This is a column about business processes and their management, the intricate, dynamic, ever-changing manifestations of the economic activity of companies. Today, companies are looking for secrets, skills and tools that will enable them to create and mesh together business processes that are so outstanding that customers will pay to use them, time and time again.
Katy Ring of Ovum Ltd. research explains the essence of business processes: “Whatever your organizational structure, be it in manufacturing, services or retail, your operation is underpinned by processes–the fundamental ways of doing things that are either efficient and appropriate, or, more often, outdated and arthritic.”
Operating a process, keeping it updated, operational and effective, is complementary to the evolution of its design–both must be supported simultaneously and independently. Companies must treat their processes with care because they constitute vital intellectual property: Processes are the business. In every case, the process is the company’s product. When World War II broke out, no longer did coal and iron go in one end of the Ford Motor Company’s River Rouge plant and automobiles come out the other; during the war, tanks rolled off the assembly line. Ford’s “product” was its vehicle manufacturing process.
So far, business processes have passed through two waves of business history, first living inside policy and procedure manuals, and years later, residing in unmalleable automated information systems and ERP suites. But after 50 years of automation built on data foundations, companies are frustrated by technology that does not reflect their business, has not delivered the promised returns, and, even worse, locked them into rigid software systems that strip them of the business agility they so desperately need in today’s uncertain economic times. But help is at hand. At the heart of an innovation we call the “third wave” of business process management (BPM) is a new understanding of the elementary building blocks that make up all business processes.
As workers or consumers, everything we do is a communication act. We derive new information through communication. We transact through communication, we delegate through communication, we observe our surroundings through communication. We even communicate about communication.
Communication lies at the center of all business processes. Mathematicians have now shown that communication lies even at the center of all computation. The ill-matched bedfellows that were the business process and the computer process have been reunited through the re-expression of all processes in an important new theory called the Pi-Calculus. One of the first commercial applications of the Pi-Calculus is the Business Process Modeling Language, published by the Business Process Management Initiative (BPMI.org), the foundation for Business Process Management Systems.
A simple analogy for a business process is the humble business meeting. In fact, a meeting is a process. Depending on your point of view, the process began when the meeting was called, or was itself the result of other processes. We say that the members of the meeting are participants in the process. Each brings something to the table. The process grows as participants are confirmed to attend and evolves rapidly through conversation once everyone is assembled in the room. Information is freely exchanged and generated. The process develops in the collective memory of the participants and its electronic outcomes (documents, e-mails, tasks etc). The process design is the trace of everything associated with the meeting, past, present and future.
But look closer, for there is more complexity here. Suppose someone leaves the room during the meeting. We say that the process loses a participant, and with them, their information and skills–their processes. Yet because they had been a part of the meeting in the past, they will have transferred some processes to other participants. It can also happen in reverse. A facilitator joins the room and brings something new, a process for helping others reach conclusions. Perhaps a manager intervenes, providing new goals or news of a change in circumstances. As a result of these interventions the process gains a greater, or lesser, significance. Processes are always interacting like this, growing or shrinking, merging with others and as a result, morphing from one form to another.
Processes may start informally and later be formalized. They may start small and grow in response to, let’s say, an unexpected innovation in one part of the business, or may start big and fail, such as the case of an ill-conceived “strategic” business initiative. Processes may be deliberately designed to serve some purpose, or may arise naturally through past experience and refinement. Good processes add value to the firm, growing in scale and participants. Poor processes either die soon after birth or wither naturally following a period of experimentation. Worse, they may live on, festering, draining resources and causing distraction. Shepherding processes is what management is. All processes are important. Each has a lifecycle. Each must be nurtured or retired.
Such “third wave” processes underlie business at all levels, in ad-hoc communication, in planning, in supply chain logistics, in product design and in customer service. They are not workflows in the conventional sense of that phrase, nor are they applications or integrations of other applications. They are something new.
We know now that there need be no distinction between the process of change and change in the process. Business processes are change, and change occurs through communication only. It has taken the IT industry 20 years to find a way to represent all business processes–everything from the elementary computations of computer systems to the most grandiose strategies of CEOs–in a form that preserves the continuity of all associated information. It is what gives them an independent existence, abstracted from the systems, work habits and resources that drive their execution.
We call this lifecycle the process and it is the reality behind today’s IT-facade of disjoint data models, application logic, workflows and integration systems, repeated a hundred times in a hundred silos. The third wave alternative was conceived in response to the chaos companies find around them as they position themselves for 21st-century competition, and it marks the next chapter of business history.