Essentially the term Business Process Management (BPM) means the activity of managing task(s) and processes pertaining to the execution of any business. More formally, Gartner Inc. defines BPM as a discipline that uses various methods to discover, model, analyze, measure, improve, and optimize business processes1 . It connects the behaviour of people, systems, information, and supporting infrastructure to produce business outcomes in the execution of a business strategy. BPM expert, Nathaniel Palmer explains it further by adding that it involves any combination of modelling, automation, execution, control, measurement and optimization of business activity flows, in support of enterprise goals, spanning systems, employees, customers and partners within and beyond the enterprise² .

BPM at the Core

In its simplest form, BPM is a way of designing and then controlling the processes that are present in an organization. It is an effective methodology to make certain that the processes are efficient and effective, as this will result in a better business outcome.

The operative word in BPM is clearly the first letter “Business”. Fundamentally BPM as a discipline when applied properly can have a profound impact on business – identifying new business opportunities, understanding failing business lines, uncovering poor service and leading to reorganization of the organization itself. Many of these opportunities come from looking at current processes considering possible improvement from a customer perspective or discarding them if they are not adding value anymore.

Further, the concept of true ‘management’ should not merely be in overseeing a process to ensure robustness or correctness. Its true significance should be infused with the approach of continuous improvement. This implies that BPM as a management discipline should be a continuous and alternating cycle of process improvement and process reengineering (Michael Hammer, 2010).

In the more recent times, some of the proponents of BPM have postulated that this term should not be restricted to individual or single process, or even a group of processes.

It should represent a more holistic view of business processes. BPM is, therefore, better described as an integrated set of corporate capabilities related to six areas – strategic alignment, governance, methods, technology, people, and culture. Research has shown that in order to successfully implement BPM in an organization, it is necessary to incorporate capabilities in all these areas.

BPM and Business Services

While the definition of BPM covers all activities of a business enterprise, somewhere along the way, a distinction was created between manufacturing operations processes and support service processes. All processes of a predominantly service industry, whether they are operations or support, are by default ‘service processes.’ However, within the industries that are predominantly manufacturing, support service functions/processes exist such as Finance & Accounting, HR, IT, Supply Chain, CRM and others. To make the terminology clear, all service processes across all industry sectors are collectively referred to as Business Services. In the mid-90s, offshore and onshore centers emerged consolidating service processes across businesses or countries, and they were referred to more by their operating models like captive shared services, third party business process outsourcing and several hybrid models. Until 2012, these centers gave more emphasis to ‘process’ in the term BPM and used the overall term ‘BPM’ more restrictive to mean elements like mere consolidation or aggregation of processes, processing of transactions, workflow systems and tools, etc. Thus, the term ‘BPM’ got used by two different groups very differently, while the larger mega meaning covered the management of ALL processes within an organization, and a very limited meaning by the Business Services sector.

In 2013, practitioners and experts at Shared Services
Forum (SSF) deliberated that in the spirit of keeping it
simple and holistic, there was a need to expand and
describe BPM with respect to Business Services Industry.

Accordingly, BPM was termed to be the combination of four dimensions of business processes: Business Process Consolidation (BPC), Business Process Transformation (BPT), Business Process Management Systems (BPMS), and Business Process Skills and Capabilities (BPSC). The intent was to emphasize all three aspects of BPM – the Business, the Process and the Management. Over the last 6 to 7 years, in the face of high-speed changes, this description too has become inadequate to comprehensively cover the composite environment of growing dimensions in global business services.

Widening the Horizon

In order to describe the operating environment of a commercial organization, the term ‘Business’ increasingly became self-limiting to a specific LOB (line of business) and was not understood to include the critical activities not directly connected to one business or meant to serve all businesses of the enterprise collectively. With the focus on end-to-end processes, and with Technology moving from being a mere ‘enabler’ to being ‘integrated’ at the core, the focus is also becoming ‘enterprise-wide’ in scope and impact. In line with the above, the concept of Business Process has also expanded into include comprehensive, corporate wide thinking, and this is referred to as Enterprise Process (C1 - EP). The term Enterprise Process has been deliberately kept distinct from Business Process due to its expanded reach (enterprise wide) as opposed to being LOB wide. The term ‘Process’ too seems to indicate the activity of running the business and focus on the company’s operations while running the risk of not having adequate focus on the long-term corporate ‘vision’. Clearly there is a need to expand horizons on this too to include the concept of ‘services’ instead of restricting oneself to ‘processes.’

Services as a term can be all encompassing and inclusive
of all activities that result in customer experience.
Eventually, it is ‘service’ that the customer gets, and
‘processes’ are the instruments or vehicles that enable it.

However, to get from process to services, one has to go through the steps of actual execution i.e. ‘operations.’ The process is the design and operations (more generically referred to as ‘processing’) are the steps needed to be executed in order to deliver services. Once processes have been designed, operations become simple. Operations, in turn, provides the feedback loop to change the process to make the operations and services smoother. In this discussion document, we will refer to this ‘operations’ as Business Service Operations (C2 - BSO). Essentially, it is the actual execution of the various business processes, individually or collectively by separate operating units or partners for one or more enterprise functions using requisite skills and capabilities.

In the evolution of running a business unit, which typically has an array of processes and services, there are a few dimensions that assume great significance, which may not have been adequately covered while studying the science of BPM. Clearly, running a business enterprise is a lot more than managing its processes. Given below are six dimensions that are critical to running a business enterprise and yet, are over and above the clinical elements of Process Management:

Collectively, these dimensions are termed as Enterprise Capabilities Enablement (C3 - ECE) representing what the corporation does or can do to go beyond operations – as an integrated set of technical and leadership capabilities that result in achieving business outcomes. As professional business management grew to becoming a more exacting science, the role and importance of these technical and leadership capabilities became clearer. In a way, NASSCOM recognized the power of ‘capabilities’ for captive centers by upgrading GICs (Global In-house Centers) to GCCs (Global Capability Centers).

The three terms mentioned above are really bound together by the omnipresent technologies, which have today become the core of all the enterprise functions. Technologies cannot be made to be distinct from the functions as the processes, operations and capability enablement are intricately infused together and have a tremendously high level of influence/ impact relationship with each other. This infused technology is called Integrated Technologies (C4- IT). It represents the shift from IT enabled to IT integrated, encompassing the digital ecosystems and human workforce mix. This becomes a force that cuts across Enterprise Processes, Business Services Operations and Enterprise Capabilities Enablement.

A need has arisen for a wider, more comprehensive term to incorporate the shift of focus from business to enterprise as a whole; from business process to business service operations; from technologies supporting businesses to integrated technologies; and to bring out the concept of enterprise capabilities enablement. It is probably best termed as Enterprise Services’ or ES. ES can be considered as the consolidation of the above four constituents (C1 through C4). It defines business management of services beyond best practice to ‘world class next practice’. Under this broader description, the importance of growing unique and specialist capabilities, integration of technology into processes, going digital, and increasing the potential of design thinking have also been incorporated, amongst others.

The doctrine of ‘Enterprise Services’ has been formulated with the intention of encompassing a mega picture of all those services related to a corporate entity that connect and integrate the enterprise through business processes, technologies and new age capabilities. Thus, the horizon has been widened to include every aspect of the enterprise and its ecosystem in order to provide focused and sustained service. This makes Enterprise Services as a ‘business’ by itself; a sine qua non for success and value delivery.

ESM and its Components

While the four constituents put together represent
Enterprise Services, to enable us to use this practically,
a management framework has been drawn out
to describe the working to achieve this world-class next
practice. This management framework is called
Enterprise Service Management (ESM).

ESM is the art and science of managing the enterprise as one composite complete unit to achieve the corporate goals. It is important to note that BPM has not been replaced by ESM. Rather BPM has become a part of ESM. The concept of ‘Process Management’ itself has been extended beyond the business to cover the enterprise as a whole, becoming a key component of ESM, with an emphasis on services. BPM continues to retain its relevance in a larger context much beyond Business Services as a composite term representing process consolidation and transformation through the key drivers of strategic alignment, people, skills culture, process, technology, governance, automation and excellence to carry out an effective management of services.

As stated earlier, ESM is a structured framework comprising the holistic principal components to design the pathway to achieve ‘Enterprise Services’. There are six holistic principal components for ESM with the acronym CENTUM³. These components are:

C ustomer centric operations

E nterprise process management

N urturing partnerships

T ech integrated operations

U nified capabilities

Digital Metamorphosis

Each of the above components represents distinct focus areas needed to deliver a comprehensive and consistent service. Each component, in turn, covers five sub-components, which largely explains the component.

This is the study of carrying out the tasks as required by the process operations with a mind-set of impact or use to the customer. There could possibly be several connotations of the term “customer”. The definition in this case is all-inclusive and covers all clients, external or internal customers, ultimate consumers, suppliers, or any other stakeholders in the process. For each individual process operations, as well as for each individual process manager, the term ‘customer’ could mean different entities or people. This definition essentially covers them all.

Customer/ Client Orientation: Having or creating an understanding of the customer’s point of view is clearly the starting point. The service delivered needs to be of the quality and standard that creates a superior experience in the minds of the customers. The customer receives the services and the process is the instrument or the vehicle.

Consolidation of Processes: Fundamental to customer orientation is the creation of consolidation strategies for business processes. Each business process either directly or indirectly affects the customer. Consolidation strategies provide the opportunity and direction to the organisation to improve the customer touch point experiences.

Structuring Models: A component of ESM which covers the various models of consolidation of processes for business service operations, such as centralization, shared services, outsourcing, joint ventures, managed services, or various forms of hybrid models such as Dedicated Captives. A mix of the models is also possible (at times preferred) with a scientific process-by-process study of its relative risks and advantages.

Processing & Service Delivery: This forms the core of the component. It signifies the actual execution of the tasks as part of the business service operations and delivery of consistence services to the satisfaction of the customer. It involves demonstration of commitment, ownership and accountability.

Operational Excellence: The need, ability and execution of services in an organisation resulting in ongoing improvements. it involves focusing on the customers' needs using both technology applications and innovativeness.

This component emphasizes the need to look at each process and activity across functions beyond the boundaries of consolidated operations. In other words, for whatever processes of any function we provide services, the focus of the process needs to be enterprise wide. The significance of process value chain is in its end-to-end traceability from actions to overall organisational, customer and financial impact.

Enterprise Functions: It represents all processes of common (horizontal) functions of the organisation across the enterprise such as Finance, HR, Procurement, IT, CLM and connects the businesses, entities and corporate, In service sector verticals, like BFSI, it can also extend to ‘consolidatable’ processes of business operations. An overall strategic view for one or more enterprise function is expected for effective ESM.

Process Management: It is the art and science of aligning processes of one or more enterprise functions with the strategic goals of the organisation. Among other things, this would involve designing and implementing process architectures, establishing process measurement systems, defining process level goals and impart the skills and knowledge to the process managers to execute the processes effectively.

End to End: This is a key element of ESM and assumes that each process that needs to be carried out in pursuance of the corporate goals is considered as one unified process not bound by silos – functional or territorial. Examples of end-to-end could be establishing linkages between front office and back office, onshore and offshore, onsite and offsite, outsourcing and client, or any other cross-functional process like Procure-to-Pay that can run the risk of an imperfect management.

Customer Journeys: This concept considers the customer - not the organisation – at the centre of success. It refers to creating value through transforming collective processes to manage series of customer interactions referred to as journeys. Unlike individual touch points that generally last for short periods of time, customer journeys include all things that happen before, during, and after the experience of product or service. Journeys are longer, stretching across multi-touch and multi-channel. Customer journeys, being cross functional by nature, require cutting across traditional organisational functional boundaries.

Process Reengineering: Improvement or transformation in the way business processes are carried out. Unlike incremental changes, reengineering is usually radical changes or fundamental rethinking or redesign of the processes. This involves wiping the slate clean and re-writing the processes afresh. The intention is to standardize processes across the enterprise and in the process save costs, improve efficiency and improve quality of service. An approach of reorganizing processes should be solely based on enterprise impacting outcomes.

Many a deal of ES business, be it captive or third party,
have fallen through or have been prematurely terminated
due to poor relationships at all levels. Like all businesses,
ES business too depends on the development and
maintenance of vital relations with employees, business
partners, suppliers, customers — any person/ entity
involved in the business process.

Companies that cultivate and nurture connections are more successful than those that ignore them. A trusted relationship is formed after many rounds of interactions that have gone well. At the beginning it may require offering service without expecting anything in return. Once this happens, a trust is formed and can frequently create huge opportunities and have enormous long-term impacts. It is imperative that each party treats each other well and does not abuse the relationship for a one-sided gain.

Strategic Partnership: A relationship with another business or individual that can help the ES business at the fundamental level or for critical outcomes. This can be a relationship with a supplier or a customer. Though not very common, such relationships can also be informal, especially in the smaller firms. Such partnerships are usually built on a give & take kind of an arrangement and require a fair amount of trust at both ends.

Trusting Relationship: As mentioned above, a fairly deep element of trust is essential before any form of meaningful partnership can be established. It is a fragile dynamic, which requires commitment and effort to build and sustain. It is usually a result of long durations of ‘experiments.’ The concept expects a ‘safe’ situation at times of need. Elements such as dishonesty and hidden agendas can quickly lead to mistrust resulting in loss of integrity in addition to any business loss or withdrawal of service contracts.

Stakeholder alignment across levels: Very often there are strong alignments between the ES organisation and clients (customers) either at the top level or at the operating level. For a healthy partnership, which is of mutual benefit to both the parties, a strong relationship needs to exist across the spectrum – at the strategic level, at managerial level and at the operating level.

Robust Governance: This is the mechanism used by the management and other stakeholders to implement and monitor policies, practices, procedures, and job responsibilities. A robust governance operating structure between the ES organisation and stakeholders helps enable the execution of authority, accountability, and responsibilities at all levels, and provides a structured approach to nurturing relationships. While it creates performance monitoring structures, defines reporting lines and linkages, identifies decisions, risks, and other matters pertaining to seamless service delivery, it also sustains a connect with the key stakeholders.

Collaborative Change Management: The ability and need for partners to monitor and control change collectively for common good. In this case the partners could well be employees, suppliers, customers, parent organisation, ecosystem or any other partner in change. The core element of any successful change management process is collaboration. Collaboration combined with the change purpose statement, communication, sponsorship, business commitment and customer focus will most always lead to success.

The world has moved on from being “IT enabled” to complete tech integration. The tech platform has graduated to become enterprise wide and deep all the way down. ‘Wide’ technologies which are social, mobile and interconnected compete for mindshare with ‘deep’ ones, which are analytical, robotic or inherently intelligent. Each of these is equally important today as the business fabric is becoming increasingly digital at a breakneck speed. ES organizations, in particular, need to quickly adapt their businesses to the capabilities these technologies provide.

Modern and leading-edge businesses are integrating
technology ‘AS’ the core of the business – and not
merely integrating technology applications ‘AT’ the
core of the business.

With all these, there is a clear demand to combine creativity with structure, excellence with end-to-end, and being with doing.

Tech-operations interdependence: This is simply the fact that operations today are inseparably a part of the process. Newer technology environments have brought about processes that do not exist on their own. In fact, the execution of the operations is the execution of the technology. Business service operations units deploy add-on tools like Document Management, Workflow, OCR, Activity Monitor, Duplicate Audit/ Reconciliation tools etc., which are core to the execution of the processes.

Co-existence of conventional and nextgen technologies: It is all about aligning, leveraging, effectively integrating and optimally utilizing the existing technology applications and systems such as ERP, legacy systems, etc. with nextgen technologies such as Robotics, Cognitive, Automation and block chain. The true measure of digital competence or maturity is the synthesis of the two, not just use of advanced technologies, which very often gets mistaken as the only measure of digitalisation in service organizations.

Enabling Infrastructure: A parameter that strides both the conventional as well as nextgen technologies, with reference to infrastructure. Even powerful technologies like AI/ ML with poor infrastructure will fail to be effective. This parameter is important enough to be considered as an independent dimension as it is the bedrock on which the two technologies would rest, be connected with and finally work as one. It can also be referred to as the designing and enhancing tech infrastructure connecting both conventional and nextgen technologies, optimizing core infra & network, data, information security, data privacy, recovery etc. – all of which form critical features in any ES organisation.

Enterprise-wide process-tech linkages: This is the existence robust technology inter-linkages to the processes from end to end across the enterprise. It also emphasizes the need to systematically analyse, manage, and monitor the various functional linkages within the organisation, whether interdisciplinary or inter-institutional.

Customer Inclusion: In this technology dominated times, inclusion and participation of the customer is critical for the success of the final outcome – customer experience management. Inclusion involves inviting the customers to engage with the organisation not just at the superficial level, but devoting attention, keeping themselves updated and having skin in the game. These integrated technologies, in fact, bring ‘solutions’ also under the umbrella of ESM.

It is the age of specialization. The ‘capacity and ability’ of
an ES organization to showcase its commitment to deliver
best-in-context services and the skills/ knowledge
required to be leaders in each of the areas it operates in,
has now become essential.

This dimension covers a complete 360-degree human, organizational and systems capabilities. The organization’s ability to amalgamate and use the explicit and tacit skills, knowledge and capabilities of all its strategic assets, including humans, to sustain effective performance has become critical to enterprise.

Talent, Skills & Culture: The creation, monitoring and use of the human element in any functional organisation. The capabilities created by deploying the fundamental tacit knowledge, skills and talent of the people who are at the centre of the processes can make the difference towards creating competitive advantage. It is also the process of shaping the work ethos, mind-set, skills and behaviours of people to imbibe/ promote common goals through inspiring leadership, people practices, innovation, risk appetite, data management. Skilling, up skilling and reskilling, especially with speed can become a big differentiator.

Knowledge Management: This is the understanding and effective use, dissemination, exchange, updation and growth of the people assets and knowledge assets, which are as important to the ES organisation as the tangible ones. The asset is, however, in our peoples’ minds, in unique methodologies, and in repositories. It is a structured knowledge system to enhance capability development including reskilling and leading-edge knowledge exchange for organisation learning to drive improved performance of business.

Risk Management: The capability of the ES organisation to predict, identify, analyse and mitigate uncertainty in business operations. It involves understanding the fundamental dependencies of the business or process, be they internal or external. It also involves having a plan to mitigate risks based on degree of expectation of occurrence and extent of disruption possible. In the fast-paced technology dependent world of today, this is a real threat and needs to be taken seriously head-on.

Innovation & Agility: The ability of an organisation to adapt to change with speed is an essential trait. This capability of the ES organization can make a difference between staying afloat or sinking in times of major changes in the environment. Creating a culture of innovation and agility involves a major leap of faith in the people of the organization. It requires the management to encourage new thinking and a spirit of experimentation. With this comes the acceptance of failures. Agility on the other hand requires creating corridors of quick decision making, empowerment and taking risks.

Systems & Automation: This requirement clearly is the flavour of the moment. The capability to synthesise systems and embed automation at all stages within the ES organisation activities is important. This requires a deep understanding of the processes and knowledge on the deployment of the relevant tools. This also requires the ability of the managers to change process workflows, when required.

With unprecedented advances in Internet of Things,
Robotics, Artificial Intelligence and related innovations,
machines now almost outperform human performance in
a range of work activities including those requiring
cognitive capabilities.

Over the past few years, almost every industry and life in general has seen a transformation caused by the inclusion of technology in one form or the other. In a way, the depth and extent of impact on companies due to a series of transformations is best termed as ‘Digital Metamorphosis’. Simply put, this is a revolution that will comprehensively affect marketplace, workplace, and social networking space. It will affect current jobs and roles, will rewrite competition, will change the way customers access and demand fulfilment of services, and will truly make the globe borderless. Hence, there is a clear need for ES organisations to equip themselves with this capability as a differentiator to successfully implement ESM.

Continuous Transformation: As mentioned earlier, a continuous series of transformational changes results in a metamorphosis, which as the name suggests, is absolute, with a dramatic change in form, state and nature of things. With the world becoming increasingly volatile and unpredictable, customers are demanding more and different experiences. Creating an environment of change is essential – an economic and digital metamorphosis. This dimension requires the ES organisation to see that both business inputs and outcomes will rapidly change and will soon become a way of life. The leaders will have to live with it and become comfortable with it.

Digital Technologies, Tools & Workers: Business processes are rapidly changing. Computers and systems processes have become prominent and complex tasks are being automated. Managing the new cognitive workforce of the technologies involved is a new ball game. The extent of specialization is deep, and it is now possible to treat robots at par with their human counterparts. Robots get employee IDs, they have reporting supervisors, and need training. This component has the risk of making a significant impact on the ES business if the adoption or implementation of a best-fit option is not met.

Cognitive & Intelligent Automation: This is the ability of the organisation to infuse intelligence into information and repetition intensive processes. It is commonly associated with Robotic Process Automation (RPA) and Artificial Intelligence (AI). This is a state-of-the-art processing stage in an ES organisation where routine tasks are carried out with ease with few exceptions. Over time, the machine ‘learns’ the correct way to operate and reduces exceptions. This capability provides appreciation of the investment/ adoption options available to gain significant advantages towards cost savings, customer satisfaction and ability to work on unstructured information.

Partner Ecosystems: Signifies the need to understand the involvement and importance of the complete ecosystem of the digital journey. Specialisation has forced professionally run organisation to partner with other specialists and present a common unified product to the customer. In today’s highly digital world no single organisation can be complete by itself. The ecosystem as a whole must cohesively exist for a seamless process. Typically, AI/ML as well as Data Analytics are possible areas of partnership with the external IT/ startup/ ES ecosystems to minimize investments, enhance of speed of adoption and optimise deployment to deliver value.

Changing Business Models: Digitization has completely changed the business models of the companies. Things that were true for millennia are suddenly not valid anymore. Businesses are constantly changing to stay with the changing times rapidly in order to stay afloat and continue to create value. Typically, technology companies are becoming competition to companies in BFSI, Transportation, Hotels & Hospitality, and virtually every other industry with e-commerce replacing brick and mortar servicing options. ES organisations, being in the services and technology space, together need to build expertise to innovate and support strategic choices of the enterprise.

Power of ESM – A Blue Sky Approach to Becoming a Strategic Asset

With its expanded definition, ESM is a vision-enabler to look into the futuristic world of Business Services and Business Capabilities, breaking all boundaries of the past. It is a dynamic framework with several interconnected, fungible and intangible components. To that extent, it has become more akin to the real world – it is flexible, agile and will adapt itself to the changing environment of the future, enabling global enterprise service organizations to become ‘future ready’.

The power of ESM adoption can only be assessed by evaluating the several direct benefits that this new form of service management has the potential to bring about, such as:

Clearly, ESM is not just transformational, but
transcendental to the extent that it broadens the
outcome focus and has the potential to take the growth
trajectory of the business services unit into a hypersonic
pace and make it a true strategic asset of the company.

The ESM Framework along with its six components (as CENTUM) was developed and brought out by SSF as part of its 2018 Global Research Report based on interactions with several global practitioners and thought leaders. The above feature includes the ‘why, what, and how’ of ESM i.e. (a) the context and reasons on why the ‘leap beyond BPM’ has become essential; (b) the four constituents that captures the ‘what’ of the doctrine of Enterprise Services; and thus (c) demonstrating the power of ‘how’ the ESM Framework enables the present day Business Services organizations to design the pathway to achieve Enterprise Services, thereby becoming ‘future ready’.

– ed.