Business of BPM

The E-mail Process

I usually think about applying BPM to paper intensive processes.  I think I need to expand that focus to include e-mail centric processes.  Not that it wasn't inclusive before, but talking about it in those terms seems to bring out new opportunities.

Just in the past two days, I have met with a Fortune 100 and Fortune 400 company where this [e-mail] is their process management tool.  At the one, their documents are completed and e-mailed around the company for work.  If one person in the chain is gone, the whole process is on hold.  No one has any visibility to the process and where the work is. 

At the other, one person told me that they get 600 e-mails a day because everything - HR, procurement, identity management - are all done by paper forms which are e-mailed around.  Again, no visibility to status.  No way to escalate if the person is gone. 

These are low-hanging opportunities for business process management.  With simple use of forms, a basic process, and automated workflow, these processes would be more efficient and controllable.  Once you add BAM (business activity monitoring) to the solution, you would reduce cycle time and make staff much more efficient. 

BPM as a Business User Tool

I have been using the Appian Enterprise 5.1 and 5.5 Suite now for about 6 months.  We have deployed it at a client and have several implementations ongoing.  It has been very easy to learn and use. 

Without being a developer or a hard-core technologist, I find it easy to build models, create automation, implement rules, create document management repositories, customize the portals, and create dashboards.  Since one of the big values that I see in BPM is the ability to push some of this "application management" out to the business, this is critical.

In general, I expect an integration specialist that can write custom code or understands existing ERP or legacy applications will need to be involved, but if a business "power user" can do 75-80% of the application development, that is great.

Although I have used the Lombardi Blueprint tool, I have not gone as far in TeamWorks, their BPM suite.  I hope to get there in the next month and share some similar thoughts around their tool.  In Appian, it is mostly drop-and-drag with the need to subsequently configure the node (e.g., who is the e-mail sent to, what data is collected).  The one area I would have complained about in 5.1 was the forms editor, but 5.5 added an AJAX form editor which makes that even easier. 

Both companies offer rapid implementations.  I know we did one implementation in about 10-12 weeks from process mapping and requirements to production.  In another case, the implementation team is one consultant with some adhoc support.  The ability to create process oriented applications in a RAD (Rapid Application Development) approach is great. 

Lombardi's Blueprint

As a Lombardi partner, I have been asked numerous times what I think of Blueprint.  I hadn't gotten a chance to really play with it until last week.  The first release was a Beta so I have lots of expectations for the future versions, and so far, all the suggestions that I have made seem to have already been on the roadmap.

It is a very easy to use tool.  It didn't take any training to just jump in and get started.  The functionality is basic today, but it allows you to create a pictorial image of your processes simply by typing an outline.  The idea of having a shared, collaborative environment for process design that can be used by anyone is a good idea.  The fact that it then creates a Powerpoint presentation right from the tool is an unexpected benefit.

It is built upon a SIPOC framework which is a Six Sigma process framework which stands for Suppliers, Inputs, Process, Outputs, and Customers.  Capturing this information is a great first step for process analysis.  Once all the functionality is there, this tool would make a lot of sense for people to use in the initial stages of a project. 

You can go do a tour online which is where these images are from. 

So, where do you take it from here:

* Add more process mapping functionality (e.g., decision points) - this is a planned functionality that is already in the demo for the GA version

* Allow the process to be BPMN compliant (I believe this is in process)

* Allow the process to be imported right into TeamWorks (in process)

* Add process analysis to make the tool more like the BPA tools (e.g., Mega) - this is also in process and part of the original plan

I have heard and read lots of skeptical comments about this tool, but I think it is a nice front end tool for starting a process discussion and capturing the critical data points.  Yes, it doesn't execute today and isn't solving all your problems, but what is.

You do that on paper???

I was talking with a friend the other day and had one of those "Oh my Gosh" moments.  He was sharing with me a process that one university sells to government and architecture firms. 

When an architecture or engineering firm bids a contract, they include numerous references.  The entity buying the services faxes this list of references to this company.  The company then calls out to the references and documents the reference checks.  These are then captured in a word document and tracked in an Excel spreadsheet. 

The client finally gets a list of the completed references later in the process. 

I gave them some free advice...There is a better way. 

1. Create an external facing web form where the client (the buyer of the architectural / engineering services) can enter the list of references and their contact information.
2. Have this automatically trigger e-mails to the contacts letting them know that you will be contacting them and offering them a web form / questionaire to complete if they prefer to do it via self-service.
3. For people that you talk with live, use this same form / questionaire.
4. Create a dashboard that is visible internally and the client which shows the status of all the references.
5. Have the system create an automatic report that summarizes the data and creates a report aggregating the scores.

Now, wait.  I guess if we make it this easy then they go out of business.  Well...I guess that is life.  I was always taught to engineer yourself out of a job.  Here is a great example.

BPM Maturity (e.g., CRM)

It is interesting.  We are still at a place where the acronym BPM doesn't necessarily mean something to everyone even in IT and much less on the business side.  This is not that unlike where CRM was in 2000.

I joined a company (Firepond) which was in the CRM space in January 2000.  We took the company public (pre-bubble), tried to take on Siebel, and ended up having to restructure to keep the core business.  But, when I left in mid-2001, I remember having CRM on my resume and getting asked what that meant and having to explain what we did compared to Epiphany or Siebel or other applications.  Now, I can just say CRM to almost any business or IT person, and they know instantly what I am talking about. 

I perceive us to be at a similar place with BPM.  The software vendors have consolidated a little bit - from hundreds to dozens.  The big players (IBM, SAP, Oracle, Microsoft) have all started to focus on the space.  The EAI players (or others like Filenet) with strong install bases have developed solutions.  Companies are starting to have VPs of BPM and post jobs that include business process management in the title.  Additionally, you start to see lots of vertical or geographic consulting groups come up to focus on BPM. 

Over the next few years, we will likely continue down a similar path to CRM:

• More and more companies will adopt BPM as it moves from tactical to strategic and from early adopters to the average company
• BPM will move to become a key component of outsourcing
• BPM will be offered as a managed service (SaaS) along with as a traditional application
• Value propositions will grow and companies will use BPM to drive transformation
• Process architects will be a core role
• Companies will wrap BPM solutions around their existing ERP implementations
• Standards will become normal
• Training and certifications will become normal
• Vendor consolidation will happen

I could go on, but the point that I wanted to make here is that this is a great time to be part of this movement.  You aren't on the bleeding edge.  Companies and technology have proven themselves.  People have worked through the sticky parts of how this works with Six Sigma and how to use it. 

Visio / Sharepoint - Dead?

Are these tools dead today?  Obviously not.  Most of you probably use them.  Some of you may even use them daily.

Although I like both of the tools, I question their value.  If you hare using Visio to map processes, those two dimensional static representations quickly become shelfware.  I could pull up dozens of these on any BAs computer or file cabinet.  With the constant change of people and processes within companies, these hold little value outside of their immediate project use.  For a short-term tool to quickly get people on board, they do well (although index cards and string might have the same effect). 

If you are focused on continuous improvement, you are doing process mapping, looking at current state and future state, identifying metrics, and hopefully evaluating automation strategies.  So, why not use a BPM modeling environment that can be imported into a run-time engine.  This is why all the software vendors started offering free modeling tools over the past year.  You could also use a BPMN template for Visio and hope that the import process works for your software of choice.

I feel the same way about Sharepoint.  Easy to use.  Simple to understand.  Decent interface.  But, isn't it just the next Access.  Every project, every team, every department has one.  There are numerous installations of this across any company using it.  You immediately lose control and have content distributed in places where it is forgotten and not integrated.  Eventually, this all has to come together.  Talk to anyone that has had to reign in their Access use for control purposes.  Something to avoid if you can. 

Since document management and collaboration are possible in BPM tools, why not do it there.  Most documents are either inputs to or outputs of a process.  Collaboration is happening around a specific instance of a process especially around exceptions to a process.  Why not centralize all of these things. 

With the BPM vendors providing easier and easier modeling and development environments using AJAX, this is something that a broader audience can use and understand.  If someone can use Access, Sharepoint, or Visio, I believe they can do 75-85% of the work in a BPM tool.  The only heavy lifting that is code specific is the integration points.  With the vendors (or consultants) developing pre-built integration "nodes" this is becoming less critical. 

So, my suggestion is to step back in your continuous improvement efforts.  Think about the long-term, and realize that a BPM solution is what you are likely needing to address mapping, versioning, collaboration, knowledge management, document management, reporting, analysis, and automation. 

BPM for Smart Devices

I was driving yesterday when I saw one car hit another car.  It immediately made me wonder why that accident couldn't trigger a series of events in a pre-determined process.  The accident could send a report to the police.  It could send a message to the pre-selected repair shop of the driver to schedule an appointment.  It could send a message to the insurance agent.  All of this could happen simply by mapping out a process, embedding rules in the process, and having it listen for a message to be sent from the car.

If this was true, then you could apply this to lots of semi-intelligent or someday to be intelligent devices - refrigerators, stoves, computers, alarm clocks, etc.  An idea I toyed with about a decade ago was building out the infrastructure for an intelligent home.  The idea was that everything could / should be coordinated. 

• If I press snooze on my alarm clock, my coffee gets delayed.
• If I leave the house late, my first meeting gets rescheduled.
• If I run out of milk, I get an e-mail on my way home from work reminding me to stop at the grocery store.
• If I change an appointment at work, it rearranges my home calendar.
• If it is hot outside, it opens or shuts the blinds.
• If the temperature gets too hot, it adjusts the thermostat.
• If I leave the house, it turns the lights out.
• As I pull into my street, the lights go on.
• When I leave work, it begins to warm up the house.

The point here is that a process architecture that connects human centric tasks and embedded system tasks can finally make something like this happen especially when rule driven and triggered by events.  It can extend into our personal lives and connect our various activities such that logical coordination can happen.

On the one hand, this is a little scary, but on the flip side, it seems like this would avoid common pitfalls that we all have which create mistakes. 

Webinar / User Group Updates

This is an update on several things:

1. We did our first webinar last week with Howard Webb (BPM Group) and Dr. Kiran Garimella (webMethods and author of The Power of Process).  It went well.  The slides are still posted at www.talisentech.com/eseminar.  There was good discussion about designing metrics and driving adoption.
2. We are hosting our next webinar on April 6th where Howard Webb (BPM Group) and I will speak about the Process of BPM.  You can register here.
3. I gave my presentation at the ITSM (IT Service Management) LIG (Local Interest Group) meeting a few weeks ago talking about Six Sigma and BPM and beginning to draw the correlation to IT or ITIL.  There was lots of discussion especially around this and CoBIT which eventually morphed into how IT grows.  The two clear answers of CSFs were leadership and communication as keys to IT success.
4. Last but not least, we are scheduling our second St. Louis BPM User Group meeting to continue our idea exchange.  We will have a business presenter (AG Edwards) and a technology presenter (Appian) at this upcoming event.  It is scheduled for April 13th at the Talisen offices.  For more information, please contact me at [email protected].  This is meant to be a user discussion with presentations from vendors / consultants as selected by the group.  This is not a sales meeting.   

Case Studies

I decided to sort through some of the case studies I got at Gartner to highlight a few examples which had real numbers in them.  In doing that I talked with an individual that had worked at 3 of the BPM vendors and sold over 40 BPM projects.  He told me that none of them included an ROI.  That is amazing to me.  I only know how to sell based on building a business case and tracking back to a baseline metric (even if somewhat qualitative).

1. Freddie Mac implemented a BPM system from Pega Systems as a rules tool for its underwriting system.  This provides greater flexibility in changes rules rather than having them hard-coded into the application.  It is expected to cut the operating and maintenance costs of the system by 30%.
2. Samsung Heavy Industries used a BPM system from Handysoft to streamline international shipbuilding operations in areas of order placement and contract outsourcing to save $4.4M annually in management productivity, outsourcing production volume, and material selection.
3. Korea First Bank used a BPM system from Handysoft to streamline loan processing reducing cycle time by 41%, processing 55% more loans, cutting employee overhead by 16%, and saving 28% in overall operational costs.
4. School Employees Credit Union of Washington used a BPM system from Handysoft to reduce credit card and home loan application cycle time from two days to 30 minutes, improve customer service response times, and reduce manual data entry and errors saving over $50,000 the first year.
5. A REIT which does 7,000 invoices per month was able to cut staff from 24 to 8 saving $320K per year while handing the same number of invoices using the Handysoft BPM system.
6. An asset management firm was able to increase transactions by 100% in the first year and 70% in the second year without hiring additional staff using the Handysoft BPM system.
7. The US Marine Corps implemented an Appian solution for procurement that has reduced the competitive award of task orders to less than 28 days saving them almost $9M in a 12-month period.
8. The US Army implemented an Appian solution for knowledge management which allowed them to reduce complex content replication unnecessary eliminating almost 5,000 servers and savings almost $28M in hardware expenses.
9. Sprint implemented Lombardi for their billing disputes and adjustments process which reduced the time to resolve a billing dispute from 12 to 2.5 days; reduced the invalid and incorrectly processed adjustments by 10%; and increased call center productivity by 9%.
10. Pulte Mortgage used Lombardi for their mortgage lending process to increase customer satisfaction from 85% to 92% and reduce their costs by 10-20%.
11. Lee Memorial Hospital used Lombardi to reduce their on-boarding process for new hires resulting in a 50% reduction in recruiting time per new hire and a reduction from 9 hours to 10 minutes for creation of a new employee record.
12. A large pharmaceutical company with 12,000 sales people used Lombardi to reduce their sales incentive cycle from 30 days to 7 days.

Creating the automated coach

A typical struggle that a large company has is how to deal with mid-market companies or average customers.  Typically national clients or repeat customers get great attention, but it is hard to give this same customized attention to an average customer even if they might be your next big customer.

This challenge is exasperated by the difference between your average customer service or account management professionals and your top performers.  How do you embed the DNA of the top performers in that of the average employee.

When I was at Express Scripts, I used to half-kiddingly suggest creating an "automated pharmacist".  All of our clients from individual groups of 200 people to the Department of Defense with 9M members all wanted a pharmacist to provide them with personalized recommendations based on their member demographics and triggered by market events - e.g., Prilosec goes OTC (over-the-counter), Zocor loses patent, a new drug comes to market.  There was no easy way to do this.

Additionally, all of us who use the healthcare system want more personalized attention from our physicians, nurses, pharmacists, physical therapists, etc.  But, of course, we don't want to pay a retainer to have them on call.  We just want them to somehow manage to give us proactive advice.

Any professional services firm (e.g., accountants, lawyers) has this same challenge.  When something changes (e.g., long-distance excise tax), how and when do they communicate this change to all of their clients and help them assess the impact of this change on their business. 

Companies with distributors or retail branches have similar challenges from communicating downstream or upstream changes across the different constituents to help them prepare in advance.  For example, if your advertising company calls and tells you the ad copy will be 2 days late which means the collateral will be printed 3 days late which means that the supermarkets installing your new display have to shift schedules to have it set up 4 days later...

Well...it didn't hit me until this morning, but Business Process Management (BPM) technology could help here.  We could map these processes til the cows come home, but that won't do any good.  Streamlining these processes, capturing the rules, embedding logic into the process, codifying best practices, and integrating these human and system centric solutions can create this automated intelligence.  It is not artificial intelligence but it can help manage your clients and create real personalized value.

Let's stick with the pharmacy example:

• Image that Claritin announces it is going over-the-counter
• This trigger from the Pink Sheets kicks off an internal process
• The process queries the claims database to identify the number of patients with Claritin claims
• The internal process sends an e-mail to all the account teams within your PBM (pharmacy benefit manager - e.g., Express Scripts, Medco, Pharmacare, Caremark, Argus) or MCO (managed care company - e.g., Aetna, Cigna, Wellpoint, BCBS)
• Based on rules or election by the account teams a subsequent e-mail is sent to each of the clients
• The client can opt-in to a communication to their members
• This approval triggers a mail merge of a pre-approved letter which is sent to all the affected members (patients)

This is a service that every client wants.  They want the hand holding, but it is hard for large companies to give this to every client.  There is not time enough to have all these discussions, talk about customizing the letters, wait on customer approvals, or manage things through e-mail when people are busy and unavailable.  A BPM approach to this embeds the logic and creates a personalized flow triggered off key events that can initiate dormant processes that are waiting in the background.