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Don't be like GM: How a BPM strategy can help you avoid bankruptcy

Midmarket CIOs who think of a business process management (BPM) strategy in its basic form as a tool for putting processes around purchase orders, claims or employee onboarding and offboarding should re-consider the role it plays in business sustainability during a recession, according to one analyst.

“You look at all the businesses that didn’t survive the recession – some of them were in a bad market segment, OK, but some of them just couldn’t scale down fast enough,” said Clay Richardson, an analyst at Forrester Research Inc. “Look at GM, for example. That’s really the GM issue — they couldn’t scale down fast enough.”

Although a BPM strategy and scalability might seem like minor factors among the financial obstacles GM is facing, the expansive company has been unable to respond quickly enough to decreases in demand — GM has lost about $88 billion since 2005 — and as a result, was forced to file for bankruptcy protection.

As more and more businesses suffer the same fate (Chrysler, Circuit City, Linens ’n Things) how helpful can a BPM strategy be for companies in a rocky economic climate?

“I think BPM is becoming important for sustainability,” Richardson said. “Looking at downscaling from a sustainability standpoint, we have to have control over our processes so we will be ready when things turn around.”

But not everyone understands sustainability and how a BPM strategy can have a positive affect on it. According to a recent report from the BPM Forum, “more than 53% of companies don’t have or don’t know if they have a corporate sustainability agenda in place. And lack of awareness of business benefits was identified as the top challenge to environmental sustainability.”

So what can midmarket companies do to achieve the business and sustainability benefits of a BPM strategy?

Transparency, process standardization and a company-wide understanding and appreciation for the processes keeping the organization moving steadily along are important. The more business processes you are aware of and attuned to, the easier it will be to recognize even a minor change in “business as usual.” This improved way of doing things can result in quicker reaction times, efficient restructuring and (hopefully) bankruptcy avoidance.

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