A Prominent factor of international business today is its strategic direction. Global firms are competing with a wider variety of business and operational strategies and with more complex operational strategies today compare to 12 years before.
Under global operational strategy to concentrate geographically located activities in a way that captures most of the available economies of scale and factor cost advantages.
BPM Vs ROI
BPM considers processes to be strategic assets of an organization that must be understood, managed, and improved to deliver value added products and services to clients. The need of optimization and streamline the operational activities for global companies are historical.
Here are some of the facts:
- There is no clear formula or mathematical model available for exact mapping of cost associated with BPM/Dependent projects and ROI. Benefits are multi-dimensional compare to single direction.
- ROI is a critical factor for any larger corporation/ senior management to know before approving any BPM related investment as its not in critical path of company success.
- Major corporations/companies understand the needs/benefits of optimal strategies for operating models to save cost. But don’t want to invest on BPM due to unknown ROI.
- There are initial up front cost associated with BPM installation and adopting this model.
Determining ROI & NPV for BPM: Tracking direct benefits in terms of cost saving for short term (1 Year) and long term (5 year) period.
- Improvement to operating structure/efficiency due to BPM,
- Reduction in day to day breaks, failures, rework compare to previous year,
- Optimized staffing model consist of reallocation of roles and responsibilities( globally or low cost area) as Business Process Modeling exercise
- Reduction in risk exposure with more control points determined with help of BPM
- Standard and enhanced End – 2 – End detailed process maps to reflect companies’ policies and procedural (Direct saving on External/internal audits & Time spend on audits with reduced exceptions).
Tracking In-direct Benefits in terms of cost saving
- Due to more standardized documentation and process mapping, Ease of change management or future enhancements as indirect benefit
- Centralized location of Policies & Procedures with details End – 2 – End mapping for cross reference.
- Direct contact and interaction with IT and business staff due to seamless integration.
- Ease of brining “New client on-board” and developing new strategies to accommodate need of clients.
- Centralized Business analysis & Project Management efforts with more control.
- Expansion of BPM model to other department with minimal efforts and reduced external expertise.
- Regulatory and compliance benefits and support to compliance certifications.
Adoption and Best Practices
It’s always advisable to incorporate BPM for detail analysis and integration of operation – technology is to take “incremental approach” at enterprise level.
Biggest obstacle for adopting BPM are “Culture, resources, funding” because for larger organization where multiple division need to coordinate for initial roll-out.