Business process management as applied in industry

BPM is typically used in industries where the following is true:

• The business process is distributed and spans across multiple applications or software systems
• The process involves complex rules that have to be maintained and updated overtime
• There is a need to continuously improve the business process by monitoring the existing activities
• The business is done by the collaboration of multiple stakeholders

With the above considerations, we can apply BPM to any process-oriented domain, such as healthcare, insurance, point of sales, supply chain management, and banking and financial services. A fully functional BPM system gives a huge advantage in terms of the turnaround time for an organization with a new product/service offering or an improved process.

Considering the scope of this book, we can briefly detail some domains in the upcoming sections. A detailed study of these use cases is done in the subsequent chapters, and these use cases are used throughout the book for explaining each and every aspect of jBPM.

Supply chain management

A supply chain is an interconnected set of business procedures and business partners that manages the flow of goods and information from the point of design to the delivery of the product and/or service to the end customer. The supply chain provides a well-coordinated channel to organizations for delivering their products and services to the end customer. Supply chain typical include the following:

• Suppliers: They supply the raw materials.
• Manufacturers: They manufacture the product.
• Distributors: They distributes the product for sale to the retailers.
• Retailers: They sell the product to the end customers.
• Customers: They buy and use the product. Therefore, a supply chain is a collaboration of multiple functional units, and these groups can be within the same organization or from different business units. Coordinating the jobs and meeting end user expectations in a cost-effective manner is a challenge and is attributed to supply chain management systems. As you can see, the domain is inherently process oriented, with a lot of complex rules and regulations governing each stage of the process, and this is a best-fit domain for applying complete BPM systems.

A few processes to name in the supply chain domain are as follows:

• Manufacturing flow management: This deals with the manufacturing of products and/or provision of services
• Order management: This meets customer requirements in terms of order fulfillment
• Customer service management: This provides real-time information about product availability, shipping dates, and order status

Order management is a core process in the supply chain domain. The process depicted in the next figure is a trivial process but is intended to exemplify the ease and clarity that a business process brings to the table, particularly to a cross-functional business process. From the process diagram itself, any layman can understand the cross-functional units in the organization and, of course, the flow. Thus, the users, both business analysts and operations users, can understand the bigger picture more easily, thereby improving the overall communication and efficiency.

Payment is an activity but has the size and complexity of a separate process. Further, if we apply the rule of responsibility, a payment needs to be clearly abstracted as a separate process that can be reused across the processes of the organization for processing a payment. Thus, we can take a design decision of making payment a sub-process that reduces complexity, enables better handling of exceptional situations, and enables reusability.

Another point I want you to notice in this particular process is the Stop event in No Stock; a message is embedded in the termination of the process. This can be used as a signal to another organization process for handling No Stock situations; for example, in this case, No Stock would be the signal event to trigger a demand management process.

Banking and financial services

Banking is another domain where BPMs are heavily applied. BPM enables banks to automate their business process such as account opening, loan processing, payments, and transactions. Visibility of processes and compliance to regulations are critical in the banking domain. Banks continuously make innovative changes in their processes and services, and BPMS provides them with the capability to adapt to process improvement initiatives rapidly.

The typical business processes associated with banking are as follows:

• Account opening and maintenance
• Loan processing
• Payments and transaction processing

The preceding figure shows a simplified version of loan processing, similar to the supply chain management domain sample process. The clarity it brings in is obvious. However, in the banking domain, the more important aspects are the flexibility, automation, and intelligence options that BPM puts before the business users. The business users can define processes and modify them, thus bringing agility for market promotions; automation helps users to successfully comply with regulatory compliance; and activity monitoring-based analytics help banking organizations to reduce fraud and enhance customer experience.