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Business Process Management

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vom Brocke, J., Roswemann, M. (2014), Business Process Management, in: Wiley
Encyclopedia of Management, Volume 7. Management Information Systems, 2014.

Business Process Management

Business process management is dedicated to analyzing, designing, implementing, and

continuously improving organizational processes. While early contributions were focusing on
the (re-)design of single processes, contemporary research calls for a more holistic view on
the management of organizational processes. To that end, business process management is
understood as an integrated set of corporate capabilities related to strategic alignment,
governance, methods, technology, people, and culture. This article outlines the emergence of
business process management, presents major principles of process-thinking, describes the
essential capability areas of business process management, and discusses context-awareness
as a major success factor of business process management.

Roots and Objectives

Business process management (BPM) has its roots in early studies of organizational design
(e.g., Taylor 1911). This initial focus developed later into the more comprehensive discipline
of industrial engineering and remained focused on the analysis of operational activities in the
dominating manufacturing sector. An increasing significance of services, the growing
importance of information technology for the design of processes and the overall recognition
that processes form a critical corporate asset, have elevated this domain into the status of a
management discipline.

According to Hammer (2010), BPM as a management discipline is characterized by the two

developmental paths:

▪ Process Improvement: Earlier studies in the field focused on the analysis of existing
business processes, aimed at continuous or incremental process improvement. Examples
 for this approach were Total Quality Management (Juran 1988; Crosby 1979), Lean
Management (Womack, Jones 2003), or Kaizen (Imai 1986). Basic principles were
provided by Deming, for example, who in his studies on statistical process control
conducted systematic analyses of processes by means of both quantitative and qualitative
criteria (Deming 1986).
▪ Process Reengineering: Hammer and Champy (1993) presented an approach that
fundamentally questioned existing business processes and demanded the radical re-design
of extant processes. To that end, processes were re-designed from an end-to-end
perspective in the light of organizational goals, particularly capitalizing on the potential
of information technology (IT) as a major driver for innovation (Davenport 1993).

Contemporary BPM combines both perspectives as illustrated in Figure 1. Given a certain

technological frame, BPM provides an integrated set of methods, tools and techniques to
continuously improve business processes in order to meet business targets (process
effectiveness) in the most economic way (process efficiency). The technological frame,
however, sets the boundaries (viz., a logical limit) for improvements (referred to as p1max in
Figure 1). In order to increase performance beyond this point, new technology can afford
radical process change. Such technology is referred to as disruptive technology (Bower,
Christensen 1995), and information systems to date have particularly proved to be a facilitator
of process innovation (Markus and Silver 2008). BPM also concerns identifying and
evaluating the action possibilities originating from existent or new technologies, so as to
capitalize on affordances that emerge in relation between systems, users, and the context in
which information systems are used (Leonardi 2011). As changes in technology and processes
created new risks, BPM also requires to evaluate alternative process designs and decide upon
the right time to implement the next innovation.
Performance

p2max

p1max

Improvement Improvement …
t1 t2
Innovation Innovation
Time

Fig: 1: Alternating Improvement and Innovation in BPM

Process-Thinking

According to Hammer and Champy a process is “a set of activities that put together produce
a value to a customer” (Hammer, Champy 1993). Process orientation is deeply rooted in (a) a
focus on customers and (b) thinking in activities. When engineering processes, further details
are considered in order to analyze processes such as the “self-contained, temporal and logical
order of those activities “ (Becker, Kahn 2011), as well as the characteristic of business
processes to „realize an organizational objective or policy goal“ within a given „set of
conditions“ (van der Aalst 2002).
Fig: 2: The Pattern of Process-Thinking

Processes are supposed to create value. Specifically, processes transform inputs received from
suppliers into outputs of (added) value to customers (see Figure 2); a pattern that has been
applied to various units of analysis, both vertically inside an organization (analyzing internal
customer-supplier-relationships) and horizontally across organizational boundaries (analyzing
supply chain and network relations). Given the focus on value creation, processes have
proven a suitable lens to integrate different perspectives on business, for instance, in order to
support IT-business alignment (Henderson, Venkatraman, 1993). More generally, process
thinking supports the design of socio-technical systems by helping to integrate task-,
technology-, people-, and structure-related decisions (Bostrom, Heinen 1977).

BPM as an Integrated Management Discipline

While early BPM was focusing on isolated optimization projects, it is now perceived as a
permanent responsibility providing capabilities needed in order to sustain competitiveness and
performance in organizations (e. g. Harmon 2007, Spanyi 2008). With this, BPM has evolved
into a comprehensive management discipline focusing on organizational processes at the
center of interest (Rosemann, vom Brocke 2010). Research has shown that in order to
successfully implement BPM in an organization it is necessary to incorporate capabilities in
all six areas. For each area BPM provides a variety of contributions. These factors are
described in maturity models (Fraser et al. 2002) that identify specific capability areas
relevant to implement BPM. Rosemann and vom Brocke 2010 provide an overview of
maturity models in BPM. De Bruin et al. 2005, for instance, propose a model that can be used
to assess an organization’s business process management maturity (see Figure 3).

Fig. 3: The BPM Maturity Model

The model distinguishes six capability areas:

▪ Strategic Alignment: BPM needs to contribute to superordinate, strategic goals of the

organization. Related capabilities include the assessment of both processes and process
management initiatives according to their fit with the overall corporate strategy.
▪ Governance: BPM needs to be implemented in the organizational structure. Related
capabilities include the assignment of various relevant BPM-related tasks to stakeholders
and to apply specific principles and rules to define the required responsibilities and
controls along the entire business process lifecycle.
▪ Methods: BPM needs to be supported by methods for process design, analysis,
implementation, execution and monitoring. Related capabilities include selecting relevant
BPM methods, tools and techniques as well as adapting and combining them according to
the specific requirements of the organization.
▪ Information Technology: BPM needs to utilize technology, particularly process-aware
information systems (PAIS), as the basis for process design and implementation. Related
capabilities include the ability to select, implement and successfully use relevant PAIS
solutions covering for example workflow management, adaptive case management or
process mining solutions.
▪ People: BPM needs to consider the employees’ qualifications in the discipline of
business process management as well as expertise with relevant business processes..
Related capabilities include an assessment of the human resources impact of specific
 BPM related initiatives as well as programs facilitating the development of process-
related skills throughout the organization.
▪ Culture: BPM needs a common value system supportive of process improvement and
innovation. Related capabilities include the ability to assess the organizational culture
according to relevant values as well as the ability to derive measures to further develop
these values accordingly.

In the following, each of these six factors is discussed in more detail.

Strategic Alignment in BPM

Research on process simulation and process analytics has provided methods to analyze
processes according to criteria of strategic relevance (zur Muehlen, Shapiro 2010). Process
improvement tends to focus on the so-called devil’s quadrangle assessing time, cost, quality,
and flexibility (Reijers & Mansar, 2005). With the recognition of BPM as a management
discipline, performance evaluations of processes have increasingly been integrated into
corporate management and reporting system. Research on process performance measurement
systems has investigated the design and use of key performance indicators that monitor
process performance from different stakeholder viewpoints (Heckl, Moormann 2010). Value-
based business process management has been suggested in order to provide decision support
in process redesign (Neiger et.al. 2006;vom Brocke et al. 2010).

The return on process transformation, for instance, is a financial measure that can be used in
order to evaluate alternative process designs based on their return on investment (vom Brocke
et al. 2009). Following stakeholder theory (Freeman 1984), the objective is to balance multi-
perspective views on process, particularly considering stakeholders including customers,
employees, shareholders, and society at large. The latter relates to an upcoming stream of
research, coined as sustainability performance measurement that intends to include social and
environmental effects of business processes in the measurement system of organizations
(Seidel et al. 2012). The collection of process-oriented data allows organizations to capitalize
on process mining as an important strategic tool for analyzing data in order to identify
patterns for process improvement (van der Aalst, Weijters 2004).

Governance in BPM
Prior research in the field has provided detailed procedures on how to conduct process
redesign (e.g., Hammer, Champy 1993, Becker, Rosemann, Kugler 2010, Scheer, Brabänder
2010). According to Harmon (2007), typical phases include: (1) understanding the process,
(2) analyze the process, (3) re-design the business process, (4) implement the improved
process, and (5) roll-out of the re-designed process. With the understanding of BPM as an
integrated management approach, it is now considered a permanent organizational task as
opposed to a one-time project.

Further research has investigated how to implement a process-oriented design in a given

organizational structure (e.g., Markus, Jacobson 2010. Melenovsky and Hill 2006). Scheer
and Brabänder 2010, for instance, distinguish seven BPM-related roles: (1) the BPM sponsor,
(2) the head of BPM, (3) the BPM steering committee, (4) the BPM center of excellence, (5)
the business process expert, (6) the process owner, (7) the process coordinator, and (8) the
process modeler. Besides, the service portfolio of a BPM Center of Excellence as a special
organizational unit to bundle BPM related tasks has been in the focus of attention of BPM
research (Rosemann 2010).

Methods in BPM

Over the past two decades, a vast amount of methods supporting BPM related tasks has been
proposed (e. g. Kettinger 1997), most of which related to modeling and analyzing business
processes (Recker et al. 2009). In order to balance both the expert and the layman’s view,
semi-formal languages are commonly used that are formal enough for engineering purposes,
but easy enough for business people to understand. Frequently used examples include Event-
Driven Process Chains (Keller, Nüttgens, Scheer 1992, Davis et al. 2006), the Unified
Modeling Language (UML) (OMG-UML 2011), Integrated Definition (IDEF3) (Mayer et al.
1995), or the Business Process Modeling Notation (BPMN) (OMG-BPMN 2011). Building
upon the analysis of business processes, organizations are enabled to improve processes and
organizational performance, in turn. Six Sigma, for instance, aims at minimizing variability in
process execution and focuses on analyzing root causes of defects, instead of symptoms. Six
Sigma uses quality management tools such as check sheets, Pareto diagrams, Ishikawa
diagrams, histograms, quality function deployment, and root cause analysis. Lean
Management is another prominent business process improvement method, which considers
the consumption of resources for activities that do not create value for the end customer as
waste that needs to be eliminated. Lean Six Sigma (LSS) is an increasingly applied mixed
method that intends to do both, reduce variability in process execution and remove wasteful,
non-value adding activities. When applying BPM in an organizational setting, enterprise
architecture, business transformation management and large-scale process portfolio
management are of growing importance and mark further areas of current and future research.

Information Technology in BPM

Information technology may be the most important intervention in the performance of

business processes over the last decades. Process-aware information systems (PAIS) are
information systems that manage and execute business processes that involve people,
technologies, and information sources (Dumas et al. 2005). Workflow-management systems as
a specific type of a PAIS allow for implementing logical process flows that are executed
across functions and organizations according to specific business rules (van der Aalst, van
Hee 2002). Enterprise resource planning systems provide generic solutions for specific
business functions and economic sectors that can be customized according to specific
business requirements (Esteves, Bohorquez 2007). Enterprise content management systems
support the creation, storage, retrieval, and retention of all types of information in business
processes (Grahlmann et al 2012).

In addition to transactional PAIS, analytical systems also play a major role in BPM. With
regard to the underlying time horizon, one can distinguish between three basic types of
analytic applications in the context of BPM. Process controlling and process mining systems
analyze historical process data that can be found in log files of workflow management
systems and other process-aware information systems (van der Aalst, Weijters 2004). These
approaches focus on an ex-post analysis of process behavior. Business activity monitoring
(BAM), in contrast, focuses on capturing and processing process events with minimum
latency, that is, near real-time. BAM foremost strives for transforming process-related events
into key performance indicators (KPIs) and for detecting changes or trends indicating
opportunities or problems that require managers to take proactive or corrective actions
(Janiesch et al. 2012). Finally, process simulation and predictive process analytics strive to
forecast the behavior of newly designed or currently running processes. Recently, approaches
have been emerging combining the above approaches and help process owners to evaluate the
past, understand the present, and to predict the future in a more timely fashion (zur Muehlen,
Shapiro 2010). In-memory technology providing an accelerated information processing
capability of enterprise systems, for instance, is seen as a key enabler in this respect (Plattner,
Zeier 2011). Innovation in the design of PAIS leads towards highly flexible and adaptive
systems supporting alignment with emergent business needs – a development that is
epitomized by concepts such as object-oriented design (Sircar et al. 2001), component-based
software engineering (Fan et al. 2000), and software-as-a-service (Alter 2010).Other
technologies that play a salient role in BPM as a management approach spanning
organizational boundaries include groupware systems (Bjorn et al. 2006), decision support
systems (Power 2004), and knowledge management systems (Alavi, Leidner 2001). While
such systems do not implement sequences of specific process steps, they rather provide
services to knowledge workers (Davenport 2005). It has been asserted that organizations need
to be careful when it comes to automating knowledge-intensive and creative processes by
means of, for instance, workflow management systems (Seidel et al. 2010); instead,
technology should be accessible according to a pull principle where knowledge workers can
access a tool in order to solve the problem at hand (Davenport 2005, Seidel et al., 2010).
PAIS that do not presume predictable processes, but predominately aim at handling
unpredictable sequences of tasks are subject to research in Adaptive Case Management
(ACM).

People in BPM

In early contributions on BPM, employees were mainly considered to be interview partners in

process analysis and addressees of trainings in the role out of re-designed processes (e. g.,
Becker et al. 2010). BPM as a comprehensive management discipline, in contrast, calls for a
systematic alignment with human resource management. First, employees are required to
develop specific skill sets needed to analyze, model, improve, and continuously manage
processes. This includes methodological skills related to process modeling and analysis,
change management skills to master the dynamics of improvements and innovation at the
workplace, as well as skills, for instance, to run a BPM center of excellence.

Second, as changing processes leads to changes in work practices, employees need to be

trained in operating new business processes, often relying on new information infrastructures,
in their day-to-day operations. Kokkonen & Bandara (2010), for instance, present a BPM
expertise model that identifies constructs such as the living system (organization or person),
the knowledge (explicit knowledge or tacit knowledge), behavioral characteristics (mind,
behavioral system, spirit) and the context (context of the organization, context of the person).
Research also investigates in curriculum design for BPM (e. g., Bandara et al. 2010).
Culture in BPM

Culture has often been alluded to as an important factor for BPM success (Harmon, 2010;
Spanyi, 2003). Despite its palpable importance, only recently culture has been investigated as
a distinct component in BPM (vom Brocke, Sinnl 2011; vom Brocke, Schmiedel 2011). BPM
culture is defined a set of organizational values supportive for realizing BPM objectives (vom
Brocke, Sinnl 2011). Four specific cultural values have been identified: (a) Customer
orientation, (b) Excellence, (c) Responsibility, and (d) Teamwork supportive for effective and
efficient business processes (Schmiedel et al. 2012). The BPM Culture Model suggests that
BPM initiatives are more likely to succeed if the specific organizational culture incorporates
elements of the BPM culture (vom Brocke, Sinnl 2011). Their work relates to research in
organizational studies, e.g. by Schein 2004, particularly investigating actions and structures as
manifestations of cultural values in organizations.

Context-Awareness in BPM

Any BPM initiative is bound to the organizational context it is situated in. While early work
in BPM focused on comparably well-structured, homogenous domains, there has been a
growing interest in areas where there is no clear-cut structural flow of work activities.
Davenport (2005), for instance, discusses how the management of knowledge work can
benefit from a process-oriented view, highlighting that process-orientation implies design,
that is, the explicit goal to improve work. He proposes a classification structure for
knowledge-intensive processes, based on the two dimensions of level of interdependence and
complexity of work. Seidel et al. 2010 point out that business processes may comprise of
both well-structured, transactional parts and creative parts (“pockets of creativity”). The
creative parts can typically not be precisely specified in terms of resource requirements,
control flow, and outcome. The associated uncertainty sets boundaries for the application of
concepts such as automation or process modeling, and organizations are required to be
cautious when applying those traditional BPM approaches. Melao et al. 2010 distinguish four
perspectives on business processes: (1) Business processes as deterministic machines, (2)
Business processes as complex dynamic systems, (3) Business processes as interacting
feedback loops, (4) Business processes as social constructs. They also give examples for
business areas and discuss appropriate methods for process modeling and analysis. Rosemann
et al. (2006) present a context-awareness framework in which they distinguish between (1) the
immediate context, (2) the internal context, (3) the external context, and (4) the environmental
context of processes. Contextual factors are considered a driver for choosing the right
measures within each capability area illustrated above.

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