BPM tackles the challenge of operational agility and cost reduction

Business as usual will not help South Africa`s insurance industry manage the challenges of operational agility and cost reduction, says Patrick Kuwana, director: Sales for Computer Sciences Corporation (CSC) in South Africa. What is needed is an evolutionary approach to improving business processes.

South Africa`s insurance industry is looking to business process management as the new technology to help improve operational agility, quickly bring innovative products to market, reduce operational costs and improve business processes.

CSC`s experience in the European financial services industry shows that improved management of business processes has resulted in operational cost savings for our clients of between 25% and 50%. We estimate that these companies could achieve a further 25% saving though the automation of manual tasks using business process management systems (BPMS).

One of the major challenges in re-engineering business processes is integrating the wealth of company information housed in legacy systems with new web-based technologies, for example, that support agile business models

Annually financial services companies in Europe spend up to 40% of their information technology (IT) budgets on systems integration. IT staff typically support dozens of software applications across multiple technology platforms, requiring maintenance of thousands of point-to-point interfaces.

Changes to these complex IT environments can be expensive, and are sometimes impractical. Despite the investment in these systems technology can be an obstacle rather than an enabler of change.

At the same time insurers, banks and capital markets firms are under increasing pressure from government regulation, technology-savvy clients and smart competitors. In this climate process thinking and agility are essential. Business processes must be well defined, consistently executed and able to rapidly respond to changing business dynamics.

One approach to overcoming process limitations is replacing all underlying legacy systems with a single software solution. This big-bang approach is often unrealistic for many financial services companies as it is often disruptive and expensive.

The most practical approach is one that simultaneously exploits the potential of new technologies and the embedded value in legacy systems. This is the fundamental strategy behind CSC`s e4 enterprise architecture.

CSC`s e4 gives financial services companies a robust architectural framework for enterprise integration, enabling quick and cost-effective design and deployment of business processes.

CSC`s e4 eliminates redundancies in internal and external business processes and increases automation, providing end-to-end process visibility, control and accountability.

A proven service-oriented architecture, CSC`s e4 integrates web technology, legacy systems and commercial software components with a business process management (BPM) engine, connected by adapters to middleware services.

The approach takes IT off the critical path by fully involving the business owners in the design, deployment and monitoring of enterprises processes. Business processes can be tuned or amended with minimal changes to the base tools. A true plug-and-play solution at the business level, CSC`s e4 eliminates repetitive systems integration tasks and costly point-to-point interfaces.

The power of CSC`s e4 is most beneficial where processes are fluid, difficult to co-ordinate across numerous parties and where the focus of management attention is on continual process optimisation and improved decision-making.

In the insurance sector claims present a daunting challenge to business analysts and systems architects. Claims administration is a complex process with clearly defined outcomes - payment or denial of payment. Each claim must traverse parallel processes and sub-processes, many or all of which must interact efficiently to administer the claim in a timely fashion and control financial leakages.

CSC`s e4 provides a framework that enables the process complexities and exceptions found in the physical world to be more easily reflected in the digital world. Volatile processes are managed at a layer above the application software. Automated and manual activities are combined in an uninterrupted, end-to-end process.

With one of the world`s largest portfolios of insurance and banking software, CSC is uniquely positioned to help financial services companies transform business process and IT systems. CSC`s software is designed to help firms exploit the full power of CSC`s e4.