BPM 2.0 Leverages Agility in New Ways
By Jim Sinur | July 1, 2008
In the BPMS today, agility mostly appears in the ability of adjusting decision points in a fixed process usually visible through a process flow. There is more to agility than what is delivered in most of the BPMS engines today.
Agility is defined as the ability to think and draw conclusions quickly to exercise nimble movements easily. Having a broader view of agility allows for more opportunities to expand the dynamic behavior of business processes.
While I think that an agility opportunity around decision making in the flow of processes is extremely important, there are additional opportunities around business actions, people optimization and technology fluidity that can play in the next generation of BPM.
BPM 2.0 Expands the Tweak Points in a Process:
Today, most agility is aimed at process control flows, but there are many more opportunities to impact process behavior. BPM 2.0 will help control outcomes by adding coordinated agility around goals and tolerances.
Process managers will be able to dynamically change the goals and their balance to create outcomes that meet conflicting goals while staying efficient by allowing coordinated tolerances to be set to match the new goals given to the process.
In addition, processes will recognize relevant events that might change a course of action on a specific case and/or a class of process instances.
At a maximum, the recognition of certain events and/or tolerance statuses might suggest an opportunity for a new round of optimization and/or a change in goals. So goals, tolerances and event recognition are some of the new tweak points that enable a new dimension of agility added to the traditional decision nodes in a process.
BPM 2.0 Adds More Intelligence to Complex Decisions:
Today, process decisions tend to be simplistic and process engines can handle these natively. BPM 2.0 will require more sophisticated decisions that will require a deeper integration of heuristics and other forms of decision making.
Intelligent processes should be recognizing conditions that will require intervention. This means recognizing the effect of aggregated and/or complex events that might be of interest to a process manager and giving advice on the likelyhood of making some kind of adjustment.
In advanced capabilities, the process might suggest alternative courses of action with a likely success percentage for each course of action.
BPM 2.0 Puts SOA Concepts on Steroids:
In the ultimate scenario, BPM 2.0 would not only orchestrate services and pseudo services (impure wrapped legacy services and/or composite flows), but BPM 2.0 would also perform dynamic orchestration that would change the sequence of invocation depending on conditions.
The conditions could be sensed dynamically by event recognition and/or agent/flocking agent behaviors. Process snippets and composite flows would be available and treated as service assets.
In addition to the ability to swap services dynamically based on positive/negative business and/or technical outcomes, BPM 2.0 will dynamically orchestrate services.
We will see this concept leveraged to content and micro content in dynamic aggregation for the creation of proper content for clients and other process participants.
I would call this content oriented architecture (COA). This approach would also be appropriate in creating a dynamic set of people and skills to face the incoming workload in a dynamic fashion, thus yielding people oriented architecture (POA).
BPM 2.0 Rules Outside the Actual Process:
Today, most of the rules are contained inside the process context itself, but in the world of BPM 2.0, there will be rules outside the process in the form of constraints and distributed agents. When process can be ultimately flexible, there needs to be boundaries that processes should not go beyond without some form of notification to the process manager and/or process worker. In addition agents should be snooping for conditions of interest to the process manger.
BPM 2.0 Has a Better Handle on Process Context:
BPM 2.0 takes advantage of process intelligence. Even though a process may be as optimized as possible, there are changing conditions in the market place and your client base that need to be brought to light. The clues for these trends are seen in the process and it’s outcomes as well as complex events detected and/or alerts emitted by agents employed by the process managers. Many processes are evolving and need to be goal directed and collaborative in nature. Process Intelligence can help identify patterns for governance.
Bottom Line:
BPM 2.0 leverages agility in a supercharged way to deliver processes that can adapt and adopt in an instant, if needed. As we enter the kind of complexities that evolving processes bring, I expect more rapid evolution of agility leverage.
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BPM 2.0 Enables Leveraging Information in New Ways
By Jim Sinur | June 24, 2008
We have made great strides in integrating data across multiple application stacks and data integration has had a great impact on giving a better picture of what’s happening in the business while being able to move and transform data amongst disparate systems.
Data marts have sprung up that combine data for trending and the generation of helpful downstream information. Unfortunately this is only a step in a longer journey.
Today some of the most important Information is disjointed, not in context of the business and not timely enough to compete in today’s fast moving world.
Information Needs Multiple New Tributaries:
In order to compile a current business/process state, we will need more than just integrated and extracted data, operational data from purchased applications and legacy systems of record. There is important information that needs to be brought to the eyes of the process and knowledge workers with visibility to the processes managers.
These new sources include content such as images, graphics, forms, rule-driven micro content, etc…, email, web content such as blogs, Wikis, social nets, mash-ups etc, and events/complex events. Even though some of these sources are new and the uses are just emerging, BPM 2.0 should take them into account for a 360-degree view of the process information necessary to support the “heads down” process worker and the emerging knowledge worker processes.
Information Sources Need to be Usefully Aggregated:
Process is the new additional view/window to business activity that has the ability to view information in a way to optimize operational business activity and give a personalized view for workers and managers at multiple levels. This means that information should be delivered in a way that is useful to the organizational role viewing/leveraging said information while considering the needs/desires of the individual working with it.
This means that the information also needs to be meaningful to individuals for the step in the process it is delivered in at the moment. This may mean considering not only format, culture, role and personal preferences, but also adding downstream value delivering knowledge leveraged information by combing multiple information sources and making the information ready for interactions with certain trending and projection modeling algorithms.
Information Needs to be Timely:
In the ultimate scenario for BPM 2.0, information needs to be immediate with little or no lag for certain performance information combined with tolerable lags for certain trending information. This will put a premium on complex event processing and combining these events with traditional information.
While most would dismiss this kind of immediacy for their industry segments and would say this is only necessary for market sensitive transactions, the needs are evolving and emerging for industry segments that were considered insular to the winds of change. Timely information tied to leveraged and anticipated strengths, weaknesses, opportunities and threats will be the minimum price of admission, going forward.
Information Needs to be in Context:
In order for properly organized, aggregated, timely and useful information to be leveraged for the business, it needs to be put in context. At a minimum, it needs to be understood in the flow/evolution of process(s).
This means understanding the status of work in a process and the utilization rates of resources being applied to the process. At a maximum, this allows workers to leverage kinetic information into knowledge that can distill the wisdom needed to perform actions.
This may mean identifying crucial opportunities for action such as lost revenue, wasted material, idle workers, compliance issues, prevention opportunities, missed deadlines, broken business rules, stock outs, angry customers, new best practices and so on. It may also mean keeping track of the process in it’s market and geographical/cultural context.
Information Needs to be Actionable:
Proper actions should be provided to deal with new insights delivered by better information within processes. This means that one can anticipate the conditions that may show up in the information. This is probably true of 70% of conditions.
The rest of the 30% will be indentified for additional analysis, so one can learn to provide programmed actions. Certainly knowledge workers play an important role in deciding and accumulating and archiving information about these challenging situations; looking for patterns and suggesting alternatives to policy makers.
Bottom Line:
BPM 2.0 affords a very different use of information in addition to the traditional uses. As we consider the kind of complexities that evolving processes bring, I expect a more rapid evolution of information leverage. This gives new light to some new information forms and structures. I can see ontological patterns emerging here when tied to indeterminate and evolving processes.
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BPM 2.0 Enables Powers Processes in New Ways
By Jim Sinur | June 18, 2008
Today there is a strong emphasis on BPM because good processes enable the people in an organization, regardless of the business functional area they reside in at the moment.
Not only do processes enable functional excellence while saving time and money, they can easily traverse functional silos and engage people through a repeatable and somewhat standard and competitive process without forcing everything through a single application.
Today’s BPM-driven processes take into account the organizational structures and the skills of the job classes and people involved with handling a process (opposed to forcing organizations to reflect applications). Processes and applications working together in concert across the organization and leveraging compliant best practices with the help of SOA and workflow is a big step forward, but there is more to the story of running a competitive business today.
Organizations need to be agile and adaptable as well because of outside forces, the behavioral patterns of people (see BPM 2.0 Enables People in New Ways ) and shifting conditions. Processes have to be able to handle this kind of agility for not only the systems with dynamic service involvement, but for people, as they have evolving workloads and processing needs.
Processes Need to be Indeterminate:
In order to keep up with the dynamics of change, processes have to become more indeterminate in nature. Today processes usually require complete process models that are pre-planned with most all of the exceptions baked into their flows and subtasks. Most BPM tools are wired toward fixed processes with variability handled through rules, but the trend is towards having more dynamic and unpredictable processes.
These processes take fixed process snippets and/or business services and use them more dynamically bounded by business constraints and policies. This is a must for supporting knowledge workers. This means that BPM 2.0 has to handle multiple process patterns, even some that are indeterminate in nature (see Prevalent Process Patterns Enable BPM Benefits Differently).
Processes Need to Support Best Practice Discovery:
In order to take chaos and expense out of processes, BPM 2.0 will need to support process discovery. There are a couple of aspects of process discovery. One is to watch the high performers and see how they operate within fixed processes/applications. This may mean analyzing how an activity behaves within the bounds of a fixed and maybe legacy application.
The other is to observe patterns of collaboration between organizations and individuals in evolving knowledge work to find suitable patterns for fixed/standard processes. This might generate best practices and/or better rules for straight through processes. This practice is handy for driving out costs and taking evolving processes to their next step of productivity. This could be driving out the very indeterminate portion of a process as policies evolve towards determinate processes.
Processes Need to be Widely Inclusive:
The problem with most BPM capabilities is that they only understand their own process language and are generally focused on a primary technology platform. As processes cross functional stove pipes and/or organizational boundaries, they must include process snippets and complete processes that run on foreign engines and/or platforms. This is particularly true for supply and value chain processes.
The problem with most platform giants and BPM vendors is that they are self focused and are not inclusive in their attitude. We live in an environment where we assume that standards will lag need, so BPM 2.0 will have to handle multiple process platforms easily. The process models have to portable and the process should be able to be started on one platform and finished on another with many potential intermediate steps on other platforms.
Processes Need to be Intelligent:
In the world of BPM 2.0, processes will have to have levels of intelligence beyond BPM today. One facet of intelligence would be a self awareness in the terms of identifying work progress in an established process, identifying extraordinary conditions in an established process, identifying participant best practices in an established process, identifying extraordinary conditions in the context of a process and discovering work paths selected in indeterminate processes. This kind of intelligence is leveraged in process discovery and process visibility.
The other form of intelligence is related to notifying process owners and operators of evolving conditions that may require a future intervention such as a rule change or a new process path. In an advanced world, the process might suggest the answer to an evolving set of conditions or an emerging business scenario.
Processes Need to be Goal Driven:
In the ultimate BPM 2.0 scenario, the process would be able to take multiple conflicting goals and drive towards a set of outcomes that balance the best results amongst these conflicting goals. These goals will likely be tied to corporate performance plans and desired operational outcomes. BPM 2.0 might also automatically try various alternative forms of predictive behavior to suggest goal and resource adjustments.
Bottom Line:
BPM 2.0 affords a very different kind of process than what we know today. This will be a long journey before this is pervasive, but expect leading BPM providers to add features that will allow the processes to take more agility guided by context and intelligence.
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BPM 2.0 Enables People in New Ways
By Jim Sinur | June 12, 2008
Traditionally, people have been an afterthought in business systems and processes. In a world of standard processes and well-accepted and automated best practices, this makes sense; maybe.
Today, the world is changing to require evolving work patterns and the enablement of people as they encounter unique/ new conditions that require rapid response without violating governance and accomplishing stretch goals. Learning the evolving best practices, evolving polices and business conditions will be the economic driver to reach for BPM 2.0.
The BPMS took us down the road to help some of these evolving conditions, but a more people-centric process environment needs to be added to the BPM platform. I would call this a people-oriented architecture (POA), but we shall see what the pundits call this. (See Democracy: AKA Collaborative BPM).
People Need a Personal Workspace:
There is a need to allow people to create their own work environment around the intersection of the job roles that they are fulfilling at the moment. This implies a dynamic and easy-to-use workbench that delivers an awesome user experience balanced with productivity assists and suggestions. This could mean working in a different visual 3D way that goes beyond traditional portals and BPM work lists to leveraging mashups and animation. I expect to see some real creative people-interaction environments popping up within the next year or so combined with BPM.
People Need to Connect:
To handle the issues facing the people who are managing and executing processes, there is a requirement to support collective intelligence that leverages the right roles, the expertise, the reputation and knowledge of individuals to form a collective team. The new BPM will have to intelligently identify the right people with the right reputation and situational successes, understand their preferred way of communication, their availability and their access to the tight resources in order to deal with a problem within a time window needed to attain specific goals. I imagine that unanticipated communities will sprout with this kind enablement.
People Need an Understood Presence:
It is imperative that the new BPM understands who the individuals are and the current state of their connected presence so that the proper team can be assembled. I believe this will happen through rich participant profiles and tagging.
The profiles will contain current and past roles, skills, interests and backgrounds leveraging profiling techniques that employ user specification, system attributes, feedback and mining techniques. Connected presence will show what people are doing at the moment, what is the participants preferred channel matched to what is the best available channel, the need for recording and the estimated length of interaction time.
People Need Context:
The real leverage for influencing performance lies in the feedback structures that generate events and patterns within the context of the process and the environments the people and their supporting processes are operating in at the moment. Great care will need to be applied so as not to react to the present state to the detriment a balanced set of goals . The new BPM must support trending, correlation, instant feedback for precursor events for anticipated outcomes, understand the consequences of actions, anticipate delayed effects, improve mental maps/best practices, deliver better anticipation, and improve collaboration outcomes. This is an evolving science around decision management that leverages policies, rules, data, information, content, knowledge and complex events.
People Need Guidance:
People need to constantly make progress towards goals while learning new skills/behaviors without going out of bounds leveraging the best/current information. For the early experiences with process one could imagine leveraging E learning, Wikis and content. Advanced participants will additionally need advanced search, blogs, bookmarking, social tagging and team collaboration. Both kinds of participants will need to be guided by polices and constraints established by management and trained on how to recognize the need to provide feedback to the policy makers.
Bottom Line:
BPM has to change to enable knowledge workers, and the requirements are fairly demanding. The benefits to organizations that want to differentiate themselves is incalculable, but identifying repeating best practices for evolving conditions will certainly suffice for a cost benefit. Making people more productive in a dynamic world that requires a personal touch is the stuff that drives the GNP of countries and the bottom lines of organizations.
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Do We Really Need BPM 2.0?
By Jim Sinur | May 30, 2008
It seems that the Business Process Management Suite (BPMS) is just reaching a level where some organizations are leveraging many of the aspects it supports, so why would anyone want to come up with a new version of BPM? On top of that, why would anyone name anything 2.0, since it seems a little worn out?
Technologies like Web 2.0 do not seem to be generating the kind of capital growth like many experts expected. Why then BPM 2.0, or some other new name for a second generation of BPM? Let’s examine the issues.
The BPMS is Gaining Traction:
I see several organizations delivering success in terms of ROI and time-to-market on a daily basis. Process-focused activity is still in the minds eye of the business professional as well as many CIOs. It seems like the momentum is there. Of course, there have been issues around learning curves and methodologies, but for the most part BPM efforts are proving themselves.
I have not heard of any disasters and it seems that the pioneers/leaders have been successful and BPM is moving along fine for the followers. The BPMS, which is more holistic in nature, supports the full life cycle of process development through incremental improvement. The BPMS can define, model, simulate, deploy, execute, monitor, analyze and optimize processes. Even those organizations that are early in the BPM maturity cycle are seeing success in leveraging BPM technologies and business process improvement practices. Why tip the apple cart when there is progress a plenty?
The BPMS Supports Several Use Cases:
We have seen BPM successfully applied to system intensive straight through processing to eliminate mundane and repeatable processes. This is even true for processes that integrate across application and stove pipe business functions in a highly automated fashion. The problem here is that much of the work done in a business does not fall into highly automated, lights out category. Carbon units need the help of the BPMS as well; the myopic IT view won’t quite do it here.
BPM is also successful for the human intensive heads down work that exceptions kicked out from system-to-system activity or just human intensive work that defies complete automation. This can include case management and/or document management or not. This category is what I call “blue collar” activity in an information factory. Structured and predetermined tasks are the hallmark of this use case. Sometimes there is light workflow involved and others heavy BPM.
Up until now, the BPMS combines these two areas of process work, but this is not the end of the journey. Besides working up the maturity curve, there are more kinds of work to consider.
There is a an Emerging Need to Support Knowledge Workers
The next step in BPM is a big jump. I do think that including SOA is important, but the real win for BPM is to support the knowledge worker and search for best practices to permeate to the rest of the workers. Knowledge workers are the keepers of the organizational knowledge and are interested in flexible processes that can be indeterminate by nature (You can’t really draw complete and structured process model easily).
Knowledge workers, of course do have fixed snippets of structured process that they leverage in their overall job duties. Quite often these workers work in a collaborative fashion and have networks of people they interface with on a regular basis. Even though the processes may not be as structured, progress and goals must be applied and tracked for optimal time to market and throughput. This is what I call “white collar” activity in an information value chain.
Bottom Line:
BPM has to change to include knowledge intensive processes and tasks. It is debatable that we need a new term for BPM that can handle all the types of processes that are needed, but it won’t stop me. I will call this new capability BPM 2.0 for now because it includes a number of Web 2.0 features that enable knowledge workers.
It may be that the capital play for Web 2.0 might be BPM. I plan on enumerating on the kind of supports that will be needed for the knowledge intensive work in the coming weeks. Watch this space.
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Don’t be Content with Just Content
By Jim Sinur | May 20, 2008
It is pretty easy to settle for the short term and what appears to be a good deal. Today you can find content-focused vendors that will just throw in some free software when you buy their hardware. Then there are those that will sell you content management software without the hardware, but will claim a strong BPM story. They will tell you that they have true content enabled BPM, but “buyer beware.”
It’s easy to justify this to the purchasing types and the accounting dudes, but there is a “devil in the detail” when one is headed towards differentiating business process (the foundation of the future).
The devil of “one sourcing content” is prevalent in these approaches in that these vendors only work with their proprietary content formats. A good content provider would allow for the integration of multiple content streams regardless of the content source/vendor.
This is what I call content integration and some of the large vendors can’t even integrate their own multiple offerings, much less another vendor’s content. If you have multiple content sources or can leverage SharePoint at the low end, you will be disappointed with your purchase in the long run.
There is also the devil of “limited process patterns.” Most of these giant vendors support only “light weight” workflow, but do not support strong human interaction. In addition, few can easily provide straight through processing process patterns along with human-to-human BPM without a large scale and expensive service contract. Few support collaborative processes as well. If your processes are a combination of process styles, you are headed towards disappointment. (See Prevalent Process Patterns Enable BPM Benefits Differently)
Leverage Content with Process:
Content is just data that is static by nature and can be more interesting with embedded meaning and recognitions, but content truly becomes kinetic and potent when combined with rich processing options. This is particularly true when you combine content with collaborative case management and rules. Process adds the innovation needed to accelerate benefits. An example would be mobile building inspections with immediate results posted to a shared content site.
Leverage Content with Collaboration:
Some BPM vendors support more collaboration during the process execution phase to allow knowledge workers to tap each others knowledge. This requires a different kind of process that supports process snippets and includes workers outside the native environment. Good collaborative BPM supports and captures discussions around work in progress, goals, targets, policies, rules and deadlines while accessing knowledge nets, shared work lists, shared calendars and shared case information, including unstructured information/content. An example would be the handling of complex medical requirements in life insurance underwriting where multiple medical professionals might have to collaborate on a decision to underwrite a policy within standard risk parameters.
Leverage Content with Rules:
It is well known that combining rules with process can deliver business agility that is unprecedented (see What’s the Big Deal about Agility in BPM? ). Few organizations have combined micro content with rules and can be short sighted when dealing with content. For some surprising results, consider the idea of creating dynamic content based on rules, late-bound data and constraining policies. An example would be creating customized legal contracts around products and services thus by-passing the legal department log jam.
Bottom Line:
It’s pretty easy to take the easy way out by picking a power vendor that flashes the BPM term. The sharp organizations are asking the tough questions about “What type of BPM am I getting here?” What kind of differentiating process and products can be put together with agile process-driven kinetic content. Perceptive managers are asking about limits of the content vendors or any other independent BPM vendor.
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Money Making Drivers for BPM Part 3
By Jim Sinur | May 13, 2008
In the last blog entry on drivers for BPM, I indentified drivers around process outsourcing, package implementations and process standardization.
In this blog entry, I will explore people automation, value chain enablement, optimization, and compliance and process scenarios.
Get Work Away From People Through the Automation of Manual Processes When deciding what processes should go into a “human-to-human” or “system-to-system” process flow, process models can be analyzed for candidates. I believe that process models will start momentum toward automating the management of human activities through facilities found in BPM suites.
These are normally processes visible to humans (above the water line), but the models can also illustrate processes captured in computing systems (below the water line) and identify tasks that would economically move from human hands to system components or service-oriented business activities.
Additionally, human-centric processes implemented in a BPMS engine can be studied to determine if the process steps can be replaced with rules or even services. If you expect that the logic is volatile, then a rules engine might make sense. If not, hard coding might be a good alternative. So you can automate pure manual processes into a BPMS and take certain tasks below the water line when it appears that the human tasks managed by the BPMS are too mundane and repeatable.
Value/Supply Chain Creation/Maintenance
This is much like new process creation, but the process model serves as a crucial input to the partner negotiation process. Through methods that are “swim-lane oriented,” process models can help determine which partner/party is responsible for what portion of the process. BPM tools can also simulate interactions and outcomes for value chain behavior under unanticipated conditions.
There are even system dynamic models available for supply chain design and management. The models can be used to plan and manage partner/party impacts implied in pending changes. Much the same processes can be applied to internal process fusion, but the internal organization negotiates roles among the human and systematized processes.
Modeling can also be the gateway for the fusion between the business process and the supporting technical infrastructure. Care must be taken to make sure all parties agree on the meaning of the data underlying the shared process model when going across functions and legal entities.
Do Things Better With Optimized Processes
Processes can easily be managed for optimized cost, time to market, resource loading, risk and quality through the use of process models for initial design and ongoing improvements. This can work in conjunction with methods such as six-sigma and round-trip engineering.
Process models are no longer just logical/theoretical representations. They can accept near-real-time input from the real process flows and be re-simulated for incremental improvements. I have even seen BPM tools that can perform “champion-challenger” and “surround simulation” that automatically drives the process solution towards pre-determined business targets.
Stay Out of Trouble by Staying Ahead of Compliance
Typically, compliance is focused in a reactive matter where the actions are caught by auditing history after the fact. BPM allows one to build the compliance constraints into the process, so things get done properly. Process models can be helpful for instrumenting processes with compliance controls. As the costs of remaining compliant go up, and as governing boards and societies require more-responsible behavior, modeling changes in compliance with the business process will increase in importance.
Stay Hungry: Move Faster Through Scenario Building for Agility and Policy Management
Process models can be used to create reactions to opportunistic and threatening scenarios. Obvious process strengths can be applied in a model to different business, market and geopolitical conditions. The same would apply to obvious or subtle weaknesses. The accepted planning scenarios could be waiting for out-of-tolerance conditions or threat markers, with associated policies linked to ready-to-implement and pretested packages of rules that can be plugged into business processes.
These initiatives will serve as the foundation for these enterprises’ improved capabilities to cut costs and boost competitive advantage. Simulation can also be used to try out good or bad scenarios and explicit rules will allow the agility needed to adjust to a scenario as it is sensed in near real time with BPM.
Bottom Line:
Good business leaders understand that process disciplines can be applied in multiple directions, but care must be applied to set priorities and stay focused. Rome wasn’t built in a day, but a solid understanding of the real process goes a long way in helping guide results.
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Money Making Drivers for BPM Part 2
By Jim Sinur | May 6, 2008
In my first blog entry on drivers for BPM, I identified drivers around current process understanding, creating new processes, and process activity around mergers and acquisitions. In this blog entry, I will explore process outsourcing, package implementations, and process standardization.
Get Someone Else to Do the Dull Stuff with Business Process Outsourcing
Business process outsourcing (BPO) activities require enterprises to document their current processes, so they can ensure that the BPO provider will handle their processes properly. The process models will also be crucial in identifying opportunities for crafting service-level agreements (SLAs).
The side benefit to the BPO provider will be having a process road map for accurate servicing of the business process. Everybody wins with an accurate process model done at the appropriate level of detail. If the BPO provider identifies an industry best practice, a process model will be a strong way to communicate the effect on constituency relationships.
No enterprise wants to lose clients because of a bad process fit. This way everybody understands the process and/or has an opportunity to question this explicit process and the governing rules.
Another opportunity revolves around how some BPM players leverage explicit processes and rules. Most organizations outsource commodity processes that do not differentiate them. The implications here are that organizations do not want their unique and profit producing processes and rules available for others to copy and/or leverage with competitors of any kind.
If the originating organization controls the flows and rules so that they are invisible, even the operation of differentiating processes can be run in an outsource mode. I have seen a few organizations take this next step.
Implement Packages Better
There are many examples of the effects of failing to understand the implied business processes contained in the package and the effects of taking those implied processes directly into an organization without understanding their long-term impact on the organization, the constituencies and the employees.
Although a “force fit” may work, the amount of pain and cost is sometimes so high that it takes years for an organization to regain momentum. Understanding the potential “pain points” and corresponding customization necessary to implement packages is a natural application of process modeling. An increasing number of organizations are attempting this process match activity with great success.
There is emerging availability of vertical and horizontal process templates. Patterns and frameworks are becoming available as package alternatives, and they are best evaluated through BPM (which are quicker, less expensive and more standardized than packages). I have found that larger organizations are attracted to these kinds of process templates and patterns because they have many habits that can be molded into a process that is 70% defined and be quite happy filling in the rest of the details.
Even if the packaged alternative is chosen over the BPM-based templates, process patterns and reusable process frameworks, BPM can help surround the standard package system transactions to allow for the customization and extension of standard package function. This surround strategy will allow for the processes to ideally customize applications around organizations and individuals.
This is a definite “win - win” combination that even the package vendors see as an opportunity. The problem with their offerings is that they are likely to be early versions of BPM; not the new forms of BPM (sometimes called BPM 2.0 or Human Interaction Management - HIM).
Get Control of Proliferating Processes by Consolidating to Core Processes
Enterprises often create separate, but similar, business processes to enter new markets for anticipated revenue lifts. This usually includes copying a process at a point in time and enabling the copied process to evolve into something that has a life of its own. Although this lifts the careers of the revenue gleaners who cloned the process, the total cost of ownership (TCO) tends to eat away at overall profitability. It’s hard to reconcile these processes/system variants without some business process representation to help normalize them back into a core process with local variations for product type or region.
Many organizations are trying to standardize on core processes with variations added for local customization. These unique customizations are easier to manage than multiple copies of the core processes that have to be maintained in a duplicity fashion. This is a much more economical way of dealing with customizations for unique countries, legal frameworks and/or constituents.
Bottom Line:
Good business leaders understand that process disciplines can be applied in many directions. The above money makers also leverage the individuality of processes, organizations and constituents.
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Money Making Drivers for BPM Part 1
By Jim Sinur | April 29, 2008
There is a trend toward more emphasis on process activity; even process excellence these days. It’s because business leaders know that there is money to be made in BPM. Because processes are in the critical path of progressive business change, business processes are coming under intense scrutiny.
The need for process understanding and automation will create significant business process management activity. I take heart in the success of recent BPM projects. The numbers that are emerging from BPM projects are more than encouraging, but it will take true justification efforts to spring the cash to invest in BPM up front (See Justifying BPM blog posting).
Here are some things that are driving business process activities today and where it is proven that money can be made.
Determining if Your Processes are Right or Wrong Through Current Process Understanding:
Traditionally, business people will continue to do their work the same way unless they run up against some operational problem and/or exception. Although it’s not common knowledge, most enterprises don’t really understand the depth and breadth of their business processes, if they haven’t had a recent business processing discovery effort.
In fact, there are a lot of shadow processes that are not seen nor understood. This isn’t intentional; however, processes that were designed years ago have been adapted for volume changes, exceptions, managerial regime changes and additional regional activities. Processes tend to become costly and burdensome as a result of process entropy (what non-engineering types call “decay”).
During down economic times, the studying of processes shows opportunities for cost savings that enterprises thirst for during tough times. I believe that this is an ongoing opportunity, but enterprises tend to forget this when new opportunities burgeon in an up economy.
Build Better Processes Faster for Fun and Profit:
During the mid-1990s, business process “gurus” asserted that enterprises needed to break their established processes and start over. They believed that creating new processes was the primary reason to perform modeling exercises.
Although these gurus, who were active during the business process reengineering (BPR) era, almost killed business modeling as viable activity, designing new business models is still a major activity. This is especially true for new products and services. During up economic cycles, this is a common way of understanding and simulating the kinds of processes that need to be put into place to support progressive new offerings.
There are numerous areas of opportunity that are available to the business leaders. The first place to look is manual activities that are ripe for improvement. These activities could include collaborative knowledge work where best practices emerge or just for standardization for more consistent results. One does not have to look far to find process opportunities, but I would recommend going after a “hot button” area where you could solve a significant point of pain for an organization.
If you do not view yourself as a risk taker, then there are tons of small manual processes that are available for discovery and some form of automation.
Leverage Processes in Mergers and Acquisitions:
Mergers and acquisitions are common during all economic cycles and are great opportunities to normalize and standardize processes across combined organizational entities immediately or in the future. Some dominant acquirers insist on using proven business processes; however, modeling the acquired entity’s processes will be crucial in building a transition plan.
Other acquirers look to pick the best-of-breed business processes, and comparing business models is a proven technique for success. Some acquiring enterprises exhibit different behaviors on a case-by-case basis, but understanding the explicit or implied processes goes a long way in M&A activities. BPM-driven SOA can play an important role here in the resulting processes by publishing a SOA interface into legacy applications and processes.
Bottom Line:
Good business leaders understand that it is wise to invest during down times, so that when they get busy again, they will not have the opportunity to focus resources anywhere, but supporting the business operationally. BPM is as good as any investment that I have seen to invest in going forward.
Topics: BPM | No Comments »
Justifying BPM Efforts
By Jim Sinur | April 23, 2008
It’s not easy to justify any kind of capital budget item, especially in light of some of the recent economic challenges. However, BPM is rich with opportunity and documenting benefits is easier than anything else I have had to justify in my career.
It is not my intention to provide you with a formula, but to list opportunities that you can turn into a business case. In fact, the kind of benefits might change depending on your driver(s). If you are trying to do more with less, hard benefits will appeal. If you are looking for better client retention, the softer benefits will appeal.
Hard Benefits:
Benefits in this category are easier to convert into real economic numbers. Time and cost savings can be calculated without a lot of effort unless you want real time and motion studies.
With a little imagination, one can calculate the probability and frequency of a compliance event linked with probable costs. Once this is calculated, one can take a fraction of the financial impact and make the case for BPM. This category can even put a smile on the face of your dower accounting types.
- Cost Savings
- Reduced Elapsed Time
- Resource Optimization
- Automation of Human Tasks
- Manage End to End Processes
- Fewer Errors
- Ensure Compliance
- Smart Processes
- Goal Driven Processes
- Adjudicate Conflicting Goals
- Business Scenario Driven Processes
- Business Dynamics Guided
- Leveraged Labor Pools
Soft Benefits:
This is the mushy side of your justification effort. Equating this list of benefits to hard costs requires a special person. What is the value of a reputation? What is shared knowledge worth?
It takes a visionary business professional to convince top management of the economic value of any item on this list. Most folks will come up with enough on the hard benefits side and add these benefits for flavor to add some spice to your business case. Feel free to leverage these going forward.
- Higher Customer Satisfaction
- Visible Processes
- Shared Knowledge
- Identify Overlapping Processes
- Higher Employee Satisfaction
- Rule Driven
- Constituent Differentiation
- Departmental Harmony
- Lower Risk of Lawsuits
- Real Time Agile Business Behavior
- Policy Driven
- Competitive Advantage
- Process Focused Culture
- Company Image
Rule of Thumb for BPM Budgets:
Any justification requires the cost side of the equation, so I would like to provide some guidance for you. I promised that I was not going to provide you with any kind of formula, but I think I might be able to get closer to something that seems to fit logic on the cost side.
Start with the cost of the software (hopefully you have not sliced this cost to a ridiculously low level to invalidate this approach). Take this amount and multiply it by a factor of 2 for simple efforts and up to 4 for large scoped processes (for pilots this can be lower). This will give you the outside services costs. Double this amount for the amount of internal labor you are likely to expend.
Fortunately there is no cash flow with internal resources beyond the sunk costs you are already absorbing with salaries and benefits. You can adjust this up or down depending on complexity factors, such as difficult people to work with and technology pioneering. This is where your judgment comes into play.
Bottom Line:
Justifying BPM efforts is an art; not a science, but there are many opportunities on the benefit side of your home grown equation. Hopefully I have given you some fodder for your justification efforts. Additional reading for you is available in a few of my previous blog postings (Process is Free) & (BPM Yields Steady Returns in Good times and Bad).
Topics: BPM | 3 Comments »