Many corporations have successfully completed one or more Business Process Management (BPM) initiatives. The first initiative most likely concluded with development of a graphical representation of a core cross-functional business process that is better understood by many employees, and some excellent performance improvements such as happier customers or higher productivity. The first business process that was chosen for analysis now has a formal and visible model that is available for continuous improvement and future analysis. Building on the initial success, a second BPM initiative was most likely undertaken with similar results and perhaps a third. Success breeds success!
As the BPM initiatives continue, perhaps some will realize that the business processes require connecting and integrating in such a manner so as to identify additional performance improvements between the previously modeled core cross-functional business processes and their external entities (e.g. customers, suppliers, etc.). Some might refer to this type of scrutiny as value chain analysis. Looking at the relationships among core cross-functional business processes will most likely provide additional opportunities for performance improvements beyond those of the individual business processes. These newly discovered opportunities allow the leveraging of the initial investments in the first few BPM initiatives to achieve additional improvements.
But, what about integrating the next BPM initiative with the earlier ones and what about the remaining business processes in the enterprise? What do you call the integration of all these processes? Integrating two different, but related core cross-functional business processes in an engineering type model, is the beginning of an architectural representation of the business. This is called a Business Architecture (BA)! The BA is a blueprint of the enterprise built using architectural disciplines to improve performance. Perhaps many will consider the next evolution of BPM methodologies to include the building of a Business Architecture in the approach.
In order to integrate business processes in this type of model, you have to understand the architectural disciplines referenced in the definition. The “enterprise blueprint” is not a casual term, but a very formal one based on the same metaphorical concepts of building a house, office building, ship, or airplane. In an enterprise blueprint, all of the functions, processes, components and services are integrated and connected to form an operational whole, designed to work in harmony. This integration and connectivity is achieved by clearly defining all of the inputs and outputs of every business process. One process is connected and integrated to another by theses inputs and outputs. The business process models have to make the inputs and outputs visible in the graphical representations, and not bury them in some supporting text document or worse yet ignore them altogether. True process integration is achieved in this manner. Process models which do not have all of the inputs and outputs defined and visible prevent true integration and obstruct improvement analysis. Many consultants will try to “hyperlink” some visible or interesting elements in a model and call that integration or they will try to illustrate integration by juxtaposing the models in a group presentation or by posting them in close proximity on a wall. This is not integration. Of course some will say that it is too hard or too cumbersome to identify the inputs and outputs. In the long run it is more efficient since it provides far greater clarity and preciseness in the model along with a better understanding of the purpose of the business process.
Consider this very simple example. The three core cross-functional business processes of Order Fulfillment, Manufacturing/Distribution and Procurement for a “build to order” manufacturer are successfully completed as independent BPM initiatives with excellent results. By integrating these three models in a Business Architecture, one may begin what some call value chain analysis. Understanding the relationships between these three core cross-functional business processes from the Business Architecture perspective, additional opportunities for performance improvement will develop.
These relationships are the inputs and outputs of the processes. The “sales order” going into Order Fulfillment from the customer represents product demand. The “order release” going into Manufacturing/Distribution from Order Fulfillment represents the go-ahead to build the product. As Manufacturing/Distribution consumes raw materials from inventory, a “purchase order” is created and sent to the appropriate suppliers for replenishment.
Looking at the BA as an integrated system rather than a collection of isolated processes, a new strategic initiative and opportunity may surface. By working with customers to frequently fulfill “sales orders”, the manufacturer will promptly deliver hot selling items, thereby increasing their customers’ profitability, and increasing their own corporate sales. In a similar manner, working with the suppliers to frequently replenish raw materials used to build those hot selling items; inventories are kept at just-in-time levels, thereby reducing corporate costs. These kinds of performance improvements are realized by viewing the enterprise as a system enabled by analyzing the Business Architecture.
As one can see, additional opportunities for performance improvements in other core cross-functional processes will develop as additional BPM initiatives complete and get integrated into the BA. The integrated system of business processes grows and expands as well as the insight to determine new strategic opportunities. Properly developed, managed and leveraged, the Business Architecture complemented with the successful completion of BPM initiatives will deliver the results expected in the strategy. In the above example, improvements such as increasing customer profitability, higher corporate sales and lower corporate costs are achievable and will easily demonstrate the value of the Business Architecture. These are opportunities the enterprise can not afford to overlook, and perhaps when brought to fruition will lead to a competitive advantage!
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