What are BPS, BPI, and BPM? And, more importantly, how can these practices enhance organizational performance?
In this article, we’ll explore these concepts in detail, including:
- The definitions of BPS, BPI, and BPM
- How they are applied in modern companies
- How these practices and disciplines can improve business performance
The best place to start is by defining each concept.
Business Process Standardization (BPS): A Definition
Business process standardization (BPS) is a business practice aimed at streamlining and improving the efficiency of existing processes.
As the term suggests, business process standardization “standardizes” existing processes by:
- Creating procedures, protocols, and guidelines for specific business processes
- Following best practices to maximize process efficiency
- Ensuring that the relevant teams follow those standards
There are numerous benefits to standardization, such as increased efficiency and performance.
Standardized processes can also minimize errors and mistakes, since employees are following an established set of steps, rather than an ad hoc workflow.
Business Process Improvement (BPI)
Business process improvement (BPI) has a great deal in common with business process standardization – both aim to change and improve existing business processes.
Business process improvement is occasionally referred to as business process optimization (BPO), though business process outsourcing shares the same acronym, so it can be less confusing to use the term business process improvement.
Terminology aside, however, it is important to note the key differences between “standardization” and “improvement.”
Technically speaking, standardization refers to the implementation of procedures, protocols, and standard practices, as mentioned above. Though this can certainly result in productivity gains, the aim is not always performance improvement.
With business process improvement, however, the goal is just that – increasing the performance, productivity, and efficiency of existing processes.
This is accomplished by:
- Analyzing existing processes
- Identifying business process inefficiencies
- Designing and implementing process improvements
- Analyzing the new process’s performance
Both the standardization and improvement are applied to existing business processes, but there is yet another practice that is implemented when developing new business processes from scratch.
Business Process Design (BPD)
Business process design (BPD) is the development of completely new business processes.
Ideally, new processes will be standardized from the outset, providing employees and employers both with a set of procedures, guidelines, and expectations regarding that new process.
Standardizing new processes from the very beginning will accrue many of the benefits covered above: increased efficiency, fewer mistakes, and so forth.
However, this is not to say that new processes should not be optimized over time. On the contrary, the newer a process is, the more likely it is that there will be waste and inefficiency.
All of the practices that we have covered so far – standardization, improvement, and design – are components of a larger management discipline, business process management.
Business Process Management (BPM)
Business process management (BPM) is the business function dedicated to systematically designing, analyzing, and improving an organization’s business processes.
Organizations that have permanent business process management functions will continuously update their existing processes in order to improve performance, reduce waste, and increase efficiency.
Today, this discipline is becoming more relevant than ever, since organizations are undergoing continual change and transformation.
As organizations change, so too do their workflows and their business processes.
In such constantly changing business environments, it is critical to constantly appraise processes in order to maximize efficiency, boost output, and reduce costs.
When Is Business Process Management Applied?
There are several reasons why an organization would choose to implement business process management, some of which were covered above:
- Improving the performance of existing business processes
- Implementing new processes for an organizational change initiative
- Designing processes for specific business projects
As with any other business function, business process management is an investment that can be measured quantitatively. Though small businesses may have little use for a formal business unit dedicated to process improvement, as an organization grows in size, so too will the benefits that result from these improvements.
Business Process Improvement, Step-by-Step
Business process improvement and standardization often involve very similar steps, which include:
- Process analysis and mapping
- Redesign or modification
- Implementation and evaluation
When designing new processes from scratch, then the steps would simply be modified slightly, by including a needs analysis at the beginning. Once the needs are understood, then a new process would be mapped, designed, implemented, and evaluated, just as listed in the steps above.
Should Your Organization Invest in Business Process Management?
The short answer: when the productivity gains exceed the investment cost of business process management.
That is, if inefficiencies – or the potential gains of increased process performance – are greater than the cost of process improvement, then it is wise to make the investment.
If however, the costs associated with business process inefficiencies are lower than the cost of hiring business process managers, then it is wiser to hold off.
Of course, as mentioned, once organizations exceed a certain size, business process management will inevitably become a profitable investment.