How do digital startups manage their activities? Insights and opportunities for business process management

Business process management (BPM) aims to help organizations manage their business processes. Startups differ from established firms as they go through different phases of prospecting, developing, and exploiting the new venture. Startups begin to focus on the organization of their processes after they reach the exploiting (scale-up) phase. Digital startups are unique as information technology (IT) becomes the business model itself. These unique characteristics raise a question: how do digital startups at the scale-up phase manage their business processes? To answer the question, two case studies on digital startups in logistics providers are conducted. The case studies are designed to be inductive in nature. Grounded Theory Method (GTM) is used for data collection and analysis. Data is collected via interviews and supporting documents. The BPM capability provides the basis to create guiding questions for the interviews. The interview results are analyzed with a grounded theory approach of open, theoretical, and selective coding. To derive a new theory, cross-case analyses are conducted. Findings from two digital startups allow us to identify important categories that play a role in how digital startups manage their activities: industry and stakeholders, digital offerings, organic structure, process management, performance measurement, employee training and culture. We further theorize that the competitive nature of startups makes them customer-centric and focus on agility. Digital startups continuously improve their product and conduct adaptive process experimentation involving a cycle of process identification, IT-based process implementation and process adaptation. The supporting capabilities that enable the process management of digital startups are agile people and culture and organic structure.