A prerequisite of Digital Transformationis the review of business processes in which new technologies are embedded, helping to increase productivity, compliance and quality.
However, mappingprocesses, and bringing them into a digital ecosystem is not easy, and involves strategic and business choices that can even revolutionise the entire company.
In the following paragraphs we will give an overview of business processes and look in detail at the digital technologies that support them.
Business processes: what are they and how important are they?
Business processesare “aggregations of activities aimed at achieving the same objective”. There is no such thing as a company without processes; these are as crucial as the structure and the people in it.
Each process consists of an initial input and a series of activities aimed at achieving a result, through the use of human and non-human resources. A process is thus ‘a chain of activities through which, starting from certain inputs, the desired outputs are obtained’.
A process can also be an input for another process, e.g. in the case of production, the supply of raw materials is an input for their processing. Conversely, one process may also be the output of another.
Efficient and effective business processes
“You cannot improve what you cannot measure”.
A process creates value, is effective and efficient, and the lower the cost and time of its activities, the higher the quality of the activities and the output produced.
Creating value means the ability, through the improvement of business processes, to provide the customer (internal or external to the company) with a benefit greater than the resources employed, which translates into an appropriate price.
A process creates value when every each individual activity is efficient, effective and well coordinated. In other words, it does not hinder the other activities of the process, but tunes in with the others as in a symphony. For example, in the material procurement process, if the sales department delays in communicating the quantities and times required, it will also delay the arrival of the materials and thus production.
An efficient and effective process must be measurable in order to be improvable. This means that it will be necessary to establish metrics for each process that are shared with the people involved and compatible with the business objectives, in terms of e.g. cost, time, quality.
Technology to support business processes
Systems such as workflow management, business process management, project management, support the process owner and the organisation in running effective and efficient processes and help to track and extract useful metrics in decision-making processes.
Workflow management system (WFM)
The workflow management system is a software system capable of digitising manual and operational work processes, sharing information, managing communication and the transfer of tasks from one employee to another according to a set of procedural rules.
In a workflow management system we provide an initial input to the process and through the activities and individual actions of the team involved we produce a final output. Each individual activity is tracked and it is possible to extract reports and KPIs on the information entered.
In summary a Workflow Management system:
- digitises and/or automates a sequence of tasks starting from an initial input and obtaining a final output;
- focuses on the individual and the role he/she plays: it makes him/her responsible by making him/her the owner of the activity;
- can manage a large volume of activities involving different people, even physically distant from each other and not necessarily internal to the company;
- Activities can be human or systemic. In particular, the workflow management system can integrate with other systems, such as ERP, and acquire data from the latter.
- aims to complete the process, obtaining the output in the shortest possible time.
- focuses on the optimal organisation of tasks
Business Process Management System (BPM)
The Business Process Management System (BPM) manages business processes like the workflow management system, but at a broader level. If the workflow management system focuses on the people who perform specific activities within the system and their individual roles, the BPM focuses on defining the individual processes of an organisation in an attempt to improve their efficiency.
For instance, in an accounting office, the BPM software will manage the complete activity of the department consisting of several processes, such as suppliers, receivables, invoices, etc. The workflow management system, on the other hand, manages individual processes in detail, with the actions themselves carried out in the system, e.g. the process for managing suppliers.
This statement is however related to cases and to the type of system, because by correlating multiple individual processes it is possible, even with Workflow management platforms, to create a network of processes that covers the entire department and therefore provides a broader view.
In summary, the BPM:
- Manages multiple processes at a broad level
- Extracts reports, KPIs on macro and micro processes
- Provides an overview of how the processes are doing
- Focuses on all-round process optimisation
Project Management System (PMS)
A project management system can sometimes be confused with a workflow management system, as both manage activities to achieve an end goal.
However, the focus and approach are also different in this case. While in workflow management the activities are repetitive, linear and sequential, i.e. when one step is completed one can move on to the next, in project management this is not necessarily the case. The activities are related to theobjective of the project and may also vary from project to project. Each activity has one or more owners and a fulfilment time. The activity is defined, monitored and evaluated at each step of the project.
The activities in a PMS are not necessarily consecutive, there is a lot of flexibility and they can be changed during their performance
In summary, the PMS:
- Focuses on time-limited projects
- The actions of the project can be unique and unrepeatable
- Assigns a time limit to actions
- The activities and owners can be changed throughout