Have you ever worked a job and wondered why some things are done a certain way, even though they seem inefficient? Maybe you’ve asked why, only to be told “That’s just the way we’ve always done it.” Tradition has its place, yet doing things the same way for years on end doesn’t always produce business outcomes that are ideal.
In some cases, a company must change its business processes before it can expect to see improvements in efficiency, customer satisfaction, or bottom line. This is where the concept of business process management (BPM) comes in. BPM lets business owners reconceive the ways that they operate, whether that’s managing tasks, changing employee protocols, embracing a digital transformation, or something else that reimagines existing methods. Here’s how business process management works.
What is business process management?
Business process management (BPM) focuses on improving the efficiency and effectiveness of business processes, which can range from employee onboarding to product design to customer retention. Managers use business process management systems to steer the design, execution, monitoring, and refinement of business processes, with a focus on helping their companies achieve their desired business goals and objectives.
Benefits of business process management
- Increased efficiency
- Cost reduction
- Improved inventory management
- Compliance and risk management efficiencies
- Higher employee productivity
- Improved project management
- Adaptability to market changes
- Opportunities for business process automation
- Consistency and standardization
- Data-driven insights
- Improved customer experience
Retailers who embrace business process management may see increases in agility and efficiency, leading to a better customer experience. Here are some ways that BPM can improve your company’s existing systems and generate greater business value:
Increased efficiency
BPM systems can streamline business processes and reduce operational inefficiencies, such as delays in restocking inventory or lengthy checkout procedures. This leads to quicker service, reduced wait times, and improved customer satisfaction.
Cost reduction
By optimizing business processes, retailers can identify areas of waste or redundancy, leading to cost savings. For instance, improving inventory management can reduce excess stock and minimize storage costs, while efficient supply chain processes can lower shipping costs.
Improved inventory management
BPM tools can enhance inventory control by improving inventory forecasting, preventing the need to backorder while also avoiding overstocking, which later requires discounts that erode profit. At the same time, better inventory control helps to minimize lost sales due to stockouts.
Compliance and risk management efficiencies
Business process management systems help ensure adherence to regulations and compliance standards. They also assist in managing risks associated with inventory, pricing, and data security.
Higher employee productivity
Optimized processes can simplify tasks for retail staff, allowing them to avoid repetitive or manual procedures. In some cases, business process management software can take over human-centric processes through the use of machine learning. This can let workers focus on activities that add more value, such as customer relations and strategic planning.
Improved project management
In addition to promoting process improvement, business process management tools can help managers oversee projects. In doing so, a BPM system helps ensure that new initiatives align with organizational goals and comply with regulations.
Adaptability to market changes
A business process management tool can promote corporate agility, helping a business swiftly adapt its processes to changing consumer behaviors, market trends, or technological advancements. For instance, if business activity monitoring reveals that more customers wish to use buy now, pay later purchase options, the company can optimize business processes to expand BNPL.
Opportunities for business process automation
BPM software may involve automation tools to streamline repetitive and ongoing processes. Robotic process automation can lead to cost savings, improved accuracy, and increased process efficiency across multiple systems.
Consistency and standardization
A business process management system can improve business processes by ensuring that protocols are standardized across multiple stores or locations. This promotes consistent service quality and operational efficiency throughout a retail chain.
Data-driven insights
BPM systems gather and analyze data from various retail processes, providing valuable insights. Predictive analytics, trend forecasting, and strategic decision-making can incorporate this data.
Improved customer experience
Business process optimization allows retailers to better understand and respond to customer needs. Optimized processes ensure a smoother shopping experience, from browsing to checkout, and a consistent retail experience in stores and online. By managing processes from a customer’s point of view, brands may experience increased customer loyalty, repeat business, and better overall business outcomes.
Types of business process management
There are three principal types of business process management, each of which aligns with specific business objectives.
Human-centric BPM
This type of BPM focuses on optimizing processes that require human interactions and decision-making. This includes task management, workflow management, and bridging process gaps between teams of employees. Examples include improving employee onboarding, handling complex customer service requests, or orchestrating approval workflows.
In some cases, human-centric BPM can turn some tasks into automated business processes that don’t require much human involvement—for example, using AI-powered chatbots to handle routine customer service interactions.
Integration-centric BPM
Integration-centric BPM concentrates on marrying various systems, applications, and data sources within an organization. For instance, BPM project management software might utilize application programming interfaces (APIs) to enable interoperability between different software components. Or, a retail-focused BPM suite might integrate a customer relationship management (CRM) system with an inventory management system to ensure accurate stock updates based on sales.
Document-centric BPM
Document-centric BPM works by applying business process management to core processes that involve the creation, handling, and processing of documents. This might include automating document creation as well as review, approval, and storage. It could also involve monitoring documents through various stages of a process and maintaining version control to ensure accuracy.
Business process management lifecycle
The five stages of the BPM lifecycle typically start with process design and progress toward a state of continuous improvement. Here are the end-to-end process stages:
1. Design
This stage involves identifying, analyzing, and designing the business processes. It includes mapping out the steps, inputs, outputs, roles, and responsibilities. Process design aims to create a blueprint or model for how the entire process should function.
2. Modeling
After designing the process, BPM practitioners can create visual representations or models using diagrams, flowcharts, or other tools. Process modeling helps stakeholders visualize and understand the workflow, making it easier to identify inefficiencies or areas for improvement.
3. Execution
Process execution involves the actual implementation of a process model. It may include manual tasks performed by employees, automated tasks using software systems, or a combination of both. The goal is to put the design into action. In some cases, this will involve integrating multiple processes that work hand-in-hand with one another, like improving processes for both warehousing and shipping.
4. Monitoring
Once processes are in place, they need to be continuously monitored by gathering data and metrics related to cycle times, error rates, and resource utilization. Monitoring helps root out bottlenecks, inefficiencies, or deviations from the intended process. These issues are common in complex business processes, and monitoring can help smooth out any kinks in the system.
5. Optimization
Based on the data collected during monitoring, businesses can analyze and identify areas for improvement. Process optimization involves making changes or enhancements to ongoing processes. This can include streamlining operations, eliminating inefficiencies, and adding a new process to an existing workflow. Company leaders optimize existing processes to align them with their business strategy and evolving goals.
How to implement BPM
Business owners can use BPM in many scenarios. When put to use, BPM can challenge existing business rules and use different tactics to optimize existing business processes. Here are three examples.
Supply chain management
Optimizing the supply chain involves managing complex networks of suppliers, manufacturers, distributors, and retailers. Challenges often include inventory management, demand forecasting, logistics, and coordination among various stakeholders.
Implementing BPM in supply chain management can streamline procurement, automate restocking, improve demand forecasting, and enhance logistics by creating efficient workflows and real-time visibility across the supply chain. Through various methods, BPM may help reduce lead times, minimize stockouts, and optimize inventory levels.
Omnichannel order fulfillment
Retailers operating across multiple channels (online, brick-and-mortar stores, mobile apps) often face challenges in coordinating inventory, order processing, and fulfillment.
BPM can streamline omnichannel order fulfillment by integrating various systems (inventory management, point of sale, ecommerce platforms) to create a unified and efficient process. It may involve designing workflows that manage order processing, inventory allocation, or order routing to the nearest or most suitable fulfillment center, such as a store or warehouse.
Customer service
Customer service departments often deal with various complaints and inquiries. Managing and resolving these efficiently is critical for maintaining customer satisfaction.
You can use BPM solutions to build structured workflows for handling customer complaints. This involves handling complaints via phone, email, or social media, categorizing them based on type and severity, assigning them to the appropriate personnel or teams, setting escalation paths, and tracking resolution progress. It may help to automate processes, so that customer complaints reach the right departments with minimal human effort.
Business process management FAQ
What are the core elements of business process management?
The core elements of business process management (BPM) include the systematic design, execution, monitoring, optimization, and continuous improvement of organizational processes.
What are the types of business process management?
The three main types of business process management are human-centric BPM, integration-centric BPM, and document-centric BPM. All function to optimize existing processes and ensure that a business performs more efficiently.
What is a BPM system?
A BPM system is a software solution designed to model, automate, monitor, and optimize business processes. They are often sold to business users who are interested in optimizing and automating business processes.
