To become and remain successful and rise above the competition, businesses must continuously improve and monitor their processes. Failure to do so may result in big financial losses, lower investment capital, reduced motivation in employees, and fewer satisfied customers.
This is why more and more companies worldwide are adopting business process management (BPM) applications in different flavors. BPM tools are designed to manage workflows in a consistent, repetitive model, providing an instrument for collaboration among all team members.
According to the report led by Market Research Future, the BPM market is expected to grow to approximately USD $16 billion by 2023, with a 14% CAGR between 2017 and 2023.
The major factors fueling this market growth include the increasing number of companies from different industries that are aiming for cost efficiency and process optimization, investment returns from the BPM software, and business coordination and control.
Note that business process management is not limited to large enterprises. In fact, small and medium enterprises account for the largest market share in terms of organization size segment.
Any industry that adopts the mentality of process optimization and has the resources to define and manage processes (or outsource that) fits well in the BPM target bracket.
Let’s take the 10 largest industries in the US as a practical example. Note that every industry is represented by both large enterprises AND a myriad of small family-run businesses or startups reaching the same conclusions as they grow.
1. Real Estate
The real estate industry covers a broad set of providers dealing with acquisition and property sales, renovation, construction work, among others.
The data from the National Association of Realtors® shows that 5.34 million existing homes were sold in 2019. Every organization involved in the process follows protocol around gathering information from other parties and providing the outcome for purchase (or the next participant in the workflow).
Complex processes around expensive purchases or development initiatives should be as optimal as possible—or otherwise, you’ll end up with an 8-figure (or larger) investment that doesn’t generate the ROI you expect.
In terms of property acquisition, experienced vendors have comprehensive workflows they go through to determine the land quality, the history of the building, different factors around moist or humidity, how safe the area is, average prices, upcoming trends that would value the property in the next 5 or 10 years.
“BPM success in real estate or any other industry is actually about using automation to weed out the tedious or distracting processes and enabling employees to interact with customers or perform tasks more effectively.”– Ben Farrell
Visiting the town hall to research development plans in the coming years may uncover different surprises—say, a prison build nearby or just heavy construction work that will render living there unpleasant.
Similar factors will play out in the selling phase—but generally speaking, business process management will provide the right tooling to manage processes, track status, and delegate initiatives to different parties during the separate stages in the funnel.
2. Professional and Business Services
A 2015 survey by BPTrends shows that 96% of companies had some form of documented processes in 2015. Surviving without maintaining the institutional knowledge in a persistent form is barely possible, which is why companies of all business segments keep documenting and structuring processes in various forms.
Accounting, legal services, marketing, PR, and some forms of engineering or innovation services (like biotech) fall into the same category.
Processing invoices, handling contracts, calculating VAT, generating billing reports, monthly statements, conducting marketing research for campaigns—a small fraction of day-to-day activities larger agencies or firms deal with.
Automating these and providing the right workflows to follow minimizes the margin of errors, increases productivity, and enables less senior talent to work independently by following established workflows.
Taco Bell is a prime example for a company that went from losing money to being worth $1.98 billion in 30 years by re-engineering their core processes. Employing the right management talent (in-house or through management consulting) combined with the right tooling can turn a business around for good.
3. State and Local Government
State and government systems handle a lot of the operational activities required for a city or municipality to exist and thrive.
The educational system, police forces, courts, other municipality-regulated services like construction planning or introducing new traffic lights are handled by service workers in the state or city administrative facilities.
The concept of e-government has picked up adoption over the past decades. Countries like Estonia leading the race here – with 99% percent of all public services being available 24/7 online.
Due to the complexity of state and government jobs and the broad number of cases to follow, this has been regulated by tons of law books and internal clauses handling all sorts of scenarios. After all, this should be applicable to millions of people (or even a billion in some cases).
The Department of Defense (DoD) has also used a BPM toolkit to reduce the large volume of paperwork and simplify procedures with American military service members. This also reduced the number of hoops required to obtain classified information (previously performed via a third party accessing sensitive details).
Following protocol strictly is crucial and that’s why process management is integral to scaling the efforts over time.
4. Finance and Insurance
“Our survey shows that the financial services sector leads the way in adoption of Business Process Management software and approaches: 65% of financial services decision-makers that participated in the survey stated that their organization had launched a BPM initiative of some description, while 52% anticipated that greater emphasis would be placed on BPM over the next year.”– Nicholas Kitson, Head of Business Process Management, Global Financial Services Unit, Capgemini
Banking, investment, insurance are some of the areas of work with complexities introduced on a daily basis.
This entails different legal regulations, currency exchange rates, alignments based on GDP, annual interest rates, the stock market itself – and lots of other investment projections that keep the system running and operating successfully.
Many of the aforementioned industries rely heavily on machine learning (an AI segment) to handle large volumes of historical data and perform analysis for essential services—approving loans, calculating mortgage rates, handling refunds after car accidents (to name a few).
Errors in this department can lead to massive losses or lawsuits that cost a fortune. Handling business processes internally in a professional manner and keeping them up to date is the responsible and mature action to take.
This is one of the leading reasons why professional business process management is deployed in large corporations. An industry-specific BPM tool has the incentive to get certified for compliance reasons, ticking off all essential boxes for data protection and privacy, complying with existing regulations in the field. Relying on an automated system to adhere to standards by minimizing the margin of error has a serious upside in terms of successful growth in operations.
5. Health Care and Social Assistance
The healthcare industry covers the government-regulated activities around running hospitals, clinics, dentists’ offices, social care.
The insurance industry plays closely with healthcare to determine the allowed procedures covered by the country (or state), services covered by individuals, and the distribution of resources accordingly.
With COVID-19, a lot of these processes get adjusted on a weekly basis since governments also calibrate the allowance which all medical institutions have to follow.
There are other tangible segments that should be considered as a part of this segment. For instance, take accessibility – liaison with local governments for wheelchair ramps or parking spots for disabled individuals. Different insurance fees for different classes too (depending on their income). Accessibility regulations for institutions running web properties – including web visitors with braille readers.
Bambino Gesù Children’s Hospital, Italy’s largest pediatric hospital, reported incredible results after deploying a BPM platform for their healthcare-related services.
Over the course of 6 months, the application helped physicians and nurses to reduce the operational and paperwork overhead and increase the essential time as experts they need to allocate by close to 60%. Combined with the automatic email planning for medical exams, human error was brought down significantly, and “the quality of data and reliability of the pathway scheduling have been seriously improved.”
Needless to say, maintaining a complex set of processes is inevitable.
6. Manufacturing of Durable Goods
Durable goods are meant to last for a prolonged period of time – at least a year. This is why vehicles, furniture, kitchen appliances, electronic devices form a significant segment generating a decent chunk of GDP for most countries.
Manufacturing requires factories, producing goods following established (and complex) processes, maintaining qualities in warehouses, being shipped through a myriad of logistic companies.
In times of crisis, cost efficiency is paramount. Even though layoffs are the last resort, increasing operational efficiency and retaining productivity while having to cut costs is a consideration large enterprises may need to go through.
A BPM project led by Leonardo for Iron Ore resulted in headcount reduction by 30% due to process standardization and productivity improvements, in addition to added benefits while finding offshore opportunities for managing work remotely.
ERPs or enterprise resource planning platforms represent one of the integral process automation and management categories of software that almost every business relies on for their day-to-day. Additionally, management operations find other BPM applications instrumental for selecting vendors, following low-end product costs (motherboard, chemical elements) across the world, negotiating shipping fees at scale.
7. Wholesale Trade
Wholesalers are the bridge between manufacturers and business properties like retailers, restaurants, gas stations, other factories, construction companies, chemical firms, and clothing businesses.
There is an expected decline in the global wholesale market from $48761.6 billion in 2019 to $48477.8 billion in 2020 at a compound annual growth rate (CAGR) of -0.6%. This is primarily due to the economic slowdown across countries brought about by the COVID-19 outbreak. The recovery of the market will not be until 2021 at a CAGR of 6%, reaching $56797.7 billion in 2023.
This required optimizations and improvements across different segments – from employee efficiency to reducing paperwork, limiting the margin of errors, finding more cost-effective resources, to name a few.
Logistics is integral to the wholesale ecosystem since shipping often happens internationally, including aviation, shipping, truck transportation, trains, local shuttles.
Provisioning relies on storage facilities being built, rented, or acquired thanks to the construction and real estate industries.
You end up with tons of international accounting and legal frameworks for goods that can or cannot be shipped across the board – due to FDA regulations, blacklisting chemicals, or disallowing the import of certain goods for various reasons.
Implementing a set of business process management systems is what makes all of this possible—through software tooling, hardware devices, and operational management on top of that.
8. Retail Trade
The retail ecosystem selling direct to consumer encompasses a broad variety of businesses—grocery stores and larger supermarkets, gas stations, drug stores, furniture showrooms, hardware stores, clothing shops, toy shops (to name a few).
Capgemini’s report demonstrates that 96% reported a positive return on investing in Business Process Management, with 55% even concluding ROI at least twice their initial investment.
Understanding the relevance of BPM has yet to mature in the retail industry as compared to the other industries according to Brian Girouard of Global Consumer Products and Retail at Capgemini. Their research study shows that in five consumer products and retail decision-makers, there are only fewer than one who believes that BPM should be among the managerial-level agenda.
Retail is also a truly competitive industry and 85% of retail and 79% of consumer products companies plan to be using intelligent automation for supply chain planning by 2021. Race to the bottom and price gauging make the survival of the fittest a daily challenge. Ensuring competitive prices, reducing logistics fees, finding low rent high density offers for new stores, securing loyal talent are common challenges businesses struggle with.
Liaising with other businesses for logistics and quantity management is combined with additional tooling, strict processes, and best-practice checklists to make everything happen.
9. Manufacturing of Nondurable Goods
Nondurable goods face their own challenges unlike other business segments covered so far. Time-sensitive materials and products don’t last too long – which is why shipping as much as possible and selling them in a timely manner is integral.
Manufacturing labor productivity decreased at a 15.5% annual rate in the second quarter of 2020 according to Labor Productivity and Costs. The total manufacturing productivity also declined 4.1% over the last four quarters with output decreasing 15.8 percent and hours worked decreasing 12.2 percent. These were the largest quarterly declines since 1987.
Food, some beverages, paper products, and a lot of the clothing and footwear products fall into the same category. Businesses have to carefully maintain order requests and available supplies in-house, provide very specific environments for both production and storage (plus shipping), deal with billing projections based on lost or expired goods, and be smart with reusing or refurbishing materials for leftovers.
This determines a number of different segments around logistics, production, regulations (FDA or governmental), trade, real estate that would be impossible without the right automation and software stack for business process management.
In a research by Capgemini, there are reportedly three types of BPM implementation levels within the manufacturing industry and these are the following:
- individual process transformation
- agility layers on top of legacy applications
- end-to-end transformation
Each of these levels corresponds to the different segments of the nondurable goods industry with which different applications are suitable for business development.
The bottom line is that the renovation and optimization of existing processes are more important than ever—which is where powerful software applications and management practices are in need.
The broad information industry includes most of the Internet-based data distribution platforms, media outlets, and publishing.
Data embargo for press releases, hiring talent, managing journalistic efforts across the globe, monitoring myriads of data sources for the latest news, aggregating humongous loads of data, handling data centers and data replication systems, and peering up with most of the aforementioned ecosystems tends to be a software-first job in many places.
Even the more old-school, traditional media businesses are forced to transition to innovative models and tap into the global school of thought. Scaling resources and aggregating information, recruiting expensive talent through applicant tracking systems, scaling management processes for growing businesses, and funded startups rely on a network of process management solutions.
Let’s not forget social media, either. An enterprise architect for a large German automotive business reports that “The power of social media is rapidly increasing, which means that it will become a focal point for all mass-market businesses. Market trends will be dictated by social media trends, and the public view of a company will be determined by its social media interaction.”
Automated tools for content scheduling, brand monitoring, aggregating data through different sources, and analyzing competitors have been around for a while—representing separate tools required for BPM purposes in established organizations around the world.
The BPM Ecosystem Will Keep Growing
The graph above shows the size of the information technology and business process management (IT-BPM) market worldwide from the year 2014 to 2018. The graphical data also shows that 198.billion U.S. dollars was spent on BPM globally in 2018.
The evolution of the business segment will keep exploding over the coming years. With COVID out and companies like Microsoft or Twitter announcing remote working as the norm, on-site management and collaboration will be reduced, leading to the need of automating more processes and cross-checking workflows in a well-organized manner.
This covers a broader segment of the most popular business and public ecosystems relying on process management solutions. The further you dive into the growth aspect of any business, the bigger the need for additional process management solutions to effectively scale your business further.
What about small businesses?
Most BPM systems out there target the enterprise segment. With compliance requirements on one hand and legal regulations to adhere to one another, serving small businesses is a larger undertaking that hasn’t been fully covered yet.
This is one of the reasons we built SaaS BPM as a BPM toolkit serving small and medium-sized enterprises (SMEs), agencies, professional firms in the service industry. Aside from being really affordable (starting at $29/mo), it’s versatile, with clients also expanding to the restaurant or passenger transportation industries.
Regardless of the technical suite you’re using now, consider switching to an established, industry-grade solution that refines your processes over time. The further your business grows, the larger the impact on onboarding and training talent efficiently, managing sick leaves, building more complex processes across different parties.
Documenting and automating business processes is the logical step toward building a solid foundation for the years to come.