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Advantages of Business Process Automation

April 8th, 2010 Posted in business process automation

Before looking at the benefit of pragmatic BPM, let’s make sure we are all on the same page for process automation.

Most everyone has done process discovery and definition at some stage in their professional career; when handling an unexpected situation or defining a procedure. Business Process Modeling organizes these activities in a structured approach to systematically discover, document, analyze and optimize business processes to improve operational efficiency.

When restructuring processes, companies transform the way of doing business, save money and time by streamlining business processes and increase quality of operations and products.

In some areas modeling and analysis is sufficient, but companies increasingly go beyond this stage and implement process automation software to reach a new level of performance or solve process immanent problems that can not be controlled in manual processes.

Let’s look at the challenges of manual process flow and examples of customers who have used process automation software to increase competitive advantage.

Shorter cycle times

Modeling allows companies to define and streamline business processes, by eliminating unnecessary tasks, realigning steps and optimizing information flow. While this typically shortens cycle times tremendously, the improvements often aren’t sufficient to reach a defendable competitive advantage.

A midsize manufacturer for electronic components and security solutions who specialized in mass customization had a custom quote process in place that would take three weeks from the initial inquiry to providing the client with a formal quote. At the same time competitors were able to deliver the quote within one week. The company not only wanted to improve their process to at least that level, but also wanted to beat the other players in respect to response time to achieve a sustainable competitive advantage. While manual process execution would have limited them to an average response time of one week, they cut it down to only three days in average and thereby manage to permanently outpace their competition.

Manual processes have a natural limitation to how fast they can flow. With process automation, tasks can be executed in parallel, are instantly transferred to the next step on completion and allow for notifications and escalations when deadlines are reached. If your company needs to break through manual process limitations or your employees have difficulties keeping up with the workload, you should consider supporting them with process automation software.

Reduce workload

Application software today provides tremendous value that we wouldn’t want to miss any more – from simple spell checking to data analysis or extensive calculations. In manual processes, people conduct steps and tasks that could just as well be handled by process automation software, just like application software helps us get work done faster.

A Swiss investment bank creates monthly reports for their institutional clients on the performance of their portfolio. While application software allowed them to copy and paste information into the reports and thereby save a lot of time, they were looking into ways to automate the creation of the reports without risking the validity of their content. With process automation, they were able to automate the whole process cutting report creation time down from six and a half hours per report to only 30 minutes in which they did quality assurance. The information is gathered from other systems and reports are automatically generated. These are then routed to the appropriate people for quality assurance. The software then takes over again, creates PDFs and automatically sends them on to the clients.

Manual processes are limited to the ability of application software to help employees get the work done. Process automation frees up employees from work that can be handled more efficiently by systems so they can focus on growing the business.

Measure work

Companies are investing heavily in the area of Business Intelligence to generate data that is required to make smart decisions based on business data. While data can be extracted from applications, manual process flow can’t be measured automatically and therefore companies are still driving their businesses purely based on common sense, experience and guts feeling in this area.

A travel and service company knew it had to guarantee a high level of customer satisfaction to maintain their competitive edge. They set up service level agreements so that customer complaints would be resolved within a week for 60% of the cases and within 2 weeks for close to 100%. While standard business intelligence would only have been capable of checking their performance against the goals, business process automation allows the company to monitor and control the complaint process, adjust parameters and analyze the data to identify bottlenecks and opportunity gaps. This empowers the company to further tighten service level agreements and therefore remain competitive.

By implementing process automation, process data is collected automatically and is available for monitoring and analysis. This data helps you make profound decisions and provides you with early indications about process deviations within your operation.

Eliminate Human Errors

Even the best manual process does not prevent people from making mistakes. There are infinite possibilities of what can go wrong. Increasing workload certainly is a key driver of human error causing a lot of rework and frustration and imposing risk on the company. Systems can help prevent human errors on data entry through plausibility checks and are designed to perform the same tasks over and over again with the same high quality result, which is a key advantage of process automation.

A large manufacturer for printing machines automated a process that originally required people to send faxes to various locations, type the information into various systems and at the end to manually compile the information to create a quote for the customer. At every step the company risked to lose information or transfer information incorrectly. Process automation provides process participants with computer aided data entry. The software checks for logical errors and passes the information on automatically to the other systems so human error could be dramatically reduced. As a result the company improved customer satisfaction leading to a 40% increase in order entry.

Quality is a key differentiator in many markets since customer satisfaction is closely interrelated with it. Since there are ways to provide high quality, error free results it has become an imperative for companies to automate business processes with business process management software.

Compliance

While many discussions around compliance today focus on rules and regulations imposed on companies, implementation actually is the more challenging part – similarly to business processes: How do you make sure people follow the rules instead of simply defining responsibility in case something goes wrong?

A large automotive supplier had a paper based process in place that required every employee to gain approval for their purchase and expense requests from their manager. While every employee knew the process, they were very creative in finding weaknesses of the process, by bypassing the manager’s signature or get it when he was passing on a way to a meeting etc. Their finance director searched of a solution that would require the employee to use the available forms and the manager to sign the requests when he was at his desk. Within weeks of implementation, purchase expenses for office goods dropped by 20% while staff productivity remained at a high level.

Efficient processes can only deliver the anticipated results, if employees comply with the defined process flow and task handling. Business process management software ensures that rules are followed, defined steps are taken and processes become transparent.

This was a long post, but I didn’t want to split it up. We will turn to the pragmatic BPM benefits the next time.

3 Responses to “Advantages of Business Process Automation”

  1. Tweets that mention Advantages of Business Process Automation | Pragmatic Business Process Management (BPM) | pragmaticbpm.com -- Topsy.com Says:

    [...] This post was mentioned on Twitter by Ashish Bhagwat, PragmaticBPM. PragmaticBPM said: Advantages of Business Process Automation #BPM Benefits http://www.pragmaticbpm.com/advantages-of-business-process-automation/ [...]


  2. seobpo Says:

    Nice post and nice site.. well worth the read thanx!


  3. iCollegeInfo Says:

    I never thought I would agree with this opinion, but I’m starting to see things differently.


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