IT Requirements of Business Process Management in Practice – An Empirical Study

INTRODUCTION:

Patig, Brito and Vögeli (2010) conducted an empirical study on IT Requirements of Business Process Management (BPM) in Practice with the exploratory research goal to elicit the requirements that must be met by tools that support BPM. As a hypothesis, the authors contend that most companies are at level 2 & 3 of the maturity models, and are unable to reach level 4 because the current software systems do not sufficiently satisfy the requirements that must be met by tools which support BPM. The study is based on responses to a questionnaire by 130 companies from the “Forbes Global 2000” list. It derives inferences from responses to specific questions. The study concludes that the transition to highest BPM maturity level seems to be hindered by the fact that current BPM tools do not satisfy two specific requirements mentioned in later sections. This review essay attempts to compare the inferences derived from the responses to some of the questions with the findings and opinions in other available articles and studies on those issues. The comparisons ultimately help examine the hypothesis and the final conclusions drawn in the study.

BACKGROUND AND AIM OF THE STUDY:

Patig, Brito and Vögeli (2010) conducted an empirical study on IT Requirements of Business Process Management (BPM) in Practice. The exploratory research goal of the study was to find out the requirements that must be met by tools that support BPM. BPM tools denote any software that can be used to manage business processes.

The authors hypothesize that most companies in the USA & Europe are on BPM maturity levels 2, or between level 2 and 3 because the current software systems do not sufficiently satisfy the requirements that must be met by tools that support BPM. The typical maturity levels are:

Level 1 where no processes are defined and the organization is functional,

Level 2 where the core and the commonly used processes are defined, and the representatives from functional areas meet regularly to coordinate with each other,

Level 3 where all processes are defined and BPM is employed with strategic intent. In these organizations, process oriented specialist teams exist outside the functional organization to gather and process data and optimize processes, and

Level 4 where the coordination within the company and with its vendors and suppliers is process-oriented and the functional organization structure is subordinate to the process structure. Process performance measures and BPM software are extensively used.

Hence, it is important to find out the requirements which must be met by these tools so that more companies can progress to higher levels of maturity. The authors mention several related works, and contend that no study so far provides sufficient details on this issue.  Studies between 1999 and 2009 deal with issues like BPM drivers, benefits, turning points in business process maturity, alignment, BPM spending, tools used, benefits and challenges of BPM modelling and implementation, approach for tool evaluation, use of BPM notations, and usage & usage rates of BPM notation constructs.

For this reason, the authors conducted this empirical study. The important requirements for BPM tools mainly depend on the nature of processes and the kind of IT support aimed for. The study investigates both aspects.

RESEARCH METHOD & COMMENTS:

The study is a worldwide survey, conducted from January to December 2009, of companies from the “Forbes Global 2000” list. This list comprises of the top 2000 public companies ranked on the basis of sales, profit, assets and market value. Out of these companies, only those in countries with E-Readiness score of 6.4 (the average rating of 70 countries) or above were considered. E-Readiness describes the ability of a country and its businesses to use information and communication technology to their benefits. Out of such 1680 companies (headquartered in countries with above average scores), 1172 companies were randomly selected and contacted. 130 companies responded (11% response rate). Most of the respondent companies were from Europe (58%) and North America (20%), and 53% of the responding representatives were from the IT departments. Importantly, nearly half (46.7%) of the representatives had a company-wide picture (overview) of the processes in the organization. The survey consisted of 42 partially open-ended questions grouped in many sections dealing with BPM (current status, tools), processes (characteristics, change, and statistics), process modeling (procedure, languages) and socio-demographic information. The study concentrates on questions related to IT support for BPM. Some of the questions were optional, and data was collected on nominal (selection of all applicable alternatives) and ordinal (ranking or rating of the alternatives) scale. The questionnaire was pre-tested with 10 BPM experts, and revised before using it to conduct the survey. The questionnaire contained explanation of the key terms, was in English, and implemented as an online form with ‘Limesurvey’ tool. The questionnaire was sent to the top level executives (CIOs or CEOs), and reminders sent to obtain response. No incentives were given.  

The study suffers from some limitations due to the nature of the survey population. Firstly, it surveys only big companies and the ‘Forbes Global 2000’ list disregards large non-American companies which do not have commercial relations with USA. Most of the surveyed companies belonged to the banking & insurance sector. This is because the companies on the list are ranked on the basis of sales, profit and market value, which favors such companies (large borrowed capital). Exclusion of non-profit organizations also limits the validity of the results.

RESULTS OF THE STUDY:

It was found that mainly the processes are related to the companies’ products (60.9% respondents), administration (55.5%), customer contact (52.3%), system integration (51.6%) and system development (50.8%). Most processes in the company stay within the company, but span several (3-4) departments. On an average, processes are accomplished by 7 persons, most take a week to be completed, and a majority are executed several times a day. Most processes involve 20 tasks and 4 applications. Frequency of change in processes is low, and the most frequent trigger for process change is evolving internal business.

Process documentation (required for levels 2 & 3) is mostly done by text & tables and some modelling language. Among the languages, BPM notations (BPMN) is top ranked.

Importantly, in 42.6% companies, processes are identified and described within the individual departments and then centrally aligned, and in 26.6% companies central BPM teams exist. Thus (totalling the two), 69.2% companies do have centrally aligned processes and teams. Decentralized process modelling without alignments (30.8%) also exists.

The processes are mostly (70.8%) described to prepare BPR or to provide precise guidelines for the executives (68.5%). Other important motives include automation of the process (55.4%) and integration of the software systems (43.8%). 58.8% companies affirmed that process model can be found in non-BPM software (e.g. ERP software like HR & CRM systems, data warehouses and engineering software) they use.

The participants rated importance of a list of functionalities and qualities for BPM tools. Based on statistical frequency, usability (60%), alignment to standards (55%), modelling capabilities (49%), simulation capabilities (48%) and workflow enactment (48%) were the most important requirements. Even based on mean ratings, usability, modelling capabilities, software integration, report generation, alignment to standards and process execution were the top six requirements. Databases, ERP systems and office software were the top three applications involved in execution of business processes. Since these applications were perhaps sufficient to take care of the needs, BPM Suites were the 10^th ranked application and not necessarily required for implementation of business processes.

Execution of tasks, task routing, information providing and automated process execution were the top ranked kinds of support required from the software. This is consistent with the rankings of the applications involved. Drawing and writing tools are the most commonly used software. This is in line with the process description methods mentioned earlier.

Lastly, the companies were asked to rank distinct criteria influencing the selection of BPM tools. Here, ‘functionality and qualities’ was the top ranked criteria. Pricing, support, vendor image and availability came in second to fifth, in that order.

DISCUSSION OF THE FINDINGS:

To summarize, the study reveals that most of the process stay within the company which is akin to levels 1-3 of maturity models. Even according to Harmon & Wolf (2012), most organizations were at level 2 (48.1%), and level 3 (22.2%). Further, Wolf & Harmon (2012) mention that most (71%) respondents used simple tools like Visio and 37% used BPM Suites that can manage the runtime execution of a business process. As mentioned in Harmon & Wolf (2011), level 2 organizations are closer to ERP efforts than to process improvement efforts (process modelling). According to Pearce (2013), the worldwide spending on BPM Software is expected to grow by 9.5% in 2013. In Australia, it is expected to reach $70 million, a growth of 10% over 2012. So the growth is apparent, but other studies indicate that even now the level 3 & 4 organizations are less in number.

The fact that most processes span across several departments, and involve many persons, tasks and applications indicates the processes require substantial software integration. Further, the rankings indicate that customer orientation of processes because most of them are product, administration or customer driven. Importance of CRM as an application for business process execution also supports this.

The findings related to motivating factors for process documentation indicate that process documentation and language should be human oriented. There, process automation is ranked fourth, and BPR as an organizational goal, guidelines for humans and as-is documentation are the top three. This is also confirmed by the finding that text in natural languages is popular as modelling language and usability (by executives) is the topmost expectation from a tool. BPMN is accepted as a process modelling standard. Furthermore, most of the task routing is still being done manually (affirmed by low prevalence of BPM Suites). Further, task execution is mostly done by ERP systems (the most important non-BPM software which incorporates process models).

Based on the inferences drawn from the responses to specific questions, the authors conclude that most of the companies are on BPM maturity level 2 (core business processes defined and documented). Transition to level 3 is possible in more than two-thirds (69.2%) of the cases where there is central alignment of process modelling or there are central process modelling teams. They also concluded that transition to level 4 seems to be hindered by the fact that the current tools do not satisfy the two important requirement. Firstly, BPM requires process modeling languages and the tools that are designed for the use by humans. Secondly, the tools must be able to integrate the heterogeneous applications involved in execution of business processes.

However, according to Harmon & Wolf (2012), only 31.4% considered lack of IT tools as the critical capability gap in business process centre of excellence (formal process work teams). Lack of data information / management system (40%), lack of cultural support (45.7%) and lack of proper performance measurement systems (51.4%) were more important. Even according to Wolf & Harmon (2012), recession and the rapidly changing BPMS offerings prevents rolling out of large scale BPMS implementations. According to Harmon & Wolf (2011), when inquired about the roadblocks to BPM Software use, 60% of the respondents stated that they were “Not ready to implement BPMS”. The other difficulties were “Too difficult to implement” (11%), “Too expensive to implement” (18%), and only 15% “Don’t think BPMS tools are mature enough”.

According to Hill (2011), advancing BPM maturity drives better business performance outcomes. Further, investments in six dimensions advance BPM Maturity. These are organization and culture, process competencies, methodologies, technology and architecture, metrics and measures, and governance. However, though investment in technology and architecture is important for reaching levels 3 & beyond, other aspects like organization and culture and methodologies are also equally important. These findings & opinions appear to be against the basic hypothesis of the authors.

The authors have highlighted that progression to level 4 is still not so widely prevalent. Considering the possible benefits of transition to higher maturity levels mentioned by Hill (2011) like lower costs and increased productivity, this issue needs to be addressed at all possible levels. The study is able to elicit requirements which must be met by tools that support BPM. However, there needs to be more evidence to believe that the existing software do not meet these requirements. Further, there is no evidence that this supposed deficiency in the software systems is the main reason preventing companies from reaching level 4. As mentioned in this study itself, implementation of business processes does not necessarily require BPM Suites. So more research may be required to confirm this relation.

CONCLUSION:

From the review of the study it is clear that most companies are at level 2 or level 3 of BPM maturity. The study is able to elicit important functionalities and qualities for BPM tools like usability, modelling capabilities and software integration. However, more research is suggested to confirm that the move from level 3 to 4 is hindered mainly because of deficiencies in existing BPM tools. Further, evidence is required to confirm that existing software do not meet those requirements. More importantly, research may be required to understand other factors hindering the transition to level 3 and level 4. Understanding these constraints may help in improving the usage of BPM systems in organizations. Transition from level 2, where 48.1 % of the companies are, to level 3 (22.2%) may have a more profound effect on improving the entire system.

References

Harmon, Paul & Wolf, Celia 2011, Business Process Modelling Survey – December 2011, viewed 24 September 2013, <http://www.bptrends.com/members_surveys/deliver.cfm?report_id=1005&target=Process_Modeling_Survey-Dec_11_FINAL.pdf&return=surveys_landing.cfm>.

Harmon, Paul Harmon & Wolf, Celia 2012, Business Process Centres of Excellence Survey –  2012, viewed 23 September 2013, <http://www.bptrends.com/members_surveys/deliver.cfm?report_id=1007&target=2012-BPTrends-CoE-Survey-3.pdf&return=surveys_landing.cfm>.

Hill, Janelle 2011, Advancing Beyond Early Stages of BPM Maturity, Gartner 2011, viewed 24 September 2013, <http://www.pega.com/sites/default/files/private/Advancing-Beyond-the-Early-Stages.pdf>.

Pearce, Rohan 2013, Australian BPM Suite Spending up 10 per cent in 2013 – Gartner, viewed 23 September 2013, <http://www.cio.com.au/article/460734/australian_bpm_suite_spending_up_10_per_cent_2013_gartner/>.

Susanne Patig, Vanessa Casanova-Brito, and Barbara Vögeli 2010, IT Requirements of Business Process Management in Practice – An Empirical Study”, in Proceedings of Business Process Management, 8th International Conference, BPM 2010, Hoboken, NJ, USA, September 13-16, 2010, pp. 13-28.

Wolf, Celia & Harmon, Paul 2012, State of Business Process Management 2012, viewed 23 September 2013, <http://www.bptrends.com/members_surveys/deliver.cfm?report_id=1006&target=2012-_BPT%20SURVEY-3-12-12-CW-PH.pdf>.