By Neal Lohmann, Director of Business Transformation Solutions, Metastorm, Inc.

As the financial services industry begins its slow recovery, what role will "business transformation practices" play in helping companies streamline operational costs and improve balance sheets? Business transformation practices are comprised of management methodologies used to identify, design and deploy business change in order to improve or maintain market position. Over the past year, management teams have scrambled to resurrect favorite approaches and reuse them or have looked externally to emerging management techniques to help solve some of today's biggest business issues. As part of this scramble to remain viable and competitive, Business Process Management (BPM) and Business Process Management Systems/Suites (BPMS) have re-emerged and are proving to be a good foundation for transforming business operations.The appeal of BPM is that its foundation is based on the quality practices that managers and executives have grown up with (Total Quality Management, Plan-Do-Check-Act, and Six Sigma). As such, BPM may also be an appropriate foundation for today's business transformation practices. The strength of leveraging BPM for transformation lies in its ability, through the use of technology, to not only model the process and identify opportunities for process effectiveness but to also provide continuous monitoring of process performance. Today's BPMS technology enables companies to combine workflow management of the process, monitoring the ebbs and flow of work, with monitoring and analyzing the process in its entirety for corporate performance reporting and assessment.

When we consider the example of an integrated Business Transformation Framework, there are three primary phases in any business transformation. Phase one, identifying market trends and setting a Business Direction or vision to stay competitive. In the second phase, an organization creates new operating models, capabilities and processes to implement the Business Change. Phase three, monitor and Manage the Business to ensure the goals and requirements of the new business change are being met. BPM supports all three phases by providing a solid discipline for managing processes at the operational level, capturing performance data to measure business direction, and providing a consistent process language for the business change. The primary strength of BPM is its ability to manage the current state of critical business processes and provide the framework for continuous, ongoing process optimization. BPMS technologies automate the processes and provide managers with the ability to route work to ensure maximum efficiency of an organization's process assets. BPMS technologies also automate the monitoring of process performance data and the identification of business issues and opportunities through reports and dashboards - providing the actionable insight needed to make improvements.

The opportunities, reports and dashboards provide a good understanding of current performance for use in identifying gaps in the current state vs. the business vision. BPM and BPMS provide a transparent view into the current state that marketing and senior executives can align to an external view of the market and use as the baseline to identify changes that are necessary to remain competitive or improve market leadership.

The documented process and modeling techniques used in BPM can also be leveraged to facilitate a quicker design and deployment of the business change required to meet the new business vision. In an integrated Business Transformation Framework you can leverage the BPM modeling techniques, measurement definitions, facilitation methodologies and process documentation to quickly develop new operating models. Aligning your business transformation practices around a common language and set of definitions allows multiple disciplines to use the same information. The ability to collaborate around information development speeds up the transformation and reduces communication errors. Rapid response to market changes is critical to helping organizations maintain a leadership position and BPM enables this agility.

In the past, the financial industry's primary driver was growth of market share. This was accomplished by using organic silos and through acquisitions and mergers where the primary objective was to integrate the general ledger. Operational cost savings was a secondary objective, and the integration of new processes and technologies was not a high priority. In the new order of business as we enter 2010, these same companies need scrutinize organizational complexity and redundant processes and find opportunities to reduce cost - this is essential to maintaining competitiveness. Forward-thinking managers are turning to business transformation practices to address this challenge, and they are leveraging BPM and BPMS as a solid foundation on which to achieve positive process changes and successful transformation initiatives.