A Comprehensive Look at What Business Process Management Is

Business process management is the field of operations management that examines how business chores are performed collectively and individually. The importance of business process management has expanded dramatically in recent years, owing to the rising complexity of corporate operations and lead conversion procedures. This continuous process assessment helps companies identify areas for improvement to create a competitive business environment. So, with this tutorial titled ‘what is process management?’, you will discover this binding domain of business management.

MBA With IU and LSBU

Study in Germany and get a dual degreeEnroll Now
MBA With IU and LSBU

What Is Business Process Management?

Business process management is a management discipline in which a company reviews its operational processes collectively and individually. Companies use this evaluation to discover development areas to build a more efficient and successful corporate environment. In simple terms, business process management is all about optimizing and enhancing a company's business processes that service consumers and generate revenue.

BPM is a broad field that is, by definition, dynamic due to the constantly changing organizational roles, rules, methodologies, business goals, and other aspects it incorporates. BPM has developed over time to accommodate a variety of optimization methodologies, ranging from Six Sigma and Lean Management to Agile. However, it is important to note that a business process management project can be completely built with new and unique approaches.

If you break down the nuts and bolts of business process management, you will find three key factors: Business Processes, People, and Technology. All of these factors will have to be in sync for a BPM project to be successful. Now, you will learn more about business process management with the help of a loan processing example in the case of a bank.

The loan process typically begins with the electronic loan application from the customers' end via the bank’s website. This application then gets directed to the sales department by IT regulatory processes. By evaluating the submitted inputs in an electronic application, a salesperson will formulate a list of loan products to present to the customer.

Business_process_management_1

However, if a customer is interested in a specific financial product, such as a home loan, the salesperson will inform him about the details and eligibility criteria. He will also ask for a few documents to verify the customer's eligibility, such as an ID card, income source or salary slip, property documents, etc. This initial phase of the loan application process is known as Pre-Qualification Process.

In the next phase, the administrative team will evaluate the documents submitted by the customer and forward them to the credit analysis team. When the credit department gets the application, the first step is to review it for correctness, authenticity, and completeness. If some required fields are left blank, the application will then be returned to the customer or credit analyst, who will contact the customer to get the necessary information.

Business_process_management_2

The credit team employs the Loan Origination System to determine a consumer's creditworthiness. A good LOS will assist a lending bank in establishing processes for loan processing. It may automatically identify files that lack required fields, return them to the customer, and notify the sales department that these documents must be reworked. A new department of information and technology will also come into play to manage this tech.

Once the underwriting and credit evaluation process is done, the lender bank makes the credit decision. The application will be approved if the consumer meets all the qualifying conditions. Conversely, if the customer lacks somewhere, the application will be declined.

Business_process_management_3

In the next phase, quality checks will be conducted. Banks rely significantly on the quality control step of the loan origination process since lending is a highly regulated business. The application is passed to the quality assurance team, which compares key variables to internal and external standards and regulations. This is the final stage in the loan process before the loan is submitted for financing.

Now, consider all these processes altogether. Each process works on the feedback of other processes or some new input. Hence, managing every input and process can increase the speed of business operation by removing internal miscommunications, service delays, customer complaints, etc. And BPM is the management discipline that works specifically toward that goal. To put it simply, BPM is all about managing numerous input streams and inter-communication of business processes in order to create desired business outcomes in the shortest amount of time possible.

Add Another Star to Your Performance Evaluation

Learn from industry experts for FREEStart Learning
Add Another Star to Your Performance Evaluation

Why Is Business Process Management Important?

Effective business process management is critical to corporate success. The following are some common examples of BPM benefits that drive success:

  • Creating and manufacturing a new product
  • Maintaining client services 
  • Fulfilling a product order in a given time
  • Integrating a new employee

These corporate activities might include hundreds, if not thousands, of tasks and the permissions needed to perform them. They often involve people, IT systems, other business machinery, and business process outsourcing providers. A well-designed business process divides these duties into defined, repeatable phases that employees can use to get consistent outcomes. The repeating procedures assist firms in forecasting their resource requirements, decreasing the risk of under or over-allocating resources.

The rapid rate of business transformation in the twenty-first century shows no indications of abating. To thrive, organizations must be able to adapt swiftly and effectively. Playing catch-up is no longer a viable strategy; things are changing too quickly, and if you don't change with them, your firm may fail. A business process management system allows you to continually reinvent your business procedures, infusing innovation along the way and doing so over the long haul.

Moving forward, in this ‘what is process management’ tutorial, you will explore the standard life cycle of business process management.

Life Cycle of Business Process Management

Technology management and people resources are three crucial pillars of BPM. So the BPM life cycle formulates the collaboration of all three pillars with five steps mentioned below:

1. Design

In this phase, all the processes are carefully designed to be as straightforward as possible by making use of standardization and IT automation. This phase demands a large team of IT professionals and management experts. Management professionals will thoroughly examine an associated collection of business processes. And with the help of the tech team, they will try to redesign processes with the objective of making them purpose-oriented.

2. Model

The process is documented in the form of an activity model in this phase. It enables specialists to mimic the system's behavior and experiment with various situations using a what-if perspective.

3. Implement

Once the process is approved by higher management by looking at the modeling and simulation sheet, it is then executed and deployed over the information system. If management discovers a discrepancy, it can be corrected using standard automation methods.

4. Monitor

The performance of the business process is checked throughout this phase to see if anything goes wrong.

5. Optimize

If any bottleneck or error is found during the monitoring phase, it will be further optimized in the next phase of business process management. This phase is known as optimization. Often, this phase remains continuously under the run, since the good BPM always improves its business process on an ongoing basis.

While the BPM lifecycle appears to be simple, each phase might take months or more and requires careful preparation. Business processes are often distributed across various systems and divisions. Onboarding an employee, for example, might entail not just HR but also the IT department, which issues security credentials and computer equipment, finance, which sets up tax paperwork, training programs for on-the-job education, and so on.

Furthermore, the task of locating and evaluating current processes, developing and testing new models, and refining a business process might result in the creation of thousands of papers. If BPM is not adequately managed, there is a massive possibility of failure. Hence, companies should plan the implementation of BPM thoroughly by assigning appropriate resources.

With this ‘what is Process Management’ tutorial, you will discover the benefits of business process management.

Post Graduate Diploma in Management by JAGSOM

Become a Digital Age Management LeaderApply Today
Post Graduate Diploma in Management by JAGSOM

Benefits of Business Process Management

Here are some of the key advantages of using BPM in your business:

  • Increased visibility of business processes
  • Increased efficiency in identifying bottlenecks
  • Provides complete control over chaotic business processes
  • Allows effective creation, mapping, analysis, and improvement of business processes
  • Reduced lead conversion time
  • Clear definition of employee roles
  • Implies a cross-functional approach that improves the support mechanism
  • Unified systems and operations
  • Expanded growth potential
  • Removes human error in system

Get a chance to live in Berlin or Bad Honnef while pursuing your Global MBA. Apply Now for our exclusive 1 year MBA with
IU, Germany.

Conclusion

In this ‘What Is process Management’ tutorial, you discovered the field of business process management and what it is. After that, you understood why BPM is important for companies to strive in today's competitive environment. You understood the life cycle of BPM later. Finally, you went through the broad benefits of using business process management.

Simplilearn provides one such curriculum, a mixed (online + offline) business management program developed in collaboration with IU, Germany. This course will allow you to learn more about Germany as a study destination. You may now take advantage of the best that IU has to offer by studying on campus, creating an international management career, and working in Germany with this PSW initiative. With this master of business administration MBA program from IU Germany and London South Bank University, you can become a global management industry leader. Furthermore, if you complete this course, you will be able to begin working in German enterprises with an 18-month post-study work visa.

If you have any questions or require clarification on any part of this ‘What is process management’ tutorial, please leave them in the comments box below, and we will get back to you as soon as possible.

About the Author

SimplilearnSimplilearn

Simplilearn is one of the world’s leading providers of online training for Digital Marketing, Cloud Computing, Project Management, Data Science, IT, Software Development, and many other emerging technologies.

View More
  • Disclaimer
  • PMP, PMI, PMBOK, CAPM, PgMP, PfMP, ACP, PBA, RMP, SP, and OPM3 are registered marks of the Project Management Institute, Inc.