Risk Management in Business Process Management Life Cycle

Understanding the risks involved in Business Process Management (BPM) is crucial for success. This paper outlines the different risks at various lifecycle stages and proposes strategies to avoid, mitigate, transfer, or accept these risks.

Business Process Management (BPM) has emerged as an essential strategy to maintain a competitive edge. By aligning processes with business goals, organizations can improve efficiency and adaptability. However, just like in other complex organizational interventions, implementing BPM is not without challenges and risks.

While there has been considerable research into the critical success factors for managing BPM projects, there has been less focus on the associated risks. These risks are not limited to the software development and deployment phases but extend across the entire BPM lifecycle. By ignoring or underestimating these risks, organizations may find that their BPM initiatives fail to deliver the expected benefits.

Some of the identified risks include:

• Stakeholder Composition: The involvement or lack of involvement of different stakeholders can introduce risks at different stages.
• Method Mismatches: Using inappropriate methods or tools can lead to inconsistencies and errors.
• Goal and Metric Mismatches: If the goals and metrics of different phases do not align with organizational objectives, it can lead to inefficiencies or failures.

These risks exist not only within individual life cycle phases but also in the transition between phases, making the BPM lifecycle a complex and potentially hazardous journey. Traditional risk management strategies may overlook these unique challenges, leading to possible failures or inefficiencies in the BPM projects.

The paper suggests four strategies to deal with these risks:

1. Avoid: Recognize and evade scenarios where the risks are unmanageable.
2. Mitigate: Implement procedures and controls to reduce the impact or likelihood of the risks.
3. Transfer: Share or distribute the risks, such as through insurance or partnerships.
4. Accept: Recognize that some risks may be unavoidable and prepare to deal with the consequences.

The paper also suggests that frameworks such as CobIT and COSO can be related to the identified risks, providing a structured approach to risk management in BPM projects.

Implementing BPM is not a straightforward task, and ignoring the inherent risks can lead to failure. Recognizing and classifying these risks, understanding how they relate to different BPM lifecycle stages, and applying targeted strategies to manage them are essential. Future work mapping these risks to activities within frameworks like COSO and CobIT promises to provide practical risk mitigation strategies for BPM projects. By acknowledging and managing these risks, organizations can leverage BPM to its fullest potential, creating sustainable competitive advantages in a rapidly changing business environment.

For CIOs and IT Leaders, the learnings from the above information translate into actionable insights:

• Understanding the Unique Risks: By recognizing the specific risks associated with each phase of the BPM lifecycle, CIOs can create tailored risk management strategies. This understanding enables them to move beyond one-size-fits-all approaches and address the nuanced challenges BPM projects may face.
• Applying Four Strategies: The strategies of avoiding, mitigating, transferring, and accepting risks provide a structured approach to risk management in BPM. CIOs can leverage these strategies in various scenarios to effectively manage risks.
• Leveraging CobIT and COSO: These frameworks offer standardized guidelines for risk management. By aligning BPM projects with these frameworks, CIOs can utilize proven methodologies to mitigate risks. This alignment ensures a cohesive strategy that is grounded in widely-accepted best practices.
• Adopting a Holistic Approach: By considering both the individual lifecycle phases and the transitions between them, CIOs can implement a comprehensive risk management approach that accounts for the entire BPM project. This perspective helps in creating a robust process that's resilient to potential pitfalls.
• Future Planning and Continuous Improvement: The insights into BPM risks provide a roadmap for future planning and continuous improvement. CIOs can use this knowledge to preemptively address potential challenges in future projects, ensuring a more streamlined and efficient process.

The real-world application of these learnings for CIOs lies in a strategic, informed approach to BPM risk management. By adopting these insights, CIOs can guide their organizations towards more successful BPM projects, avoiding common pitfalls, and capitalizing on opportunities. The targeted, thoughtful approach to risk management outlined here is not just a theoretical exercise; it's a practical toolkit that can empower CIOs to drive their organizations toward more effective and resilient business process management.