As a Senior Consultant at a business technology consulting firm, I recently worked on a strategic project to resolve a vendor selection challenge. The client, a leading health plan, needed to select a vendor application to assist with day to day operations. The client was seeking a commercial off the shelf (COTS) solution that should be highly configurable, customizable and flexible at an optimum cost. This particular business unit was very dynamic and demanding in nature due to regulatory compliance needs and high standards targeted to achieve efficiency. During the vendor selection process, this business unit was primarily interested in selecting an application with the following attributes:
- Business control over configuration with minimal dependency on an IT unit
- An application that is easily scalable and extensible
- Continuous improvement to meet and exceed regulatory compliance needs
As the committee went through the extensive analysis (Request for Information, Request for Proposal, Demo, Proof of Concepts, and Gap Analysis) the selection finally boiled down to 2 applications:
- BPM Solution Framework
- COTS Solution
So, how did the objective of selecting a COTS application end up with the selection of two alternate solutions?
The answer is – because there is no such COTS application that can meet all the needs of a large volume business without significant work effort, time commitment, and cost. And the ‘Total Proof of Concept’ and ‘Process Flow Analysis’ exercises exposed the need for a ‘Business Process Management’ solution.
Now, let’s take a look at how BPM tools can deliver positive changes within a challenging business landscape.
What is BPM?
BPM, or business process management, is a term that has evolved over the past few years from software tools, to a technology suite, to a management system. In terms of Oracle Systems, the “B” in BPM stands for Business, or the people who interact with the process on a regular basis. These people understand the operational limitations and have ideas for improving the process. There is an increasing desire among business users to jump into the driver’s seat while creating business applications. Business users want to manage the design and execution of business processes. This is especially true for business processes where IT has been unable to keep pace with changing business needs.
As per the BPM Basics Learning Center – Appian, BPM can also refer to various automation efforts, including workflow systems, XML Business Process languages and packaged ERP systems. In this case, the management emphasizes the ability of workflow engines to control process flows and subsequently measure processes and generate reports.
Market drivers are as dynamic as ever. Businesses are required to align processes with an organization’s strategic goals, designing and implementing process architectures, establishing process measurement systems that align with organizational goals, and educating and organizing managers so that they will manage processes effectively.
Significant opportunities in this phase are:
- Complying with continuous changes due to healthcare reform
- Rapid evolution of member and customer needs
- Pressure to reduce administrative/operational costs
- Access to new markets in the competitive landscape due to acquisitions, mergers and new technologies
On one hand, as the technology market is rapidly evolving, Business Process Management applications are boasting new levels of flexibility and adaptability to address three imperative needs:
- Improve process and efficiency
- Increase business agility
- Deliver better business insight
On the other hand, COTS applications are created by considering the general industry requirements and not the unique requirements of the client. For a client of relatively smaller size, the number of gaps due to unique requirements will not have a significant impact. However, for a larger client (larger in terms of business volume), the unique requirements are most critical to keep them ahead in the competition, therefore there are more gaps and customization requirements. Bridging the specific gaps and customization needs, result in a negative impact to implementation time, cost, and process efficiency.
What is the ROI?
The obvious next question for many of us is, “What’s the ROI?” Since BPM application implementation does not come at a low cost, it is important to clearly understand the return on investments.
This is a tough question and with the current application selection project being in the evaluation stage, the ROI has not yet been realized. However, research states that the ROI can vary based on the scope of work and nature of the business unit. The factors contributing to ROI will be throughput, usability, sales figures, administrative costs, customer satisfaction, process efficiency and effectiveness.
Stay tuned for the next edition which will cover this specific topic in greater detail.
In the meantime, please share your experiences on the ROI of BPM implementations.
Sharad Srivastava is a Senior Consultant at SDLC Partners, a leading provider of business and technology solutions. Please feel free to contact Sharad at email@example.com with any questions on this blog post or to further discuss software testing.