Welcome to the Capgemini Global. Business Process Management. (BPM) Report. This report is an exploration of key trends in BPM as seen by CXOs across a
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2Contents Foreword 3About the study 4Executive summary 6The key to BPM success: BPM as a C-level concern 8How may I help you? The key bene˜ts of BPM 10 Cost ef˜ciency 10 Business agility 12 Compliance 14 Customer-centricity 15 Social media strategy 19 Staff satisfaction 20 Show me the money: BPM and Return on Investment 21 Speculating to accumulate: BPM as a counter-cyclical investment 23 Barriers to BPM implementation 25 Key conclusions and recommendations 29 Capgemini sector and country focus 32 Financial services 33 Public sector 36 Manufacturing, automotive and life sciences 38 Consumer products and retail 40 Telecommunications, media and entertainment 42 United Kingdom 45 United States 46 Australia 47 Germany 48 Italy 49 France 50 Spain 51 Nordic Region 52 Netherlands 53 Acknowledgements 54
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3Foreword Welcome to the Capgemini Global Business Process Management (BPM) Report. This report is an exploration of key trends in BPM as seen by CXOs across a broad selection of sectors and geographies. BPM is perhaps at a tipping point Œ it™s certainly at an exciting stage in its evolution. As both an engineer and an Operational Research practitioner in my early career, and subsequently as a consultant, I have seen BPM through its development over the last 26 years. BPM has its roots in management practices such as Total Quality Management, Business Process Reengineering & Model Based Development; but the advent of the new generation of sophisticated modelling and process execution technologies has greatly enhanced BPM™s power to truly transform businesses. This has created one of the most rapidly growing and attractive market sectors for both services and technology. We see BPM as a critical management discipline that when executed against clear, cross organizational business objectives, can deliver exceptional value to that organization. However, we also see that the potential for BPM is not well understood. Our decision to conduct this global survey stemmed from discussions with our clients. We sought to gain a better impression of their understanding of BPM, how they measure its value, and how far it is prioritized within their Business and Technology Transformation efforts. This research con˜rms our belief that BPM needs to be a jointly owned Business and IT discipline. It also demonstrates that it is starting to gain signi˜cant traction in the market and investments are starting to pay dividends to the early adopters. At Capgemini we are being asked by our clients to help them simplify and improve their business models and the technology that supports them and we are already seeing BPM become an integral and key part of this proposition. Business Process Management is becoming ever more relevant to both large and small organizations in the current economic climate. At a time when many different market sectors are facing slow revenue growth, customer churn and increased pressures on costs, BPM becomes a critical weapon in the battle for ef˜ciency and effectiveness in processes. Furthermore, in a challenging and changing business environment that is characterized by uncertainty, it allows organizations to adapt, be more agile and ˚eet of foot. Capgemini is seeing strong demand for BPM services in markets such as the USA, the UK, the Netherlands and France; and there are clear signs of increased interest in other geographies such as, Germany, Sweden, Spain, Italy and Australia. In sector terms, the ˜nancial services industry has led the way in BPM adoption over the recent past, driven by increased focus on customer- centricity and regulatory compliance. Other sectors, public sector, utilities, telco, retail and manufacturing are now not only catching up, but are starting to use BPM in new ways to create new business models to serve customers and outsmart the competition. The research ˜ndings also show however that this is a complex landscape, and we are not seeing adoption of BPM in a clear and consistent way. This report also looks at some of the barriers to adoption, with organizational silos being a major obstacle. Waters are further muddied by fragmented budgets, lack of clear governance and ownership and internal politics. The objective of our investment in this research project was to shed some light on these elements with a view to assisting organizations to create strategies that avoid or at least mitigate some of these barriers to success. Management of change in such endeavours is a key part in enabling the appropriate alignment of business and technology to support their transformation efforts. I hope that you ˜nd this report of bene˜t in the further adoption of Business Process Management. Bob Scott Senior Vice President Global Head of BPM Capgemini
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4About the study Capgemini worked with FreshMinds, a UK-based research ˜rm, to conduct the primary research for this study. The research process consisted of two complementary phases. During the initial quantitative phase of the research, a 30 minute online survey was completed by over 1,100 CXOs, senior business managers, IT directors and managers, and other senior business decision-makers. All major industries were represented in the study: Distribution and transport Financial services Public sector Manufacturing, automotive and life sciences Education and science Consumer products and retail Telecommunications, media and entertainment Utilities, energy and chemicals Professional services Healthcare Only participants from ˜rms with more than 1,000 employees were eligible for the survey. 55% of survey participants were drawn from enterprise companies with 10,000+ employees, 16% from large companies with 5,001-10,000 employees and 29% from mid-size companies with 1,001-5,000 employees. Respondents were drawn quite evenly from 11 markets: Australia Brazil France Germany India Netherlands Italy Spain Nordic Region UK USA The second, qualitative phase of the research comprised a series of in-depth qualitative interviews with senior business and IT professionals drawn from the networks of both Capgemini and FreshMinds Research. These individuals were selected to represent a cross-section of geographies and sectors, and were selected for their practical experience of Business Process Management initiatives. In each section of the report, our insights are based on the quantitative ˜ndings from the primary research, illustrated by graphical representations of the data. These are supported and illustrated by anecdotal ˜ndings and quotations from the qualitative interviews that comprised the secondary phase of the research. In the sections labelled ‚Capgemini view™ we have added supplementary analysis that is drawn from our consultants™ experience of working on BPM projects.
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6Global Business Process Management Report Executive Summary Capgemini™s Business Process Management research examines current practice in BPM, the bene˜ts being achieved and the barriers to success. A key theme is the relationship between executive-level sponsorship of BPM and its success. The purpose of our research is to help organizations understand what is involved in realizing the bene˜ts of BPM, and avoid the pitfalls that many have already encountered. BPM has an increasingly high pro˜le, with a growing belief among large organizations that BPM should be sponsored at a senior level. Of survey respondents who have both knowledge and practical experience of the topic, 82% believe that BPM should be treated as a C-level concern. There is a correlation between process maturity and treating BPM as a C-level topic. 68% of survey respondents who state that BPM is an important agenda item at managerial level also Initial Repeatable De˜ned Managed Optimizing The starting point for use of a new or undocumented repeat process The process is at least documented suf˜ciently The process is de˜ned / con˜rmed as a standard business process The process is deliberately managed in accordance with agreed upon metrics Process management includes deliberate process optimization / improvement The Capability Maturity Model provides a framework for understanding where our clients ˜t in terms of their adoption of BPM, and the potential roadmap for further development. The model was ˜rst developed by the Software Engineering Institute of Carnegie Mellon University. 1 1 http://www.sei.cmu.edu/cmmi/ say that their business processes are either fimanagedfl or fioptimizedfl ˛ the top two levels of process maturity as de˜ned by our maturity model.
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8The key to BPM success: BPM as a C-level concern The more Executives know about BPM, the more likely they are to believe that it should be regarded as a C-level concern. 82% of participants who have both knowledge and practical experience of the topic believe it should be part of high level business strategy. This is in stark contrast to the 20% of respondents who say that BPM is currently treated as an important agenda item at managerial level within their organization. At present, a lack of senior sponsorship means that only a minority of companies are reaping the full bene˜ts that Business Process Management can bring. These bene˜ts are discussed in greater detail in the next section of the report. Capgemini view To be successful, BPM needs to address organizational silos. In order to allow this to happen, executive sponsorship at enterprise level is essential. It is important for C-level decision-makers to focus on the business outcomes Figure 3. Respondents who have the greatest knowledge of BPM are signi˜cantly more likely to believe it should be treated as a C-level concern. Do you consider BPM to be a C-level concern? fiPercentage of respondents indicating ‚Yes™fl 82.0% 60.6% Respondents indicating fiI know a lot about Business Process Management and have plenty of practical experience of itfl Total Respondents of BPM rather than being hampered by the existing technologies. Strong BPM leadership at a strategic and tactical level is essential for long-term BPM success. It should be noted that while strong BPM leadership is important, it is not suf˜cient. Programs often fail because of a lack of day-to-day governance. This can lead to an insuf˜cient framework to address competing requests for limited resources, differing objectives and timescales.
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9fiProcess improvements need to be embedded throughout the organization. The top management™s time and attention needs to be given to such a strategic and longer- term value creating item.fl Business Unit Manager, Federal government agency, USA fiImproving process is vital for our business but can be a painful process which meets resistance in some quarters, hence the need for C-level sponsorship.fl IT Manager, enterprise level utilities business, UK Figure 4. Just 20% of respondents stated that BPM is currently an important agenda item at managerial level. Which of the following best describes the current level of interest in Business Process Management within your organization? 16.6% 18.6% 17.4% 20.1% 16.8% 10.5% Our organization is not currently interested in the topic We are interested in the subject but there have been no concrete actions so far We are investigating the concept and small projects have been started One or more departments are currently dealing with it at a more tactical level Currently Business Process Management is an important agenda item at managerial level and at least one strategic initiative in this ˜eld is under way Don™t know
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10How may I help you? The key bene˜ts of BPM This research examines which business drivers are most critical in different sectors and explores the application of BPM in these aspects. Cost-ef˜ciency Many organizations grasp that improving cost-ef˜ciency requires more than simply slashing budgets. Strategic investment is required in order to achieve material savings. 56% of respondents anticipated that their organization would increase investment in ef˜ciency over the next 12 months. Far-sighted companies are recognizing that effective implementation of Business Process Management technology and techniques can be a route to achieving signi˜cant ef˜ciency savings in the medium-term. Of those companies surveyed that are currently planning to launch a process management initiative, the area in which the highest proportion believed the project could have greatest positive impact was in maximizing cost-ef˜ciency. Total US UK23.4% 37.2% 32.8% 5.6% 1.1% 29.2% 30.1% 35.4% 5.0% 0.0% 21.9% 43.0% 30.7% 4.4% 0.0% Invest a lot more Invest a little more Invest the same Invest a little less Invest much less Figure 5. 56% of businesses will increase investment in maximizing cost-ef˜ciency over the coming year. How will your investment in the following business area change over the next 12 months: Maximizing cost-ef˜ciency? To understand the bene˜ts of a BPM implementation for a particular organization, it makes sense to consider ˜rst which business drivers are most critical for the organization. The business challenges that respondents identi˜ed as most important re˚ect the macroeconomic outlook prevailing in many developed markets and the pace of technological change.
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11 56% of respondents anticipated that their organization would increase investment in ef˜ciency over the next 12 months. Figure 7. 74% of businesses that introduced BPM to reduce manual work and increase automation reported a positive impact. What impact has this BPM initiative had on your business from the following perspective: Improving process performance by reducing manual work and increasing automation? Figure 6. The three areas in which businesses anticipate BPM could have the greatest impact are: Maximizing cost-ef˜ciency, optimizing time-to-market, facilitating customer self-service. In which of the following areas do you think process improvement could have the greatest positive impact on your business? The application of BPM technology and thinking automates complex processes, reduces manual work and eliminates duplication of effort. 74% of respondents who launched a BPM initiative with a view to reducing manual work reported a positive impact on the business. It is possible to achieve the same output with fewer fiWith process improvement you™ll streamline and automate business processes, give everyone in your company a complete view of the customer, provide deeper analysis and insight into critical sales and customer metrics, keep everyone focused on getting new customers while keeping the ones you already have.fl IT Consultant, enterprise level private healthcare business, UK Maximizing cost-ef˜ciency Optimizing time-to-market Facilitating customer self-service 1.7% 6.9% 15.5% 31.0% 43.1% 1.7% Quite a negative impact Neither a positive impact nor a negative impact Quite a positive impact A very positive impact Don™t know A very negative impact 29.7% 38.8% 55.8% resources, or increase output with the same resources. BPM can be an integral part of an intelligent cost management strategy, which allows a business to cut costs rather than cut growth. n.b. Respondents were able to select more than one answer, so percentages sum to more than 100%.
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