 | Level: Introductory Tilak Mitra (tmitra@us.ibm.com), Senior Certified Executive IT Architect, IBM
29 Jan 2008 This installment in the Architecture in practice column focuses on why business process management (BPM) is imperative for both the business and IT. Effective management of business processes is essential for driving business agility in an enterprise. Get an introduction to BPM and its lifecycle phases, and learn how it is complementary to Systems-Oriented Architecture (SOA).
Introduction
One of the most interesting economic developments of the 21st century is globalization. New marketplaces, new
workforces, new competitors, and a diverse cultural mix must be taken into account by any enterprise
that wants to stay ahead of the competition.
The last decade has brought constant change to enterprise IT — efforts toward legacy modernization, en-masse technology upgrades, or
continuous addition of applications to an ever-increasing portfolio.
However, the traditional notion of maintaining a
steady state set of an enterprise's core business processes is no longer enough to keep
pace with the ever-changing demands and dynamics of the marketplace. The traditional paradigm of "build to last" now needs to give way to its
ascendant business imperative:
build to change.
To keep a competitive edge in the marketplace, business processes
must be dynamic, flexible, and capable of being transformed and modified so the latency of change is not disruptive to the
enterprise. Enterprises must
constantly sense changes in market conditions, and rapidly adapt their
strategies to reflect the changes. The primary manifestation of strategy
adaptation is through executable business processes that are built
around a business, and an IT framework that supports the agility and flexibility
imperatives.
In this article, learn how effective
management of business processes provides the essential recipes for driving
business agility back into the enterprise.
What is BPM?
In the IT industry, BPM can have different meanings. For some, it is Business Process Modeling, dealing with techniques, tools, and best
practices for process modeling. For others, it is Business Process Monitoring, which deals with tools and techniques for effective monitoring of executable
business processes.
Our definition is Business Process Management, which combines business domain
expertise and knowledge with associated and supporting technologies
to accelerate process improvement, and to facilitate business innovation. BPM strives
to integrate the three pillars of an enterprise architecture -- people,
processes, and information -- into a single and managed discipline to manage,
control, and dictate business innovation. One value of BPM is
its capability and promise to discover, design, deploy, interact with, operate,
optimize, and analyze complex, long-lived, multi-company business processes. BPM
is part of the cycle from the design of the business processes to the
identification and realization of an IT infrastructure that provides the platform
for their execution.
BPM is as much an imperative for the business as it is for IT. It lets
business stakeholders use their business domain knowledge to
assess, analyze, and identify what matters most to their bottom line, and to scope and define the IT initiatives (programs and projects). The
scoping mechanism fosters usage of business processes, and their enablement
through IT, as the basis to design and implement executable systems.
Business processes are typically measured using business measurement criteria (such as
key performance indicators (KPIs)). IT is compelled to provide a robust
mechanism to monitor the performance of the executable systems. IT is now using business measures as the key
criteria to measure IT effectiveness and efficiency.
The goal of BPM is to develop and execute on a perpetual value-generation
cycle, where value is realized by continuous process improvement in an
effort to sustain market competitiveness and dominance.
More than automation
According to Michael Porter from Harvard University, there are two types of work activities in a
business process:
- Primary activities
- Are customer-centric, and customers have a direct interaction with them.
The efficiency of primary activity execution provides the lynchpin behind BPM
as an enabler for an enterprise's competitive advantage in the
marketplace.
- Supporting activities
- Provide more of the back-office type of activities, such as administrative details that are required to keep the business operational.
BPM is more than automation. Though automation is the first required step in identifying parts of the business process that can be purely
implemented as a set of software services, the more challenging task is to
continuously monitor the processes to remove bottlenecks and perform
optimizations. Automation tools, techniques, and technologies are important; they empower a business to incorporate the right information and metrics
in the business processes so the correct things can be measured in a timely
manner — an imperative in developing a robust decision-making framework.
Business processes are central to the business architecture of an enterprise.
Business processes can be designed to make work within an organizational unit
much more business-focused. In this capacity, a business process integrates
stovepipe applications within an organization domain. A business process can also
typically transcend the organizational boundaries.
Business
processes represent a value chain or a value delivery process. In either scenario,
BPM, by using business processes as the fundamental construct, strives to maximize
overall bottom line by integrating verticals and optimizing core work (different from traditional functional management disciplines). Functional
management uses functional and business domains as their first class constructs. Both are structural in nature, providing a static view of the
enterprise, as opposed to the more dynamic view, depicted through the business
processes in BPM.
Business processes, and the agility that they empower, allow an enterprise to maintain the competitive advantage. The BPM tools, which
is where automation comes in, should be viewed as enablers to create and
optimize the business processes. A goal is to make the processes capable of sensing and
responding to market changes and demands, and using the technology infrastructure to
reflect the changes in the executable processes. It is here that the key, and
often elusive, business and IT alignment has its first taste of success.
BPM provides the platform that enables the business functions embedded
within applications and systems to interact and integrate at a level
higher than application-to-application and data integration. This collaboration
platform shields customers, suppliers, and trading partners from the technology
dependencies of an enterprise's application portfolio, and provides an
orchestration substrate to execute and manage end-to-end business processes.
BPM and SOA
BPM and SOA are complementary disciplines; SOA enables a successful BPM. BPM encapsulates the view of the business around
how they expect their enterprise processes to operate. SOA is the IT lynchpin
behind the successful implementation of BPM. It provides a set of principles
and best practices for an architectural style and a programming model which,
when followed, helps realize the business processes in IT in a
mechanism where true flexibility and visibility (of performance, issues,
bottlenecks, and so on) can be implemented.
BPM provides the discipline and expertise for the required process transformation
to fully capitalize on the efficiency and flexibility of SOA. A service is one of the fundamental constructs in an SOA. Services:
- Are a reusable and configurable encapsulation of a repeatable business task
that hides the implementation details from the service's interface.
- Are building blocks for business processes.
- Can be composed with each other
to encapsulate higher value business functions that make sense in the context
of specific business requirements.
Business processes are encapsulated from a
direct interaction with the application functions through this layer of
service virtualization. Business processes are orchestrated by wiring services, of
varying degree of granularity, together to form end-to-end realization.
Flexibility in business processes is a result, because a
service can be swapped with a more pertinent implementation without having any
effect on the consumer of the business process.
Reusing SOA assets to build
business processes lets you quickly reconfigure and modify the
processes with a very reasonable size effort. New process capabilities are provided, enabling an enterprise to:
- Sense and respond to market shifts and demands.
- Adapt their business processes to reflect changes.
- Ttip the punctuated equilibrium of market economics in their favor.
Ideally, a business
process would be orchestrated purely through services. In reality, there are many
non-functional requirements that warrant a hybrid implementation of business
processes, where a process is orchestrated by a combination of services
and more granular functional IT components.
SOA enables IT to define and govern how business processes interact with
services, applications, and systems to ensure that the first priority is
optimizing business process performance -- helping to further align IT with the
business.
BPM and SOA are both multi-disciplinary in nature. Intra-disciplines within each
of them also work together and influence each other. For example, the methodology
for service identification in SOA influences how process modeling should be
carried out in BPM so that candidate services may be identified. BPM governance
and SOA governance also work together to assess which business processes should be
in scope of a particular business transformation. Assessments can also include which processes lead to the
prioritization of IT, thereby dictating which services should be
identified, specified, and funded for implementation.
A BPM lifecycle
Any mature discipline is usually organized in the form of a lifecycle,
with phases that are logically separate from each other but have well
defined hand-off points to move from one phase to the next. BPM too
can be defined, at a high level, as a lifecycle consisting of well-defined phases.
Figure 1 shows the various phases that might constitute a
typical BPM lifecycle.
Figure 1. Phases in a typical BPM
lifecycle
- Envision
- The business goals of the company are
documented and well understood. The KPIs of the business
goals are analyzed and, with the combined knowledge of goals and
performance requirements, a vision for the BPM solution is developed. A change
to the management strategy may also be needed.
The vision
caters to the technology vision, and to how the strategy (regarding organization
capability and readiness) may need to be developed to support a BPM-enabled
business transformation.
- Assess
- The "as-is," or current state of the
enterprise as applicable to process design and development, is analyzed.
Organizational structure, application ownership model, governance around process
design, development and deployment, and application portfolio analysis (at a high
level) are some of the activities assessed for gaps between what exists
and what's required in the future steady state.
Current organizational
capabilities are assessed to determine if they can adopt the
new business processes, which might straddle organizational boundaries and require
a flattening of the organizational structure and hierarchy.
Existing
business measures and metrics are identified, and are
assessed against the capabilities of the new business processes that are
envisioned in the transformation. The current IT architecture is
documented and assessed for its maturity to support the IT transformations. The current technology stack is also assessed and documented.
Based on the thorough assessment of the current architecture,
technology, business processes, measurement metrics, and governance framework,
the vision is reevaluated to make it realistic. Assessment may also incorporate
the definition of the IT strategy and roadmap to realize the business
transformation.
- Define
- Where the "to-be," or future steady state, enterprise business processes are developed (design, implementation,
deployment, and management). They are simulated to identify potential bottlenecks. Solutions are incorporated into the process models to reduce
real-time performance inhibitors. The future state of the business architecture
is developed around the people, processes, and information models. Business
components are defined as fundamental structural components of the business
architecture. Business processes that integrate functions from
potentially multiple business components are also defined.
The business
architecture is defined through both a structural and dynamic view of the
business. Gaps in the IT architecture, as identified in the previous phase,
are used as input, along with the business architecture, to define the future
IT architecture for the enterprise. The future architecture could support the
design, development, implementation, and monitoring of the business processes and
their supporting applications. The technology stack that would support the
lifecycle of the business processes (their modeling, design, assembling,
deployment and monitoring) is also defined during this phase.
The governance
process and framework is modified and refined to support the scoping,
prioritization, and funding. Modifications also establish the gating criteria to certify
processes and their implementation, in the client environment, vis-a-vis the
performance objectives.
- Execute
- The high-level definition of the business, and
IT architecture and its components, are actually modeled, built, integrated,
assembled, deployed, and monitored in their respective run times. In general, the:
- Business processes are either redesigned or designed from scratch.
- Decomposed process models are used as one of the mechanism to identify services.
- Process is assembled and wired using the service and other IT components.
- Process is deployed on a process run time engine, and the running processes are monitored for
performance and other Service Level Agreements (SLA) and KPIs.
The technology
stack supporting each phase of process development is installed and
configured for whenever the current phase requires the tools and products for its
successful execution.
The business processes are monitored based on the KPIs and
their metrics. The IT infrastructure that monitors the executable business
processes sends out events and alerts that may be represented through various
dashboards that cater to specific roles within an organization. For example, the
CEO would like to know about business events and exceptions, so she may
summon a team for immediate reconciliation. The CIO may be interested in a
dashboard view that provides high-level information about whether the services
conform to the service SLAs.
The required organization changes,
as defined in the previous phase, are also initiated. Implementation of the
process governance framework is initiated and deployed during this phase.
- Optimize
- The various aspects of the
enterprise architecture are monitored, managed, and optimized for better performance, and to meet the business and IT metrics used to define the success of the
enterprise operations. Results from the executable processes are typically
gathered and analyzed.
Analysis usually reveals information that feeds back
into the Envision phase, where the business goals and priorities may be
reworked based on the real-time operational environment for the
enterprise.
Some visions may be easily met, allowing the stakeholders to
start thinking about the next level of enterprise maturity. Some visions might be
too far-fetched to be realized within the maturity limits of the enterprise. Results from the execution phase help in such optimizations.
Business processes are not the only facets of an enterprise that are capable of optimization. The
organizational structure, the governance framework itself, the technology
architecture, and the metrics, KPIs, and SLAs may require optimization
before the next iteration of business and IT transformation is envisioned and
defined.
BPM is best practiced through a phased and
lifecycle approach, which lets you iteratively build and execute a business
process management framework based on successive iterations of scope.
Conclusion
BPM provides a framework that enables enhanced control and management of core
business processes across an organization.
An enterprise can integrate the business functions they've built over the decades by using BPM tools, techniques, technologies, best practices, and business processes as the fundamental construct. The enterprise will be much more flexible, dynamic, and capable of integrating into the value chain of products, suppliers, and
consumers. The enterprise can be in the middle of the chain as a
value-addition node to the overall value delivery network.
The vision of BPM, enabled by SOA, assists in the packaging of IT capabilities as a set of
reusable and repeatable software building blocks (services). Orchestration of
business processes using services provides flexibility in the business process
to tweak and change on demand. The enterprise has gained time to sense
and respond to changes in the market place. BPM and SOA complement each
other very well; BPM is the vehicle for SOA to align IT with the
business goals and imperatives.
This article provides some ideas and rationale for why BPM is a
serious business proposition, and includes some guidelines for
how it may be practiced.
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About the author | 
| | Tilak Mitra is a Senior Certified Executive IT Architect in IBM. He specializes in SOAs, helping IBM in its business strategy and direction in SOA. He also works as an SOA subject matter expert, helping clients in their SOA-based business transformation, with a focus on complex and large-scale enterprise architectures.
His current focus is on building reusable assets around Composite Business Services (CBS) that has the ability to run on multiple platforms like the SOA stacks for IBM, SAP and so on. He lives in sunny South Florida and, while not at work, is engrossed in the games of cricket and table tennis. Tilak did his Bachelors in Physics from Presidency College, Calcutta, India, and has an Integrated Bachelors and Masters in EE from Indian Institute of Science, Bangalore, India. Find out more about SOA at Tilak's blog. View Tilak Mitra's profile on LinkedIn or e-mail him with your suggestions at tmitra@us.ibm.com. |
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