I believe process is a competitive differentiator. This blog provides comments around Business Process Management (BPM) from a business perspective. To me, BPM is technology enabled continuous improvement that builds on reengineering, activity based costing, business intelligence, and other prior business efforts. I will also use this to share my thoughts around leadership, innovation, and business in general.
BPM Enterprise offered me an opportunity to blog which I view as a nice privilege given the other bloggers are Kiran Garimella (webmethods), Ismael Ghalimi (Intalio), and several others which have been active in the industry for years.
I am fortunate that Howard Webb (BPMG principal) and Kiran Garimella (VP, Office of the CTO at webmethods and author of The Power of Process) have agreed to present at our first webinar titled "Understanding Business Process Management & the 'People' Factor of Process Change".
This is the first of three e-seminars on business process management. This session focuses on the "people aspect" of BPM and how change leaders are enabled by BPM adoption. The next two sessions will feature a discussion of process and technology aspects of BPM.
No matter what your familiarity and experience with BPM, you won't want to miss the opportunity to hear the views of two leading BPM experts who have worked with Fortune 1000 companies for over a decade on business process improvements.
Today's sessions started off with a great breakfast event with Michele Cantara (VP, Gartner) talking about the BPM marketplace. Most of the rest of the day, I focused on client examples. Everyone seems to be talking about the organizational challenges of change (a lesson we should all have learned on all our other system implementations).
Gartner has decided to offer a second show in the fall in FL. This is definitely the even to be at if you want to talk with customers, hear client / prospect challenges, and meet the vendors. Most of the vendors are here with one noticeable exception - Intalio.
I will work on longer items around some specific topics of discussion, but here were my key takeaways from Day Two (while acknowledging that I am skipping the last section to blog and relax).
Gartner will be coming out with their BPMS updated magic quadrant soon. They have put 5 companies on the watch list - webmethods, EMC, Cordys, Microsoft, and SAP.
DST is currently the market leader for BPMS based on market share.
The drivers of BPMS adoption are - companies have completed other value efforts and focusing on business process, SOA, web 2.0, Six Sigma / Lean / Kaizen, and BPM extending the life of their current applications while waiting for SOA.
The inhibitors of BPMS adoption are - culture, resource shortage, and forecasted (but not existent today) disillusionment with the space.
BPMS CAGR for 2006-2011 is forecasted at 23.8%.
No single vendor can meet all your needs.
BPM is core to a process based ecosystem. (Similar to point from Day One about creating a linkage between internal and external processes.)
An enjoyable key note by Gartner VP & Fellow Daryl Plummer who has excellent stage presence. He talked about SOA (Services Oriented Architecture) and tried to make all of us business people understand without boring the technologists. (Gartner says 40% of the audience here is business.)
Business describes what their job is. Programmers describe what their systems do. A process model closes the gap.
A service in your life today includes phone, water, electricity, Google, etc. A "service" in your architecture is similar in that is an always on connection to one of your backend applications which can be "called" at anytime to perform a function. (My business interpretation of what I heard.)
Talk about event driven service (e.g., the phone rings (event) which triggers me to lift it up and access a service) versus BPM driven service (e.g., after x step call this service to get data).
Lots of talk about options being custom developed application versus BPMS. Some talk about BPM best-of-breed and putting together a virtual BPMS.
American Home Shield talked about using BPM to help them double in size and to capture and drive compliance with best practices.
Symetra Financial talked about eliminating paper processes to improve customer service with less errors and shorter cycle time. He talked about the change of address process requiring someone to pull a paper file, make the changes, capture the before and after screen images, and then return the file. (Oh my gosh! That is almost as bad as a person I met once whose job was to take letters of the printer, fold them, grab an envelope off another printer, and seal the envelope...he did this 8 hours a day.)
Symetra had huge results - 20% increase in productivity per underwriter, 30% increase in productivity per case manager, increased job satisfaction, processing time reduced by 4 days, 67% more volume without increasing staff, increased compliance, and reduced training time by using foolproof processes.
Symetra had some good lessons learned / CSFs - work with a pilot team which for them was newer employees that weren't stuck in the old process, advertise to the users about the benefits (e.g., "No more papercuts"), talk to lots of vendor references, and do a proof-of-concept.
SanDisk talked about their implementation focused on A/P. Their PO processes were too manual making authorization enforcement difficult and international paper approval processes ridiculous (e.g., paper "evaporation").
SanDisk did a 16 week implementation but smartly added on 2 months of piloting and UAT. They reduced cycle time from 3 weeks to 1 week and were able to handle 80% more volume without increasing FTEs.
SanDisk's team is 4 people - architect, administrator, and 2 business analysts.
The SanDisk person did comment that even though they automated the current state it opened up Pandora's box since the users saw the power of the system and wanted to make lots of changes.
Western Union make a great point about how they modeled the "To-Be" future state process prior to buying a tool. Once they got the tool, it identified steps that weren't necessary because the system could fully automate things that the users just assumed had to happen manually.
Epcor talked about their order to cash process which often required a "hero" to make it successful. They looked at custom development (5x) versus BPMS.
Epcor was able to drive their order to cash process form 12-16 hours to 5 hours which made it easier for everyone and increased job satisfaction. The change was hardest on the heros that enjoyed saving the day in the old manual process.
Geisinger talked about using BPM for clinical document capture, A/P, and appeals and grievances with great outcomes.
So, for those of you missing the conference, here are at least a few nuggets. Nothing earth shattering if you know the space but good reinforcement and examples.
Gartner is holding their 3rd BPM Conference right now in San Diego. There are about 1100 people here which shows the growing interest in BPM. It is a mix of companies with a certain bias towards financial services / insurance and government.
There are several things I will pull out an blog on over the next few weeks, but I thought I would share a few items from the first day.
Interesting discussion about the shift in BPM value propositions from cost, value, and agility to process visibility and metrics to innovation.
Lots of discussion about top down versus bottom up. Challenges with either.
Move with companies that are doing this to go from rote processes to intracompany processes.
Discussion about process as a competitive differentiator.
Implications of BPM focus include enabling BPO, making SLAs easier, and forcing role definition.
Three groupings of BPM: (1) BPM Suites (e.g., Appian, Lombardi); (2) Process aware middleware (e.g., Tibco, webmethods); and (3) process orchestration in composite applications (e.g., SAP).
Heard an interesting presentation about an ideal future state by the founder of Pega and talked with a PBM (pharmacy benefit manager) and a MCO (managed care organization) using them.
Had several companies tell me about their Proforma use (I was unfamiliar with them).
Discussion about sub-processes versus end-to-end processes and the challenge of organizational change to support becoming a process centric organization.
Some typical entry points for BPM include performance management, application integration or upgrade teams, and compliance.
BPM enables moving from job "artists" and company heros to consistent and predictable processes.
Rich Phillips from Maritz gave the best user presentation so far talking about their changes. A key point he made is that the typical BPM process is missing the VOC (Voice of the Customer).
Rich also talked about linking supplier processes to corporate processes to client processes.
One example Rich used was the ability to drive pricing changes across the company from a one year cycle to a one week cycle.
There has been too little discussion on process design from an outside in perspective.
Aflac made a great point that the only reason to automate is visibility.
El Paso talked about using BPM for a new oil well process and how this got rid of paper and e-mail.
Had an interesting discussion around User Friendly Process Modeling and all the options from stickies and whiteboards to PPT to Visio to VSM (Value Stream Mapping) to IT specific tools to BPA tools to using the BPMS modelers.
A great kickoff activity that one company mentioned for getting users thinking about process is to have them talk about their morning process of getting to work.
Peter Schwartz from the Global Business Network spoke. As I have always respected him, this was a treat. He talked about the future of BPM being tied to the change of customers (e.g., aging, diversification, greening, Long Tail), change of technology (e.g., spintronics, nanophotonics, plasmonics, convergence), change in competition (e.g., consolidation, innovation, new nations), and change in business (e.g., raw material costs, geo-political).
Was introduced to the COO of Zynium (Dutch Dwight) by a consultant who said that their product has been helpful in Visio import / export for BPM.
I think this is a challenge for lots of people. Process improvement should be iterative. It won't be perfect the first time, and as people wait for perfection, they miss opportunities for feedback. One of the benefits of BPM is that it allows people the flexibility both from an modeling perspective and an automation perspective.
This can be good and bad. The ease of use in changing a model and modifying the resulting application or automation of the process makes it tempting to tweak it real-time. This both creates some change management and application stability risk, but it also makes it difficult to manage user expectations. As they better understand flexibility, they want to make real-time changes. Compare this with years past when the user realized that if they missed their requirements window, they had to wait for a future release.
There is something in between that allows for agility while preserving stability. But, the key is making everyone understand this. I will stick with my golf analogy from blogs past. If I waited to play golf until I perfected my swing, I wouldn't have a lot of fun. But, in playing the game as I learn, I continue to find things to work on, situations I didn't consider, and identify questions to ask. When I go back to my pro for more lessons, I know things to work on and areas to develop on the practice green. BUT, modifying your swing during the round is typically a mistake. I think this is a good framework for thinking about your BPM efforts.
It takes a lot for a general print article to get me going, but I read an article earlier this morning that talked about the stupidity of using auto-replies on e-mail to tell someone you are out of the office. The person claimed that they don't use voicemail, travel 250 days a year, don't have a Blackberry, get 200+ e-mails a day, and respond to everyone within 24 hours. Obviously, they must be an amazing communicator (or have an amazing assistant).
While I agree that it may not be optimal to use an auto reply that says you are out of the office and gives an alternative contact, I appreciate knowing that fact. We are all busy. Travel is a way of life, and everyone wants an instantaneous reply. I can't advocate that people don't take vacation, and I do advocate that people be disconnected at times. People need to refresh and innovation often happens when you step back from the fray.
I talk about this because the better solution than giving up your life would be to use e-mail (for example) to kickoff a process. You could create a customer management process by which they can call or e-mail or fill out an online form to initiate the follow-up process. The prospect or customer provides some basic information that lets the process route it for follow-up. If your sales person is gone, the process automatically escalates it. If another SME needs to engage, the process engages them. If it is a billing question, the data can be pulled up and routed (with context) to an agent for follow-up.
The point is that sales and customer support don't need to be dependent on one, always connected resource. It is a team effort and process management using rules can make this seamless and transparent to the end customer. If you choose the original route, good luck. I have tried, and I couldn't do it.
BPR (Business Process Reengineering) was about wiping the slate clean and rebuilding processes. This was too radical for many people. BPM is about iteration and moving towards optimization.
BPM adoption has been hurt by BPR type discussions around cost, quality, and personal productivity. [I feel the opposite that especially in today's global economy people want whatever edge and embrace BPM because it offers them an easier way to get the BPR benefits.]
"BPM recognizes that improvements are only temporal and that today's business climate creates more pressure to reduce the cycle time between changes. Rather than continuous improvement, it is better to deploy a less-than-perfect approach as long as it can be adjusted quickly."
She reinforce the people aspect of BPM - "not simply to eliminate manual efforts. After all, the obvious places have already been automated. Rather, the objective is to understand the interactions and dependencies among the people, the systems they rely on, and the information they require to do their tasks best."
A point a really like is how banking and other companies "use process modeling to help them identify where manual efforts significantly contribute to the quality of the consumer experience". She goes on to point out that personalizing these interaction points can provide competitive differentiation.
BPM is about coordination of people and systems and understanding the value-add of each within a process.
She reinforces a point I have made several times that BPM drives innovation primarily around exceptions to the process.
I think it is a great article that hits a lot of key points. As I am off to the Gartner conference tomorrow, I will look Janelle up to discuss.
I mentioned it earlier this week, and I am a big believer that the small and middle market will rapidly embrace BPM at the right price point. I was with the COO of a small professional services company earlier this week. Along with his VP of Finance, we were looking at using BPM for their billing process. It was a great fit but cost was one factor. (but BPMS cost for big companies is minor compared to ERP, CRM, custom development, etc.) The other issue was process standardization.
It is hard to automate a process when each partner does HR, billing, collections, etc. very differently. We are going to look at documentation and standardization before worrying about technology.
I guess (as a business person) I might have come to this positioning over time, but it took several technologists to convince me that BPM systems "could" (and I am not advocating should) be viewed as toolkits for building custom applications.
If I think about it, the reason for custom applications is that each business has their unique quirks to any process. Rather than change process, many companies change tools either by customizing off the shelf software (not my recommended strategy) or developing a home grown solution from their internal IT group. The custom application meets the users needs to a tee. (or at least the needs they identified two years ago when the project was funded)
With the BPM tools, a business user is defining their custom process and modeling it. That model becomes the core of the application with some additional integrations needing to be build. But, the work is 70-80% owned and done by the business. So, the business now has a short-term strategy for achieving a custom application that can be modified on an ongoing basis without simply getting on a long list of IT open projects.
This is a great reality in my mind, but selling a toolkit is not very exciting (to a business user). I think keeping focused on process automation and reporting is much more exciting. It talks about what I care about - bottom line results. Although I am frustrated by IT's inability to understand and respond in real-time to my needs, I don't care how they fix it. I just want it better. (at least that's what many business execs would say)
A prospect asked me the other day to summarize my opinions about BPM. What did I think were the 5-10 things that they needed to think about. I don't know if I passed the test, but here is what I told them:
BPM is part strategy, part process, part technology, and part people. Success happens only when all these factors are integrated.
Process is the connector between IT and business and is why BPM has such high expectations.
Process can drive innovation. This is not simply cost reduction and efficiency focused.
Start with the end in mind. You need to know what you want to achieve; how you measure it; and how you intend to manage it.
Iterate. This is not a waterfall approach. The BPMS technology allows you to move rapidly and account for change real-time.
This is a continuous improvement effort not a project.
Don't overlook the people. BPR was about staff reduction. BPM is about staff reallocation to more value added tasks.
NOTE: The opinions expressed here are those of the author, are not necessarily reviewed in advance by anyone but the individual author, and neither Talisen Technologies nor any other party necessarily agrees with them.