In the 1990s, Michael Hammer and James Champy's blockbuster book, Reengineering the Corporation, set off a tidal wave of business process improvement initiatives throughout the corporate world.
The two management gurus showed that redesigning a company's processes, structure and culture could lead to a dramatic increase in performance. But a lack of attention to change management and the impact of these initiatives on employees yielded counterproductive results in many companies that tried to put Hammer's and Champy's ideas into practice. The once golden notion of business process re-engineering took on a tarnish and fell out of fashion. Today, business process improvement has a new name - business process management - and is in vogue again. Spurred by the pressures of global competition, commoditization and government regulation, companies are re-examining their business processes in search of more efficient ways to execute them through automation or even outsourcing. Companies again see business process management (BPM) - the practice of continually optimizing business processes through analysis, modelling and monitoring - as a systematic approach for solving business problems and helping them meet their financial goals.
"Companies are realizing that a good, solid understanding of their processes is essential to achieving any of their performance objectives," says Roger Burlton, founder of consultancy Process Renewal Group. "Most organizations, if they're not already doing something [with BPM], are starting to get into it."
THE POLITICAL TUSSLE
As BPM takes root in corporations, a struggle for control between the business and IT is ensuing. Historically, the business has managed its own process improvements. But the arrival of sophisticated BPM tools and IT's ability to operate across the enterprise have given rise to the belief that IT should lead the charge.
It's an idea that naturally incites pushback from the business. Burlton notes that BPM projects dealing with CRM or supply chain management initiated by IT often get subsumed into the business when a senior line executive realizes that the very processes IT is automating are those that drive his segment's revenue. The executive worries that if IT screws up and his unit doesn't meet its financial goals as a result, his bonus - and maybe his job - could be on the line.
Many of them also view IT as a bottleneck that adds cost and complexity to projects, so they're hesitant to cede BPM to the CIO, according to Burlton. Finally, territorial instincts fuel their desire to control process management initiatives that affect their turf. (For ideas on how to work effectively with line-of-business managers who own BPM initiatives, read "Keeping Your Hand In", right.)
Even some IT execs are leery of leading BPM: Farrukh Humayun, National City Bank's vice president and portfolio architect in charge of business systems, says the business must own BPM to be successful. "BPM is a business discipline," he says. "IT can be a powerful enabling force . . . but the IT folks will not understand business drivers, processes or metrics as well as the business."
It's no wonder IT executives like Humayun and others are loath to advocate for IT ownership of BPM: So many ERP and CRM projects led by IT failed when employees refused to adapt to changes driven by technology. CIOs have been told that the business needs to lead any big change management initiative and that technology initiatives must have a business sponsor to succeed. So why should BPM be any different?
Well, for a number of reasons. CIOs must make sure IT is a part of these initiatives because so much technology is involved in BPM and because IT will have a hand in automation. What's more, says Karl Kaiser, CIO of the city of Minneapolis, since processes often cut across business silos and IT is the one organization that straddles and supports them all, IT has the best vantage point for leading BPM.
"Doing these things from within [a line of business] can be difficult because they can't see the forest through the trees," says Kaiser. "It's better done by an outside, independent organization [such as IT] with no axe to grind."
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