BPM: The power of process

Don`t think workflow Mr CEO, think business process management (BPM). Automate your business processes, implement an independent management layer and focus on the whole enterprise as opposed to a departmental approach.

This is what you would have heard at a workflow and BPM conference organised by KnowRes in Johannesburg in May. And like many of the delegates, you may be thinking that BPM sounds awfully like workflow and so what`s the fuss? And why should one be implementing something that comes across as very similar to workflow? Is BPM just vendor-driven hype or will it provide real business benefits?

Workflow in its simplest form is the automation of the routing of documents in a set order to users responsible for working on them. The advantages of such a system are obvious: documents don`t get lost or reshuffled to the end of the queue; each document moves along at a set pace; and they are processed by the right people at the right time. Generally speaking, workflow works at a departmental level, while a BPM implementation is done at an enterprise level.

Unfortunately while the concept is a good one, workflow implementations haven`t always delivered the expected results, resulting in a certain amount of scepticism among corporates.

Jon Pyke, CTO at Staffware, which sponsored the conference, says implementation failures around workflow or BPM generally occur due to processes being contained within departments, as opposed to integrated into lines of business across the enterprise.

True BPM is not just about workflow, but its amalgamation with transactional support, distributed processing, enterprise application integration and business activity monitoring.

Jon Pyke, CTO, Staffware SA

In addition, workflow implementations have often taken much longer than expected, as the processes each would affect have had to be understood properly before they could be automated.

"There has been a lot of confusion over the last 18 months about workflow and the subtle move to BPM, but it`s nothing new. In essence, with BPM, we`re just trying to solve the same problems in a more efficient way.

"True BPM is not just about workflow, but its amalgamation with transactional support, distributed processing, enterprise application integration (EAI) and business activity monitoring.

"BPM not only defines and automates business processes, but provides a full 360-degree view of line of business procedures, controls the execution of the organisation and facilitates who does what when," says Pyke.

Not that workflow fades away. Mark Ehmke, MD of Staffware SA, says workflow is still required within departments.

"BPM is just the next step up from workflow and is best suited to the enterprise-type environments where the emphasis is on the management-critical processes.

"BPM is more strategic than workflow because of its over-arching end-to-end processes and the fact that it has that independent integration layer which business processes plug into, no matter where they are in the organisation.

"When an initiative like BPM is driven from the higher levels of an organisation, it automatically gains more credibility and authority, and is used to process-manage vital and highly visible aspects of the business such as the corporate database, customer relationship management (CRM) and EAI, gaining prominence and dominance within the organisation.

"It is more strategic than workflow because of its overarching end-to-end processes and the fact that it has that independent integration layer which business processes plug into, no matter where they are in the organisation," he says.

BPM is more strategic than workflow because of its overarching end-to-end processes and the fact that it has that independent integration layer which business processes plug into, no matter where they are in the organisation.

Mark Ehmke, MD, Staffware SA

The reason why BPM works, according to Pyke, is that with BPM, processes are understood, automated and managed with why the processes of a system work being key, not just what tasks need to be moved along the queue. Coupled with the automation of processes, people are then integrated into BPM, so the inconsistencies within the environment can be revealed.

"Process is king. But we must realise that the people within the process are as important as the system," Pyke says.

And as the speakers pointed out at the conference, there are ample examples of the successes of workflow and BPM.

Lance Moore, channel manager in charge of Africa for Lexign, cited an example of how workflow solved Credit Guarantee Insurance`s problem with some of its paper-intensive processes.

"Credit Guarantee faced a situation where they had all their applications done in a paper-intensive process where data was entered into the system on multiple occasions. No accurate measurements could be taken on application processing time and the results, and there was no easy way to retrieve or store documents pertaining to applications.

"By automating the process and digitising all application forms and placing them on the Internet for remote access, the processes and its results were able to be accurately measured, operational costs were reduced, human errors were eliminated, and an audited paper trail process was provided, resulting in a paperless office."

Moore gave another example involving Dell Financial Services where Lexign was able to shorten the time it took to process a lease form from four hours to three minutes.

"Previously orders were placed and contracts signed by faxing documents back and forth, and runners were used to move documents around for processing. But by automating the process, the time it took to complete was drastically reduced," says Moore.

Layna Fischer, GM of the Workflow Management Coalition, highlighted the example of the Professional Provident Society (PPS), a local insurance company.

"The PPS was established in 1941 to provide sickness and disability benefits to graduate professionals. In 2001 it transformed its processes using BPM to become more competitive in a changing insurance environment."

It implemented three main processes and 11 sub-processes in total, starting with membership enrolment processes and then moving into other line of business processes.

"It not only eliminated their application backlog in four months, but increased its revenue streams and saw a dramatic saving in paper and printing costs. Not only that, it gained a competitive advantage over other insurance companies," Fischer said.

Chris Cleator, national sales director of Durban-based Collaboration and Knowledge Management Business Systems, says although SA is still an emerging market as far as BPM is concerned, the demand for it is growing.

"The increased demand for BPM is being driven by the consultants. Gartner is bringing out its first report on BPM - an analysis of 90 pure play BPM vendors in the market. This shows there is now a demand for performance in the enterprise as the market seeks instant gratification."

Cleator says the need to streamline business processes and retain knowledge within an organisation in order to increase efficiencies has caused a fundamental shift in approaching BPM over the past year.

"With successful projects having been implemented, giving positive reference sites, local businesses are starting to allocate more budget towards BPM."

The question then is how does one implement workflow or BPM successfully in business?

Speaking at the conference, Rainer Gaier, director at Ovations Technologies, said workflow had been perceived as a "magical black box" that would address processing problems.

"The gap between business` understanding of what workflow is and what it actually is, is often where the problem lies and change management is therefore critical to part of the success of implementing workflow."

Paul Mullon, marketing director of Metrofile, says technology is the enabler to speed up manual business processes, and managing the way a technology like workflow or BPM changes the environment is the key to its success.

"Through workflow and BPM, companies are able to manage and speed up their processes. But speeding up a process which has bottlenecks and resistance will only make those problems more frequent."

Mullon says companies are in danger of making the same mistake with BPM that they did with workflow.

"Many companies have emerged disillusioned from workflow. While productivity and efficiency were often increased, business often ended up automating bad processes or introducing an expensive and underused layer of software into an already overburdened IT department.

"Despite the failures of the past, too many organisations still make the same fundamental mistake of applying the technology without understanding the problems they hope to solve and the benefits they would like to achieve."

Steven Lauter, a business development manager at the IQ Business Group, says mature processes are therefore needed before they are automated using workflow/BPM technology in order to make the process work faster.

Lauter says process maturity begins with the analysis and measurement of processes before technology is applied.

"Diving head first into an exercise is not going to provide results if there is no benchmark to measure it against or the technology is not used correctly. Time needs to be taken to assess the current processes to see whether they need to be redesigned or if the faults lie with the adherence to the process.

"Change management processes then need to be applied to ensure correct and complete acceptance by the intended user base," he says.

Rounding off the conference by looking ahead, Ehmke spoke about the divide that has separated IT and business.

Despite the failures of the past, too many organisations still make the same fundamental mistake of applying the technology without understanding the problems they hope to solve and the benefits they would like to achieve.

Paul Mullon, marketing director, Metrofile

"IT started because business needed to record processes. Therefore IT has always been about data. Almost all of the recent technological innovations such as enterprise resource planning, CRM and business intelligence have been built upon this data paradigm.

"Because business is about process rather that data, a business-IT divide has been created. But now for the first time, IT is moving from a data-centric approach to a process-centric approach, providing business with the tools that it needs in order to make its processes run more effectively," Ehmke said.

With IT tools now being placed in companies` hands, Ehmke said businesses are now able to create their own processes and manage them, while IT has the chance to regain its credibility by providing technology to drive those procedures.

Mapping out future trends, Ehmke said BPM and Web services would play a key role in managing processes that powered business.

"One of the new drivers in this new process-centric view is Web services, which act as an electronic application interchange. Together with Web services, BPM promises to change the role of IT in organisations," Ehmke said.

The advent of Web services has meant that companies are now no longer trying to fine-tune applications but are working to break them down into standalone services according to the emerging Web services standards.

The result is that a large number of discrete services are being combined or used completely separate as well.

"The future of BPM will be to provide a process engine that can coordinate these services into a variety of compatible business processes at run-time, referred to as process orchestration."

Ehmke said process orchestration holds the key to the future of BPM because of its ability to define processes that could dynamically change in response to data inputs and unplanned business events, both of which are crucial to delivering flexibility to business.

Diving head first into an exercise is not going to provide results if there is no benchmark to measure it against or the technology is not used correctly.

Steven Lauter, business development manager, IQ Business Group

"With process orchestration, business analysts are able to map business processes by describing the services that might be used without necessarily understanding exactly which services will be used, or even whether the services are internal or external."

It is a new concept and certainly difficult to get one`s head around. But Ehmke gave an example of the healthcare environment where a process engine managing process orchestration was vital in allowing different processes to occur in different orders.

Ehmke said process orchestration has already been implemented by Siemens Medical Solutions in a number of hospitals within the US.

"In hospital, a patient will have to have various treatment at various times, depending on his or her condition. There are thus sets of different procedures that occur in a different order, depending on the patient.

"The hospitals in turn all connect to Siemens Medical Solutions which acts as a service provider to manage the process orchestration on behalf of the hospitals."

Ehmke said that as the proliferation of Web services increases, service brokers (like Siemens Medical Solutions) would register and publish services from which customers could subscribe to. Process monitoring would become an even more key requirement with key performance indicators set across the entire value chain with triggers and alerts to cater for any exception.

Looking ahead, Ehmke predicted that businesses would no longer run applications, but would use a process engine and connect via the Internet to a set of service brokers that would connect them to the relevant Web services. They would then be charged for their consumption of services on a monthly basis, much like the consumption of electricity or for connecting to a mobile network.

Ehmke said consumers will therefore experience true computing on demand and be spoilt for choice of services available, while brokerages will take a fee and vendors will be paid a royalty.

"IT has always been data-centric while business is process-centric. We therefore need to support the drive towards integration and process-centric applications."