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The Role of Business Process Virtualization in Your Business

Chapter Description

Martha Young and Michael Jude introduce the concept of Business Process Virtualization (BPV) and explain how technology and the economy are its driving forces.

What Is Incrementalization?

BPV is a process in itself. It is not a flash cut to a new business model. In fact, it can't be. Because the changes are so profound, BPV is achieved in increments. This is the good news of BPV. It can be achieved one step at a time, and each step can yield significant benefits. The benefits are not isolated, but are cumulative. The total is substantially greater than the sum of its parts.

One Process at a Time

Consider the typical enterprise, composed of dozens of departments and hundreds of workgroups. Each of these workgroups has defined multiple work processes. In many cases, these processes are part of company-wide business processes, but a large percentage of these work processes are particular to the group. These processes also are highly manual. They can range from the procedures for approval of work to the ways in which people collaborate and document what they do.

Each of these processes can be automated to varying degrees; in some cases they can be virtualized so that they become location-independent. Each of these conversions can be justified on the basis of an immediate timesaving benefit. Ultimately, the virtual process of one group or many groups can be stitched together to form virtual departments and, ultimately, virtual companies.

The point is that each individual process can be virtualized incrementally without waiting for some grand scheme to answer all the questions associated with virtualization at an enterprise level. However, this isn't the only way to think of incremental improvements.

Horizontal Incrementalization

Consider the business processes that cut across multiple departments. These are typically associated with service delivery, engineering, time management, and accountability. In these cases, BPV can be applied to such processes to accelerate the flow of information and to improve communication between groups. BPV can also be used to facilitate the inclusion of groups that might not ordinarily be included in a process because of geographical separation or other factors.

Horizontal incrementalization typically involves investments that are larger and systems that are more complex than those applied to individual group processes but that can be a logical adjunct to them. As noted, when sufficient numbers of workgroups are virtualized, it makes sense to tie them together with higher orders of BPV. If the groups work together in different departments, horizontal incrementalization yields excellent returns. This doesn't mean virtualizing the entire enterprise; rather, it means an incremental, stepped approach within target workgroups or departments where positive economics can be demonstrated.

Vertical Incrementalization

Vertical incrementalization, like horizontal incrementalization, merely extends BPV from the workgroup. However, whereas the focus of horizontal incrementalization is on the business process between groups at an equivalent level of responsibility, vertical incrementalization focuses on extending the virtual workspace up the reporting hierarchy within the same division.

Vertical incrementalization is the process of upscaling incrementalization as successes are achieved in specific work processes. For example, a workgroup could implement document management to rationalize the process of manipulating and using documents. Once stable, this could be augmented with desktop management to rationalize and improve the use of individual desktop environments. Ultimately, this could be extended to the development of a completely virtual work environment.

Vertical incrementalization is actually BPV's most powerful principle, because it is how an organization can ultimately achieve the highest degree of virtualization. As control becomes vested in automation rather than in interaction of management layers, the actual location of management and workgroups becomes less important. Ultimately, the process itself is the control structure, with management focused on process rather than people.

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