Impact Of Business Process Management On Business

Advantages of using BPM

Discuss about the Impact Of Business Process Management On Business.

An increase in competition makes a company renovate its operations hence increasing performance. Decisions are made and changed by looking at the successes and failures of the company. Current competition rates can be investigated by looking at the:

1. Quality of products.
2. Product lifestyle cycle.
3. Technology advancements.
4. Government interventions into businesses such as incentives, subsidies.
5. Power interactions and relationships.
6. Substitute concept of companies.
7. Trade blocs and globalization.
8. Environmental management and social ethics in businesses.

Concurrently, companies should develop better and fast ways to obtain competitive advantage to thrive in the dynamic business economies (Alzoubi, 2015). This can be obtained by either quickly identifying problems and business opportunities or deploying solutions that lead to survival. Good performance strategies or models can lead to success since they necessitate easy project or business implementation that lead to competitive advantage.

The performance models also help identify business opportunities and problems by investigating the production schemes and checking if the goals or objectives are being achieved (Kadir, 2015). Information about the performance systems is then compared with the objectives and priorities of the organization. Issues affecting the organization are then raised and possible solutions generated.

Higher economic performance in Hoberte indicates that the company has a competitive advantage than its competitors (Gerard, 2015). The performance of an organization relates to the internal and external requirements in the organization and the designs and the operational strategies. Business process management has always been linked to customer satisfaction, competitiveness and changes in the management. BPM is essential in business performance (Zinser, 2010). The following are some of the advantages of using BPM:

• Reduced costs of production.
• Reduced time in marketing.
• High customer satisfaction.
• Positive social and managerial impacts.
• Quick delivery of services and products.

Though BPM is essential in business performance sometimes it becomes difficult to implement it (Rajnoha, 2014). Some of the difficulties associated with deploying BPM include the following:

• Employees not comprehending concepts of BPM
• Inconsistency in development of BPM strategies.
• Long-term development of strategies.

Apart from the above advantages, there are several reasons why businesses use BPM. Performance management is still used in global markets (Beli?, 2011).  Other reasons include

• Increased Globalization
• Technology adjustments.
• Introduction of Laws and regulation.
• Stakeholder actions and loss of business frontlines.
• High competition in the global markets.
• Interest in organizational management and improvements.

Huge investments have been directed towards initiatives of BPM. About 88.0% of the organizations that have been surveyed indicate that over five million dollars are invested towards BPM (Saheb, 2013). Improvements are the main priorities for most of the CIOs. To improve performance several alternatives on how to make that happen to crop up and the companies have to choose for the best alternatives. BPM is such a complex issue since it involves various terminologies and different methods to deal with. Additionally, in any company, several variables have an effect on the performance. These variables include the methods, culture, technology, government policies, and strategic realignments (Aysolmaz, 2013). In case a company wants to obtain competitive advantage then deploying BPM is essentially in focusing on customer needs and discovering market gaps in an accurate and fast way.

Reasons why businesses use BPM

The main objective of business processes is to achieve business goals especially satisfaction of customer needs. Business processes help organize company operations, ensuring coordination and interaction is present which enables easy access to information (Wamoto, 2014 ). Business processes follow organizational hierarchy, from top-level management to low-level employees. At the low-level management, these processes flow efficiently and quickly. At this level, the top management should inspect and supervise operations and performances.

In this organization, there is a decrease in the amounts of revenue collected and inadequate coordination from the management which has led to failures (Maull, 2007). Adoption of BPM is going to be a necessary approach to ensuring the organization is more competitive and efficient. Some of the ways this approach will be helpful to the organization include the following:

• Monitoring tasks online. Increased efficiency in the company since manual effort is reduced.
• Reduced use of the paper system which saves time and cost.

Introduction of BPM in this company helps position business operations and support departmental value chains with regard to the external and internal perspectives (Mendling, 2013). Any processes with no value to the departments have to be eliminated. Elimination of the processes is done by looking at the internal procedures in the organization which is related to external procedures then we identify the impacts of the value chains.  A good example of a company using BPM is the Isuzu motor vehicle company. The company was able to determine the importance of BPM by focusing on the processes of manufacturing. 

Adoption of the BPM also helps connect the external and internal organizational environments (Indulska, 2009). This also helps balance and match business resources which include the employees, processes and business systems.

Some of the major issues that the company experiences is procurement of resources and delays in the deliveries since it relies on emailing to provide information. The company needs to computerize its business operations as this reduces delays and creates uniformity in the business (Mendling, 2013).  Another major issue is the use of papers to do operations, the company needs to reduce the use of papers and increase online platforms by creating databases which are less costly and easy to manage. The company should then integrate the online platforms into the company systems. At the top level management, the company should introduce ERP systems or introduce a very powerful speed internet that can easily distribute information.

Costs of implementing the intranet, SAP, and networks will be high for the organization. Costs of training increases since only 22 employees have at least little knowledge of the computers. The training processes can be done slowly (Gerard, 2015). The directors and the managers should also acquire the necessary training then the subordinate staff slowly trained. Subordinate training should be supervised by the managers and directors of the different departments.

BPM and strategies

Another problem experienced by this company is procuring stainless steel probe. This is a very good equipment that can operate in all soils but sometimes it is difficult to obtain it (Coleman, 2013). It is supplied by a single supplier from Istanbul. The supplier operates as a monopoly and changes prices on the goods at will.

Another factor that leads to poor management in the company is in the accounts department. Most of the files in this department are arranged unorderly and this leads to entire loss of information in case one of the files is misplaced or lost (Buh, 2015). This makes it hard to identify some of the loyal customers and even lose others in the process. Computerization of the filing system in the organization enables easy track of the debtors so manual or analog systems should be eradicated (Zinser, 2010). These systems can easily be managed by the ERP system. ERP helps reduce the overall operating phases in the firm.

The organization should try to solve the problems indicated above and re-engineer processes that maximize profits. This is a necessary step that helps reduce operating costs necessitating thriving in the stiff market conditions especially having a competitive advantage. The marketing department in the organization needs to be adequately evaluated by doing thorough research and development of the features of the product being marketed. The above should be done since this department is becoming passive and is not providing the way forward on the future developments of the product and the product’s lifecycle.

This is a collection of all the organizational processes and how they relate to each other. Incorporating the above into business operations ensures there is efficiency and good performance in the business (Buh, 2015). Integrating various business processes helps create a link between different departments in an organization. For example, there is a relationship between the finance and the marketing department, logistics and the production department and several other departments. This also helps maintain value chains of business as well as other business operations such as procurement, finance, IT and logistics (Dijkima, 2016). Strategic development of BPM from current business processes increases plan execution and increased developments. Creating a link to all the business processes ensures that there is easy operational flow across departments and no errors are made when conducting daily operations (Hajiheydari, 2012). This improves efficiency as mentioned earlier and saves time thus so much work can be done over just a short period of time.

Problem analysis

It is good to say that this is going to be such an important remedy to this company and a big difference will be realized. For so long the flow of the business processes has not been properly checked and applying BPM will have a great impact on the organization (Damij, 2007). This organization has been operating on manual work that cannot be depended on and thus the need to develop advancements in the business processes. Using BPM, links together all the organization’s department and there is a maintained flow of information which ensures that they will be no faults or errors in the business functions. High productivity and efficiency are going to be realized (Aysolmaz, 2013). As noticed, the sales are still low and thus the management has to identify faults in the current marketing strategies and develop a well-organized marketing plan that enables sales improvement and overall company development.

Through formulation and implementation of BPM, it is much easier to identify and correct errors so that the decreasing profits of the company in the previous years can be changed. There is also easy, efficient and fast business operations (Zinser, 2010). The production, accounting, and the logistics departments are well managed. Implementation of BPM also determines if the strategies and plans the company develops to increase profits or generate more sales are similar to the TO-BE-PROCESS that is developed and need to be followed. The company is going to operate faster and efficiently if it incorporates ERP system into its operations (Wamoto, 2014 ). The diagram below indicates how the processes of the company can be done.

This is a complex system that links the different departments of an organization and facilitates easy communication across this departments. With this system, it is easy to align resources and appropriately assign them (Gerard, 2015). In case there is a fault in the operations, this system is able to identify it and make necessary corrections in accordance with the strategies or objectives of the company. Some of the advantages of the system include the following:

• For this organization, it is easy to manage time. Some employees have to spend so much time in handling a single task. For example, Alvin has to physically check if goods are available for a week then provide the necessary information after that(Beli?, 2011). Incorporating the ERP system automates the company operations and there is an easy transmission of information.
• There is possible loss of information since the organization mostly uses papers to record information(Pun, 2012). Incorporation of this system ensures that there is proper and efficient record keeping.
• Maintenance of customer and supplier invoices is going to be easy and efficient.
• It is easy to trace the revenues collected and thus draft company future plans and strategies.
• The supply chain in the company is going to be maintained since all the buyers, sellers and feedbacks are well analysed.
• There will be high automation of procedures in the company. Procedures such as order acquisition, order delivery, inventory checking, logistics analysis, accounting, storing details will all be stored in a single system that is able to categorize all of them(Beli?, 2011). ERP system will also aid in making payments and increase productivity in the organization.

Considerations to be made before making solutions

The ERP system cost should be the first aspect that needs to be evaluated. The cost of these systems varies due to different brands or type of software needed (Rajini, 2012). The normal price of a good system ranges from $200,000 -$800,000. Some of the elements that affect the cost of implementing the SAP business include the user number, skills, geography, functional needs, integration or development needs. A good example of implementing SAP business is as follows: Fifty users that deal with the following functions: Finance, CRM, manufacturing or distribution. Total estimate is $200,000 dollars (Wamoto, 2014 ). This includes all the fifty users of the system, in the first year maintenance and implementation services.

1. Training and education

The proposed solution

One of the major risk of adjusting the management system from the old to a new one is that some of the employees may not comprehend or even in future get to comprehend the new system (Buh, 2015). Some of them may need the training to develop necessary skills to utilize the new system. This may turn to be expensive to the company. Companies that have skilled users of the new system have a better advantage.

1. Resistance to change.

Sometimes it is hard to adjust your lifestyle or habits or develop new ones. This also happens in organizations where some employees refuse to understand new systems that an organization develops (Pretorius, 2016). This results to wastage of time and resources especially if no employee wants to use it. If these employees do not adapt to the new system then this means that business processes do not change and no profits are realized.

1. Rise in conflicts and poor operations coordination.

In some instances, some employees do not get along with each other. Introduction of the new system may want different departments to work together (Maull, 2007). This becomes difficult and leads to conflicts among the employees leading to inefficiency in the operations.

1. Inadequate resources from the IT department.

Some information may be complex to some employees and thus difficult to comprehend. This can only be done by the IT specialists who explain all the necessary steps to ensure productivity (Aysolmaz, 2013). Failures in the business have been due to inadequate support from the IT.

1. Poor alignment of the ERP system and business processes.

Better decision making and proper redesigning of business processes enable the processes of an organization to go hand in hand with the ERP system allowing efficient operations and full benefits of the system (Indulska, 2009). This also portrays that the system is not only a process but also a productive initiative. Additionally, this enables aligning strategies and purposes of the system. Specifying all the ERP system requirements ensures that the system will meet the system requirements and also support business processes. During planning, it is necessary that all information about current business processes are obtained and also evaluate some of the outcomes of the projects. Testing of the system before implementing is also necessary (Tiwari, 2012). Monitoring of this system just after implementation is critical as this determines whether the system is efficient and offers adequate support to the processes in the organization.

Some of the recommendations that could prove to be effective and need to be considered by this company include the following:

• The company should install the ERP system. Though quite a big issue it saves time, cuts down operational costs and improves company operations(Saheb, 2013).
• In case the desired products are not available, the order for purchasing can easily be sent to the suppliers online since this suppliers will also have access to this system. The several months or weeks spent in sending orders and receiving dispatches can be reduced.
• All the accounting details need to be evaluated. It is indicated that the debtors are holding over $600,000.00 and only $168,000.00 of the total money owed can be collected soonest and over 28.0% of the debtors have been owing money for over two months(Kadir, 2015). Although the finance manager indicates that payment of products is done within three weeks, the follow up needed is little. This is a huge issue that needs addressing since a lot of company finance is held up in the debtor pockets and little follow up is being done.
• During direct deliveries, some personal assistants need to be hired who provide the necessary demonstrations on how the devices are used. This helps prevent mistakes and errors.
• The company needs to recruit more IT specialists who can understand and carry out the ERP software installation and development and also train other people to use the system.
• It is also essential that the company should acquire professional advice from consultants related to marketing strategies and setting up new departments different from the current ones(Alzoubi, 2015). This is going to help improve performance and increase sales in this departments.
• Installing an ERP system is quite costly especially for companies operating under small-scale economies(Damij, 2007). For this company, since its cash is one million dollars and the number of individuals needed is just fifty installing this system may be quite risky. A better option is to use Microsoft Access.
• The organization needs to address the individuals who may be causing tensions in the business operations(Zinser, 2010). For instance, John indicates that there is still huge sums of money to be followed up.

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