BPM Adoption – How to derive extended cost savings?

Recent research has shown that there is a marked increase in the move to outsourcing application development and maintenance of organisational applications.

Computer Economics have found that based on an annual survey of 200 IT organisations, there has been a marked decrease in ‘in-house’ IT staff ratios for application programmers and system analysts. It has declined from 25% of the IT staff on average in 2007 to 20% in 2009.

The tasks performed by these roles typically focus on those performed during the Software Development Lifecycle and includes activities such as:

  • System design
  • System analysis
  • Software development
  • Testing
  • Maintenance of application software

In contrast, the analysis found that:

“… the decline in application programmers and system analysts over the three-year period was offset by growth in related functions, especially business analysts and business intelligence personnel.”

In my opinion, this can be attributed to various factors but I would propose that most of the business solutions that organisations have implemented over recent years have focused on reducing cost, increasing efficiency and ensuring better decision making.

On average IT departments spend at least 80% of their budgets on development and maintenance. Reducing this will have a direct impact on the bottom line.

At this point you may well be asking – “So what? What has any of this got to do with Business Process Management?” The answer, it has everything to do with it.

BPM is a catalyst for ‘Change’ as well as a vehicle that can be adopted to drive standardisation, shortened delivery lifecycles, alignment between IT and Business users which in turn leads to a more responsive and effective business. A key component, and I would argue a mandatory prerequisite, is that an organisation should clearly understand how to adopt BPM, as not just as a tactical tool, but rather as a strategic way of delivering continued business improvement.

As with any new initiative, comprehensive preparation ensures a better chance of successful outcomes. Part of that preparation is having the right people with the correct skills. In my experience, BPM projects can fail for myriad of reasons, but the one that is always underestimated is the need for a project team (Business and Technical) that is familiar and experienced with BPM concepts, iterative development methods, extensive technical skills (not just BPM tools) and above all have the ability to quickly adapt to changes in business and technical needs within an organisation.

The type of logistical, financial and management investment required to create and maintain such an ‘in-house’ team and capability is more often than not far too costly for even the largest of organisations. This, however, does not mean that BPM should not be adopted as a viable way to deliver the afore-mentioned organisational benefits. It just means that it may require a bit more focus and creativity when choosing the best operating model that will match the culture, budget and objectives of the organisation.

In future I will be exploring various topics I have raised in this post. In summary, I would suggest that if you are involved in a BPM initiative or are considering embarking on a BPM journey, take some time and consider the following:

  • What are the key objectives that need to be achieved as part of the initiative?
  • Do the correct skills and resources exist in the organisation?
  • What gaps in knowledge, skills, experience, and culture exist that can’t readily be closed by internal teams?
  • What criterion has been specified to ensure a successful outcome?

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