The new wave of BPM (Business Process Management) is not Business Process Reenginering, enterprise application integration, workflow management or another packaged application – it's the synthesis and extension of all these technologies and techniques into a unified whole. This unified whole becomes a new foundation upon which the enterprise is built, an enterprise more in tune with the true nature of business processes and their management. In a competitive economy, where margins continue to narrow and the pressure to respond to market shifts is greater than ever, the business rules approach is a great paradigm shift toward the process-managed enterprise and a significant enabler for reinventing ERP and the whole enterprise applications system.integration, business rules (BR), Business Process Management (BPM), Enterprise Resource Planning (ERP), information technology (IT)

Hurbean, Luminita

English

Research Papers in Economics

A NEW APPROACH IN BUSINESS PROCESS MANAGEMENT 
 
Conf. dr. Luminiţa, HURBEAN, West University of Timisoara 
 
Key  words:  integration,  business  rules  (BR),  Business  Process  Management 
(BPM), Enterprise Resource Planning (ERP), information technology (IT) 
 
Abstract  
The new wave of BPM (Business Process Management) is not Business Process 
Reenginering,  enterprise  application  integration,  workflow  management  or  another 
packaged application – it's the synthesis and extension of all these technologies and 
techniques into a unified whole. This unified whole becomes a new foundation upon 
which the enterprise is built, an enterprise more in tune with the true nature of business 
processes and their management.  
In a competitive economy, where margins continue to narrow and the pressure 
to respond to market shifts is greater than ever, the business rules approach is a great 
paradigm shift toward the process-managed enterprise and a significant enabler for 
reinventing ERP and the whole enterprise applications system.  
 
  1. INTRODUCTION  
 
Over  a  long  period  of  time,  enterprise  applications  providers  have  made  a 
remarkable progress in assuring an easy (as possible) implementation and some pre-
implementation alternatives. Indeed, leading ERP systems now offer broad functional 
coverage,  with  vertical  industry  extensions;  ever-improving  technical  architecture; 
training,  documentation,  implementation,  and  process  design  tools;  continual 
enhancements; global support and so on. 
The  promised  flexibility  of  today's  "standard,  best-practice,  configurable" 
applications actually means choosing from a list of existing, predetermined options, and 
if  the  required  option  does  not  exist  in  the  vendor's  menu,  there  is  no  flexibility 
available  (Thompson, 2006). These applications attempted to  eliminate  the need for 
modifications.  In  reality,  the  majority  of  ERP  customers  are  still  modifying  theirsystems.  Very  few  organizations  really  run  applications  as  they  were 
implemented, since every business changes constantly, in small or large ways.  
Successful  enterprises  are  increasingly  taking  on  new  business  models  and 
business  processes  in  an  ongoing  effort  to  overcome  the  competition.  The  source 
problem is the incompatibility between the desired agility of the business and the static 
underlying  information  system  –  most  current  commercial  ERP  systems  are 
architecturally  imperfect,  inflexible,  and  embedded  in  outdated  concepts  of  pre-
implementation  flexibility  and  post-implementation  rigidity.  The  main  explanation 
resides  in  the  material-centric  nature  ("make,  move,  maintain")  of  both  the 
organizations and the application software in the 1990s as well as in the first years after 
2000.  The  typical  information  system  requirement  has  traditionally  been  a  common 
group-wide  process  control  and  reporting  system.  ERP  systems  accomplish  their 
mission  in  "material  changes",  because  they  easily  perform  modification  and 
augmentation of machines, operations, materials, warehouses etc. 
The above described circumstances set off a few associated courses of action 
(they do not exclude each other): 
a)  Mend  the  traditional  application  software.  Important  players  in  the  ERP 
market made attempts to enable post-implementation flexibility with their new product 
versions through improved product connectivity and openess, role-based user access 
and communication, improved analytics and reporting tools, user-definable processes 
and workflow modeling. These efforts assure flexibility, though not always in the areas 
most important to the customer.  
b) Change the organizational structure by "design for people". By assuming that 
flexibility requires  a structural transformation in organizations and their information 
systems, the enterprise reinvents itself, becoming a people-centric organization ("staff, 
source, serve"), in order to manage knowledge, skills and intellectual property. 
c)  Switch  to  service-oriented  architecture  (SOA).  Further  than  being  a  new 
technology, SOA supports the alignment between the implementation of IT applications 
and the design of the business. This provides strategic business value because the key to 
long-term success is business flexibility, and strategic implementation of SOA provides 
IT flexibility that lines up with the ways in which the business is likely to change.    
d) Build for change using the business rules (BR) approach. Building for change 
is  concerned  with  the  technology's  role  in  making  organizations  more  flexibile, 
adaptable,  and  agile  and  it  ranges  from  leveraging  BR  and  BPM  software  to  make 
processes  more  dynamic,  to  speeding  collaborative  software  development  with  new 
practices and job roles. 
 
2. EVOLUTION OF CONCEPTS AND THEORIES: BPR, BPM, BR 
In  the  1980s,  organizations  used  business  process  reenginerring  (BPR)  to 
improve  productivity,  quality  of  service,  and  cost  effectiveness  by  making  radical 
changes  within  the  processes,  based  on  IT  solutions.  The  concept  of  reengineering 
business processes (Davenport, 1992; Hammer and Champy, 1993) led the information 
system implementation wave in the first place. 
The BPR approach of trying to change everything at once seems a bit extreme – 
few  enterprises  are  interested  in  radical,  clean-sheet-of-paper  process  design.  The 
practical need is to continually refine and improve key business processes (Bendoly, 
Jacobs,  2004).  In  order  to  maximize  and  enhance  the  value  of  their  enterprise 
applications,  organizations  should  focus  three  value  drivers:  integrate,  optimize, 
informate (Davenport et al, 2005). 
Experience showed that ERP implementation does not ensure the full integration 
of information and processes. For most organizations, integration is an ongoing process 
that continues long after implementation of the core ERP functionality. Certainly, ERP 
(integration projects, in general) proved to be a journey, not a destination. 
Another huge difference between the BPR of the 1980s and the BPM of the 
present is the fact that BPR involved hard-coded process changes. Organizations not 
only needed programmers instead of business users to implement these changes, but 
they  were  time-consuming.  Technologies  for  process  automation,  document 
management, etc., were independent of each other, and could only be integrated through 
coding. This made integration more difficult than it is now, resulting in it often not 
being used at all. 
When  pure-play  BPM  vendors  arrived  on  the  scene,  they  created  a  product 
whose  components  were  already  integrated  with  each  other  to  form  one  cohesive    
solution. These vendors focus on the business side of the organization, creating a user-
friendly  interface,  and  involving  business  analysts  in  the  entire  cycle  of  process 
modeling and implementation – not just in requirements gathering and user acceptance 
testing.  This  means  that  business  users  can  apply  changes  more  efficiently  without 
relying on the IT department, because changes are not hard-coded and usually do not 
require programming skills.  
 
3. THE BUSINESS RULES APPROACH 
Like human behavior, businesses also make decisions based on facts, and the 
quality of those decisions is based on the quality of the logical rules. For a business to 
make consistent decisions, it relies on consistent, high-quality rules and facts that are 
available to decision makers. These rules and facts are known as business rules. In a 
large organization there are probably thousands of rules. When business people and 
information systems have access to adequate business rules at the right moment, they 
can make informed choices in a timely manner. In this framework business rules serve 
as  the  guidance  system  that  influences  the  collective  behavior  of  an  organization's 
people and information system. 
The  BR  approach  is  a  formal  way  of  managing  and  automating  an 
organization's business logic so that the business behaves and evolves as its leaders 
plan.  A  BR  approach  to  information  systems  development  allows  the  business  to 
automate its own intelligent logic better, as well as to introduce change from within 
itself and learn better and faster how to reach its goals (Von Halle, 2002). 
An organization operates according to many different kind of rules, like legal 
mandates or specific constructed rules. They guide the way the organization works, they 
make sure that it comply with legal and other regulations, and they are a source of 
competitive advantage or a barrier to success. Logically, BR are valuable when they 
represent the best thoughts of the organization's best "thinkers". Typically, an enterprise 
constructs  a  unique  set  of  rules  for  guiding  its  areas  of  core  competencies  to 
differentiate  itself  from  its  competitors.  Regrettably,  too  often  BR  have  a  shadowy 
existence, being inaccessible or, worse, unknown. This is the case when the rules are 
"burried" in legacy code, for which there is little or no documentation. Those who use    
the system or want to make changes in the business logic don't have access or don't even 
know  about  the  rules  and  they  have  to  make  assumptions  about  them  that  may  be 
incorrect or inconsistent. Such assumptions lead to uncoordinated behavior (human or 
electronic), not capable of easy changes and adaptability.  
Needless to say, the pace of change today, mostly due to technology revolution, 
has  reached  unprecedented  heights.  It  is  essential  for  an  organization  to  be  able  to 
change. Nevertheless, humans are capable of assimilating new knowledge, adjusting old 
knowledge, applying it to activities, and evaluating the results – this is called learning. 
Individuals have a great affinity for learning and organizations should capitalize this 
ability  in  order  to  remain  healthy  and  competitive.  Now,  more  than  ever,  the 
organization and its people need to learn more and learn quickly. 
The information system's analysis and design should take into account the BR 
approach. The today's organization needs systems in which the rules are:  
- separated from other components, so everyone knows that they exist; 
- externalized so everyone knows what the rules are; 
- traceable to their origins and their and their implementations so everyone knows 
where the rules come from; 
- deliberately positioned for change so everyone knows how to improve them. 
By ignoring the BR approach, an enterprise puts itself in a dangerous position 
for today's businesses. It is no longer secure to separate the business from its ability to 
reason, the underlying guidance system by which it carries out and justifies its activities. 
By keeping the memory of BR, an organization can more easily experiment change, 
learning, growing smarter, and exhibiting more consistent insightful behavior. 
 
4. IMPLEMENTING THE BUSINESS RULES APPROACH 
Commercial rules technology will most likely serve as a significant step forward 
in  the  evolution  of  systems'  design  and  implementation.  The  commercial  rules 
technology promise to deliver better changeable systems faster, putting the business 
back in touch with itself, by finding and externalizing its own rules. 
The base is a change in philosophy, using the BR approach to methodology, 
management, and technology. A BR approach may provide the organization the most    
important  business  advantage:  its  own  logic  in  changeable  technology.  The  BR 
implementation features are described in Table 1. 
Table 1. The BR implementation features 
Issue  The BR Implementation Features 
The 
economics of 
IT  
The high cost of rebuilding applications as technologies change is 
greatly reduced because the business process and rules of the 
application are stored independently from the software code, and can 
be re-generated onto new architectures. 
Dynamics of 
business  
Business changes are analyzed based on changes to business 
processes and business rules. The impact on the application can be 
assessed, and changes can be incorporated and visualized by the 
business analysts. Once the business is satisfied with the new 
application, new application code can be automatically generated. 
Uniqueness of 
each business  
Applications are built on business processes and rules, which allows 
business analysts to understand and make customizations to the 
application without compromising the quality of the application. 
Custom applications can be built rapidly for very unique businesses 
or business functions. 
Business 
processes 
cross 
application 
boundaries  
Business processes are defined externally to the underlying 
applications. Existing applications can be assembled into new, 
composite applications to support business processes. The business 
process layer shields the users from the complexity of multiple 
systems. New functionality can be rapidly developed to provide 
support where existing applications fall short to fill the gaps. 
Quality and 
TQM 
The BR approach allow for less complexity in the code and 
significant automation of the software code development, which 
promises to result in significantly increased application quality. 
 
Not considering how far and how fast commercial BR technology advances, a 
fundamental aspect of delivering higher quality application systems is to start collecting 
and  managing  the  rules  of  the  business.  It  is  no  longer  desirable  to  burry  rules  in 
specifications  and  program  code  where  they  are  locked  away,  requiring  costly 
intervention and overhead to make changes. Furthermore, the rules can no longer be 
delivered in a format that is inaccessible and not understood by the business audience. 
Commercial  BPM  suites  are  fully  integrated  solutions.  They  combine  key 
technologies into one offering to enable business users and management to control and 
manage  business  processes,  without  heavily  relying  on  the  IT  department.  These 
technologies  include  business  process  modeling,  business  activity  monitoring,  a 
business rules engine, business process optimization, and application integration.    
Still,  BPM  should  not  be  regarded  as  a  "magic  wand"  that  will  remedy  all 
corporate maladies. Simply buying a BPM system, installing it, and turning it on will 
not  transform  business  processes  into  a  clean,  efficient,  and  holistic  business 
management system overnight. The main challenge in evaluating and deploying BPM is 
that multiple capabilities like integration, workflow, and process modeling tools must be 
assessed.  BPM  deployment  takes  work,  commitment,  discipline,  and  careful  change 
management,  all  of  which  entail  methodical  planning  and  dedication,  and  a  well 
thought-out implementation.  
 
5. CONCLUSIONS 
This paper premise is that integration of applications, information, and business 
process has become today's #1 IT investment priority. Application integration surpasses 
the technology borders, becoming a paradigm that provides the enterprise with a clear 
strategic business advantage: the ability to do business in real time, in an event driven 
environment, and with reduced latency. 
To meet these challenges, companies around the world have invested heavily in 
IT, with a major focus on ERP systems. However, an ERP suite per se delivers zero 
value. The power of ERP lies in its ability to improve business processes. The process 
becomes "the hub of the enterprise's universe". 
Like some other present-day topics in IT, business rule is one of those terms that 
many people use, but few are  able to define.  Over the past few  years, the level of 
interest in business rules grew rapidly, which is a useful indicator that might have some 
value in building modern information systems. BR is not completely new – the newness 
is not technology, but a renewed focus on what's important.  
The  collection  of  rules  across  an  enterprise  encompasses  its  collective 
intelligence. The organization's rules captured, analyzed, automated, and challenged in a 
business-oriented way, determine who the organization is and… what it can become. 
Eventually, the best thought patterns of the enterprise could become BR, the inspiration 
and  primary  guidance  system  for  collective  behavior.  The  BR  itself  becomes  an 
instrument of change. Some authors predict that a BR approach to systems development    
will turn out to be a competitive advantage for any enterprise, by transforming it in a 
process-managed enterprise. 
BPM specifically coordinates interactions between systems, business processes, 
and human interaction in a process-managed enterprise. The goal of BPM should not 
only focus on solving processes through technology, but also focus on cultural shifts 
within the enterprise that encourages information sharing, because BPM promotes the 
notion that a business moves forward based on the collective information that is stored, 
shared, and circulated among employees. It makes information available to all those 
who can use it, and enhances the investment that some businesses have already made 
through  the  implementation  of  ERP  solutions,  allowing  for  greater  efficiencies 
throughout the entire value cycle of a business. 
 
 
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A new approach in Business Process Management

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