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BPM 101 IBM Smarter Process BPM - Business Process Manager (Process)

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1 BPM 101 IBM Smarter Process BPM - Business Process Manager (Process)
ODM – Operational Decision Manager (Rules & Events) Vignette: Instant: What if you new who your customers were when the walked into the store? Seamless: What if you could

2 BPM Topics What is BPM? Typical Business Value Key Capabilities

3 Have You Ever Experienced This?
Oops, I didn’t know that this customer just became a Premium Client I love helping our customers, but I can’t take too much time or I’ll never get my other work done. Why did we touch that request 20 different times? I really wanted to help out, but I couldn’t find the information they kept asking for! This guy just kept on calling, wondering why he had not received an answer yet! I had to spend so much time updating systems and status information – I barely got anything done today! This is the first part of the introductory slides. Ask audience who has experienced these kinds of issue (suggested to do it issue by issue as it is unveiled). Key Points: Illustrate the kinds of business issues that may lead a business organization to consider using BPM approaches and technologies.

4 BPM Can Help Realize Your Business Goals
Customer Focus Service Culture Cost Effective and Price Competitive Enable Workers To Provide Optimal Customer Experience Easier To Do Business With Grow and Scale Efficiently Second part of the introductory slides. Key points: BPM needs to be focused on realizing business goals. BPM works best if driven by business objectives and business leaders

5 What is Business Process Management (BPM)?
Business Process Management is… … a combination of technology and methodology that allows you to more quickly and clearly… … identify and communicate what you do as an organization … measure how well you’re doing it … optimize and improve your processes … to bring real business value to your organization.

6 Business Process Management Fundamentals
BPM Defined: An integrated approach to aligning the key activities of an organization into processes that you can consistently measure to optimize value to your organization and its end customers. Main Point: BPM helps organizations of all sizes and in all industries achieve their business goals by addressing the processes that drive their business. As companies look to transform and grow, they are turning to BPM as the engine for growth. Process improvement yields significant business value, and combining BPM with decision management provides the full spectrum of capabilities to achieve process optimization. Organizations looking to adopt BPM typically struggle with one or more of the following pain points: Poor visibility into business processes and how work is actually done Employees spend too much time managing exceptions and doing rework Sub-optimal productivity due to ad-hoc processes or inconsistent prioritization Work environment spans multiple systems that are disparate and siloed Can not react quickly to changing market, consumer, or regulatory demands 6 6

7 Typical Business Process Challenges & Results
Poor visibility into business processes Significant amount of rework due to exceptions Lost productivity due to unstructured tasks or inconsistent prioritization Inefficient handling of work, spanning multiple systems Inability to change processes as frequently as business demands BPM’s value to the company was higher than ERP, CRM and SCM. Organizations had > 90% success rates on BPM projects. 67% of projects were completed in < 6 months, 50% in < 4 months. 77% of projects had returns greater than $100,000 per project. BPM projects had 10% or more Internal Rate of Return (78% had >15% IRR, some as high as 360%) 80% of the respondents felt an increase in competitive advantage. (Source: “Justifying BPM Projects”, Gartner) Main Point: BPM helps organizations of all sizes and in all industries achieve their business goals by addressing the processes that drive their business. As companies look to transform and grow, they are turning to BPM as the engine for growth. Process improvement yields significant business value, and combining BPM with decision management provides the full spectrum of capabilities to achieve process optimization. Organizations looking to adopt BPM typically struggle with one or more of the following pain points: Poor visibility into business processes and how work is actually done Employees spend too much time managing exceptions and doing rework Sub-optimal productivity due to ad-hoc processes or inconsistent prioritization Work environment spans multiple systems that are disparate and siloed Can not react quickly to changing market, consumer, or regulatory demands 7 7

8 Improve business efficiency & innovation with Smarter Process
Typical process problems BPM brings order to the chaos Account Administration Executive Mgmt Billing Risk Management Teams Invoice Reconciliation Teams ERP Customer Service Account Admin Imaging Rules Finance & Ops Executive Management CRM Rules Rules Customer Service Finance and Ops Inefficient working environment Incomplete or inaccurate data flow Inconsistent prioritization Lack of control over the process Poor visibility into process performance Automate workflow & decision making Reduce errors and improve consistency Leverage existing systems and data Streamline processes and initiate actions Real-time visibility and process control 8

9 Typical Process Problems – Business Chaos
Customer Service Account Administration Finance and Ops Unstructured Tasks (Phone, paper, attachments, etc.) Inefficient Working Environment Spans Systems Inconsistent Prioritization Incomplete or Inaccurate Data Flow Between Systems & People Lack of Control Over Process Flow and Business Events/Exceptions Poor Visibility Into Process Performance 6 Executive Management 1 3 Invoice Reconciliation Teams 2 4 5 Main Point: A deeper look at typical process problems to highlight BPM’s value Speaker Notes: Here is a deeper look at the problems that cause process management problems. The key points here: Yes, you have systems. But they typically only solve part of the process. At the human level, the problem is that work is not well controlled Finally, there is no end to end visibility to the process – that spans humans and systems

10 Typical Process Problems – Business Chaos
Customer Service Account Administration Finance and Ops Inefficient Ineffective Inaccurate Incomplete Inconsistent Inflexible Invisible 6 Executive Management 1 3 Invoice Reconciliation Teams 2 4 5 Main Point: A deeper look at typical process problems to highlight BPM’s value Speaker Notes: Here is a deeper look at the problems that cause process management problems. The key points here: Yes, you have systems. But they typically only solve part of the process. At the human level, the problem is that work is not well controlled Finally, there is no end to end visibility to the process – that spans humans and systems

11 BPM Layer Process Rules Events
BPM Orchestrates Human to Human, Human to System & Inter-system Interactions …brings order to the chaos Automate workflow & decision making Reduce errors and improve consistency Standardize resolution across geographies Leverage existing systems and data Monitor for business events and initiate actions Real-time visibility Customer Benefits: Huge Reduction in Manual Work, Errors Faster, More Consistent Issue Resolution Metrics, measurements, visibility and business- friendly reports Rapid, Agile and Iterative process improvements Executive Management Customer Service Invoice Reconciliation Team Finance and Ops Account Administration Process Rules Events BPM Layer Main Point: A deeper look at typical process problems to highlight BPM’s value Speaker notes: So, a good way to think about BPM is that it is a layer that gives you the control and visibility over the processes. Key points: It sits between people and systems and manages the process across those participants Prioritizes your work, but also gives you visibility and control And when the process evolves and changes – you can quickly implement that change and that is immediately

12 BPM Layer Process Rules Events BPM Results: Visibility Agility Control
BPM Orchestrates Human to Human, Human to System & Inter-system Interactions …brings order to the chaos BPM Results: Visibility Agility Control Collaboration Automation Integration Governance Optimization Executive Management Customer Service Invoice Reconciliation Team Finance and Ops Account Administration Process Rules Events BPM Layer Main Point: A deeper look at typical process problems to highlight BPM’s value Speaker notes: So, a good way to think about BPM is that it is a layer that gives you the control and visibility over the processes. Key points: It sits between people and systems and manages the process across those participants Prioritizes your work, but also gives you visibility and control And when the process evolves and changes – you can quickly implement that change and that is immediately SAP SAP SAP BWL1 BWL2 BWL >PD PPTour OF Dash OF OPT+ I C L Collab OF i P A D i P h o e S I G Responsiv M O F ART OTP BK P P BK PD BFS NM BFS BFS Visibty VIP N S T PD Collab SnapDesign On Thy Fly BR1 BR2 BR3 ODM 1 Tour SAP SAP BWL Col PPSpanish Dash AO GOPT Collab AO Map iPho BPM85 E2E PD Tour BFS GEO Visibty ME ppdDIAGs Snap Deploy Incdnt Mgmt ODM Retail DM1 DM2 DM3 ODM 2

13 The essential BPM capabilities
Modeling Monitoring Automation Governance Optimization Rules Business Data Documents Events Integration Collaboration Analytics Finance and Ops Customer Service Executive Management Account Administration Risk Management Teams SAP SAP SAP BWL1 BWL2 BWL >PD PPTour OF Dash OF OPT+ I C L Collab OF i P A D i P h o e S I G Responsiv M O F ART OTP BK P P BK PD BFS NM BFS BFS Visibty VIP N S T PD Collab SnapDesign On Thy Fly BR1 BR2 BR3 ODM 1 Tour SAP SAP BWL Col PPSpanish Dash AO GOPT Collab AO Map iPho BPM85 E2E PD Tour BFS GEO Visibty ME ppdDIAGs Snap Deploy Incdnt Mgmt ODM Retail DM1 DM2 DM3 ODM 2

14 BPM delivers business value as adoption progresses
Project Program Transformation Efficiency Effectiveness Agility Take time and cost out of the process Work smarter to deliver higher revenue and profit Outmaneuver competitors with rapid response to change Reduced development time by 40% Drives $3.6M in additional revenue and saves $2.7M by integrated sourcing processes with real-time inventory visibility Line of Business Personnel Launch Campaigns in Two Days Instead of Months Saved more than $100M with improved efficiencies and higher levels of customer service Cut “engineering” time of designers on car systems by 20% in one year. Speed to market gains of over 50% Main Point: BPM delivers business value from Project to Program to Transformation. Organizations adopt BPM for variety of reasons, but no matter the reason, BPM delivers real business value as these company examples show. Main Point: Organizations adopt BPM for a variety of different reasons, but no matter what the specific process challenge is, BPM delivers real business value. Organizations just starting out with an initial project typically benefit from greater efficiency. As business value is realized and the project is extended into a program, additional value is realized, usually in the form of effectiveness…..the ability to work smarter. Extending BPM across the enterprise for transformation yields additional business value in the form of agility. Project Victoria Worksafe deployed a first phase claims processing application to ensure timely workplace claims processing for their citizens. The project is estimated to have payback of 6 months and hundreds of millions in savings from improved fraud detection. Due to the success and cost savings of this initial project, Victoria Worksafe has plans to expand scope to program level. Program Mark’s Work Wearhouse a Canadian retail chain specializing in work clothes was struggling with product sourcing processes and a lack of visibility into inventory that were causing lost sales. Mark’s ultimately deployed a new automated process that integrated the sourcing processes with real-time inventory visibility across all stores. This new process made it much easier for customers to get the merchandise they were looking for, and resulted in 3.6 million dollars in additional sales in the first 10 weeks that the new sourcing process was deployed. A great example of implementing an effective BPM program to work smarter and increase revenue. Ford Motor Credit was not flexible enough to meet shifting user demands; their technology was outdated and no longer supported. Ford Motor Credit wanted to find a way to revamp and upgrade its existing applications using multiple workflow applications to support its day-to-day business and development efforts. To achieve its goals, Ford Motor revamped its critical workflow applications. By using IBM IBM to redesign its critical workflow applications, Ford Motor Credit has increased the efficiency of its development efforts by 25 percent. The new workflow applications offer improved performance as well as significantly more functionality. The successful deployment of this project has caused Ford Motor Company to take note and transition its process development efforts to use this team's approach in terms of technology choices and infrastructure. Transformation HealthNow built an agile member enrollment system to automate, optimize and monitor key business decisions throughout the enrollment process determining eligibility and applicable coverage, easily identifying pending enrollment and exception cases, processing new member application and current member policy changes, enforcing regulatory compliance, disseminating tasks and triggering notifications as required. The IBM BPM solution yielded speed to market gains of more than 50%. It provided HealthNow with the ability to introduce new behaviors into systems in days rather than weeks or months, and enabled end-to-end visibility into the enrollment process - resulting in greater clarity, accuracy and consistency – transforming the way HealthNow approached and conducted business. **NEED EMT INFO** 14

15 Key IBM Smarter Process Capabilities
The following section explains the various features and functions of a BPM system that enable the realization of the benefits described earlier and implement BPM approaches to address business concerns.

16 IBM’s approach for reinventing business operations
- to enable greater customer-centricity - in the age of mobile, social, cloud and big data - while driving efficiency and optimization into end-to-end processes Smarter Process is IBM’s approach to reinvent business operations. Reinvention is need to be more customer-centric and to grow the top line and in the age of mobile, social, cloud and big data, customers have more information in-context. Your business operations need to add to this information that customers have, in an instant, seamless and insightful way. None of this is possible if processes are efficient and optimized and build to deliver complete end-to-end outcomes.

17 IBM Smarter Process Capabilities

18 How is Process Discovery done today?
Figure it out yourself Lock the team in a conference room for day(s) Sticky notes Butcher paper Whiteboard drawings Back and forth till you finally understand your process Scribe it all down Convert it to a diagram/drawing 18

19 Simple Social Cloud SaaS Offering… Get Started Fast!
Near Zero Learning Curve … Collaborate, engage, model, analyze and improve your processes… Simple Social Cloud Easy for novices, rich enough for experts Focused on broad participation Single repository, built for Process and Decisions SaaS Offering… Get Started Fast! 19

20 BPM Imperative: Business led discovery, innovation & change Integrating goals, processes, and capabilities Sketch out initial process designs Storyboard experiences and explore use cases with process walkthroughs Describe your processes with the language & organizational roles your business uses Capture key business factors, actionable strategies, and align your process initiatives Leverage community-based best practices and industry content Collaborate and communicate with other stakeholders & leaders across the business IBM BPM portfolio differentiators include Business Led Discovery, Innovation, and Change across the application development lifecycle for a truly business driven design The new V7 capabilities around business led discovery, innovation, and change are exciting. These allow customers to: Sketch out initial BPMN process designs Storyboard experiences and explore use cases with process walkthroughs Describe your processes with the language & organizational roles your business uses Capture key business factors, actionable strategies, and align your process initiatives Leverage community-based best practices and industry content Collaborate & communicate with other stakeholders & leaders across the business You can have a conversation with your client about their business, and use the V7 tools to facilitate discussion around discovery, design, innovation, and change. Customers take different approaches to describing their business. Some think strategically and use SWOT analysis (Strengths, Weaknesses, Opportunities, Threats). Others look at organizational capabilities or think about the organizational overall, and some think about describing their business through a process view. With BlueWorks and WebSphere Business Compass, the technology allows you to sketch out descriptions of the business, sketch BPMN processes, storyboard and walkthrough the process right there, and describe processes with the language and organizational roles the business uses. At the end, you can leave your customers with the URL to go access the artifacts themselves or you can leave PowerPoints with the assets you just created. These are fundamental new features of V7 that are going to help make a difference with customers and that are going to help sell BPM ! 20

21 Smarter Process Capabilities

22 IBM Business Process Manager
Process Portal Process Optimizer Process Center Shared Model Process Designer The simplest way to get started with BPM Process Discovery “Modeling for Documentation” The quickest way to deliver robust process applications Process Implementation “Modeling for Execution” Introduction to Lombardi and a brief demonstration of the key capabilities. Intro: Touch on 3 quick topics: You can use all different kinds of software to build applications and systems. Lombardi Edition is a purposed built platform to building not only process centric applications, but the right ones that solve burning business pains. A lot of applications or suites have reporting modules. Lombardi Edition was purposed built for process improvement (defining KPIs & SLAs during design, understanding at risk work items during execution, and visualizing bottlenecks for continuous improvement) Process apps are not one and done. They are typically 90-day deployments with iterations every 6-8 weeks. And with programs like Allianz you can realize business value early and change frequently thereafter. But, you have to have a scalable and repeatable platform to realize BPM success across an enterprise. Demo: In this demonstration we’ll touch on all three of the Lombardi edition environments. We’re going to start in the process designer and see how processes are modeled. Then we’re going to look at the execution environment and the business user’s interface for performing and managing work. We’ll finish the Lombardi Edition tour looking at the Optimizer environment to see how you can analyze performance data to identify areas for improvement. Then we’ll wrap up with a look at how Blueprint can be used to help define and document business processes.

23 BPM in Action Rapid, Agile and Iterative
Worker Process Portal Process Coach UIs 4 Execute and Monitor Manager 1 Process Discovery, Modeling & Analysis Process Center Shared Model Optimize Design Execute Business Analyst 5 Analyze and Improve Process Optimizer 2 Import Process Model Business Modeler Process Designer 3 Model for Execution XPDL SAP SAP SAP BWL1 BWL2 BWL >PD PPTour OF Dash OF OPT+ I C L Collab OF i P A D i P h o e S I G Responsiv M O F ART OTP BK P PD BFS NM BFS BFS Visibty VIP N S T PD Collab SnapDesign On Thy Fly BR1 BR2 BR3 ODM 1 Tour SAP SAP BWL Col PPSpanish Dash AO GOPT Collab AO Map iPho BPM85 E2E PD Tour BFS GEO Visibty ME ppdDIAGs Snap Deploy Incdnt Mgmt ODM Retail DM1 DM2 DM3 ODM 2

24 BPM in Action 1) BlueworksLive 2) Modeling Ease of Use
3) How It Executes 4) End-2-End Playback 6) Optimizer Heat Maps 5) Dashboards SAP SAP SAP BWL1 BWL2 BWL >PD PPTour OF Dash OF OPT+ I C L Collab OF i P A D i P h o e S I G Responsiv M O F ART OTP BK P P BK PD BFS NM BFS BFS Visibty VIP N S T PD Collab SnapDesign On Thy Fly BR1 BR2 BR3 ODM 1 Tour SAP SAP BWL Col PPSpanish Dash AO GOPT Collab AO Map iPho BPM85 E2E PD Tour BFS GEO Visibty ME ppdDIAGs Snap Deploy Incdnt Mgmt ODM Retail DM1 DM2 DM3 ODM 2

25 IBM BPM Platform: Key Differentiators
1. Process Blueprints (BlueworksLive) Collaborate on Process Modeling 8. Proven Methodology Rapid, Agile, Iterative 2. In-Context Collaboration Real-time Multi-person Screen-sharing Rapid, Agile and Iterative 7. Process Optimizer Deep metrics and Visual Heat Maps 3. Intelligent Dashboards And Custom Reporting 6. Process Center Shares Process Model for Continuous Process Improvement Optimize Design Execute BPM Shared Model Process Center 4. Process Playbacks It’s ALWAYS Instantly Runnable! 5. Snapshots Seamless Versioning Design-time & Runtime 9. Mobile Ready 10. Cloud Enabled The key characteristics that must be enabled to achieve quick and reliable change by business users is Visibility, Collaboration and Governance. Leveraging Visibility, the organization can achieve a clearer line-of-site into the operational side of the business. This enables new insight and creates opportunities from a clearer understanding of operational conditions. Collaboration fosters cross-functional and cross-divisional synchronization across all operations. This enable the sharing and consolidation of business services, which results in operational cohesiveness. Governance aligns business operations with strategy within operational processes. This enables uniform interpretation of corporate and business unit policy in in every operational situation. Simplicity is a common theme that goes across VCG. Without simplicity, business users will not effectively be able to manage change. SAP SAP SAP BWL1 BWL2 BWL >PD PPTour OF Dash OF OPT+ I C L Collab OF i P A D i P h o e S I G Responsiv M O F ART OTP BK P PD BFS NM BFS BFS Visibty VIP N S T PD Collab SnapDesign On Thy Fly Incdnt Mgmt BR1 BR2 BR3 Visibty ME ODM 1 Tour SAP SAP BWL Col PPSpanish Dash AO GOPT Collab AO Map iPho BPM85 E2E PD Tour BFS GEO ppdDIAGs Snap Deploy ODM Retail DM1 DM2 DM3 ODM 2

26 BPM Client Examples This section covers some typical business situations that are “sweet spots” for BPM-enabled solutions. The section also outlines benefits that have been realized by employing BPM for these situations. This section addresses typical business situations and how BPM can provide benefits for solving these business situations. The section starts with an in-depth look at a case study of an organization that adopted BPM. It then illustrates benefits that other organizations have observed after implementing BPM. The section concludes with a more generic view of the typical business concerns and benefits that can be achieved with BPM. Key Points: Case study and benefits Typical business concerns and business goals realized

27 Case Study: Original Process (w/o BPM)
Sort / Prioritize Work Complete Application Decision Research Eligibility Create / Finalize Record Paper Application Underwriting Decision Print Application Sort / Prioritize Work Complete Application Decision Research Eligibility Create / Finalize Record Underwriting Decision Online Application Similar, but separate online and paper processes All work done sequentially Online applications printed for filing and routing All tasks done manually – no automated business rules Work moved via “mail carts” The case study is based on the BPM project at a health insurance company. The process handles requests submitted by customers (aka members) applying for enrollment in health insurance provided by the company. After receiving the request from the customer, the work is sorted and prioritized and then sequentially routed through various processing steps that determine whether the customer can be enrolled. If the customer can be enrolled, all necessary systems will need to be updated so that the customer receives health insurance through the company. In the original process that existed prior to the implementation of BPM, all steps were performed manually. The applications from the customer were received on paper, even the online submissions were printed onto paper. The paper was sorted, prioritized (by being placed in color-coded folders) and routed through inter-office mail carts. Each worker in the process was triggered to perform their work by receiving a stack of these paper applications in the “inbox” on their desk. Once their step in the process was completed, they placed the paper in the “outbox” on their desk where it was picked up by the mail cart and transported to a worker who performed the next step. Some of the key issues with this process included: All steps were sequential, resulting in long processing times that impacted the ability to win new customers (customers typically chose the health insurance company that was able to respond fastest with reasonable premiums) Work was managed by supervisors keeping track of how many applications were “sitting on someone’s desk” Applications were easily lost or significantly delayed, especially in “exception” situations were information from the customer was missing Separation of paper vs. online process resulted in inefficient use of human resources Key Points: Similar processes for online and paper, but evolved and executed separately Work management entirely manual, using paper for routing Long cycle times resulting in lost business Inefficient use of human resources

28 BPM Phase 1: Add Workflow, Automate Simple Tasks
Sort / Prioritize Work Complete Application Decision Research Eligibility Create / Finalize Record Paper Application Underwriting Decision Underwriting Decision Complete Application Decision Create / Finalize Record Online Application Data Prioritize Work Research Eligibility Used online data entered by customer Prioritization based on rules using application data Work routing based on data Work pushed along as soon as prior task completed, no wait for “mail cart” needed Work arranged in parallel The first implementation of a BPM system focused on the process associated with online applications. Rather than printing the application to be routed in a paper-based process, the entire process was converted to using electronic data. In addition, the electronic data was used in business rules to allow the BPM system to prioritize the work and route it to the right pool of workers – multiple workers that could perform the task, not just one. Since the application is now electronically available, the process was restructured to allow some steps to be performed in parallel (they were already independent of each other in the original process, but the paper-based process did not allow the application to be in multiple different steps at the same time). Some important differences to the original process resulted from this first implementation: Work is routed via the BPM system, immediately after a task is completed The same application is routed to multiple workers who can perform the next task in the process (only one worker actually performs and completes the task for a specific application) BPM determines the pool of workers that can perform a task and the task priority based on the data associated with an application Some tasks are performed in parallel Key Points: This is phase 1 of a multi-phase implementation, focusing on important process and work management issues Key design principles for BPM implementations were applied

29 BPM Phase 2: Streamline Paper into Same Process
Paper Application Sort and Image Data Entry Underwriting Decision Complete Application Decision Create / Finalize Record Online Application Data Prioritize Work Research Eligibility Enter (all) data upfront Enable better workload balancing Reuse same routing and prioritization rules Images follow work automatically (no search), all related documents grouped into cases Same task automation regardless of entry point The second phase of the BPM implementation focused on flowing the applications that were received on paper into the same process as the online applications. Document imaging and data entry to create the electronic data associated with the application was the technology that was integrated with the BPM system. To accomplish this approach the workers that were previously needed to run the mail carts were transferred to the data entry task. Key Points: Process is the same for online and paper applications Workload is balanced across all available resources Information (whether electronic data or imaged document) is immediately available to each tasks, reducing time spent searching for information needed to perform task Although this phase emphasized document imaging over additional BPM features, it laid the foundation for exploiting BPM strengths in the next phase

30 BPM Phase 3: Setup Growth Platform
Auto Approval Paper Application Sort and Image ? Auto Approved Auto Completion Auto Eligibility Not Auto Approved Data Entry Simple Case Underwriting Decision Complete Application Decision Create / Finalize Record Online Application Data Prioritize Work ? Research Eligibility Complex Case Focus humans on critical decision making More effectively support growth Automate tasks incrementally Direct process to automated and/or manual tasks based on application data Manage service and risk Phase 3 built on the foundational steps of Phase 1 and Phase 2 by creating an application processing platform that allowed the company to significantly improve business operations. Significant improvements can be accomplished by attempting to process as many applications (that do not require human decision-making) as possible in an automated fashion. Unfortunately, not every application is fit for automated processing, especially when the application is complex or contains inconsistent information. Automated processing is typically only cost-effective when the processing and evaluation rules are relatively simple to develop, deploy and change. However, most business processes today are not setup to efficiently sort the applications that could be automatically processed from those that can’t, resulting in all applications being processed manually. This was the case in the original process. However, by setting up rules that inspect the data for each application, BPM can evaluate whether to route an application through the automated processing path or directly for human processing. If the automated processing still cannot make a decision, BPM then routes it to the human-based processing. After human-based processing is sufficient, another attempt at automated processing could be made or a decision to complete the process through human tasks could be derived. Changing the process to incorporate tasks that automatically processed a portion of all applications further reduced processing times and resulted in significant cost savings per application processed. However, since the volume of applications and revenue increased (now that the company was able to respond faster to its customers), humans were required for making decisions about the more complex applications. Key Points: Automated vs. human processing based on rules that evaluate application data Automation was incrementally introduced into the process based on analysis of highest impact and volumes Humans are focused on critical decision-making vs. performing routine, mundane tasks Significant benefits: lower cost per application, increased revenue from more applications converted into customers

31 Case Study: Benefits Observed
$750,000 savings in first year Reduced cycle time from 10 days to 2 days Increased direct and indirect customer satisfaction Balanced workload, improved responsiveness Cost avoidance, even after volumes increased The company achieved some significant benefits from the implementation of BPM approaches and technology. Benefits were reflected in monetary savings from reallocating human resources and labor costs. Additional revenue, by converting more applications into paying customers, were generated through shorter processing times and more consistent process execution that was experienced by the company’s customers. When the volumes increased, the additional workload was absorbed into the BPM solution without requiring a significant addition of staff, which would have been the case in the original process. Key Points: Typical benefits associated with BPM implementations were achieved.

32 Other Client Examples Insurance Company Health Insurance Company
March 2010 Insurance Company Credit Insurance Claims Business continuity, improve productivity Reduced cycle time, processing cost 6 month ROI Plastics Distributor Procure to Pay Improved tracking, productivity 30% reduction in processing cost Telecommunications Company DSL Provisioning Existing process inhibited increased volumes Process: reduced from 45 to 7 minutes Call Center: reduced from 400 to 260 employees Volume: from 7,000 to 35,000 starts per month Health Insurance Company Individual and family plan member enrollment Integrate imaging, new system, automate Savings: > $700,000/year Reduced cycle time from 14 days to 4 days Online Retailer and Auction Company Fraud detection Manage legal process for potential fraud Business rules based application $2.5M investment, $1M/month savings Financial Services Company Commercial lending – loan rate options Work automation, efficient rate calculation Visible work-in-process, staging for renewals Small group (15), big savings ($1M/month) 77 Project Days 105 Project Days 120 Project Days Insurance Company On-line access to Credit Insurance Claims Prevent loss of critical data Ensure business continuity Integrate/automate manual processes Rapid BPM Implementation – 77 day project implementation Improved productivity, process tracking, continuity Reduced cycle time, processing cost, risk of data loss 6 month ROI Plastics Distributor Procure to Pay Legacy, manual, paper based, uncontrolled application Eliminate duplicate entries, optimize purchasing requisition Rapid BPM Implementation – 105 day project implementation Human flow integration with electronic forms Improved tracking, productivity 30% reduction in processing cost Application replacement Telecommunications Company DSL Provisioning Highly competitive – other providers Engineering enabled increased volumes Process inhibited increased volumes Rapid BPM Implementation – 120 day project implementation Process duration: reduced from 45 to 7 minutes Call Center: reduced from 400 to 260 employees Volume: increased from 7,000 to 35,000 starts Health Insurance Company Individual and family plan member enrollment Integrate imaging, new application, automated process Spread work, improve responsiveness Comprehensive BPM Implementation > $700,000 savings per year Reduced cycle time from 14 days to 4 days Increased producer and member satisfaction Balanced workload, future cost avoidance Online Retailer and Auction Company Fraud detection Managed legal process for identified potential fraud Business rules based application $2.5M investment $1M savings/cost avoidance per month Financial Services Company Commercial lending – loan rate options Fluctuations in rate Poor turnaround of annual renewals Variability in service levels to customers Small Area – 10 to 15 Users $1M savings/month Workflow automation and efficiency in rate calculation Higher visibility of work-in-process and staging of work in anticipation of renewals

33 IBM Delivery Approach In addition to addressing business process definition and modeling needs, as well as providing process management and monitoring technology, BPM is also a business management discipline that is executed through the delivery of various types of projects. This section briefly outlines the BPM discipline and typical BPM projects.

34 Common Questions Around Process Improvement…
Should we start by modeling or automating decision points? How can we improve this process as quickly as possible? What will it take in terms of enablement and ramp-up? What incremental steps can we take? Which products are best suited? How can I get a better view into what’s happening at each step of our process? How will this integrate into our current infrastructure?

35 Iterative Approach = Better Business Outcome
Range of traditional outcomes Traditional build programs Targeted outcome IT-centric development Complex tooling Large release deployments BPM build programs Model-driven tooling Integrated and collaborative development Iterative deployment Targeted outcome Faster ROI + 3 Months 6 Months 12 Months 18 Months 24 Months 30 Months 36 Months

36 IBM BPM: Designed for rapid, agile, iterative deployments
3636 IBM BPM: Designed for rapid, agile, iterative deployments Weeks 11 to 12 Week 13 Week 1 Weeks 2-3 Weeks 4 to 10 Go Live Definition Mapping Development Test Infrastructure Configuration Infrastructure Deployment Training/ Mentoring Quickly define, test, and deploy complete BPM solutions Playback and test exactly how the process will run (Daily) Iterate quickly on different process designs Promote Business Collaboration It has become common knowledge in the BPM space that in order to deliver business value, the only methodology that works is iterative delivery of a process. The traditional waterfall methodology has high risk of failure, because the business and its requirements may change by the time the “final” process is ready to be deployed. Instead, through iteration and playbacks you can engage the business throughout the development phase and they will be able to share with you where the key points of value are in the process, which ultimately ensures that the right application gets built. When using IBM BPM we suggest conducting at least three major playbacks in each project delivery. It is imperative that you bring together all stakeholders and step through the process application at three or more playbacks over the course of a 10- to 12-week long project. We even have some customers who, after realizing the importance of playbacks, hold them every week! 36

37 Solution Delivery Cycle
Project Delivery Approach Collaborative, Iterative and Continuous Solution Delivery Cycle Solution Release Key Best Practices Develop the solution with the Business Rapid, Agile, Iterative development/deployment cycles User stories to capture business needs Time-boxing, 2-4 week iterations Frequent “Playbacks” to capture feedback Prioritize iterations: business value vs. risk mitigation. Deploy business value early and often (It’s always runnable) Monitor execution, dashboard optimization hot-spots and incorporate changes quickly 37

38 Quick-Win Pilot Demonstrate tangible value in ~90 Days!
Quick Win Pilot – 10 weeks to a Deployable Solution Define Implement (2 weeks) (6 weeks) (2 weeks) Definition Development Test Go-Live Production Deployment Discovery Workshop to define goals, ROI, model as-Is/to-be processes maps (BlueworksLive.com) User Stories Problems and Pain Points KPIs/Metrics/SLAs Opportunities for Improvement Model process for execution (IBPM Process Designer) Build UI shells. Stub Service flows. Create Data model. Prototype Rules. Prototype integrations and DB design. Mock up reports. Develop Process to specification. Build out rules and decision services. Implement services with data flow and DB layer Incorporate external service integrations. Build out reports. Finish remaining UI functionality, look and feel. Complete metrics and reports. Implement exception handling and error proofing. Define process and rule governance for continuous improvement. Playbacks = Running the process for an audience of 1+. The main playbacks are for sign-offs of the whole Business+IT team. There are more frequent playbacks, daily/weekly etc., for smaller audiences throughout the project. 38

39 Roles BPM Projects from Inception to Production in ~90 Days Week 1
BPM Analysts (1) Engagement Manager (1) Infrastructure Specialists (1) Roles Add Technical Architect (1) + Infrastructure Specialists (1) Add BPM Developers (2) Week 1 Weeks 2-3 Weeks 4 to 10 Weeks 11 to 12 Week 13 Discovery Detailed Requirements Iterative Development with frequent Playbacks Test Go Live Checkpoints Agreement on Project Scope & Goals Agreement on Process Flow and Routing Agreement on Data, UI, and Integrations Agreement that Process Meets Business Goals Technical Validation and User Acceptance PLAYBACK 3 Series “Refine the Delivery” Model Corner Cases Expanded Search Capabilities Build Metrics and Performance Reports (Tuning and Measurement) Other types of Processing Automation Feedback from Playbacks PLAYBACK 2 Series “Continue Process Build-out, Reports & Integrations” End-2-End Process Flow Rules & Decision Services. Services, dataflow & DB layer External integrations. Build out reports. PLAYBACK 1 Series “Build the Process” Model process for execution (IBPM Process Designer) Build UI shells. Prototype Data Model. Prototype Rules. Prototype integrations. Mock up reports. PLAYBACK 0 “Define the Process” As-Is and To-Be Process Maps User Stories Problems and Pain Points KPIs/Metrics/SLAs Opportunities for Improvement Playbacks = Running the process for an audience of 1+. The main playbacks are for sign-offs of the whole Business+IT team. There are more frequent playbacks, daily/weekly etc., for smaller audiences throughout the project.

40 Continuous Process Improvement
Business Strategy Business Design Implementation Model Business Operations Deploy Redesign, Re-strategize Optimize BPM Enables Continuous Process Improvement Operations Management and Monitoring Measure Business Analytics Analyze Continuous Process Improvement is a business management approach that establishes an overall design of the business (based on customer needs and business strategy) and then implements this design into the daily business operations through a series of phases. After deploying each phase, the daily business operations are measured and analyzed to determine if the business design can be further optimized or whether it needs to be redesigned. The steps in Continuous Process Improvement include: Business Strategy and Business Design creates the vision for how the business operation need to function to realize the business goals set by the business strategy Implementation uses process modeling and other development and design approaches to create a solution that is then deployed into the daily business operations Business Operations represents the executing of the developed business solution so that it can be managed and measured Operations Management and Monitoring signifies the real-time management and measurement of the business operations Business Analytics performs the analysis that is necessary to determine whether the implementation of the business solution can be further optimized or whether the conditions have shifted such that a redesign of the business design is necessary. It is important to note that an organization can start utilizing aspects of Continuous Process Improvement without fully embracing the entire improvement cycle right away. However, experience has shown that executing on the Continuous Process Improvement will deliver the largest amount of benefits. BPM enables Continuous Process Improvement by allowing a business to develop a solution that implements, measures, analyzes and improves business processes.

41 Flexible Deployment through the Cloud
4141 Flexible Deployment through the Cloud Vision of the platform…. BWL, moving to private and public cloud… In 2012, BPM and DM and Monitor… - (1) intent, discussing, sizing BPM and DM, Monitor - this is first step to deliver the BPM - (2) Integrated BPM & DM via application Pattern - (3) Preserve the design and runtime integration (process and centers)

42 Summary: IBMs Approach to BPM
Model-driven Automation + Collaboration & Sharing Simplified Experience to Maximize Business Participation Powerfully Simple Accessible Anytime, Anywhere Enterprise-Wide Visibility, Scalability, and Governance

43 Thank You Gracias Obrigado Merci Danke Grazie Thai Traditional Chinese
Russian Spanish Thank You English Merci Obrigado French Arabic Brazilian Portuguese Grazie Danke Italian German Simplified Chinese Japanese Korean


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