Getting Small Firms on Board With BPM

The greatest obstacle small business operators face in adopting business process management (BPM) is themselves. That factor could account for the underutilization of BPM by small businesses -- and the reason BPM vendors have targeted the small business sector as a huge potential market. Of course, the abundant offerings of vendors can be confusing, and the trade jargon (SOA, Saas, ROI) can be daunting. Still, the reluctance of small firms to fully utilize BPM often comes down to one thing: attitude.

"No business is too small to take advantage of BPM. For example, even a six-person automotive shop has a finance system, sales and customer management -- even a Web site," Mike Cunningham, president of Harvard Computing Group, told CRM Buyer. "I believe it's ... orientation of the management and culture that has the major impact."

Small businesses have "corporate cultures" just as large ones do -- and a firm's culture springs from the personality of the owners or a few trusted managers. That can be a problem.

"For many small businesses, using technology is a cultural change. The owner often has most of the relevant information and for reasons of keeping control, the owner doesn't want to release it or share it," Susan Eustis, president of WinterGreen Research, told CRM Buyer.

For small firms to maximize the use of BPM, three major factors must come into play.

1. The Value of Information

Small business managers must be open to the value and use of information to improve efficiency.

Leaders of small firms who are serious about improving performance must be willing not only to share information with others, but also to discover and generate even more information that will be useful to running the business better.

"The threshold for using BPM has little to do with business size in terms of number of employees," Janelle Hill, vice president of business process management research at Gartner (NYSE: IT), told CRM Buyer. "It has more to do with the desire for greater automation and the need to use software to better coordinate resources for higher work outcomes."

Resources that can be coordinated with BPM software are people, machinery, computers, information flows and, increasingly, business policies and rules, Hill observed.

In fact, a serious small business manager can turn the supposed drawback of being small into an advantage.

"Companies have been focused by function or department forever," noted Hill. As a result, performance improvements have been contained within a separate function or product line. BPM is designed to break down the "silo" approach to efficiently manage operations on an integrated, company-wide basis.

"Smaller businesses may not actually have this 'silo' challenge because their organizational structure is typically less formal, less hierarchical, less structured," said Hill. "The smaller your organization, the easier it is to see and understand the end-to-end process."

2. The Importance of Self-Knowledge

Small firms should look inward before looking outward to a specific technology or vendor.

Adopting BPM isn't something that can be ordered at 9 a.m. Monday and set up by 5 p.m. the next day. Just calling a vendor out of the blue doesn't work. The small firm must at least be able to provide the vendor with some type of goal -- and self-analysis of the operation is essential.

For example, chronic inefficiencies in handling customer orders may back into the chronic mismanagement of raw materials for making products. Small firm operators must do their homework and find glitches to realize that "the way we've always done it" may not work in the future, and to recognize that asking hard questions now will simplify things later. Looking at the entire operation from the receptionist at the front door to the loading dock out back is essential.

"Focus on the end-to-end process first and define a goal for 'process improvement,'" "Then you can identify current barriers to attaining the goal. Technology choices should come much later," advised Gartner's Hill.

"Having an actionable plan and strategy is the first place to start," said Harvard Computing's Cunningham, "and [to learn] enough to see that this is not Mission Impossible."

3. The Acquisition of Resources

Let the technology resources come to you.

Before picking a particular BPM vendor or software, small business operators should pick the brains of better-informed parties, such as trade association peers who have BPM experience.

Consultants can be helpful, but are not essential. Even customers or suppliers with BPM experience should not be overlooked as potential resources, noted Harvard Computing's Cunningham.

"A consultant is definitely not called for," added WinterGreen's Eustis. "What is most significant for BPM in a small business is service and support. The best way to find out what is a good product and what works well in a local area is to ask your friends and employees. Ask around and check out what others recommend."

If a small business manager has the time and the money, taking an introductory course in BPM can be helpful. Some vendors are offering "small business" software programs, but small firms should assess these offerings indirectly at first by talking to someone who has actually used them.

Comparing vendors before making a decision is particularly important, said Eustis. Technology vendor Software AG, working in arrangement with Wiley, which publishes the "for Dummies" book series, now offers BPM Basics for Dummies for free.

IBM (NYSE: IBM) cultivates small firms partly through its Business Partner network of customers, consultants and resellers. The company has 4,000 such partners registered in its BPM channel.

Also, a significant initial investment is not necessary. The use of open source technology is making it relatively inexpensive to pursue BPM.

"To use BPM effectively, it is not appropriate to buy individual servers and get bogged down in hardware and software issues that are time-consuming and expensive to the small business owner," said Eustis. "Cloud computing is emerging as a significant new way to bring automated processes to every small business."

When it's time to actually contact a vendor, small businesses should insist that the vendor provide some return on investment (ROI) or total cost of ownership (TCO) projections to help assess a BPM program.

Sometimes the best initial move is to outsource.

"Small business can leverage an automated process as effectively as an enterprise, but they have to be smart about it," Eustis remarked. "A lot of small business BPM is outsourced, including payroll and accounting. This is the most efficient, because it leverages existing economies of scale. By consolidating lots of small businesses, the process is able to be managed more effectively."

Later, after some experience with BPM, small firms can begin to implement BPM systems internally. The bottom line: While it is important for small firms to be prudent when starting up a BPM program, what's most important is to start.