Business Process Management Platform

Acronym or Future Embezzlement Eponym?

11-Oct-2012 12:15:09

Is it naive to envision that a universal problem which has been shrouded by years of indiscretion and apathy could be solved with a three letter acronym?

In order to appreciate how BPM (Business Process Management) can aid in eradicating corruption one must first outline the concept of corruption and then understand the cause and the effect.

What is Corruption?

Corruption is both difficult to define and challenging to measure. When a prominent executive steals millions of moolah for personal gain, it’s fairly easy to identify that as corruption. What if a parent makes a donation to a school in order to ensure their child gains acceptance? Is that corruption? What if you live in an area short on housing and you pay the officials a little money under the table to get first option on a house? Corruption exists at many different levels, and some may argue that it is impossible to define as the very notion of ‘corruption’ is culturally determined and differs from one society to the next. For example, presenting gifts to executives may be expected in one country and prohibited by law in another.

Corruption essentially involves the misuse of power, by those who hold it, for personal gain.

Where does the rot come from?

According to many researchers on the topic of corruption, lack of transparency and a culture of impunity form the basis for systemic corruption.

Transparency implies openness, communication, and accountability. A lack of corporate transparency leaves one asking “What are they hiding?”

Less information means less certainty for investors.

Investors often steer clear of companies that lack transparency in their business operations, financial statements or strategies. Companies with incomprehensible financials and complex business structures are riskier and less valuable investments. When financial statements are not transparent, investors cannot be certain of a business’s real fundamentals. Lack of transparency may also obscure the company's level of debt. If a company hides its debt, investors cannot estimate their exposure to bankruptcy risk.

Investors seek disclosure and simplicity. The more companies say, and show, about where they are making money and how they are spending their resources, the more confident investors are about their fundamentals.

If a relationship has to be a secret, you shouldn't be in it
While many people can agree corruption is ethically wrong, companies need not justify their efforts to fight corruption on an ethical basis alone. All companies, large and small, are vulnerable to corruption and the potential for internal damage is considerable.

By engaging in shady practices executives expose themselves to blackmail. Consequently the security of staff, the premises and other assets is put at risk. Companies can even face risks which lack legal remedies.

A culture of impunity is not reserved for dictatorial establishments but is also prevalent in many businesses. If a company partakes in or tolerates corrupt practices, it will soon become common knowledge internally and externally. Unethical behaviour corrodes staffs loyalty to the company and it can be difficult for staff to see why they should uphold high standards or accept accountability if the organisation itself does not embrace such values. It may also become more challenging to hire and keep skilled personnel, as professionals do not want their reputations tarnished through association.

How does BPM deter corruption?

Business systems are linked with process business logic as opposed to user behaviour, thereby ensuring executive policies and procedures are adhered to with consistent rules driven outputs.

A correctly implemented BPM system can prevent costly mishaps, indiscretions and delays by:

  • Enforcing the segregation of duties,
  • Imposing strict legislative conformance,
  • And by ensuring employee compliance with business rules, policies and procedures.
  • BPM ensures accountability for tasks by providing a full audit trail of activities. A detailed audit trail means that even years down the line, it is possible to check exactly who did what, how it was done and when.

A BPM system such as FlowCentric Processware will notify the end-user when work needs to be done, the system can notify the user repeatedly and route work to other users if the employee is not available. The system can ensure that unattended tasks are escalated to the next level. This means if a task is not completed within a certain period it will be moved up the management chain. The escalation feature reduces lag time; the risk of bottlenecks; and ensures that work is completed promptly.

In short, BPM fosters a culture of accountability and consequence, which in turn discourages corruption.

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Topics: BPM