Horace (65 BCE–8 BCE) Business Process Management (BPM) is the art and science of overseeing how work is performed in an organization to ensure consistent outcomes and to take advantage of improvement opportunities. In this context, the term “improvement” may take different meanings depending on the objectives of the organization. Typical examples of improvement objectives include reducing costs, reducing execution times and reducing error rates.
Improvement initiatives may be one-off, but also display a more continuous nature. Importantly, BPM is not about improving the way individual activities are performed. Rather, it is about managing entire chains of events, activities and decisions that ultimately add value to the organization and its customers. These “chains of events, activities and decisions” are called processes. In this chapter, we introduce a few essential concepts behind BPM.
We will start with a description of typical processes that are found in contemporary organizations. Next, we discuss the basic ingredients of a business process and we provide a definition for the concept as well as of BPM. In order to place BPM in a broader perspective, we then provide a historical overview of the BPM discipline. Finally, we discuss how a BPM initiative in an organization typically unfolds.
This discussion leads us to the definition of a BPM lifecycle around which the book is structured. 1.1 Processes Everywhere Every organization—be it a governmental body, a non-profit organization, or an enterprise—has to manage a number of processes. Typical examples of processes that can be found in most organizations include:
- Order-to-cash: This is a type of process performed by a vendor, which starts when a customer submits an order to purchase a product or a service and ends when the product or service in question has been delivered to the customer and the customer has made the corresponding payment. An order-to-cash process encompasses activities related to purchase order verification, shipment (in the case of physical products), delivery, invoicing, payment receipt and acknowledgment.
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