BPM: Maturing Toward a “Process Nirvana”

You would expect a group of business process management (BPM) software vendors to extol the virtues of BPM as the greatest thing since sliced money. But a particularly thoughtful group met by phone in October to explore the growing market acceptance of BPM as both a cost-reduction productivity platform and a business improvement and competitive advantage. They were:

• Tracy Shelby, Systems Officer, AWD Marketing & Business Development
• Michael L. House, General Manager, e-Synergy, Exact Software North America
• Chris Preston, Director, Product Marketing, North America, FileNet Corporation
• Mike Ball, Director of Product Marketing, LEGATO Software
• Laura Mooney, Director, Product Marketing, Metastorm, Inc.

Andy Moore: First, let’s look at ‘prior art.’ Why is BPM finding favor among business users where ‘process re-engineering’and “workflow” have lost their sheen?

Chris Preston: Re-engineering is coming back into vogue, and the virtues of re-engineering are very relevant. In the past, re-engineering represented long, complex efforts that were bogged down by the mentality at the time, which was to ‘re-engineer and move on,’ instead of viewing it as a continuous process improvement activity.

Mike Ball: The evolution, from workflow and process reengineering, has led to an enhanced adoption rate for BPM. In the beginning, people were focused on the technology, not on the solution or the potential results. So when companies looked at the effort necessary to implement workflow, it was daunting. Then when faced with re-engineering, people resisted because they thought they had to turn their organizations upside down and change the way they did things.

But with BPM, it is felt that the streamlining and automation that improves processes can be applied without necessarily turning the organization upside down. An existing process might work quite well, but could be improved—for instance, a manual process or one hampered by geographical distribution of people.

It is now accepted that processes can be improved and organizations can be made more agile and only minimally disrupt the way they do their work, if at all.

Laura Mooney: We’re telling our customers that there’s probably nothing wrong with the processes they have now, except there’s a lot of inefficiencies in them. So we don’t set out to change processes; we leverage technology to improve productivity. We also help them track information about their current processes. Once you can do that, you can identify the low-hanging fruit for process improvement, and evolve and adapt the processes over time.

Preston: BPM does have the potential to transform business as we know it, but it isn’t necessarily a radical process.

Automation is key, but it has to blend with integration and optimization. Our job, when we address clients, is to make sure it’s absolutely tangible and real. We express that through client examples, cases where customers have gotten ‘extreme ROI.’For example, a mortgage company was facing high volumes in their loan-origination process, due to a large number of re-financings. In that example, cycle times for decisions went from seven days to 48 hours…that’s a complete change for that business. They reduced their cost of transaction from $250 to $60 per loan…multiplied over the number of transactions per year, this company saved well over $50 million in the first year alone.

Tracy Shelby: Much of the early business process re-engineering initiatives were driven mainly by consultants. Some of the recent success of BPM could be attributed to the down economy, because companies are truly driven to identify methods that will quickly implement solutions that will bring real business value. And as vendors, we’re also driven toward rapid implementation and true business value.

Moore: Multiple choice question: Does the business process drive content creation and the value from it, or is it the content itself that initiates and drives process?

Mooney: Business processes should be driving content, because it’s ultimately the process that’s running your business. The content supports effective execution of that business process.

I see ECM and BPM as distinct and separate initiatives, primarily because content management has been around for a while longer. Many companies have already chosen content management providers and have already taken great strides in cleaning up content, making it accessible via Web portals, putting applications in place and so forth.

Now they realize that the content is not linked into any process automatically. With the fairly recent advent of BPM technology, people are just beginning to put that process structure in place. Now, at some point content is critical for decision-making and is needed to be pulled into the process. So BPM providers have to be compatible with all the content, document and records management providers. It’s not realistic for us, as a BPM provider, to think we’re going to develop and become a standalone content-management tool, because that’s not going to address the needs of the market.

Preston: A major struggle for organizations is this: I get my business process management software from Vendor A. I get my content management environment from Vendor B. And then application integration is another element all unto itself. How do I plug my infrastructure, my existing investments, into all this? A BPM solution—as a matter of being—has to unify the best-of capabilities of each of these dimensions: process, content and connectivity.

Ball: It’s a chicken-or-the-egg situation. Sometimes the process drives the content, sometimes the content triggers the process. The key is to have a tightly integrated solution—whether it’s from a single vendor or a best-of-breed selection. You need to have that tight integration to deliver the maximum benefits from either technology.

Preston: Content, whether structured or unstructured, as well as business processes are event-driven by nature. ‘Why did I create this piece of content?’ Because someone walked into a branch of my bank and applied for a loan. Based on that person’s unique circumstance, I might launch a specific process, depending on the content she provides. This is where the transformative nature of BPM comes into play—to not only apply business rules to the event (the loan application)—which we’ve done for some time now—but also to the content related to the event as well (changes on the loan application itself.)

Let’s say the person with the loan request decides to change from a fixed-rate loan to a variable-rate loan. That change in a piece of content will require a whole new set of business processes that need to be addressed. Those should be immediately enacted because of the change in that piece of content, as opposed to the old days when someone had to sit down and think about the new circumstances, evaluate them, have other people come into play and have things sit on peoples’ desks. The new state is to enact things automatically.

This is possible because the infrastructure and technology is all there now—the capabilities to make this happen in a much more maintainable form are in place. I do not have to involve IT to recompile code to make it happen. I can change a process flow by simply re-drawing it on a screen. Or change the rules in how I make decisions. We’ve abstracted the process and policy logic from the application. Typically, it was hard-coded in the past. Now I can be more agile and adaptable. And I have the compliance issues covered and still do it quickly without IT involvement.

Mike House: Traditional ERP systems do not reach a