Business process management: a new way to conduct operations.

• Author: Boyle, Brenda

Success stories about business process management (BPM) abound. Kent County, Michigan, has used BPM to streamline its accounts-payable and invoice-management processes to the point that invoices now get through the system in as little as one day. The City of Norfolk, Virginia, has used BPM to reduce construction permit turnaround time from 19 days to less than three days. The Supreme Court of Louisiana has used BPM to reduce the amount of time staff needs to issue Certificates of Good Standing to attorneys from between three and five hours a day to just one hour a day Despite these and many other success stories, however, governments are not widely aware of BPM's potential, and even fewer have fully embraced it.

BPM has been defined as "a field of knowledge at the intersection between management and information technology, encompassing methods, techniques, and tools to design, enact, control, and analyze operational business processes involving humans, organizations, applications, documents, and other sources of information." (1) This article describes the basic tenets of BPM, discusses its potential benefits, and provides an overview of BPM software. It also addresses the integration of BPM software with enterprise resource planning (ERP) systems, highlighting a number of governments that have implemented successful BPM projects.

INTRODUCTION

Business process management is a new way of conducting operations. As the name implies, it is about putting renewed emphasis on managing the business process--the sequence of events the organization uses to produce a specified outcome--as opposed to the traditional mode of managing operations primarily within the context of a department or output. BPM's overall focus is on how the work is done. Its distinctive characteristics are:

* End-to-end process perspective--managing across functions and across departments to foster collaborative efforts

* Distinct process ownership--clearly identifying process owners (individuals who coordinate and oversee every aspect of a business process) and empowering individuals to make process improvements

* Data-driven process management--recording and tracking process performance metrics

* Combining process management with software solutions--using technology to improve processes

* Tight integration with enabling technology--use of interdependent software tools such as ERP systems

BPM has produced remarkable results in the private sector. For instance, one information technology (IT) research and advisory firm found that private companies have used BPM to achieve an internal rate of return of at least 10 percent, and some companies have topped 15 percent. (2) In another study, an IT research and consulting firm found that U.S. companies using BPM reported benefits including a 50-70 percent reduction in order-processing time, a 45-65 percent reduction in the cost of customer service, and a 3045 percent reduction in data-entry errors. (3)

Governments can use BPM to achieve similar results. Areas that would be well-suited to BPM include accounts payable, purchasing, license and permit administration, government supply-chain management, citizen self-service initiatives, case management, and other situations in which a government interacts with an external party. (4)

For example, the City of Norfolk, Virginia, has employed many aspects of BPM to pare about 16 days from the amount of time it takes to issue a construction permit. City officials addressed the entire process cycle by allowing online permit applications and online departmental application review and routing. Automation and departmental collaboration have eliminated the need for applicants to visit multiple departments to obtain permit approval, and applicants are notified online whether their permit has been granted or if more information is required. Eliminating and consolidating steps in the...