Business Process Integration (BPI)

In order to improve organizational efficiency and flexibility and transform the same into effectiveness and responsiveness to the customers, companies have been concentrating on their business processes, which flow across the internal boundaries of departments and external boundaries to support customers and suppliers. Today companies are pondering over ways and means to achieve high level of integration with partners, suppliers and customers’ processes to synergize the business operations all along the supply chains. Looking at the pace at which companies are racing ahead (implementation of packages like SCM, CRM, ERP etc.), to achieve the competitive edge or advantage through Business Process Integration (BPI), BPI will soon become competitive requirement or compulsion.

Business process integration is all about information integration – seamless merger of data, which calls for:

• Integration of activities, data, knowledge and systems that are working disjointedly within the functional silos of an organization. Some of these activities might have been automated, but at best they are “islands of automation”, creating handoffs for the next units, with limited communication with other related systems.
• Integration of information architecture in such a way that the strategic significance of the business process performance can easily be ascertained.

Horizontal integration is connecting core and enabling processes along the value chain of the company to manage seamless flow of information. This applies to the activities with in a process too. Integration between the business processes depends on the physical design of underlying processes in terms of how prudently information requirements at each stage have been considered and whether all interface issues between the processes have been addressed. It is very critical to understand dependencies between the processes:

• Flow dependencies are said to exist if the outcome of a process is used as input by the subsequent process.
• Sharing dependencies occur when multiple processes need the same resource. Use of common database by different processes is an example for the case.
• Fit dependencies are said to exist when multiple activities together produce a common output. Here information is exchanged by multiple processes as and when required to deliver a common outcome. For example to develop annual plan of the company, lot of information is concurrently used and processed by procurement process, production process and sales process to deliver the final plan.

Since information technology is widely used for integrating information flow, development and use of common standards for interface between applications running on diverse platforms is need of the hour, especially so in order to achieve business to business integration with suppliers, partners and customers. Web technology facilitates such a seamless integration across the platforms. Dell’s integrated supply chain management is an often quoted example in this category. Through the integrated solution Dell enables customers to decide upon the configuration of computers online and at the same time concurrently addresses various concerns like manufacturing capacity, shipping constraints etc. in its pursuit of real time order fulfillment.

Vertical integration is about linking processes to the company strategies. The linkage between company strategies and processes comes from what is being measured and targeted in the actual process. The concept of vertical integration can be simplified if we visualize BPI (Business Process Integration) as consisting of four layers. Starting from lowest layer, they can be named as connectivity layer, application layer, reporting layer and decision layer.

Connectivity layer ensures data capture, validity and security. BPM / BPI tools enable data control and validations at each stage through well designed integrity constraints. It establishes interface with various process participants with in and out side the organization. This is a major challenge in a distributed environment. The evolution of web technologies has ensured availability of uniform interface across different platforms.

The application layer is where the traditional business process automation applications work. They enable efficient flow of information and typically prompt for human intervention to authorize the transaction. Horizontal integration between processes is ensured at this level through integration between different applications along the value chain of the company. Use of middleware utilities like ODBC ensures access to diverse database systems and reusable modules ensure cost effectiveness. Integration between applications does not simply mean transfer of information or data, but also depends on clarity of business logic that controls sequence of transactions. This is very important design criteria which can be satisfactorily fulfilled only if communication acts (requirements, commitments, obligations, permissions and authorizations that occur in successful transaction) and business rules are fully understood.

Reporting layer represents that part of BPM tools which are responsible for filtering the information and providing exception reports for a higher level of executives to analyze and initiate corrective actions. This is very important element of process control and process improvements.

Decision layer filters the information based on the analysis that top management may ask for time to time. The information at this layer aids top management team in non-routine decisions, which are characterized by uncertainty in outcomes and complexity of options. BPM tools may typically help executives by mapping different scenarios.

Business process integration is a means to streamline your business, but technology certainly can not drive the performance. It is rather a compelling business need that should drive an organization towards integration. Technology just supports the drive to fulfill the business need. Not to forget is people – it is very easy to change technology but changing the way people work is the most challenging task and so an organization with a culture of collaboration and teamwork definitely has an edge.