When Vulcan Materials Company completed a massive overall of its core IT systems, its work wasn't quite done yet.
The Birmingham, Ala., company, which produces building materials such as gravel, concrete and asphalt, replaced legacy systems with Oracle Financials and Peoplesoft for human resources and payroll. The company also restructured itself, adopting a shared services model. Instead of having each division run its own administrative centers, Vulcan Materials established companywide services for functions such as accounting.
The enterprise resource planning (ERP) rollout was mostly done by 2010 - but automation gaps still existed around and between the new systems. The company's answer was to purchase a business process management (BPM) tool to fill those gaps. The company selected BP Logix's Process Director about 16 months ago to automate workflows associated with vendor maintenance, customer maintenance, capital project approval and other forms.
Patrick McLendon, manager of systems and programming at Vulcan Materials, says the BPM tool has eased the company's administrative headaches while contributing to its cost control regimen.
"We're very much affected by the construction economy. We've been through the wringer over the last several years, and now our sales are starting to pick up again," he says. "The concern is, if business picks back up, will the administrative costs pick back up, too?"
McLendon says the automated workflows for back-office processes will help keep selling, general and administrative expenses from spiraling as sales increase. The workflows are used across the company's divisions, complementing the shared services strategy.
"We can increase volumes and not see the same corresponding increase in the cost of doing the administrative work and the back end processes," McLendon says. "That is a huge deal ... in a very low-margin business like selling gravel."
Using BPM to Cut Red Tape
The economic downturn and slow recovery have compelled organizations such as Vulcan Materials to take a hard look at their business processes, which, in turn, has elevated the role of BPM. Hard times, paradoxically, may have reinvigorated the old product category. Some vendors report growth rates in excess of 30 percent, and Forrester earlier this year said BPM is ramping up toward a $6.6 billion market opportunity.
But BPM tools may be pressed into roles beyond providing do-more-with-less efficiency. BPM tools offer the potential for greater business agility, as workflow apps can be quickly rolled out and modified to deal with shifting business trends or changes in the regulatory environment, according to industry executives. In addition, some customers are looking to deploy BPM to improve customer-facing processes as well as back-office tasks.
BPM may be edging into different roles, but its capability to cut red tape remains an important attraction. "We have eliminated a lot of the busy work and rework," McLendon says, citing " administratium" as the heaviest element on the periodic table.
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