Because of their wide applicability to so many different departments, Business Process Management (BPM) and Business Process Outsourcing (BPO) are some of the most frequently heard abbreviations in organizations today.
As their names imply, both of these processes pertain to completing—and optimizing—core business tasks. Yet, many people are unclear about just what these terms mean, while even more are uncertain about how they differ from one another.
BPM is a dedicated series of steps for increasing the efficiency of any repeatable business task such as payroll. It’s almost always completed in-house; this market involves approximately 200 billion in U.S. dollars spent around the world. BPO is largely the outsourcing of these functions to third-party providers who perform these series of tasks as ongoing services.
Both BPM and BPO are considerably improved by Robotic Process Automation (RPA), which reduces costs, improves operations, and maximizes productivity. Exploring the definitions and distinctions between BPM and BPO illustrates how RPA makes these vital processes much better.
What is business process management?
The goal of BPM is to streamline the different steps in repeatable workflows to make them as efficient as possible. That requires analyzing the different processes required for a certain objective such as onboarding new employees in human resources to increase throughput while decreasing the resources and time required to perform the work.
Typically, BPM includes the following five activities:
- Design: The design phase identifies the ideal state in which a process should occur, as well as what needs to happen to realize that state.
- Model: With this activity, organizations evaluate how the series of steps in these workflows play out in different scenarios.
- Implement: During this phase, organizations do the tasks required for BPM while standardizing them with tools such as RPA.
- Monitor: Monitoring is required for quality assurance and pinpointing areas of improvement.
- Iterate: This final step involves acting on information gained from monitoring to continually improve the output of these different tasks such as supply chain procurement.
What is business process outsourcing?
Once you understand BPM, answering the question of what is BPO becomes much simpler. BPO is the use of third-party consultants and IT professionals to perform common business processes for horizontal needs such as IT, payroll, or human resources.
Many companies choose to outsource these ongoing tasks because they don’t impact their core business. For example, healthcare providers want to focus on improving patient outcomes, not perfecting the various steps required to optimize compensating their employees. BPO lets them do this by simply paying a BPO organization that specializes in these tasks.
RPA is an invaluable tool for third-party business process specialists. Since robotic automation and bots excel at completing repetitive processes, for example, taking data from one form and transferring it to another, they free up human employees to perform more meaningful work. Bots can also greatly reduce operational costs since the Digital Workforce they create shortens time to value while enabling organizations to do more with fewer resources. Additionally, RPA bots increase agility in operations by quickly adjusting to new requirements—especially when they’re programmed in response to the needs of human workers.
BPM or BPO
The reality is that most organizations are either using BPM or BPO. In either case, RPA is critical for making these tasks more efficient, inexpensive, and effective. It’s a valuable component in the modern workforce that allows organizations to focus on their mission-critical activities while letting the Digital Workforce focus on the operational necessities sustaining them.