BUSINESS: Using BPM to Manage Risk and Address Compliance
Recent Gauteng Business News
The economic crisis has forced businesses throughout the world to readdress their strategies and establish ways to do more with less. Now, as the international financial climate stabilises, companies are turning their attention to tactics that will manage and mitigate the risks an unpredictable future holds.
Stakeholders, of course, share this concern. As a result one of the most prevalent and pressing repercussions of the financial crisis has been increased pressure on companies across industries to address risk mitigation and regulatory compliance as a priority. This is no longer an option, but a necessity as stakeholders are increasingly demanding greater transparency regarding the risks to which companies are exposed.
Companies should prepare for potential partners and investors to request detailed risk management profiles before even considering doing business with them. These requests will be in addition to the slew of new and incoming national and international regulations which are expected to be more strictly regulated and enforced than ever before.
The cost of meeting these requirements will no doubt be considerable. Accordingly, companies are considering ways in which to adapt their business environments in order to remain competitive.
It is for this reason that the business process management (BPM) market has seen interest in its offerings increase considerably. Indeed, many companies are using BPM solutions to change the way they process, manage and measure work. Additionally, advances in the technology mean that real-time information from these business processes is integrated into a process intelligence platform, enabling management to maintain a finger on the pulse of business activities, as they occur. This ensures that compliance and a high degree of risk management are applied automatically.
The current economic environment is placing pressure on management teams to identify and exploit opportunities or mitigate emerging risks rapidly. Traditionally, business processes have passed through a variety of commonly siloed departments where each activity or transaction is treated in the same manner. This replication method, however, makes it easier for things to fall through the cracks, particularly during departmental hand-overs; and the so-called ‘Golden Thread’ of process visibility is not maintained.
Process standardisation greatly reduces the possibility of fraud by ensuring processes are being implemented correctly. However, the true value of process standardisation is only unlocked when it is automated. Process automation provides an environment where less manual entry and intervention is required and the potential for errors are greatly reduced. Furthermore, automation also greatly reduces the need for paper which can be misplaced, lost or intercepted.
The process intelligence element enables real-time visibility of business operations which allows managers to easily identify inefficiencies and opportunities as they occur and react immediately. This increased visibility empowers management to optimise operating procedures and ensure efficient utilisation of people, resources and time.
A strategic difference
This level of transparency allows for increased speed and accuracy in auditing and, in the case of a dispute, information can easily and readily be located. Automation and centralisation of information also improves accuracy in reporting and forecasting, which undoubtedly provides a strategic difference to any organisation.
Data stored in enterprise resource planning (ERP) systems is usually only uploaded to the data warehouse once a day, which means that companies might only realise the existence of a risk situation long after it has been created and need to deal with it reactively. Today’s management team however requires real-time measurement and monitoring of processes. The BPM platform provides a central view of the data that is related to a packet of work, such as a procurement order or credit transfer, regardless of where that data is actually stored. This enables risk to be handled pro-actively and dealt with timeously.
This monitoring also helps identify areas of improvement within processes on an ongoing basis, and a solid BPM solution should remain agile enough to adapt accordingly. This agility enables the company and its processes to easily adapt to ongoing market and regulatory changes.
The business process is ultimately owned by the business, and BPM is as in all technology solutions, a delivery platform that makes all of the above possible. Given the benefits provided by BPM solutions, it’s no surprise that it is regarded as a business solution and not simply as a piece of technology.
Business News Sector Tags: Business| Economy| Insurance|