Business process management - lessons from European business

This paper reports on the findings of a survey and case study research into the understanding and application of business process management (BPM) in European companies. The process perspective is increasingly being seen as a mechanism for achieving competitive advantage through performance improvement and in response to market pressures, customer expectations for better and more reliable service and increasing competition. We reveal the level of importance European companies attach to BPM, what it means to them and what they have done in practice. The paper draws on a postal survey conducted with quality directors and business process managers in organisations which are members of the European Foundation for Quality Management (EFQM) and case studies in a number of organisations regarded as being leaders in the adoption of BPM. The study has helped to highlight some interesting approaches and reveal features which are important for BPM to be successful. Introduction One of the difficulties with business process management (BPM) is that of terminology. The term process can be found in many disciplines which contribute to our understanding of organisations in the management literature. An operational view is seen in quality improvement (Deming, 1986), total quality management (Oakland, 1989) and the concept of just-in-time (Harrison, 1992). Systems thinking (Jenkins, 1971; Checkland, 1981), cybernetics (Beer, 1966) and systems dynamics (Senge, 1990) give a richer meaning to the term. Organisational theorists have also talked in terms of social and organisational processes (Burrell and Morgan, 1979; Monge, 1990). A useful review of these antecedents has been provided by Peppard and Preece (1995). The domain in which the current study is centred develops out of recent approaches which seek to improve organisational effectiveness through the attachment of managerial thinking to Total Quality or Business Excellence models. These have been essentially practitioner driven and not grounded in academic theory. Examples include the European Foundation for Quality Management model (EFQM) (Hakes, 1995) and the Malcom Baldrige National Quality Award model (MBNQA) (George, 1992). While these models espouse multi-factorial and multi-constituency models of organisational effectiveness they remain essentially goal-based (Cameron, 1986). They have also developed from a strong operational framework and often have absorbed the approaches of We would like to thank Bob Dart, Simon Machin and Tony Grant from Royal Mail. We also gratefully appreciate the assistance of the EFQM, Rank Xerox, British Telecom, TNT and Nortel during the various stages of our research. D ow nl oa de d by S E L C U K U N IV E R SI T Y A t 0 2: 52 0 8 Fe br ua ry 2 01 5 (P T ) Lessons from European business 11 business process re-engineering (Hammer, 1990). They have also been influenced by strategic thinking in the strong process orientation of the value chain analysis (Porter, 1985) and they accommodate the resources based view of the firm (Grant, 1991). Use of the models may lead to questioning the design of an organisation at a strategic level by reassessing the value of functions in favour of processes which transcend functionality (Ghoshal and Bartlett, 1995; Galbraith, 1995). However, neither the EFQM nor the MBNQA provide direct guidance on how to deploy BPM. Approaches often incorporate attempts to identify business processes and to classify them as being operational, supporting or direction setting. This activity is often facilitated by consultants using a range of methods but commonly including aspects of process mapping at least at the top level of the organisation. There is evidence that adopting the process paradigm is favoured at least by senior managers (Garvin, 1995), although it is by no means clear that this is a widely held opinion throughout organisations. While it is possible to point to aspects of good practice in BPM, at least at an operational level (Armistead, 1996), we do not know how organisations apply the notion in practice and what they have found to be the key components of a BPM approach. Method The aim of the research has been to develop a better understanding of BPM and how it can be applied as a route to achieving organisational effectiveness. We have been especially interested to find out how companies have used a business process perspective as a way of managing their whole organisation, rather than just the application of process improvement techniques. In particular we have sought to explore the following questions: . How important is BPM for European managers? . Is there a common understanding of BPM among European organisations? . How are European organisations implementing BPM in practice? In addressing these questions we hope to shed light on how organisations conceptualise BPM and draw on their experiences in order to enlighten others both in terms of strategy formulation and deployment. This paper discusses the findings of the research and proposes lessons which can be learnt. During our research we have built up a rich databank of case study material. The case studies have been compiled using an open-ended interview format where senior executives (usually the quality director or business process manager) have been invited to elaborate on their organisation's approach to BPM. The interviews were recorded and transcribed and a cognitive map was developed to identify concepts. In some cases data from the interviews were supplemented by material used for internal self assessments against the EFQM model. Organisations were typically chosen because they were known to have adopted BPM approaches. This paper refers specifically to case studies with Rank Xerox, Nortel, British Telecom and TNT, all of whom have been winners in some form (either directly of through subsidiaries) of European Quality Awards. D ow nl oa de d by S E L C U K U N IV E R SI T Y A t 0 2: 52 0 8 Fe br ua ry 2 01 5 (P T )