Strategy Execution in a Digital World-Trends and Predictions for the "BPM-Discipline"
Organizations struggle with Strategy Execution
Organizations’ strategies and operations are driven by scores of ever-shifting factors: from demographic changes, capital availability, legal regulations and customers who require something new every day to technological innovations and an all present digitalization. As a consequence, strategy execution has become increasingly more challenging. According to a Gartner Study only 13 percent of businesses deliver on their yearly strategic goals. Hence, 87 percent develop exciting plans and strategies but do not deliver on them. The same study also shows that only 1 percent of companies have their business processes sufficiently prepared for realizing the full potential of digitalization. That is why strategy execution in our digital world becomes even more challenging. To master this situation successfully, organizations need to know how and when to modify or enhance their business processes, which processes are optimal candidates for intervention, and how to move rapidly from idea to action. The business process management discipline (BPM-Discipline) addresses this challenge of strategy execution in a digital world successfully. In the following, I share five key trends that I have observed over the last years and related predictions.
“BPM is now a mainstream capability that is mandatory for achieving business success in our volatile digital world”
Process Management becomes the new Discipline of Strategy Execution
The BPM-Discipline enables organizations to deal with change successfully, drive their growth agenda and create immediate, as well as, lasting competitive advantage. It increases business performance through cross-functional business and technology initiatives – fast and at low risk. The BPM-Discipline delivers significant business value by converting strategy into people and technology based execution at pace with certainty. Process management has become the “Discipline of Strategy Execution”. This is illustrated in figure 1. BPM is no longer just a set of tools and a technology used to execute projects but has become part of the day-to-day business, implemented through the practice of process management. The transparency it delivers enables the realization of conflicting business values that characterize strategies in our volatile business environment. Organizations need to realize quality and efficiency, agility and standardization, external integration and internal alignment, innovation and conservation of well working practices. Large, as well as, small and medium sized organizations will need to establish and manage this discipline of strategy execution.
© by BPM-Discipline Assets, LP
Figure 1: The BPM-Discipline – Enabling systematic Strategy Execution
The BPM-Discipline enables the Value of Digitalization
BPM-D, Widener University and the Universidad de Chile recently conducted a research study with over 200 organizations around the world. It confirms that companies are struggling to realize the business potential of digitalization. Over 55 percent do not truly know where to start their digitalization initiatives, 51 percent see issues due to slow decision making and 45 percent miss the business and technology alignment. All those challenges are addressed through the BPM-Discipline. It identifies the 15-20 percent of high impact processes that are most important to create competitive advantage, provides the governance to attain fast and well informed cross-functional decisions and aligns business and technology initiatives. The BPM-Discipline helps to focus digitalization on what really matters, improves processes appropriately in the specific business context, and sustains those digital improvements. The BPM-Discipline has become the enabler of value through digitalization.
Innovation requires Process Management
Traditional innovation has been linked to the invention of new technologies and physical products. In the last few years, more and more key innovations have been mainly process innovations: Amazon did not invent the book, but a new process of selling it, eBay did not invent the auction but a new way or organizing it, and LinkedIn did not invent networking but a powerful process of doing it. There are many more examples that show that the most powerful innovations are “process innovations”. But also conventional innovations need to be organized. The result is a systematic “innovation process” that delivers innovations in the speed required by the market. Established the right way, the BPM-Discipline has become an important enabler and driver of innovation.
The Chief Process Officer – an emerging Top Management Role
The increasing importance of the BPM-Discipline as strategy execution engine and driver of innovation requires appropriate leadership. A top manager needs to run this discipline and build it as a “value network” across the existing organizational structure of a business. This emerging leader is the Chief Process Officer (CPO). Research on LinkedIn has shown that there are already over 200 professionals with this title, and many more with similar titles like VP of Process Excellence or Managing Director of BPM. Many “enlightened” CIOs migrate into such a role. With more and more of the information technology moving to the cloud, the core assets that stay with companies are the business processes that are empowered through the cloud-based technology solutions. Top management attention is required for those process assets. This development is visualized in figure 2.
© by BPM-Discipline Assets, LP
Figure 2: The Cloud makes Business Processes Core Assets of an Organization
The BPM-Discipline gets Digitized
Traditionally, process management uses numerous digital tools, such as process execution environments, rules engines, process modeling and repository tools and many more. These technologies components digitize already parts of the process or process management: they provide collaboration components to design processes, project management systems to organize process improvement initiatives, and agile execution engines to adjust processes to changing market requirements. Now it is time to integrate those components, identify and fill gaps, and provide a more holistic end-to-end support of the process of process management. This is where I see interesting future developments for the digitization of process management.
Key Trends make the BPM-Discipline mainstream
The discussed trends have moved BPM out of the dark room of the “inventors” of process management to the top of the priority list of business executives. BPM is no longer just focused on developing tools, methods and approaches. Process management has become a value-driven management discipline providing significant business outcomes. BPM is now a mainstream capability that is mandatory for achieving business success in our volatile digital world.