal is to point them in a direction that will help them get the right processes right by refocusing the conception of business process and hence of business process management that currently dominates BPM discussions. Here are typical examples of that workflow automation view:

• BPM “Emphasizes the management aspect of automating processes to achieve maximum ongoing flexibility with minimum development and time.”
  
  
• BPM is “Streamlining the system of delivering a document to the appropriate recipient and determining where and when the document is sent next. For example, a mortgage application might travel from a retail lender to a wholesale lender. BPM software ensures that the right audience sees it at the right time.” 
  
  
• “As enterprise processes become more automated, and more and more interconnected, one piece of technology refuses to go away: the human being.”

If this is BPM, then it will be far more limited in its impacts that it can be. 

The emerging field of business process management is as full of promise as was business process reengineering in its heyday. It is also, alas, on track to repeat the core mistakes of BPR: equating “process” with “workflow” and process “management” with “automation.” The individual most associated with BPR announced in 1993 that “the curtain is rising on the Age of Reengineering” and in 2002 that “As a brand name, it is [BPR] about as attractive as ‘painful rectal itch.’” (Michael Hammer, verbatim, Who Has the Next Big Idea?, Fast Company, May, 2002, page 108)

How to prevent this repetition of history is the topic of this article. BPM is far too important a business opportunity to waste. It is the next wave in a long flow of tides. It has been process discoveries and the disciplines to exploit them that reshaped the business landscape over the past two centuries. Adam Smith invented division of labor as the base for enterprise efficiency in the 1770s; this process principle dominated the organization of work through to the 1970s. Henry Ford redefined manufacturing processes through his own invention of the assembly line, making production flow the core of the process base. Frederick Taylor’s Scientific Management invented workflows as the unit of organization and introduced the concept of systematic analysis of processes that underlies almost a hundred years of operations research and analytic methods; Peter Drucker comments that “all – all – the productivity gains of the twentieth century can be explained by the work Taylor set in motion at the century’s beginning.”

Toyota consolidated the total quality management movement, just-in-time manufacturing and lean production, all of which turned a process edge into a massive competitive differentiator and pushed European and U.S. carmakers into a decade-long defensive catch-up and retrenchment. Wal-Mart began and Dell Computer continued the transformation of end-to-end logistics processes that over a twenty-year period has reduced the percentage of U.S. Gross Domestic Product tied up in supply chain management by over 40 percent. In 1980, logistics costs amounted to 15.7 percent of GDP and 11.4 percent in 1990. In 1999, it was just 9.9 percent. Each 1 percent reduction is a savings of $10 billion. (Inside the Machine, The Economist, November 11, 2000.) The Economist also reports that inventories as a percent of shipments dropped by half in that period.

BPM continues this process evolution and is well positioned to play a transforming role in every area of business. It has more and more technology resources to draw on that liberate work from constraints of location, limitations of information access, and barriers to communication and coordination. The technology infrastructures of ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), the Internet, intranets and e-mobility (wireless communications, laptops, PDAs and wearable computers) open up new options for process design. In particular, Web Services, the coming together of a wide range of software development tools, technology standards and Internet-based innovations, are enabling rapid implementation of linked, modular services in contrast to the lengthy timetables for traditional system development. The combination of new technology enablers and the proven gains from process investment make BPM potentially the next and sustained wave of business innovation.

But only if it gets away from the limited view of process that currently dominates BPM discussions. The most common definitions are full of words like “activity”, “task’, “step, “workflow’ and “automation.” The single word that is missing and that truly determines the difference between a procedure that can be automated in the interests of efficiency and a process that can be leveraged to add effectiveness is “negotiation.” It is the interaction between the parties involved in a business process that makes it distinctive. If there is no room for providing a variety of customer opportunities and options and no room for dealing with exceptions then this is a procedure, rather than a service. Negotiation is the interactive dialog that responds to a customer request and leads to a commitment to the customer – contracting. Negotiation and commitment far more determine a business process than its workflows and steps.

The term “negotiation” tends to be immediately interpreted as disagreement, argument, trying to get an edge, and hiding information. It is far more a collaborative process – note the term process here – aimed at reaching a mutual agreement. Webster’s Dictionary definitions highlight the dynamic nature of negotiation and its collaborative purpose: “to carry on business…. To confer with another so as to arrive at the settlement of some matter…… to arrange for or bring about through conference, discussion and compromise….. to successfully travel along or over.” Negotiation is intrinsic to a process; if it is not negotiable, it is just a procedure. Procedures can and mostly should be automated. Processes can be supported and leveraged through automation of workflows but trying to reduce or eliminate human negotiation almost invariably kills any chance to make them a source of competitive differentiation.

Consider the three following business process examples: restaurants, call centers, and product development. In each instance, the workflows tell you little about the process, and in each instance the effectiveness of process design rests on balancing workflow automation with human judgment and collaboration. When they leverage each other, the result is process excellence. Workflow automation without appropriate judgment and collaboration means routine and structured procedures and hence routine and structured service. Human judgment and collaboration without appropriate workflow automation mean inefficient and unreliable delivery. In most discussions of BPM today, workflows and automation are seen as the focus of attention and payoff, with the role of people seen as a side issue or something to be eliminated.

Consider organizational processes that rest on teams, knowledge workers, adaptivity and flexibility, such as product development, information systems development, bidding on RFPs, and any process whose goal is innovation – and hence by definition is non-routine. Their effectiveness (as contrasted to their efficiency) is determined by the “loops” of requests, promises, commitments, collaboration, brainstorming, personal relationships, personal skills, dialogue, leadership, and communication. (See Figure 1) The role of information technology in business process management is to leverage all these, not to automate them out.

Figure 1

Source: Action Technologies, Inc.

Example 1: Restaurants

Chez Michel is an upmarket gourmet restaurant, The Old Grist Mill a family restaurant, and The Bistro a hotel restaurant. The workflows are basically the same for each of them, from the hostess or host welcoming and seating you, the waiter starting out by asking for drink orders, through to payment. If you were to look at the typical BPM workflow mapping you could not tell which restaurant is which.

The loops make them very different from each other, in terms of the negotiations they involve and the customer condition of satisfaction that determines the specific requests, interactions and offers. Chez Michel prides itself on its cuisine, ambience and personal attention. Customers do not just “order” an item on the menu and the waiter write it down. There are specials, requests from the customer for something that is not on the menu, and recommendations from the waiter. The customer’s “condition of satisfaction” varies quite widely and the skilled waiter is sensitive to this. One party of business people makes it clear that they are in a hurry, a couple signal that they want a romantic, quiet, and leisurely special celebration with the service unobtrusive, and yet another group wants the opposite – flourish and flair, close personal attention, and banter with the waiter. Chez Michel charges a high price and restaurant guides list it as “$$$” but it offers good value to its customers, very much because of its ambience and the personalization and flexibility of its processes – its contracting.

The Old Grist Mill similarly offers value and is listed as “$” in restaurant guides as a good buy. It caters more to families and larger groups than Chez Michel. It does not promise the same ambience and some of its menu items are marked “no substitutions.” But it works hard to make the meal a special occasion. Its staff are trained to respond to needs for children’s high chairs, splitting of menu items among the diners, concern about prices, and nutritional or dietary issues. The dialog is a form of negotiation – “Can you…? “How about….?” “Who do I need to talk to get……?” “Sorry, we don’t have…..” “If you don’t mind waiting, I can…..” This is what service is all about: responsive flexibility within a set of procedures. The contracting is a sequence of customer request to performer response leading to a mutual agreement that establishes a commitment – a promise – that meets the customer condition of satisfaction. This is the very core of the business process as contrasted with the work procedures that are part of it.

The staff in the Bistro hotel restaurant carries out comparable contracting and negotiation. They are alert to which business customers want a fast lunch versus being left alone for a potentially long business discussion, which are tourists on a budget, and which want to splurge. The Bistro tends to be more impersonal in its service and does not have many regulars, unlike Chez Michel and The Old Grist Mill whose best waitpeople have almost eidetic memories about guests and their preferences. They build relationships whereas the Bistro mainly offers transactions.

While Chez Michel’s value proposition – its condition of satisfaction for the customer – is its style (its sirloin steak and house salad are indistinguishable from The Old Grist Mill’s and Café Bistro’s and all are excellent) – The Mill’s value is much more defined in terms of price and the Bistro’s in terms of convenience and speed.

Without going into the details, it is commonsense that the business processes in each restaurant go beyond workflows. The interaction between customer and waiter is subtly collaborative. The customer in general wants flexibility and options; the performer – waiter, chef and even busboy – wants structure, procedure and predictability. The restaurant manager wants a balance between the two – happy customers who praise the service and employees who enjoy being able to meet their requests but also efficient and cost-effectiveness operations. The balance makes the process. That is what business process “management” is really about.

In all three restaurants, a key element of process excellence is how exceptions are handled. Most customer orders follow well-defined workflows but what about ones that do not fit into the routine: the customer who spills food on his lap, the one who politely complains that her steak is overcooked, the disgruntled family group that has been waiting for a table for an hour, the party that arrives late for a reservation to find that the table has been given away, the kitchen reporting that the popular daily special is sold out, or the group that would like a surprise birthday song and cake for its main guest?

Technically, all of these situations can be defined in terms of business “rules” and many parts of the overall process consists of very structured procedures and precisely-defined steps. The kitchen, for instance, is almost a factory of procedures with, in the case of Chez Michel, pastry chefs, sous-chefs and junior staff who carry out a single repetitive task following a fixed sequence and timing. Customers however do not see these procedures and are indifferent to how they are handled. For them, their dining experience is marked by their interactions with the customer-facing components of the overall process. The only way they become aware of them is when the procedures fail: the food is delayed, the order incorrectly filled, the steak overcooked, etc.

The limitations of mainstream BPM conceptions

Assume that any of the managers of these three restaurants were to investigate what BPM offers for them to improve their performance. Below is a sample of what they are likely to read (with comments added) that in essence results in a fast food restaurant or self-service cafeteria as the output of BPM:

“BPM emphasizes the management aspect of automating processes to achieve maximum ongoing flexibility with minimum development and time.” (Ebizq.net)

That viewpoint is applicable to many customer-facing processes: a car loan application, say. This can be handled over the Internet by a question and answer procedure that uses automated business rules and access to credit history databases. But would you as a customer accept that it is applicable to any of the three restaurants’ service? It is appropriate for a fast food company like McDonald’s which is a brilliant structuring of workflows that rests on taking out the human judgment and on imposing standardization. Would Chez Michel or The Old Grist Mill benefit from adopting McDonald’s processes? Surely not. The Bistro might well do so, however. If time and convenience are the value proposition, then its customers may well prefer self-service; many hotels have moved in this direction; they call it a salad bar and buffet.

“Business processes are in essence the embodiment of a company’s strategy….. when these processes are turned into business rules and encoded in software companies can realize significant financial and human efficiencies.” (Informationweek.com, April 29, 2002.)

If a restaurant is just a set of business rules, then the waitperson is nothing more than an order taker and has little impact on customer satisfaction. If the business rules are automated then this means “no substitutions” and impersonal service. That is an efficient way to provide low cost meals and employ staff with low skills who do not require much training – the foundation of fast food companies. So, it works. It would kill the three restaurants in this example. It focuses on the “straight-through” processing that is the target of many providers and users of BPM and CRM software tools. (It is worth noting that the term customer “touchpoints” has entered the business vocabulary; this appears to be a recognition that straight-through processing may remove opportunities to enhance the customer relationship; if there are no touchpoints, there is no relationship-building opportunity.)

BPM is “streamlining the system of delivering a document to the appropriate recipient and determining where and when the document is sent next. For example, a mortgage application might travel from a retail lender to a wholesale lender. BPM software ensures that the right audience sees it at the right time.” (Business 2.0, April 2002, page 37)

Yes, but what does that “audience” do with the document? Are they just passive paper pushers, as this definition of BPM implies? Obviously, many mortgage applications are routine and involve little more than checking off the documentation: application form, credit history, appraisal, title search and the like. Any software that helps coordinate this clearly adds value to the process – improvements in speed and cost, error reduction, and internal productivity.

But where is the customer in all this? In practice, most mortgages involve many interactions between the parties – questions about financing or timing of settlement, for instance. The appraisal process, which is absolutely critical for customer and lender, involves substantial professional judgment, a visit to the property, and discussions with the owner. In many instances, the real estate agent plays a key role in tracking progress, dealing with problems and communicating between buyer and seller.

It is not enough just to coordinate the documents.

“As enterprise processes become more automated, and more and more interconnected, one piece of technology refuses to go away: the human being….. In short, the increasing connection of machine and human processes is creating more and more opportunities to use classic workflow technology – because you just can’t get the humans out of the loop.” (Workflow Meets BPM, Infoworld, April 27, 2002)

Skills, judgment, experience, teamwork, motivation, collaboration and communication as a “technology” that implicitly is a burden! Processes that “involve” human beings! It is ironic that practitioners of BPM would hardly accept that this perspective would apply in any way to their own work as consultants, systems developers, process designers, and collaborators with clients, technical specialists and the people who do the work that the BPM initiative is intended to improve. It is the language of contracting in the widest sense of the term that marks their view of their own processes. They communicate with many parties via many media (email, fax, voice mail, laptop, mobile phone, PDA). They meet. Their work is highly interdependent with other peoples’ and often involves schedule-juggling, and requests for information. Their ability to complete their own tasks often rests on someone else’s actions. Much of their work is highly non-routine and involves making decisions and judgments about exceptions.

Obviously, they do draw on many tools that fit into the task/document/automation view of BPM but if they examine their own productivity they will surely accept that business process management to leverage themselves and their teams, colleagues and clients is as much or more the coordination of interactions among people as coordination of documents. They are “knowledge” workers. It should not be a goal to “get the humans out of the loop” but to use BPM methods and tools to leverage them.

A business process is “A set of logically related tasks performed to achieve a defined business outcome….. Processes may be defined based on three dimensions: Entities, Objects, and Activities.” (Davenport and Short, 1990)

Is the waiter an entity or object? The customer?

“In the context of integration, a business process refers to any multistep activity that manipulates data or business logic from multiple systems." (Metaserve, April, 2002)

At this point, the three restaurant managers are likely to give up on BPM if that is all it adds up to.

Example 2: Call centers

Consider this disguised real-world example of two call centers operated by large credit card companies. Again, as in the restaurant example, both are basically the same in terms of workflows, technology base, the types of information they access internally and from credit agencies, their CRM systems, call center tools, touch tone phone account enquiry service, etc. Here is one customer’s experience with each of them:

ABC: ABC’s customer service agents clearly do not have the authority – a “proxy” – to handle exceptions on behalf of the customer. The BPM design relies on scripts of questions and procedures that the agents follow. In one situation, this customer checked his credit balance in Washington in the morning before traveling to his home in the Caribbean. On arrival, a bookstore rejected his credit card. A phone call to ABC was literally a waste of time. The agent read from the script and would not even try to identify the unexplained transaction that had reduced his credit to a few dollars. She refused to pass the call on to a supervisor. The customer asked her to cancel the card. She simply said “yes” without trying to remedy the loss of a ten-year account. At the end, she asked “How may I help you in another transaction?” That’s what her script on the screen required her to do!

The agent fits into the “get the people out of the loop” approach to BPM. She has no proxy to go beyond the fixed procedures and scripts. A proxy is defined in terms of:

• A limited authority and corresponding sphere of discretion
  
  
• Accountability for the results of the process contracting and performance and for meeting the customer condition of satisfaction within the proxy limits
  
  
• Access to the information and systems needed for the agent, the “performer” of the process to initiate the next step in the sequence of activities and tasks, such as checking on a particular past transaction or locating a supervisor or specialist to help the customer
  
  
• A formal record of the transaction – a notarization.

A procurement manager has a proxy to place orders, perhaps negotiate special discounts, and a sphere of discretion that authorizes purchase of office furniture but not pictures and TV sets to brighten up the office. Chez Michel’s waiters and waitresses have a proxy to offer “on the house” complimentary drinks. McDonald’s order takers have no comparable proxy; that is core to its highly streamlined process designs. ABC’s agents do not have any proxy beyond that permitted in their workflow script. They are at the McDonald’s end of the workflow-contracting spectrum, with workflow-constrained routines at one extreme and discretionary judgment at the other.

Mega, the second credit card company call center example, moves far along the spectrum towards discretionary judgment. Mega’s agents seem to be as scripted as ABC’s but their proxy – authority, accountability, information and systems access, and notarization – includes making sure the customer is satisfied, not just that the specific transaction or query is handled. When they cannot handle some exception, they offer to pass the customer on to a specialist, supervisor or in some instances a manager. They promise to get the problem solved, often asking questions to help guide them in terms of possible solutions and who to bring into the loop.

An example for the customer in this disguised example was a car rental company in Europe had placed a “block” of $900 over and above the rental cost – a standard procedure to protect against the car being returned late or with damage. The block should have been released once the car was returned. ABC’s agents in such situations basically respond “not my job” and only when pushed do they provide another number to call – and of course thus place another burden on the already stressed customer. Mega’s agent makes offers – negotiates an agreement. The customer who cancelled his card with ABC recalls several instances of real “service” from Mega, such as his asking for a ten-day raising of his credit limit to handle airline and travel costs on a long trip to Asia. The customer service agent used exactly the same type of call center tools, screens and information systems as does ABC. It is the proxy, not the procedure that provided an immediate answer and a change in credit limit in about two minutes.

If you, the reader, think about the very best service and the worst you can recall from call centers – airlines, retail catalogs, e-commerce players, government agencies, etc., the patterns are clear: The best combine structure and flexibility: all the advantages of automation of information access, transaction processing and knowledge management (structure) plus proxies that permit flexibility, dialog, exceptional handling of exceptions (contracting).

Product development

The final example to consider is product development in any company. Here, all the “co-“ words of business are the core of effectiveness: communication, collaboration, cooperation, and community. It is almost laughable to think about applying the ethos of automation to those processes of innovation. There are no standard workflows so that the process cannot be routinized. There are, though, many interactive activities – market analysis, prototyping, materials configuration, field testing, and others – that must be “co-“d. BPM is basically about how to achieve the co-. Process is contracting. Contracting is negotiation. Negotiation is the coordination of requests and promises – commitments. Intellectual and human capital are the key resource in process effectiveness here, supported by coordination, information and communication tools to add efficiency and provide appropriate streamlining.

A final quotation: “Everyone knows business process re-engineering and management can mean trouble!” (Business Process Management Journal prospectus, emeraldinsight.com, May, 2002)

They should in no way mean trouble. They represent opportunity.

Refocusing BPM

Here is a working definition of what a business process is and what it is not that aims at getting beyond the workflow conception and capturing the strategic dimensions of process investment. The specific wording is not important in itself unless it clarifies what and where the BPM opportunities and payoffs are – and are not. A process is:

• An organizational routine with clearly identified tasks and responsibilities – proxies.
  
  
• Recurrent: Recurrence simply means that people carry this out often and in large numbers.
  
  
• Consequential: How well the process is carried out has impacts on some aspect of company performance: customer service, revenues, costs, staff productivity, internal efficiency, etc.
  
  
• Leveragable: Improving the process can be used as the base for further improvements in company performance through linkages to other processes, rollout across the firm, or releasing constraints and resources.
  
  
• Well-coordinated: The fundamental element of a process is coordination – coordination of tasks, people, information, and procedures. Miscoordination underlies most process mishaps that lead to errors, delays, inefficiencies, high costs, and customer dissatisfaction.

This definition of process helps sharpen what business process management should be all about and the value it creates. BPM is a menu of offers with dimensions of value for each of the features of process briefly listed above.

A routine

A process must have some degree of structure; otherwise it is a decision. One of the barriers to process investment is that many companies lack structured routines. The same process, such as handling a customer order or processing an account opening, is done in different ways more as a task than as a process; the people carrying it out may gain autonomy and indispensability by the very fact that they themselves decide how to handle it. (At a university, power very much rests in the hands of the Dean’s secretary who allocates offices, for instance; there is no defined routine.) Part of the logic of BPM is that there are many tasks that can be turned into organizational routines: account opening, procurement, employee benefits administration, help desks and order fulfillment are commonplace instances. These may previously have been handled as decisions, but they can be formalized, structured and standardized; that means that most elements of them can be automated via business logic and rules.

The impact of such BPM can be substantial. Many companies accumulate high overhead costs in small driblets: travel and expense reporting and processing, employee benefits management, procurement and handling of returns and many other fauna in the process “swamp” – the many hundreds of very varied processes that have operating budgets of tens or hundreds of million dollars in any Fortune 500 company. As these are analyzed, streamlined, standardized and turned from tasks to routines, they become processes. They may then be handled in new ways: as software routines (credit scoring for loans used to be a “decision” handled by an experienced loan officer), as an interaction between a person and a portal (procurement hubs), or through BPM software.

There are thousands, literally, of such routines in every business; they can and should be systematized. They can be because they are routines and should be because it makes no sense to have multiple versions, levels of performance, costs, and ways of doing the very same thing; so why not gain the advantage of a single, central process method and capability via BPM? Obvious examples include regulatory compliance reporting, billing, payment and collections, reverse logistics (handling of returns, disposal of overstock, etc.)

Recurrent

If a process is unusual and occasional, it does not make sense to build it; the issue is how best to source it. Large companies have in-house counsel that handle such matters as response to anti-Trust laws, discrimination suits or regulatory issues through outside individual experts and law firms. The in-house counsel is firmly in charge of the process. When a new need suddenly occurs, he or she invokes an outside service, often a costly one but an expert one. The counsel does not in any way delegate authority or responsibility to the outside parties but works closely with them. The outside law firms will include many processors – people, technology and procedures for handling a myriad of tasks, legal requirements, document filing and the like.

This is an example of a recurrent but only occasional need for a capability. There are many other capability needs that are recurrent and frequent – and just as expensive if less visibly so. The BPM payoff comes from the recurrence and volume. If a process such as billing costs $50 to handle (a low estimate according to most surveys), including queries, contested items, processing of checks, and accounting, then saving $5 does not look appear to offer much value. But for the typical large company, the savings would be $5 x thousands of transactions in hundreds of locations – for millions of dollars of payoff. (Cisco reported saving in 1999 of $1.4 million just from customers being able to download copies of old invoices and a total of $500 million from other vehicles for customer self-management. This substantial sum was accrued over hundreds of small, but high-volume recurrent customer requests for service and information.

It is recurrence that lies behind the BPM software and services industry and the emergence of a related Business Process Outsourcing industry (BPO). Routine and recurrence enable BPO providers to build a menu of offers that have a broad market and price them far lower than companies’ own costs (the $5 savings in this example is more likely to be $20) and that enable buyers to gain a substantial payoff with minimal investment, disruption and operating costs. Payroll processing is the most well-established example of large-scale BPO. ADP built a powerhouse service capability that points to emerging new powerhouses in such process outsourcing areas as routine HR operations (record-keeping, regulatory reporting, pension and benefits accounting), and routine elements of customer service. When tax laws change, ADP can spread the cost of systems changes over its massive customer base, whereas a company that runs its own in-house payroll applications must absorb the entire burden.

Consequential

A process has to have some metric of quality, and impact to merit the term. For a small business, for instance, mailing processes do not pass this test. They are commonsense “jobs” taking up little time and there are few improvements that add new value that impacts the business; it makes sense to use a Pitney Bowes postage stamp machine, preprinted envelopes, and USPS Express Mail and Fedex accounts but that is just about all the opportunity. By contrast, the exact same tasks really are processes for a large company. Mailing room subprocesses can be complex and consequential in terms of cost, pickup, tracking, delivery, recording incoming and sorting outgoing mail – even opening letters and packages can be a mailing room subprocess where improvements can generate substantial value, in terms of customer service, employee productivity, costs and staffing. Workflows, tasks and activities do not purely define a process; it includes a value dimension. As with this mailroom example, the value will vary widely across businesses and, again as here, individually small processes may add up to a substantial BPM and BPO opportunity.

Leveragable

Much of the value of a process, as contrasted with a task, is that it can be used to leverage other processes and vice versa through integration and coordination along a value chain of relationships, partnerships and crossfunctional communication. A task that does not have this feature should generally be outsourced unless there are compelling cost advantages; office cleaning is an example. By contrast, sales force activities, account administration, demand forecasting and many functions that are currently handled by separate business groups move from function to process to customer relationship and customer experience enhancement when they work together. Companies like Wal-Mart, Dell, Southwest Airlines, Toyota, McDonald’s, Fedex and other proven process leaders integrate their own best processes with tight links to suppliers’ and business partners’ processes. They source a portfolio of processes, combining BPM and BPO.

Well-coordinated

Coordination is the basic difference between a task and a process. The entire history of organizational theory and practice centers on how best to coordinate work: by hierarchy and functional division of labor, through matrix organizations, by team-based arrangements – and by process. Linear and standard procedures can be coordinated through automation of business rules. But not in such processes as product development, customer relationship building, business partnerships – or business process management itself.

Conclusion: Why does the definition of business process matter for BPM?

The term “business process” is very hard to define. But the definition matters, for a variety of reasons:

• It strongly influences what you think business process management is. The workflow/automation view of BPM narrows process down to procedure.
  
  
• It strongly influences the methods and tools BPM adopts. The workflow automation definition limits BPM success to linear and structured processes and substitutes rigidity for flexibility and standardization for responsiveness.
  
  
• It determines what you tell business managers and what response they have. The workflow/automation message conflicts with commonsense business management views of business process assets: human capital, service, knowledge mobilization, service and the customer experience.
  
  
• Most importantly, it determines the degree to which you deliver results. The successful recipes for BPM show a consistent pattern: small business teams leading process evaluation, design and deployment, information technology specialists supporting and leveraging the organizational and human side of process – not constraining it – and the choice of software and communication tools for BPM being driven by support for the proxies that facilitate contracting and negotiation.
  
  

One major implication of this expansion of perspective is that IT needs to incorporate both views of process for it to be effective in a context where automation is not enough to establish a business service identity. BPM as described in this article is the future of IT.

In the end, the conception, definition and terminology of BPM will determine the nature and effectiveness of its communication with business management. A commentator writing in Business Process Trends in March 2003 captures the issue in his review of a major symposium on business processes and value chains:

“As with most words in every day use, different groups ascribe different meanings to the same words or phrases. In the case of the business manager and the IT manager, the tragedy is that these differences inevitably fuel a misunderstanding of needs and wants between them…….

I heard speaker after speaker continue to talk about the importance of business processes, when in fact they were only talking about what I will refer to as ABPs (automated business processes)… They talked about business process management, referring only to the libraries of ABPs a company has…….

I urge the analysts [at IT research firms] to ensure that they use everyday business terminology in the way that business people do and to refrain from redefining them to describe IT specific meanings or functions. If this doesn’t happen, the problem will persist.” 

Mark McGregor, A Postcard From Europe, Business Process Trends, Marc 2003, www.bptrends.com)

BPM is a massive business opportunity; it should not be a “problem.” But it will be if it limits its language and view of process.