business process management—are you ready for the future?

Knowledge and Process Management (2012)Published online in Wiley Online Library(www.wileyonlinelibrary.com) DOI: 10.1002/kpm.1388

■ Research Article

Business Process Management—Are YouReady for the Future?

Clemente Minonne1 and Geoff Turner2*1Zurich University of Applied Sciences, Center for Knowledge and Information Management, Zurich,Switzerland2University of Nicosia, European Centre of Knowledge Management Research, Nicosia, Cyprus

*CorCentE-ma

Cop

Business process management is the discipline that encompasses the analysis, modelling, implementation, execution,monitoring/control and continuous improvement of business processes. Methods and models developed for thismanagement activity offerwide-ranging assistance to, and potential for,most organisations, yet even a general awarenessof them seems to be non-existent inmany organisations. An empirical study, conducted in the German-speaking regionof Europe, gathered useful data on issues relating to current and future investment in business process management,including initiatives in the field of business process outsourcing. Analysis of that data allows for the criticalinterpretation of the current viewpoint of this business discipline as well as providing some interesting newinsights into applications in use, level of maturity, realised benefits and outsourcing opportunities. A brightfuture exists for business process management as long as the most significant hurdle, the failure to link thediscipline with organisational strategy, is overcome. The pathway to achieve this lies in the development of areliable and effective performance measurement system that, for the most part, will be unique to each organisation.Copyright © 2012 John Wiley & Sons, Ltd.

INTRODUCTION

To better understand the modern business disciplineof business process management (BPM), it is neces-sary to return to the early 1990s when Johansson’sterm business process re-engineering (BPR) was firstin vogue (Johansson et al., 1993). Sometime later,Hammer and Champy (1993) redefined BPR as afundamental rethink and radical redesign of businessprocesses to achieve dramatic improvements inimportant metrics such as cost, quality, serviceand cycle time. By the mid-1990s, BPR gained theunfortunate reputation of being a nice way ofsaying downsizing. Writing towards the end of aperiod of recession, Hammer and Champy believedthat the lack of sustained management commitmentand leadership, unrealistic scope and expectations,and resistance to change prompted management toabandon the concept of BPR. It could also be that

respondence to: Geoff Turner, University ofNicosia, Europeanre of Knowledge Management Research, Nicosia, Cyprus.il: [email protected]

yright © 2012 John Wiley & Sons, Ltd.

the start of what was to become an unprecedentedperiod of economic expansion may have cloudedjudgement about the need for BPR.In contrast, business process optimisation, where

only more effective or more efficient individualbusiness processes should be designed, providesthe foundation for BPR from the point of view ofinternal business analysis. The aim of businessprocess optimisation typically lies in the reductionof processing time and the avoidance of workredundancy. Accordingly, it should be applied toall business processes throughout an organisations’value chain so that it has a positive impact on boththe intra-organisational and inter-organisational work-flows. While business process optimisation has theappearance of an operational activity, this alignmentwith the value chain implies a strategic emphasis.Modern-day strategic planning should be an

exercise in interpolation rather than extrapolation.This means that organisations start with an image ofwhat they want to look like in the future, highlightedin their vision statement. Then, they decide on thechanges required to develop that image from theircurrent state for inclusion in their mission statement.

C. Minonne and G. Turner

If this process takes a static view of the future, thenthe level of implementation is decided first and thecontrol system put in place afterwards to identifyactual deviations from plans, the causes of thedeviations and the appropriate actions to remedythe situation.

As one essential phase of strategy development,BPR entails a radical rethinking of an organisation’svalue chain resulting in the core, supporting andmanagement processes being subjected to a businessprocess optimisation exercise. Generally, all of theseactivities are focused on business processes thathave a high added-value potential for the organisa-tion (Prahalad and Hamel, 1990) and that will beparticularly derived from core processes and theirunderlying core competencies. The business disci-plines of knowledge management (Minonne, 2009)and information management, in conjunction withrelevant information systems concepts and associatedinformation technology solutions for process support,are used extensively here.

We then move forward to the next generation ofBPR that is typically referred to as BPM, which canbe represented as a divided cube framework, asdepicted in Figure 1. The divided cube can be usedas the basis for more extensive investigation ofBPM. Here, the business and technology perspectivesare seen to be useful when looking at BPM from astarting position especially when adopting a causalperspective. However, when subsequently viewedfrom a hierarchical perspective, a strategic or operationalorientation is preferred depending on the extent ofexperience, or level of maturity, with BPM. Further-more, it seems reasonable that, in this type of empiricalinvestigation, you would also consider the temporaldimension, namely the present and the future. Theseeight different configurations defined the researchareas of this quantitative empirical study.

Figure 1 Divided cube framework

Copyright © 2012 John Wiley & Sons, Ltd.

At the present time,within business organisations inthe German-speaking region of Europe (in particularSwitzerland, Germany and Austria), there is a degreeof hype surrounding BPM. Indeed, there are a numberof well-known organisations, in various industriesand in many places, where implementation projectsof one form or another are underway. With theseobservations in mind, this study was structured toaddress a number of different aspects relating toBPM—applications in use, level of maturity, realisedbenefits and possible outsourcing opportunities.Furthermore, with respect to each of these aspects,the authors were keen to understand what promotedand what impeded the adoption of BPM.

STUDY DESIGN

At the outset, the research context and content wereformulated in the manner shown in Figure 2. Tofacilitate the design of a quantitative survey, the firststep, which is a comprehensive review of the relevantliterature, was undertaken. There were about threedozen sources of particular interest from authors ofpublications about similar research into the qualita-tive aspects of BPM, which supported drafting thesurvey needed for an investigation along the linesshown in the divided cube framework (Figure 1).

Figure 2 Research methodology

Know. Process Mgmt. (2012)DOI: 10.1002/kpm

BPM—Are You Ready for the Future?

The questionnaire that was developed comprised 41basic and detailed questions covering BPM in eachof the eight different configurations of the frameworkwith emphasis on the use of BPM tools and businessprocess outsourcing (BPO).

The content of the questionnaire was then dis-cussed in a workshop with business representativeswho are actively engaged in the field of BPM.Thanks to the dialogue with these experts, all ofwhom have long-standing experience in the fieldof BPM, the questionnaire was assessed objectivelyand modifications made to establish the quality ofquestionnaire content so that useful and meaningfulresults would be achieved.

Data collection

An online surveywas carried out in a 3-month periodstarting at the beginning of November 2010. Thetarget group for the survey were individuals whohad expertise in and who were currently working ona daily basis with BPM. Participants were selected ran-domly through relevant research groups, specialisedtechnical forums, newsletters and invitations postedon appropriate websites. In addition, direct invitationswere made using a snowball selection process toensure that different sectors were represented in thatdata collection.With the confidentiality of respondentsand responses being respected, all participants agreedto contribute to the study on a voluntary basis.

Data collection was mostly based on assessmentsbased on a Likert scale so that ordinal and nominallyscaled attributes could be applied to the responses.For some questions, it was possible to have multipleanswers. Furthermore, with every question, partici-pants were given the ability to respond with ‘noevaluation’ simply to prevent a random responsedue to a lack of knowledge on that topic.

Data analysis

In total, 219 completed questionnaires formed thesample for this study. Analysis of the quantitativedata was performed using the statistical softwarepackage SPSS (IBM Corp., Armonk, NY, USA). Fora more precise investigation, contingency tableswere used. These tables, also known as crosstabs,contain either absolute or relative characteristics thatusually provide a rich supply of data to enhance anystudy.

In this study, crosstabs were created for all ques-tions to facilitate a comparison between the industriesand company sizes of the study participants. Here,where there were insufficient responses from aparticular industry, that industry was grouped withothers in the category Other industries.

It should be noted that the results obtained fromthis study primarily reflect the opinions of executivesand specialists who deal with BPM in organisations


that have already implemented methods or that planto do so in the near future.

BUSINESS PROCESSMANAGEMENT—HYPEOR HOPE?

Business process management helps the organisation—in accordance with the process-oriented measuresderived from its strategic objectives—with theanalysis, modelling, implementation, execution,monitoring/control and continuous improvementof business processes. This potentially leads to theincrease of organisational productivity, qualityand innovativeness. In other words, businessprocesses, and the clarity of their design, greatlydetermine the quality, the degree of innovationand the productivity of organisations.One outcome of this empirical study has been to

identify the main objectives of BPM that are charac-terised in particular by targets of quality improve-ment (76%), process optimisation by means ofstandardisation of processes (73%) and an increasein organisational productivity (61%). A generalincrease in the transparency of costs and the explicitidentification of cost-critical process activities wereconsidered important in this context by 27% ofrespondents. Furthermore, only about one-fifth(19%) of respondents indicated that BPM is usedto increase the level of innovation. Other objectivessuch as finding procedural bottlenecks (12%) andsupport for outsourcing decisions (9%) seem to playa minor role in formulating BPM activities.

BUSINESS PROCESS MANAGEMENTMATURITY

The degree of maturity of these organisations inBPM was assessed using the business processmaturity model (BPMM) as applied to the ObjectManagement Group (OMG). To make this concepteasier to understand, the model has been limited tofour levels of maturity. Organisations at level 1 areconsidered to understand the need for continuousimprovement and have a general awareness ofBPM. At level 2, organisations have moved on fromlevel 1 by identifying and addressing a few individ-ual topics within BPM. To reach level 3, organisationsmust have applied substantial elements of BPM aspart of their continuous improvement programme,whereas at level 4, they have established policies andprocedures for continuous improvement through theapplication of BPM. Figure 3 shows how respondentorganisations see their BPMpositioning in this context.Of the respondents, 61% replied that the BPM

maturity level in their organisation was at eitherlevel 1 or level 2, and 32% indicated that only certainBPM methods aimed at continuous improvementwere introduced. Only 7% of the respondents


Figure 3 Attained levels of maturity


indicated that appropriate policies and methodshave already been introduced.

A sector-specific analysis reveals that BPMmaturitylevels 3 and 4 have primarily been achieved in thebanking and information technology sectors. Overall,it is not surprising that organisations only reach theirindividual maturity optimum if they define combinedguidelines, specifications and practices, and then fullyimplement them.

Strategy comes first

Lack of support on the part of the leadership team(50%), as well as missing or inadequate specifica-tions of corporate strategy (46%), appears to be thebiggest obstacle in developing a process-orientedorganisation. This revelation is not particularlysurprising because organisational developmentand transition should be, by definition, an outcomeof the direction of corporate strategy. Significantly,being unable to enumerate and explain the financialbenefits of BPM (43%) was mentioned as anotherobstacle. The lack of expertise (42%) and lack ofresources (38%) seem, according to the respondents,

Figure 4 Impediments to


to be further impediments. High investment oroperating costs do not appear to impede theintroduction of BPM methods and systems.By breaking down these observations into different

sectors, it is apparent that in information technology,as well as in the provision of services or consulting,the failure to elaborate on the financial benefits ofany proposal is a key obstacle to its implementation.In the banking sector in particular, the lack of interestshown by themanagement team, aswell as an under-standing that BPM activities should be derived fromcorporate strategy provide a significant barrier toimplementation.Figure 4 shows the relative importance of the

critical success factors that are, from the respondents’perspective, decisive in the successful implementationof BPM methods and systems. The highest ranking isgiven to the support provided by senior management,which is regarded by the respondents as critical toBPM success. This factor is achieved by defining clearresponsibilities and the adaptation of a supportivecorporate culture. All three factors relate to the princi-pal responsibilities of an organisation’s managementteam and underline the importance of close involve-ment of senior management to ensure a successfulimplementation of BPM. This correlates well withthe lack of interest of the leadership team beingassessed by respondents as the greatest obstacle toeffective BPM.

Process follows strategy

The study reveals that 78% of respondents believethat business processes are either not derived or onlypartially derived to support organisational strategy.Only 14% of respondents judge the contrary view,which is that business processes are developedmostly or completely to drive a successful implemen-tation of organisational strategy, to be sound. Thepractical experience of the authors suggests that a

implementing BPM



possible explanation for this bias lies in an inabilityto articulate strategic objectives into concrete mea-sures of operational performance with a high levelof granularity.

What should be done when the people whomatter most in an organisation, the frontlineemployees, do not understand the organisation’sstrategy, the relevant performance measures, the coststructure and the economics of the environment inwhich they are operating? It is much easier to engagewith a transformation process such as BPM whenmeasures are clearly linked to strategies. Failure todo so creates misalignment of cost structures andpriorities with the strategy.

To avoid this problem, organisations need toimprove communication. Ideally, everyone in anorganisation should be quickly able to answer thisquestion: How am I doing on what is important for theorganisation? To facilitate answers, organisationsneed to provide tools that will help every employeealign their activities with strategy. Scorecards, forexample, will do this because they express thestrategy in measurable terms, communicating whatmust be done and how everyone is progressing.

There are a number of different alternative score-cards available, the most popular of which is Kaplanand Norton’s (1996) balanced scorecard. The concept ofthis scorecard, depicted in Figure 5, recognises theimportance of both financial and non-financialperformancemeasures as it examines our organisationthrough four different but interrelated perspectives:financial, customer, internal processes and learningand development.

Logically, key performance indicators (KPIs) ineach of the four perspectives of the scorecard shouldbe either directly related or indirectly related to eachother. Organisational strategy is the starting pointand dictates the financial objectives. One way toachieve the financial objectives is to review relation-ships with customers and determine how we canbest add value for them. The primary source of thatadded value lies in the quality and efficient workingof an organisation’s internal business processes,which is where BPM is most actively involved.Processes cannot operate efficiently, however, without

Figure 5 Balanced scorecard concept. Source: Turner (2011),p.105


appropriate learning and development within theorganisation. Identifying these links, and under-standing the specific relationship between them, iskey to implementing a successful balanced scorecard.This, in turn, is vital to understanding progresstoward achieving the identified strategic objectives.

Structure follows process

Structure follows process within the framework ofsustainable organisational development. It is alsoparticularly important that, in the context of BPM,dedicated roles be established in an organisation,which promote and support the procedural develop-ment of thismanagement discipline. Considering thatBPM itself is a process, it is reassuring that the resultsof the study indicate that half of the respondents haveidentified dedicated responsibility for BPM withintheir organisation. The other half seem not to haveexplicitly identified such a responsible person, teamor department or are not able to make an observationin this regard.The study showed that those organisations in

which there is identified responsibility for BPM arethe most advanced in the field. The majority, or79% of the respondents who confirmed identifiedresponsibility, indicate that this appointment existswithin the central organisational structure. Another12% of respondents perceived this responsibility tobe decentralised. The remaining 9% of respondentsmentioned other structural shapes, such as a matrixorganisation. Furthermore, it was determined thatin two-thirds of organisations, this responsibility isfound mostly in organisational management (31%)but also in organisational development (19%) andquality management (17%). In another 13% of cases,this responsibility is located in the informationtechnology unit.In addition, it should be noted that in 64% of

organisations that have identified responsibility forBPM, responsibility extends to the definition anddesign (modelling) of business processes. Otherkey findings concerning the relationship betweenstructure and process are first, that 63% of respon-dents identified the responsibility resting with aninternal consultancy unit, and second, in 59% oforganisations, a department responsible for themaintenance and optimisation of existing businessprocesses already existed. In an important logicalcontradiction, just 28% of respondents consideredit important that BPM should be strictly derivedfrom organisational strategy.

LOOKING TO THE FUTURE

Respondents suggest that many functional areasare seen to benefit from the introduction of BPM(Figure 6) but the ones for which the largest benefit


Figure 6 Functional areas with maximum benefit from BPM


appears to have been achieved are consulting/servicedelivery (57%), information technology (51%) andprocurement/purchasing (49%). It may be concludedthat, from the perspective of respondents in thesefunctional areas, optimisation of business pro-cesses would generate significant benefits for theirorganisations.

By looking at this aspect on a sector-by-sectorbasis, the above answers seem to derive mostlyfrom the banking sector. In those organisationswhere BPM methods are already extensively used,the functional areas—and here, it was possible forrespondents to select more than one functionalarea—at the forefront are information technologydepartments with 52%, followed by (internal) serviceprovision/consulting with 44% and procurement/purchasing with 43%. These results are not consid-ered exceptional because, in practice, BPM is heavilyreliant on systems that facilitate information man-agement, and in these functional areas, informationtechnology plays a central role.

Process description and modelling

The first step in the BPM lifecycle, which at thesame time is usually the first level of the BPMmaturity model, requires description and analysis,or modelling, of almost every business process inthe organisation. Evaluation of the data collectedindicates that, in 42% of organisations, betweenone-quarter and three-quarters of all businessprocesses are documented. Further, in 17% oforganisations, only a small part of that organisationhas documented more than three-quarters of theirprocesses. This seems to indicate that documentationof business processes is actually being carried out ina significant number of organisations. In thesecircumstances, they have made a fundamental stepin the direction of full implementation of BPM.


From a secondary analysis of the collected data, itwas clear that, in just under two-thirds of organisa-tions (63%) where more than one-quarter of businessprocesses were documented, a software-based BPMtool was being used. This confirms that relativelysophisticated BPM tools are currently widely usedfor documenting business processes.

Business process modelling notation

The study revealed that a number of accurate model-ling notations were in use as shown in Figure 7. Themost popular being used by 63% of respondentswas the classic flow chart. This popularity may beattributed to familiarity with, and availability of, themeans of production such as the Microsoft Visiosoftware tool. Business process modelling notation(BPMN) followed in second place with 49% ofrespondents claiming use of this modelling notation,which is widely accepted as a standard for BPM.Other forms of modelling notation more com-

monly in use are event-driven process chain (47%),which is followed by unified modelling language(28%). In this context, it should be noted that, on theissue of importance of BPM standards, 54% of therespondents consider them unimportant in theirorganisations. On the other hand, in 33% of organisa-tions, the issue of standards is considered importantor very important. The remaining participants (13%)took no position on this issue.By looking at these findings by industry, in the

sectors of banking, information technology andconsulting/service delivery, modelling standardsare now considered an important element in theimplementation of BPM in their organisations.An in-depth analysis of the application of the nota-

tions in different industries confirms that BPMN isalready in widespread use in the banking, informationtechnology and consulting/service delivery sectors.


Figure 7 Notations used in documenting business process models


Other industries, where the standardisation of processmodels plays aminor role, increasingly useflow chartsas well as EPC. BPMN is increasingly accepted inmostindustries as well as in public administration.

When considering organisational size, it becameapparent that BPMN is not the notation of choicefor small-sized and medium-sized organisations.However, it is striking that its use is common inorganisations with more than 1000 employees andthat considerable effort is being applied to achievestandardisation using BPMN.

Use of business process management tools

At present, more than half (57%) of the respondentsindicate that a BPM software-based tool was usedin their organisation, and only 37% indicate that,currently, a tool was not used. These results under-line the acceptance and use of software-based toolsfor the implementation of BPM by a large proportionof organisations.

When asked about the objective behind the useof BPM tools, improvement in the quality of theirbusiness processes was the first priority for therespondents followed closely by improvement inthe quality of the services and products theyoffered. Based on some comments it would seemthat, in practice, these objectives are closely linked.Using BPM tools, organisations expect, in the firstinstance, to lower process costs although this ismore likely to be achieved through the full imple-mentation of BPM methods.

Business process management tools were usedmost frequently by respondents for modellingbusiness processes (81%). Other uses are relatedto the analysis of business processes (55%) andthe support for governance, risk and complianceissues (46%). In addition, it was found that BPMtools were used more for automation (41%) andmonitoring (38%) of business processes than their


simulation (17%). This, of course, may be attributedto the often-missing functionality of tools currentlyavailable.In assessing the importance of the functions that

have a use for BPM tools,modelling of business processeswas at the forefront, closely followed by analysis of thesame. The respondents particularly highlighted theimportance of BPM tools meeting the functionalityrequired for these purposes.By looking to the future, modelling of business

processes was still seen as the most important appli-cation. However, the respondents suggested that inthe near future, they plan to launch applicationsthat better support them in the presentation ofperformance indicators as well as in the monitoringof business processes. To this end, Software AG is theleading provider in the field of BPM solutions accord-ing to 35% of the participants. Microsoft, whose BPMsolutions are used by 32% of respondents and SAPwith 27% follow closely. Solution providers such asIBM (18%), TIBCO (10%) and Oracle (9%) are in thelower order. This analysis reveals that a varietyof BPM solution providers is present in the mar-ket and in a position to challenge the traditionalproviders of standard commercial applications (suchas enterprise resource planning, customer relationshipmanagement or supply chain management).

Performance management and measurement

Earlier, it was suggested that implementation of awell-designed balanced scorecard was critical innot only linking processes and activities to organisa-tional strategy but also understanding progresstoward achieving its strategic objectives. The firsttask in building an effective balanced scorecard isto define strategic objectives, establish initiativesand construct targets across the four perspectivesalthough, in this context, most emphasis is placedon the internal business processes perspective.



Then, to monitor and measure, it is necessary todevelop metrics for performance against each ofthe targets. These will become the KPIs on whichthe effective implementation of BPM will progress.

Every KPI, whether it is used to simply clarify thecurrent position, guide the implementation of BPM,check the effectiveness of BPM or track changes inthe image of the future, will affect actions and deci-sions. Choosing the right KPIs is critical to success,but the road to good indicators is littered withpitfalls. Many seem right and are easy to measurebut have subtle, counterproductive consequences.Others are more difficult to measure but focus theorganisation on those decisions and actions thatare critical to success. In this setting, the immediatetask is to consider ways of assessing performance ina way that will enable an organisation to evaluateits BPM policies and practices.

The KPIs developed for evaluating BPM may beeither qualitative or quantitative. Qualitative measuresare typically judgement based. This type of measureis often used when the item to be measured, or theattribute of interest, does not lend itself to preciseor quantifiable measurement. Indeed, they providean awareness of what is happening in the sense ofthe direction, rather than the speed, of change.Quantitative measures, on the other hand, are usedto measure the rate of change and are usuallyinteger-based with two further divisions: financialand non-financial.

An effective performance measurement systemincludes critical success factors, a mix of financialand non-financial information and a balancebetween different views. What is more, effectiveperformance measures are dynamic, and as such,they will not be appropriate in every situation andwill be subject to change at any time. At all times,however, they will be congruent with organisa-tional objectives, easily understood by all employ-ees and promote intended behaviour within theorganisation.

This will require the development of extensivequantitative, mainly operational and financial, andqualitative measurements in support of BPM. Aquantitative approach to measurement promises amore sustainable information base compared witha qualitative one. If, for whatever reason, a quantita-tive assessment is not a realistic option, a qualitativeapproach to performance measurement is a betteroption than no measurement at all.

Historically, performance indicators fall intoconceptually different categories. There are thosethat examine the results with respect to a particularobjective and others that measure the managementof the means or determinants of competitivesuccess. The mix of factors used to gain competitiveadvantage will vary, often significantly, amongorganisations. Consequently, although indicators ofoutcomes may be similar, those of determinants ofcompetitive success almost certainly will not.


Clearly, there is no unique solution to this issue.Uniqueness only arises in the need to have anassessable strategy, which makes it impossible todesign a completely generic system for measuringthe performance of an organisation’s BPM practices.Indeed, a custom solution is needed for almostevery organisation.The KPIs, which form the basis of the control

system for the effective implementation of BPM,need to measure current performance and guidethe organisation toward its changing image of thefuture. To do this effectively, a system should includefour compulsory elements before control may befully established. These elements are a predeter-mined set of targets, a means of measuring currentactivity, a means of comparing current activity witheach target, and a means of correcting deviationsfrom the targets.These targets may be scientifically calculated or set

arbitrarily using reasonable or totally unreasonableexpectations, good or bad. The control systemmerelyprovides a means by which activity is directedtoward their achievement. In general, the predeter-mined criteria should be stated explicitly and, forthis reason, quantitative statements are preferredalthough not absolutely necessary.On a Likert scale of 1 to 4, where 4 represented

‘very important’, respondents in the study rateduniform and consistent measurement of targets, on aver-age at 3.08, with no assessment of this factor belowthe ‘important’ rating of 3. Therefore, it seems thatBPM, and particularly its performance measure-ment dimension, is now recognised by most organi-sations as an important operational task. Formanagement accountants, this situation raises thethorny issue of how to account for its management.They need to establish a set of KPIs that assess theirorganisation’s performance in implementing BPM.In doing so, they should resist the temptation tofocus only on what is easily measurable, whichgenerally is the efficiency dimension. This is not tosay that such measures are not useful in the rightcontext. However, there should be an equal orgreater focus on measuring outcomes that meet realorganisational needs, which are more likely torepresent BPM effectiveness rather than efficiency.Although numerous performance indicators maybe developed, each is only useful if it allowsmanagers to evaluate ongoing performance. As such,it is considered necessary that senior managers,who have a comprehensive picture of the organi-sation’s vision and priorities, are involved indeveloping KPIs.

BUSINESS PROCESS OUTSOURCING

On the question of BPO, a littlemore than one-quarter(27%) of respondents indicated that they havealready outsourced business processes. Just 7% of



those surveyed indicated that they would soon startoutsourcing certain business processes. Nearlyone-half indicated that they have not outsourcedany business processes and have no plans to do soin the near future. Some 5% were of the opinion thatoutsourcing is not even an issue that they wouldconsider.

In the field of information technology, more than54% of respondents reap the benefits of BPO. Inhuman resource management, consulting/servicedelivery and logistics about one-third of the respon-dents saw a benefit in BPO. Product management,and research and development saw little benefit inBPO with only 4% responding positively.

The biggest concern in the context of BPOappears to be the loss of core competencies. Studyparticipants see the major reason for BPO as theconcentration within an organisation on corecompetencies. This is closely followed by costreduction and productivity arguments. The lasttwo reasons are closely related because a reductionin costs is a key outcome of productivity gains.BPO is least used as a means of increasing the levelof innovation in an organisation. This is congruentwith the low positive response rate to BPO fromthose involved in research and development.Outsourcing in the context of risk reduction alsoonly plays a subordinate role.

Attracting a 63% response from participants, theculture of an organisation was seen as the mostimportant reason for not outsourcing businessprocesses. In addition, insufficient maturity in theunderstanding of business processes that might besuitable for outsourcing is mentioned by 50% ofrespondents as a reason for not pursuing this possi-bility. Finally, respondents considered the loss ofknow how (29%) as another reason for not engagingin outsourcing of business processes.

CONCLUSION

The outcome of this empirical research indicatesthat many organisations still appear not to be fullyexploiting the potential that BPM methods anddedicated software-based tools offer. In addition,BPM, in particular from a strategic perspective, is,in practice, much more complex than it appears tobe at a first glance. The increasing globalisation ofbusiness means that an organisation’s businessconditions are subject to continuous change becauseof intense competition. This change requires, in manycases, automation or at least the radical redesign ofbusiness processes to remain competitive. Unfortu-nately, the resulting added value typically lasts for alimited time only as competitors quickly catch up.This means that there must be continuous innovationwith respect to business processes.

In this regard, we would note that innovation inthe form of pure automation of existing business


processes usually only provides gains in the timedimension, which occurs mainly in terms ofefficiency and productivity. Although these have apositive impact in the short term, they hardly meetthe long-term strategic needs of an organisation.For this, quality and/or innovation generation areneeded to provide the important effectiveness gainsthat are required for a competitive advantage, andthese will rarely come from pure automation.Automation, in the conventional sense, means

the establishment of specific processes in the mostefficient and executable form. However, afterprocess re-engineering, automation can open upmajor innovation potential in areas such as process,product or service. In this context, the use of moresophisticated BPM tools, which support one ormore phases of a typical business process life cycle,is necessary. At this time, such tools are alreadyaccepted and used in more than half (57%) of thesurveyed organisations in the German-speakingregion of Europe.This empirical study shows generally that the

maturity of BPM in organisations, irrespective oftheir size, has still not reached a significant level.There is, however, a more general awareness ofBPM even though the use of BPM methods andtools has a long way to go to be universallyaccepted. A closer look at the objectives that arepursued using BPM reveals that factors such asquality improvement, standardisation of processesand productivity are at the forefront. In addition,critical success factors, which are crucial for theestablishment and implementation of BPM, havebeen established, and these include unwaveringsupport from senior management and the estab-lishment of clearly defined responsibilities in theorganisation.

ACKNOWLEDGEMENT

The Center for Knowledge and Information Management,in the School of Management and Law at the ZurichUniversity of Applied Sciences (ZHAW), is active in theempirical study of this management discipline withparticular emphasis on the degree of diffusion of theseprocesses (Minonne et al., 2011). Further, through thecollection of empirical data, it is keen to explain currentpractice as well as identify medium-term trends in theGerman-speaking region of Europe. The authors aregrateful for access to the data collected by the Center inthe compilation of this paper.

REFERENCES

Hammer M, Champy J. 1993. Reengineering the Corporation:a Manifesto for Business Revolution. Harper BusinessBooks: New York.



Johansson HJ, McHugh P, Pendlebury AJ, Wheeler WA.1993. Business Process Reengineering: Breakpoint Strategiesfor Market Dominance. John Wiley and Sons: Chichester.

Kaplan RS, Norton DP. 1996. Using the balancedscorecard as a strategic management system. HarvardBusiness Review: Jan–Feb, pp.75–85.

Minonne C. 2009. Strategic Knowledge Management—anIntegrative Approach: a Structured Guideline for DrivingInnovation. Südwestdeutscher Verlag für Hochschuls-chriften: Saarbrücken.


Minonne C, Colicchio C, Litzke M, Keller T. 2011. BusinessProcess Management 2011—Status quo und Zukunft: Eineempirische Studie im deutschsprachigen Europa. vdfHochschulverlag: Zurich.

Prahalad CK, Hamel G. 1990. The core competence ofthe corporation. Harvard Business Review May–Jun,pp.79–91.

Turner G. 2011. Effective Financial Management:the Cornerstone to Success. Business Expert Press:New York;105.


business process management—are you ready for the future?

Documents