Interview With BPM Professional: Jeff Sipes

Jeff Sipes is a Process Improvement and Manufacturing Strategy Specialist with over 20 years experience in his field. With strengths in Lean Manufacturing and BPM, Jeff has worked with companies throughout North America and Europe to design and implement Lean processes. In an interview with Villanova University Online, Jeff shares insight into the growing field of Business Process Management.

1. How did BPM discipline develop?

BPM is part of the evolution of overall business improvement approaches and methodologies. Throughout the 1900s, the improvement evolution has had a strong engineering influence. Even Henry Ford’s mass production (early 1900s), Lean and Toyota Production System (1950s), and Six Sigma (1980s) have strong engineering influences that focus on improvement of targeted operations and processes. Through this period there was development of charting/diagramming/modeling techniques that helped to illustrate and animate flow.

BPM emerged as a business improvement methodology in the 1990s. This is a relatively recent development in the bigger scheme of business improvement. BPM began to fill the void left by the other improvement methodologies. That void focused on process. More specifically it focused on business processes that cut across functions and addressed the bigger flow of information and product/service.  As automation and information technology became drivers of business competitiveness, the need for a way to manage the business process (horizontal focus) emerged. BPM is positioned to fill this need.

2. What are the goals of BPM?

Primary goals of BPM are:

• Develop an intense business process focus that cuts across functions and delivers value to the customer
• Animate information-based and transactional processes that are hard to see but essential to successful business outcomes
• Create methods and practices to manage, measure, and improve business processes to achieve optimization and avoid backsliding
• Align organization structure around business processes and workflows
• Design and implement processes that are drivers of technology needs and solutions

3. What are the major differences between Lean Six Sigma and BPM?

Let’s start with the common denominator among Lean, Six Sigma, and BPM. They are all approaches to improving the performance of the business. Much like a wrench, a hammer and a screw driver in your toolbox, they all are tools to improve, but each has a special purposes. You can pound a nail with a wrench, but it is not pretty! Same is true with the three improvement approaches. Specific ‘sweet spots’ for each of the improvement methodologies include:

• Lean – eliminate waste and create flow. Most effectively utilized in areas where there is a physical product and process (think widget making operation on the shop floor and supply chain).

• Six Sigma – reduce/eliminate variation. Most effective in data-rich processes with multiple variables. Usually applied to a narrow problem or specific process within a function.

• BPM – optimize end-to-end processes. Design and manage horizontal processes that cut across functions/silos and optimize performance.

Just like you need the wrench hammer and screw driver to have a robust capability to fix things at home, today’s businesses need Lean, Six Sigma and BPM to have robust improvement methodology set to achieve comprehensive business improvement.

4. How can a company that already utilizes Lean Six Sigma implement BPM?

Assuming my premise that Lean Six Sigma (LSS) is used primarily on targeted processes that are limited in scope (within one or two functions) and centered around widget/service processes, then BPM is uniquely positioned to help take these companies to the next level of improvement. Even companies that have aggressively and successfully implemented Lean Six Sigma find that they reach a plateau where further improvement gets harder to achieve.

In these situations, BPM is a methodology that takes the end-to-end business process perspective that can weave in the LSS approaches a company has used.  The plateau happens because the Lean Six Sigma projects are functionally based. Great improvement within the function, but lots of unrealized improvement further upstream and downstream, hence the horizontal end-to-end business process orientation. By taking the laser beam focus on “process” in BPM, the companies can extend their investments in Lean Six Sigma.

For companies that have not started LSS or are at very early stages, the introduction of BPM can even be a catalyst by approaching process from a more strategic position. Regardless of the starting point, BPM rounds out the robust nature of the overall improvement methodology set.

5. How do BPM and SOA interact?

Service-oriented architecture is a movement to create systems and automation that can be more easily linked and interfaced. Technology investment decisions upfront would consider whether a given software or automation is flexible to handle the inevitable changes in the business or whether the systems and automation are inflexible and therefore lock-in the company.

BPM is focused on designing processes so that we get the process right. Then bring the underlying technology and organization structure to support the right process. Therein lies the relationship between BPM and SOA. As systems, automation, and other technologies become increasingly flexible utilizing the SOA concepts, they need the BPM methodology and approach to avoid the chaos and confusion of having too many choices.

6. What industries are implementing BPM now and which industries do you believe will adopt?

To date, the most focus and adaptation of BPM is in service-based, information-based and transactional industries where information is moving around and processes are ripe for the application of new technologies to reduce cycle times, squeeze costs, and make it easier for customers to do business (think financial institutions, call centers, insurance, etc.). Furthermore, it appears that Europe and Asian countries are further ahead of the U.S in terms of BPM application.

I believe manufacturing companies will be aggressive users of BPM once the integration of supply chains becomes more prevalent. There will be a tight intersection of information processes and widget-making processes that will require the leaders within industries to begin to think and act horizontally. Furthermore, the idea of business process is weakly understood and executed in the manufacturing industry because of the legacy of silos (strong functions with thick walls).