SOPs

A-Z Guide to Business Process Management: Everything You Need to Know

BPM means designing, executing, monitoring and optimizing business processes. Read along to learn how to create or improve your own business processes.

Introduction

Imagine an employee sends over a reimbursement claim with fake receipts. Without the right business processes in place, chances are the finance department will blindly approve the documentation without a second glance. 

The result? Your business loses money to a fake expense receipt. This is not a rare-case scenario. In fact, companies generally lose about 5 percent of their annual revenue on fraudulent activities like this one. 

Fortunately, you can prevent this by setting up and managing business processes to streamline the process. These could include elements like: 

  • A formal review process: Assign a manager to review each employee’s claim
  • Regular audits: Make it a point to regularly review documentation, even after approval
  • Formalized disbursement process: You can either do this through payroll or accounts payable

This process of optimizing your business processes is called business process management (BPM).

It helps you oversee each business process and align it to your current goals. With a proper BPM system in place, employees will have clear instructions on how to carry out certain tasks. And all of these will be consistent and in line with the company’s standards.

Curious to know more about BPM? In this blog, we’ll cover what it is and how you can create a robust BPM system for your business. Let’s get started.

What is business process management?

Business process management is an approach where you analyze each business activity and find ways to make it more efficient. Think of BPM like your fitness routine.

Just like how you constantly reevaluate your workout plan as your body changes, you’ll need to do the same for BPM as the organization grows. 

This way, you’ll be able to optimize everything to holistically improve productivity and meet your business goals. One of the main goals behind BPM is to find functional inefficiencies. Once you’ve done this, you can suggest and implement ideas for improvement. 

As your company grows, your processes will inevitably become chaotic. Employees begin losing sight of where things are and what policies to follow. They don’t know who to ask when they run into interdepartmental issues like reimbursement or timesheet approval. 

This is why BPM should take top priority, even when you’re a fledgling organization.By establishing and optimizing standard operating procedures beforehand, you’re setting yourself up for success later down the line. By managing your business processes, you’ll be able to establish some ground rules for everyone to follow.

And this helps streamline overall functioning in a cohesive way. 

Take the earlier example of expense approval. Whenever an employee submits a reimbursement claim or a vendor submits an invoice, the expense goes through an approval process. This usually involves document submission, bill analysis, approval and disbursement. By using BPM, you can take a deeper look into the process and find ways to improve it. 

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Say you find that the expense approval process is time-consuming. You can flag this, and suggest getting expense management software to automate the workflow.

If you find discrepancies between spending and budget allocation, you can set limits for each employee to keep finances in check. 

As a result, your processes become more efficient and cost-effective. Which in turn helps boost ROI and meet key targets. That’s what BPM is all about. 

What are the 3 types of BPM?

From generating more revenue to increasing employee morale — business process management adds value to any organization. The way in which you approach optimization depends heavily on the type of process you’re accounting for.

Generally, BPMs are categorized into three categories based on their purpose and work they deal with:

Integration-centric

These BPM models focus on using technology to automate business processes. They reduce the need for human involvement by implementing new software that can carry out rule-based tasks. To get a better picture of how this works, think of a CRM tool.

It gathers data on your customers through their website, emails or activities. Once you create a database with all the information, it organizes everything and creates tags for easy viewing. You can also integrate it with other business tools so they can work in tandem. 

The process of integrating marketing tools like Hubspot and sales-based CRM software like Salesforce is a classic example of integration-based BPM in action. Both solutions transfer lead generation data to each other without any human involvement. This makes it easier for sales and marketing teams to collaborate with each other. 

Human-centric

Human-centric BPM is a decision-based process that includes human interaction. After all, some business processes — like leave approvals and proofreading — need the involvement of people and teams. This is because they function according to the decisions employees take. And each decision shapes the next step of the process. 

Hiring a new human resource is a good example of human-centric BPM. There’s a whole team dedicated to it. From the talent acquisition specialists who scope out the best candidates to the recruiters who guide them through the process. And let’s not forget the HR managers who handle the onboarding process. 

There isn’t a lot of scope for automation with these processes. Although, we can see aspects of it in several HR software solutions. These include recurring reminders to employees when they have pending tasks or gamified leaderboards for the top-performers. 

Document-centric

Document-centric BPM deals with business processes that involve documentation such as contracts, agreements, or invoices. It essentially defines procedures for creating, formatting, signing and validating documents. Email approval and report compliance are popular examples of document-centric BPM. 

5 Benefits of BPM

The global business process management market is expected to reach over $14.07 billion by 2030. Needless to say, organizations are quickly jumping on the bandwagon. And it’s doing wonders for them. Here are five key benefits you stand to gain by adopting BPM:

Lower costs

The 2020 BPM survey suggests most companies conduct business process management to keep a tight lid on finances. BPM optimizes expensive business processes by maximizing resource allocation and identifying instances of financial drain. 

This could be done through automation, streamlining or even better planning. For instance, you could introduce an expense management software in the finance department to eliminate redundant tasks. The tool will take care of all the paperwork and approval flows, giving employees the time to focus on high-value tasks. In turn, you save precious dollars on hiring more talent.

Improved efficiency 

Employees are often tied up with time-consuming tasks that don’t let them focus on priority work. These could range from filling in attendance sheets to attending long standup meetings. BPM identifies these problems and gives you a platform to put your solutions forward. 

For instance, you can suggest substituting daily standup meetings with a project management app or an asynchronous communication platform like Loom. This way, employees won’t have to block long hours for meetings in their calendar to get updates on the project. With the additional free time, they can focus on more productive things like upskilling or revenue generation.

More visibility

BPM gives you an in-depth insight into how each business process works. This helps you double down on inefficiencies and brainstorm a game plan to eliminate them. Most of the time, this happens during the process understanding phase, where you create comprehensive documentation of all business activities. 

Better agility 

Suppose your customer service team is struggling to explain new product features to  customers. Calls are getting longer. Dissatisfaction levels are rising. And the new dynamic is confusing stakeholders.

With BPM, you can immediately adapt to this change by implementing a solution. Say you decide to integrate Loom into the workflow. Now, your customer representatives can use screen recordings to explain the new features. This automatically makes your teams more agile. BPM relies on this principle. Managers find bottlenecks and propose solutions that result in agile teams across the organization. 

Enhance employee & customer experience

By managing your business processes, you remove hurdles for both employees and customers. Employees can work more efficiently because they have detailed information on how to execute their tasks. And because they are able to create better output, this positively impacts customer service as well. 

5 Steps in a BPM lifecycle

The whole BPM life cycle is divided into five crucial steps. When combined, they lead to a foolproof workflow for the organization. Rather than looking for problems in a random manner, follow the steps below to conduct a thorough business process management system.

Analyze 

The first step to effective BPM is analyzing the process in depth. Understand your current processes and zero in on any bottlenecks. Then list them down. Under each point, explain the discrepancies you notice. 

Now, examine the performance of your standard operating procedures, process flow, notifications, and safety measures to find room for improvements. You can now start brainstorming solutions. Create a rough sketch of the new workflow. 

Once you have something solid, ask your colleagues to give their feedback on it. Based on their suggestions, tweak your strategy. Keep in mind the new process must be better and more efficient than the previous one. 

Model

The next step is modeling a roadmap for everybody to follow. This roadmap will depict the flow of work or information in an organization. With all the bottlenecks at hand, write down four or five viable solutions to each to keep your options open.

Now, go back to the rough workflow you created in the analysis phase. Is it unrealistic? Are there any potential points of failure? If the answer is no to both, it’s time to solidify your strategy. This would include the step-by-step process for employees to follow while handling each task. For instance, categorizing customer requests based on product features. 

It should also contain tools to help employees reach their end goal faster. For example, if your customer reps are overloaded with work, you can use BPM to implement a shared Gmail inbox where executives can share the workload together. 

Always remember to Include multiple variables in the design. If you’re working on a lead generation process, a lead may sign up for the app but never use it. So, take this variable into account and design a follow-up process. 

There are three common ways through which you can model a business process:

  • Gantt Charts: Gantt Charts use horizontal bars to depict the time duration of a project. The longer the bar, the greater the timeline. Managers can use multiple bars in the desired sequence to depict a workflow and deadlines.
  • Flow Charts: A flow chart is a diagram that consists of multiple shapes — squares, rectangles, or circles — connected by arrows. Write each step in one shape. Connect it with the other to depict a sequence.
  • Data Flow Diagrams (DFDs): Data flow diagrams are similar yet a more complex version of flow charts. The only difference is that flow charts have a ‘start’ and ‘end’ point and they are more controlled. While DFDs can depict interrelated pathways of data and can change with external variables. DFDs are used to explain the flow of data in an organization.

Execute

Now that you’ve created a workflow, it’s time to implement it. Educate employees on their respective processes. This is where you teach them how to use relevant tools and theories. You might find the training process quite time consuming. And if not done correctly, it could lead to grave and costly errors for the business. 

In such cases, automating your training process can help significantly. Tools like Scribe can be very useful here.

Just capture the new workflow and the software will automatically convert it into a series of visual step-by-step guides.

Whenever an employee is confused about how to proceed with a task, all they need to do is refer back to these guides. 

Monitor 

Once employees have started executing the revamped business process, make it a point to monitor it closely. Remember that it will take time to adjust to the new workflow, so don’t be disheartened if you don’t see immediate results. 

Start tracking performance with relevant metrics. If you’re doing this for a department like sales, ask yourself questions like:

  • Has the process been improved? 
  • Does your sales team tackle more leads in a day?
  • Do they close more clients now?
  • Have you reduced their overall workload? 

Customize your metrics based on struggles and successes in each department. Then review the process, take notes, and implement changes as you go. 

Optimize

The key to business process management is optimization. All of the above steps are carried out with this goal in mind. Once you’ve started keeping an eye on relevant metrics and results, you’ll automatically pick up on ways to improve.

For example, say you revised the lead generation process. Find the most common struggles of your lead gen team after improvisation.

  • Have your number of daily leads increased but the conversion rate has decreased over time?
  • Do most leads stop engaging after getting the freebie?
  • Has the quality of leads fallen? 

Pinpoint the struggles and optimize your business process accordingly. Optimization is an ongoing process. You must constantly look for problems in your business process and find ways to improve it.

Conclusion

Business process management helps you control various business processes. When you regularly create, map, and analyze workflows in your business, you improve your everyday business operations and reach your business goals faster. But a business process management system is expensive. It’s also quite complex, so remember to include the training costs in your expenditure. 

If you want to save time and resources on training, Scribe is your answer. It lets you create business documents, workflows, and SOPs which you can share with others on the project.

You can also include videos, screenshots, and images to make your business process documentation fun and easy.

Sign up for a free Scribe account and get started with business process management today.