BPM is about Cost-Cutting

Whenever the discussion starts there are those who try to enlighten us that BPM ‘is not about technology’ and ‘not about flowcharts’ but it is a management concept and a methodology. Some call it a practice. In these times I would call BPM common sense management. It is no longer new or a mystery! We are rather going backwards with BPM to Tayloristic management concepts. Is there really anyone left in a management position in larger than SMBs who does NOT KNOW what the idea behind process management is? If yes, he/she shouldn’t be there. And once someone understands the acronym does he really need more than a day to understand what the idea is and how to implement it as a management approach? There are numerous books that will tell you how to do it. So many different BPM approaches have popped up over the years from inside-out, via top-down, to bottom-up, so clearly we need now outside-in. Why does anyone still need to be consulted on the principle approach to define work into process structures with real-world handovers, a focus on customer outcomes, assigning owners and empower them with goals, authority and means – and OFF YOU GO! It doesn’t take an Einstein to conclude that these ought to be aligned with business strategy!

I think the reason for all this consulting is that no-one in management wants to be left standing when the music stops (it seems we are dancing musical chairs). Many BPM projects are hidden manpower/cost reduction schemes and no one wants to be the bad guy. To me BPM is not a magic discipline but rather employing common business sense, that anyone with half a brain can understand in a day. Yes, we all want to improve how we work (meaning how we do processes), with less waste, clear goals and all necessary information. However, in these times the discussion of BPM without software is totally ridiculous. IT is the one and only core competitive means if businesses know how to use it. Why would anyone even think about doing process management without software?

What is wrong with the idea of BPM as implemented in many BPMS, is that huge amounts of time have to be spent to analyze process flowcharts that the people then have to adhere to. That does really come from BPM as a methodology. Only a small percentage of work (20%) might be that stable. During the ACM Tweetjam I tweeted that ‘Process is not an assembly line!’ and Connie Moore of Forrester Research retweeted ‘Agree, agree, agree!’ (Phew, I am not alone.) Businesses no longer want those complex analysis projects and the rush to buy Sharepoint despite all its shortcomings, rather than large ECM suites,  sends a clear message to all of us.

The most popular fad is now to buy drop-in process packages for BPMS to speed up implementation. That is fine but now new. Businesses often buy ERP because they are buying the hardcoded processes to improve the way their businesses work, lacking the skill to do it themselves. That is all the hardcoded processes a business can survive. Encoding more processes in BPM is not beneficial.

I give you five good reasons:

  1. Business is about people and not about processes and control.
  2. People are about relationships and not about performance oriented pay.
  3. Good business relationships bring value to everyone – customers, employees, and owners.
  4. Open communication is the only way to improve relationships (not a CRM DB …)
  5. IT is the only tool to improve communications in an enterprise.

Is cost cutting by BPM automation really the only answer to increased competition, less loyal customers, and less predictable business cycles? There are those who propose that it is possible to increase revenues, improve service quality and at the same time reduce costs by means of various magic methodologies and technologies. Yes, cutting costs is the easy way out to make results look better. But it is dangerous too. BP was cutting costs while oil well drilling in the gulf. In the long run that damages any business, which is why the next CEO will have an even harder time to pull it up from it’s sick bed using the same old snake oil. For BP that might be too late.

Well, you might say, A FOOL WITH A TOOL IS STILL A FOOL on any level, so no amount of technology will save a weak CEO. True. But the greatest of people WILL BE held back by the bureaucracy of methodology and by those hardcoded processes made for low-cost, unskilled, and simply replaceable staff. No, I am not making this up! Agile, flowcharted BPM or hardcoded ERP processes may have cut costs, but they don’t make a business more competitive despite all the claims to the contrary! HP commissioned Coleman Parkes Research in February and March 2010 to look at how current IT budgets were spent and how organizations estimated the cost of lost time, effort and opportunities due to innovation gridlock. Of 560 interviews, half of the business executives said that 40 percent of budgets are spent on mission critical systems, 30 percent on legacy systems, and only 30 percent on new IT initiatives (of which half fail or underperform), which prevented their organizations from keeping up with the competition. If executives  don’t understand IT and its power, they are like old generals who fight all the old battles again despite a change in war technology. And clearly, they will loose!

There isn’t any proof that a business gets longterm benefits from analytic BPM and complex BPMS implementations. Technology must allow processes to evolve to any structure they might need at any point in time without bureaucratic overhead. The focus must be not to cut cost, but to make the best people (knowledge workers) the most productive and effective. The most important knowledge workers of a business are at the top management level. This is where IT still fails to deliver business value.


About Max J. Pucher

I am the founder and Chief Technology Officer of Papyrus Software, a medium size software company offering solutions in communications and process management around the globe. I am also the owner and CEO of MJP Racing, a motorsports company focused on Rallycross or RX, a form of circuit racing on mixed surfaces that has been around for 40 years. I hold 8 national and international championship titles in RX. My team participates in the World Championship along Petter Solberg, Sebastian Loeb and Ken Block.
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1 Response to BPM is about Cost-Cutting

  1. Pingback: Is BPM the new Taylorism? | The Intellectual Capitalist

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