BPM Kit - Toolbox.com

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What is BPM?
2
The term BPM has evolved over time: from software tools that automate,
integrate, and optimize processes to suite technology that delivers integrated
process, knowledge, and analytics functionality to a management system that
requires process-centric skills, activities, and tools.
Does BPM create value?
6
In the short term, BPM helps companies improve profitability by decreasing
costs and increasing revenues. In the long run, BPM helps create competitive
advantage by improving organizational agility.
SaaS BPM: Business Value On Demand
13
The combination of Business Process Management and Software as a Service delivers truly disruptive capabilities. In addressing many of the strategic
and organizational challenges associated with traditional ways of doing things,
SaaS-delivered BPM enables dynamic collaboration between participants both
within the organization, as well as its customers and trading partners.
Do you need BPM?
18
Want greater visibility into your processes? Unable to identify what’s causing
bottlenecks? Find it difficult to pinpoint the assignment hand-offs in your processes? If your organization has any of these issues, BPM suites provide the
logical solution.
Getting Started with BPM
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You understand there’s great value in bringing a process-centric approach to
your business. You know there are probably numerous areas of your business
where processes improvement would cut costs and yield new competitive advantages. So how do you get started?
Visit BPMbasics.com.
Understand the basics. Explore the concept. Discover the benefits.
What is BPM?
In music, it’s how beats are measured; in business, it’s how organizations are transformed.
BPM. Originally defined as beats per minute, the acronym first became popular among DJs dur-
ing the disco era when beat-mixing was common. While the original connotation will continue to live on in
dance music, BPM is now having a huge impact in the information technology era as business process
management, where it is quickly gaining a strong following among IT and business users.
Why the rising popularity? More and more organizational leaders are realizing that business process
management creates significant competitive advantage. According to Gartner the BPMS market reached
an estimated $1.7 billion in total software spending in 2007. Gartner further states, “It is one of the fastestgrowing segments in software, and it is forecast to remain so during the next five years. Many organizations are now focused on making BPM a program, not just a project.”
Ask company executives to explain BPM, however, and the answers will vary across the board. That’s
because over the past few years, the term has evolved: from software to suite to system. At its core, it
remains the means for aligning IT and business, whether the ultimate objective is cutting costs, improving
service, supporting growth, complying with regulations, or achieving a combination of the above.
The Software
In its simplest form, BPM is software that automates, executes, and
monitors business processes from beginning to end by connecting
people to people, applications to applications, and people to applications.
By doing this, BPM technology goes beyond its predecessors:
workflow management and enterprise application integration (EAI).
While traditional workflow management connected people by automating inefficient manual processes within a single application, it
was limited because it couldn’t connect applications without extensive custom coding. EAI technology, on the other hand, connected
these applications by routing information between them so that
data was automatically synchronized throughout the organization.
However, because it couldn’t automate long-running or interactive
processes (which required someone to take action or make decisions), it failed to connect people. Connecting people and applications, BPM software brings together – and transcends – these two
technologies. At a minimum, BPM software needs to address the
four core elements of process-based application development:
Source: 2005 Future of IT Survey conducted by Ziff Davis Media and Equation Research, LLC.
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A process is simply a set of
activities and transactions that
an organization conducts on a
regular basis in order to achieve its
objectives. It can be simple (i.e. order
fulfillment) or complex (i.e. new
product development), short-running
(i.e. employee on-boarding) or longrunning (i.e. regulatory compliance),
function-specific (i.e. proposal
management) or industry-specific
(i.e. energy procurement). It can
exist within a single department
(i.e. billing), run throughout the entire
enterprise (i.e. strategic sourcing), or
extend across the whole value chain
(i.e. supply chain management).
Design – requirements:
g
S
imple Business Process Modeling Notation to create graphical Process Models
g
Incorporate a Rules Engine to create required business rules
g
Include
an intuitive designer for Forms and application interfaces
Execute – requirements:
g
E
nterprise-level scalability
g
C
omprehensive Web Services orchestration
g
E
ase of integration with other enterprise systems
te
Des
cu
Ma
e
O
Optimize – requirements:
g
B
usiness Activity Monitoring (BAM) capabilities
g
R
ound-trip analytics and process optimization
g
K
ey Performance Indicators and SLA reporting
m
pti
i ze
BPM Software
nag
Manage – requirements:
g
Task and Queue management
g
R
eal-time reporting and status alerts
g
In-Flight process modification capabilities
E xe
ign
This set of capabilities allows an organization to actively manage the entire life-cycle of a process, which delivers
immediate pay-back in point-process improvement. However, the value of BPM is dramatically extended when it
is used as the basis of a continuous process improvement effort across the organization. Moving beyond limited
tactical value requires
The Suite
As the competitive value of process improvement has become better understood, the BPM Suite has emerged
to deliver a variety of process, analytics, content, and collaboration technologies in a unified package, enabling
organizations to quickly and efficiently build composite process applications. A more comprehensive approach to
BPM than stand-alone technologies, it provides all of the Process Management capabilities needed to achieve
the optimal state of seamless, cross-functional process alignment. This allows companies to extend BPM success
within departments to enterprise-wide processes improvement.
As mentioned above, there are four critical components of a BPM Suite:
g
g
g
g
P
rocess Engine – a robust platform for modeling and executing process-based
applications, including business rules
B
usiness Analytics — enable managers to identify business issues, trends, and
opportunities with reports and dashboards and react accordingly
C
ontent Management — provides a system for storing and securing electronic
documents, images, and other files
C
ollaboration Tools — remove intra- and interdepartmental communication barriers
through discussion forums, dynamic workspaces, and message boards
Gartner: “Hype Cycle for Application Development, 2008”, July, 2008
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In addition, strong portal and personalization capabilities will give users a productive, flexible workspace for managing tasks, content, forms, documents, notifications, and reminders. Applications built with BPM suites offer:
g
R
educed deployment times (with no need to integrate disparate products)
g
L
ower maintenance costs (with simple upgrades to all components of the system at once)
g
E
nhanced management (with a single application and common administration across the Suite
BPM applications must be user-friendly (designed for business users to minimize user training while maximizing
user acceptance), personalized (delivering secure, unique content to each user), scalable (expanding to meet
the needs of the department, the enterprise, or the value chain), and web-based (making them accessible to
users anytime, anyplace). By leveraging information, they allow users to make better business decisions and
achieve better business outcomes. These applications don’t just manage business processes; they solve
business problems.
A composite process application
is an enterprise application that is
developed and deployed using a
BPM suite platform to solve a
particular business problem,
such as complying with regulatory
standards or managing a company’s
assets. By integrating existing
applications, pulling relevant data,
and connecting appropriate people,
it overcomes the limitations of
traditional enterprise applications,
offering more flexibility and scalability
as well as better collaboration
and integration.
Source: 2005 Future of IT Survey conducted by Ziff Davis Media and Equation Research, LLC.
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The System
At its highest level, BPM is defined as a management practice that provides for governance of a business’
process environment toward the goal of improving agility and operational performance.
This more holistic view offers a structured approach for optimizing processes and takes into account the software
tools discussed above as well as an organization’s methods, policies, metrics, and management practices. BPM
at this level is about becoming a process-managed organization, which requires the following disciplines
(in addition to Information Technology):
g
g
g
g
E
xpertise & Experience — focus on process-centric skills, training, education, certification,
research, business acumen, and intellectual capital
O
rganizational Disciplines — adoption of new or improved culture, structure, roles, responsibilities,
policies, rules, incentives, and procedures (often codified in a BPM Center of Excellence approach)
M
anagement & Control Activities — improvement of processes by defining, modeling, simulating,
deploying, executing, monitoring, analyzing, and optimizing
P
artnerships & Services — reliance on partners to provide services such as consulting,
implementation, and business process outsourcing
Because this approach to BPM allows organizations to abstract business process from technology infrastructure,
it goes far beyond automating business processes (software) or solving business problems (suite) – it enables
business to respond to changing consumer, market, and regulatory demands faster than competitors, thereby
creating competitive advantage.
Since its resurgence in the 1990s, the term BPM has evolved: from software tools that automate, integrate, and
optimize processes to suite technology that delivers integrated process, analytics, content, and collaboration
functionality, to a management system that requires process-centric skills, activities, and tools. Today, BPM is
being widely used across all industries. Gartner’s “Magic Quadrant for Business Process Management Suites
2007” report states that the BPMS will have a Compound Annual Growth Rate (CAGR) of 24% from 2006 to 2011,
resulting in a $5.1 billion software revenue market by 2011. By managing processes, integrating applications, and
leveraging information, BPM is helping create value and competitive advantage within organizations.
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Does BPM create value?
By decreasing costs, increasing revenue, and improving agility, BPM Suites provide a solid
return on investment.
Organizations across all market sectors are utilizing
BPM as a technology to orchestrate and integrate end users, applications, and data for defined business
processes. Companies are also using BPM as a management practice to support the continuous process
improvement needed to drive market advantage, and reduce cost and friction across all facets of the business.
Finance
g g g g Accounts
Payable
& Receivable
Billing
Dispute
Resolution
Payroll & Expense
Approval Processes
Regulatory
&
Compliance
Management
sales & marketing
g g g g g Campaign
& Event
Management
human resources
g On-boarding
g Resource Planning
Lead
Generation
& Tracking
g Proposal & Contract
Management
g Advertising
&
Merchandising
New Product
Introduction
g g products & services
g Benefits
Administration
g System Provisioning
g Timesheets
and Expense
Management
g Approvals
Order
and Vendor
Management
Product Management and Shipping
Customer Service
Inventory Control
and Supply Chain
Management
it
g g g g Change and
Configuration
Management
Asset Management
Service Desk
and Incident
Management
Application
and Security Management
Using a BPM Suite, companies are able to quickly and efficiently build composite process applications in order
to address current (and future) business challenges. As a result, companies are better equipped to adapt to
business environment changes. The business drivers behind BPM adoption are numerous, but common and
pervasive examples include:
g
N
ew compliance and risk management scrutiny driving standards and policies enforcement
g
S
atisfying customers on-demand, with agility to respond to competitive threats and constant change
g
Pressure for operational efficiency and cost reduction with increased performance visibility
BPM delivers proven Return-On-Investment (ROI) in these crucial areas by positively impacting time, quality,
productivity, and other factors.
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Reduce Costs and
Increase Efficiency
Time
Quality
Productivity
Other
Reduce Costs and
Increase Efficiency
Reduce Costs and
Increase Efficiency
g Shorter
processing cycle times
g Faster
processing time
g Decreased
time to process
g Reduced
administration time
g More
responsive
g Faster
report generation
g Fewer
manual errors
g Fewer
manual errors
g M
ore visibility
g Better
policy enforcement
g More
efficient data entry
g C
onsistent business practices
g Controlled
environment
g B
etter exception handling
g Reduced
risk
g Fewer
manual errors
g M
ore visibility
g Better
policy enforcement
g More
efficient data entry
g C
onsistent business practices
g Controlled
environment
g B
etter exception handling
g Reduced
risk
g Reduced
support costs
g Strong customer loyalty
g Peace
of mind
g Improved
ad hoc reporting
g Stronger brand
g Better
risk mitigation
g Greater
trust
BPM also addresses many of the critical IT issues underpinning these business drivers, including:
g
g
g
g
g
M
anaging end-to-end, customer-facing processes
C
onsolidating data and increasing visibility into and access to associated data and information
Increasing the flexibility and functionality of current infrastructure and data
Integrating with existing systems and leveraging emerging service oriented architectures (SOAs)
E
stablishing a common language for business-IT alignment
The features and functionality of a BPM Suite are the basis for the overall value delivered, so let’s look at each
in detail.
BPM Suite Features
Leading BPM Suites deliver a variety of process, content and collaboration, and analytics capabilities in a unified
package. Process management technology allows a company to streamline operations by automating, executing,
and monitoring business processes from beginning to end. Content management and collaborative tools enable it
to leverage information by managing its documents and content and facilitating employee interaction in collaborative, knowledge-based communities. Integrated analytics help increase visibility by delivering extensive reports on
key business operations and process execution to managers.
A composite process application is an enterprise application that is developed and deployed using a BPM suite platform to solve a
particular business problem, such as complying with regulatory standards or managing a company’s assets. By integrating existing
applications, pulling relevant data, and connecting appropriate people, it overcomes the limitations of traditional enterprise
applications, offering more flexibility and scalability as well as better collaboration and integration.
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Using this comprehensive set of features, a company can quickly and efficiently build composite process applications in order to solve its business problems. Thus, the marketing department can use BPM technology to
track strategic campaigns (including event planning, public relations, and campaign management), R&D can
use it to manage the entire product redesign process (from idea inception to prototyping to product delivery),
and corporate can use it to adapt to changing regulatory standards (achieving compliance while solidifying corporate governance).
Because they’re built using BPM Suites, these applications will be:
g
g
g
g
U
ser-friendly — minimizing user training while maximizing user acceptance;
P
ersonalized — delivering secure, unique content to each user;
S
calable — expanding to meet the needs of the department, the enterprise, or the value chain; and
W
eb-based — making them accessible to users anytime, anyplace.
BPM Suite Functionality
By integrating existing applications, pulling relevant data, and connecting appropriate people, composite
process applications built with BPM Suites tend to overcome the limitations of traditional enterprise systems,
ultimately enabling a company to:
g
g
g
g
g
g
8
S
treamline operations. A 100% HTML-based process modeler will let business users automate, execute, and monitor business processes from beginning to end, eliminating redundancy and optimizing resources along the way.
Integrate systems. By connecting existing applications (like CRM and ERP), these composite applications will route – and automatically synchronize – information throughout the organization, freeing
employees from having to manually change data in numerous applications, while allowing managers
to call upon the most relevant content when making decisions.
S
hare knowledge. Using a portal as a central access point, employees are able to control and reuse
vital corporate information, such as domain expertise, intellectual capital, and best practices. Users
can identify subject matter experts, share information in real time, and build public or private knowledge communities when necessary.
G
ain visibility. Through secure, web-based reporting dashboards, managers can monitor business
performance and analytical information in order to gain awareness of corporate operations, competitive activities, and market dynamics. This allows them to not only identify business issues, but also
anticipate and correct problems before they materialize.
O
btain feedback. With an extensive set of process performance reports, process designers can
conduct detailed analysis of successes and failures of specific processes to gain insight into future
workflow design, thereby enabling the company to achieve a continuous, dynamic cycle of enterprise process improvement.
C
reate accountability. Via the portal, managers can delegate work, track deadlines, automate escalations, and monitor performance while enforcing personnel accountability for results through reports
and audit trails.
g
g
D
rive policy. Knowledge-centric tools help capture and manage enterprise data and best practices. A
sophisticated rules engine ensures that policies, practices, and regulatory environments are clearly
defined, centralized, automated, and tracked so a company can avoid the risks and costs associated
with non-compliance or deviation from best practices.
F
acilitate change. A sophisticated rules engine allows a company to adapt its processes dynamically
as its business environment continues to change. The ability to make in-flight process adjustments
permits managers to modify processes and reallocate resources in real time.
Business Benefits
Having developed and deployed composite process applications using a BPM suite, a company is better
equipped to respond to business change. In the short term, BPM helps improve profitability by decreasing costs
and increasing revenues. In the long run, BPM helps create competitive advantage by improving organizational
agility.
Decreased Costs
At first glance, BPM seems to deliver the same major benefit as traditional enterprise application technology like
ERP: increased workforce productivity (as a result of streamlining business operations and automating repetitive
tasks). BPM Suites, however, go far beyond creating efficiency. Knowledge sharing capabilities and a collaborative portal help improve decision-making. Process performance reports help optimize workflows. Notifications
and triggers help reduce errors and eliminate waste. And an intelligent rules engine helps enforce best practices.
Thus, BPM Suites not only help organizations increase workforce productivity, but they also improve product quality and reduce corporate risk. The result? Within months of deployment, these improvements will deliver substantial cost savings to (see Figure 1B).
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Increased Revenue
In addition to decreasing costs, BPM Suites also help an organization raise its overall revenues by increasing
product output, accelerating cycle time, and improving customer service. Straight-through processing helps accelerate delivery times. Dashboards help prioritize business activities by their influence on sales. Process performance reports help identify bottlenecks and reduce hand-offs. Centralized enterprise knowledge helps speed
decision-making. And closed-loop customer feedback processes help track performance. Over time, these
enhancements result in a faster time-to-market and an improved company image, which ultimately increases
sales and revenues (see Figure 1C).
Improved Agility
While decreased costs and increased revenue are the two most immediate and tangible benefits of business
process management, BPM also delivers a host of intangible benefits. In the long run, composite process applications built with BPM Suites help organizations become more agile (see Figure 2). Intelligent rules ensure that
processes adapt automatically to changes in the business environment. Collaborative tools bridge department
boundaries while improving and speeding decision-making. And in-flight process modifications accelerate response to change by dynamically rerouting processes in real time. With these capabilities, a company is better
equipped to switch gears and respond to its changing business environment – faster than its competitors!
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Thus, BPM not only improves profitability, but it actually helps create competitive advantage for companies. Faced
with turbulent market conditions, decreasing resources and increasing demands, any company can use BPM
Suite technology to rapidly develop and deploy composite process applications that have a direct impact on the
bottom line. Within a few months of implementing BPM technology, a company can make better and faster decisions about key business issues such as reallocating its people to address emerging markets, redesigning its
products to fulfill customers’ needs, and refining its processes to meet government regulations. Having become
a process-managed organization, companies are better equipped to respond to changing market, customer, and
regulatory demands. In other words, a company won’t just be better positioned to address its current business
challenges; it will better prepared to take advantage of future business opportunities.
Case Study Examples:
Enterprise Rent-A-Car operates more than 878,000 rental and
fleet services vehicles worldwide and has annual revenues of
$9.04 billion. The company operates more than 900 offices in
Canada, United Kingdom, Germany, and Ireland.
Business Problem
With Enterprise Rent-A-Car’s expansive growth, the number of IT requests nearly doubled in eighteen months,
pushing the existing system to capacity. To meet this increased demand with the system in place resulted in a
costly, customized and time-consuming effort. It was clear additional staff would be needed to account for the increase in manual data transfer, as well as additional time and money to retool older systems in ways not originally
intended for use. Enterprise Rent-A-Car sought to implement a BPM infrastructure that would be efficient, respond
to rapid change, and allow for future capacity planning.
BPM Solution
Enterprise deployed the BPM-based Request Online system to efficiently and effectively fulfill product and service
requests from the company’s more than 65,000 employees worldwide. Using BPM, Enterprise can now consolidate functionality to increase manageability of the request services system, collect process-based data for performance reporting, and utilize a common platform to accommodate rapid change and future growth.
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Concur is the world’s leading provider of on-demand Corporate
Expense Management services. By providing a 360 degree view
into all employee travel and procurement expenses, Concur’s robust services help companies enforce policies and monitor vendor
compliance, delivering unprecedented control and valuable insight.
Business Process Management Services Problem
Concur sought a solution that would streamline its business processes and reduce operating costs by improving
internal controls and providing enhanced visibility and actionable process analysis. Concur’s customer implementation and support processes were not delivering the level of cross-departmental visibility and governance
desired. The lack of a central source of information on procedures inhibited Concur’s success with process standardization and scalability, and also created the potential for information staleness. Concur wanted to standardize and enforce customer-facing processes, organize and support process hand-offs between teams, and scale
processes while maintaining quality.
BPM Solution
Concur a BPM platform that provides extensive process modeling and control capabilities. Concur also focused
on ease of use as a crucial factor in helping achieve its corporate goal of overall process maturity. Concur has
implemented nearly 50 managed processes, and has seen an average reduction time for process completion of
20 percent. Organizational goals around improving performance have turned into metrics and management-byexception. Most importantly, Concur estimates an annual cost avoidance of greater than $700,000 thanks to their
BPM solutions.
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white paper
September 2008
Business Value
Delivered On Demand
Derek Miers
CEO, BPM Focus
This white paper explores the disruptive capability delivered by the combination of Business Process Management
(BPM) and Software as a Service. It initially discusses the strategic and organizational challenges associated with
traditional ways of doing things. We then move on to describe how the “on-demand” Appian Anywhere platform enables
dynamic collaboration between participants both within the organization, as well as its customers and trading partners.
Appian Anywhere is available today and incorporates a range of out-of-the-box applications that deliver real value to user
organizations. It also enables the rapid development and deployment of process enabled applications for internal use or
for sale through the environment. Whether in-house developed, or purchased from the growing collection available on
Appian Anywhere, each of these applications is then easily adapted to the needs of the organization over time. The code
base used to support Appian Anywhere is the same as that of Appian Enterprise, an award winning BPM product with
millions of licensed users around the world.
COrpOrate heaDquarterS
8000 TOWErS CrESCEnT DrIvE
16 Th FlOOr
vIEnnA, vIrgInIA 22182
703.442.8844
APPIAn.COM
eMea heaDquarterS
73 WATlIng STrEET
lOnDOn, EC4M 9Bj
+ 44.207.152.1130
APPIAnCOrP.CO.uk
ON-DeMaND WhIte paper - BuSINeSS prOCeSS MaNaGeMeNt
InTrODuCTIOn
Since its inception, the Internet has delivered a steady stream of new business
models and new business applications, enabling participants to collaborate up and down virtually all
value chains (it has even created some new ones). The Internet is driving the globalization of business,
enabling firms to unbundle their operations and focus on their core capabilities; allowing them to
outsource and collaborate with others in order to deliver value.
We now take for granted the idea that while we might buy goods and services from one supplier, their
composition and delivery will often involve many different organizations. Yet not so long ago, the
scale advantages of large integrated players allowed them to trump the competition, dominating many
marketplaces. But as the cost of external coordination has come down, dynamically assembled groups
of smaller, more nimble organizations have been able to compete successfully. It is now cheaper
for an organization to focus on its unique capabilities, joining forces with other specialists to offer
extraordinary value to customers.
BY COMBInIng AWArD WInnIng
BuSInESS PrOCESS MAnAgEMEnT
(BPM) CAPABIlITIES WITh ThE
SOFTWArE AS A SErvICE (SAAS)
DElIvErY APPrOACh, APPIAn hAS
DElIvErED A MAjOr STEP FOrWArD
In InnOvATIOn.
OrgAnIzATIOnAl ChAllEngES
Yet for many, the promise of “frictionless” commerce still seems tantalizingly just out of reach—a possibility that remains unfulfilled. regardless of whether an organization
has global aspirations, or merely needs to deliver on its public service obligations, it must consider how it meets the relationship requirements of all external stakeholders.
It has to find an appropriate balance between scalable efficiency and control on the one hand, and responding to subtly different customer requirements on the other. While
predictable outcomes are a baseline necessity, dealing with the needs of customers usually requires a certain degree of adaptability in the processes of the firm.
More often than not, the customer is now part of those processes, along with a range of partners and suppliers. And where third parties are involved, it is no longer possible to rely on strictly predictable processes (by definition, they are not under the control of the organization). So while a key process might support the bulk of the work,
workers still need mechanisms to vary the way in which work happens to cater for the inevitable exceptions.
Several subtly conflicting issues can inhibit an organization’s ability to collaborate with its customers and suppliers:
g
g
g
g
It needs scalable, repeatable operations.
It must have mechanisms that enable the rapid development and adaptation of processes in response
to the needs of customers, changing regulations and the actions of competitors.
unless explicitly managed, existing mental models and the inertia associated with past working methods
will impede the ability to leverage the new capabilities offered by the Internet and modern software technologies.
The supporting technology must enable customers and suppliers to take part in relevant processes;
seamlessly passing information between the parties yet ensuring appropriate controls, traceability and security.
And therein lies the difficulty—the traditional approach to supporting the scalability issue was to develop in-house “point applications” that support the needs of a particular functional area. These applications usually optimize the capabilities of that silo, often at the expense of other enterprise functions and business partners. They lived
safely cocooned within the confines of the organizational firewall, requiring humans to act as the interface with external participants. If they existed at all, any mechanisms
to support integration with third parties up and down the value chain were defined rigidly (making them very brittle and difficult to change). Of course, the time required to
develop and deploy these conventional applications was inordinately long, and the resource implications were such that only large organizations with deep pockets were
able to consider them.
ThE BrAvE nEW WOrlD
Two complementary developments have started to change the way in which firms think about their systems, and the ways in which they collaborate.
Firstly, over recent years organizations have become more comfortable with point solutions available on-demand on the Internet. Supply Chain and Sales Force Management
have emerged as critical business applications that often live outside the firewall of the organization. Integrated business applications delivered on-demand are not going to
14
September 2008
disappear any time soon. Yet these applications focus on just one aspect of the way in which an organization engages its external business partners and customers.
underpinning the first wave of these SaaS applications is a common, multi-tenant infrastructure – a single code base supporting all customers, and maintaining their
information separately from others who might use the service. But perhaps more importantly, this single code base supports only a single way of working. More recently,
vendors have opened up their platforms with Application Programming Interfaces (APIs), allowing other systems to leverage their capabilities. The problem here is that this
type of interface still means that programmers are required to handle even the smallest change.
EnTEr BuSInESS PrOCESS MAnAgEMEnT
Alongside the advances in on-demand SaaS applications has been the emergence of Business Process Management (BPM) as a mainstream discipline. BPM programs
revolve around the critical examination of a firm’s business processes, identifying how the organization really delivers value to customers and stakeholders. Most have
started by modeling the flow of tasks and activities, making explicit the relationships between the different functions inside the firm (and those of customers and suppliers). leveraging industry standards such as the Business Process Modeling notation (BPMn), they are exploring the steps involved in delivering value to their customers.
This rigor has also provided them with insights into how to realign themselves to optimize their end-to-end processes.
Truly insightful organizations are now taking this sort of initiative to a new level. They now use this same modeling approach to drive work through their operations,
ensuring that work items do not slip through the cracks. They have moved beyond merely representing the flow of work—models embedded in descriptions of standard
operating procedures printed in paper manuals or made available on the internal network.
via a BPM Suite such as Appian, they now use robust BPMn models to push work around the organization, observing built-in rules and policies to route it to the correct
department and employee. This helps break down the barriers of established organizational silos and provides a basis for much more scalable and adaptable operations.
By automating their processes, Appian customers are far more efficient—reducing the numbers of employees needed to carry out a given amount of work or enabling the
current set of employees to do much more. Moreover, the work itself becomes traceable. Thanks to direct visibility into each work item (through drill down capabilities
delivered in dashboards), managers no longer wonder about the state of their operations. If work is behind schedule or stuck waiting for a specialist resource to become
available, then the manager can expedite the item.
Furthermore, if the process needs to change, then instead of having to resort to expensive and time-consuming software programming, it is just a question of updating the
models that control the workflow. This is in stark contrast to traditional methods of developing and deploying applications where a small army of technicians is required to
create scalable business applications. From a business perspective, the net result is far greater agility and faster time to market for innovation.
Because Appian uses standard Internet protocols to support the delivery of all these sophisticated capabilities, the entire BPM Suite and the applications built upon it
are amenable to deployment over the Internet. Instead of requiring the management and support of a set of in-house servers, an organization can now rely on the Appian
Anywhere on-demand service. All that is required is a web browser to take part in the process.
Appian Anywhere epitomizes the new wave of innovation in the SaaS arena—the delivery of a generalpurpose, process-enabled platform. rather than imposing a single way of working on users, Appian
Anywhere enables the radical transformation of business operations (and potentially the market within
which it operates).
PuShIng BACk ThE BOunDArIES
using the Internet as a delivery platform makes it an order of magnitude easier to involve customers,
partners and suppliers in the process. Processes are no longer constrained to the boundaries of the
organization (the perceived end-to-end process)—the process now exists “in the cloud,” enabling the
organization to orchestrate the entire value chain.
As a particular group of collaborators mature (with participants becoming more familiar with online
collaboration), the Appian Anywhere platform is able to provide seamless process integration capability across organizational boundaries. Potentially, processes can now span from the supplier’s supplier,
to the customer’s customer.
nOW AnYOnE WITh A gOOD IDEA
AnD A rIgOrOuS APPrOACh CAn
COnTEMPlATE uSIng APPIAn
AnYWhErE TO DElIvEr InnOvATIOn
– WhEThEr ThAT IS AT ThE lEvEl OF
ThE PrOCESS, hOW IT’S MAnAgED,
Or EvEn TO SuPPOrT An EnTIrElY
nEW BuSInESS MODEl.
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ON-DeMaND WhIte paper - BuSINeSS prOCeSS MaNaGeMeNt
Moreover, the advances in model-driven process support, delivered over the Internet, have enabled a new segment of participants to engage and collaborate. Previously, the
ability to automate core processes was limited to the very large firms (as they were the only ones with the resources to engage in the industrialization of their processes).
now anyone with a good idea and a rigorous approach can contemplate using Appian Anywhere to deliver innovation—whether that is at the level of the process, how
it’s managed, or even to support an entirely new business model. This will appeal to small and medium sized enterprises that can now develop their own applications, or
purchase one developed by an Appian partner, adapting and evolving it to meet their needs over time. Appian Anywhere is also enabling knowledge workers within large
organizations to experience the benefits of process management.
BEnEFITS OF ThE APPIAn AnYWhErE APPrOACh
using Appian Anywhere as the delivery vehicle for process-based applications delivers a broad range of benefits, including:
g
g
g
g
g
g
g
g
Simple, easy to use interface—Accessible to the Business Analyst. Instead of
requiring expert software developers to make even the simplest of changes, the
entire Appian Anywhere environment is designed to enable sophisticated end-users
and Business Analysts to develop and deploy
complete applications.
pay for usage—rather than having to commit to a fixed (in-house) infrastructure up
front, with limitations in capacity and egregious licensing terms on related software,
Appian Anywhere customers have access to scalable systems support capabilities
that link directly to their current capacity requirements.
Freedom—Move away from the software license model, where each new product
release triggers a further round of integration and maintenance. The “pay as you go”
model directly links business support costs with delivered business benefits.
Opex not Capex – Customers can treat the costs of any system as an operating
expense rather than having to carry it on the accounts as a capital expenditure.
resource efficiency—Appian Anywhere customers do not need to maintain expensive resources (staff) to maintain that infrastructure.
Integration Flexibility—Appian Anywhere provides flexible mechanisms to
link directly with other applications available in “the cloud” (such as Salesforce.
com), as well as traditional enterprise applications behind the firewall (such as SAP
and PeopleSoft).
BY AuTOMATIng ThEIr PrOCESSES,
APPIAn CuSTOMErS ArE FAr
MOrE EFFICIEnT – rEDuCIng ThE
nuMBErS OF EMPlOYEES nEEDED
TO CArrY OuT A gIvEn AMOunT
OF WOrk Or EnABlIng ThE
CurrEnT SET OF EMPlOYEES TO
DO MuCh MOrE.
Service Oriented architecture (SOa) Support—Developed functional components are
reusable across business applications, ensuring efficient development initiatives.
Moreover, any Web Service interfaces and rules are fully encapsulated inside those
components.
rapid rOI—All of these benefits add up to the ability to quickly develop and deploy
an application, enabling an affordable low-cost of entry and a very fast return on investment.
And all of this leverages the same code base as Appian’s award-winning Appian Enterprise technology used by millions of people around the world. Appian Enterprise enjoys a
recognized leadership position in the BPM industry and Appian can point to a long history of successful implementations.
The key point is that, rather than always having to rely on a central IT department, knowledge workers and business analysts can now contemplate building models of their
processes and then use them to support collaboration with colleagues and external participants alike. Although they will benefit from IT oversight, because of the accessibility of the Appian Anywhere environment, the Total Cost of Ownership (TCO) is kept to a minimum.
Perhaps more importantly, rather than developing inflexible point solutions behind the firewall, the application developer can assemble sophisticated collaboration applications with ease. In Appian Anywhere, all the key components are tightly integrated into a comprehensive whole, enabling rapid development and deployment. The platform
incorporates tightly coupled Process and rules Engines, as well as sophisticated AjAX based environments for modeling processes and building user forms.
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September 2008
The Appian Anywhere environment also incorporates mechanisms to support the financial transaction between the parties (handling the money). Whether they are commercial application developers, or end-user organizations engaging their customers, Appian Anywhere can support the direct collection and distribution of funds, providing a
comprehensive accounting facility.
Appian Anywhere provides an application ecosystem that is similar to the approach taken by Apple with the iPhone. Third parties develop their applications for the iPhone
platform, which the iTunes marketplace then sells on to customers, with revenue shared in much the same way as songs and movies. While this approach is not unique
(all major phone platform providers have similar programs), the Appian ecosystem delivers the ability to provide applications that support the core business model of an
organization. The key difference here is that a purchased application is then fully customizable and adaptable to the organization, reflecting their own special needs and
working methods.
vIrTuAl SuPPOrT
Of course, not all organizations will feel comfortable or want to develop or adapt applications. They may, instead, select a consulting partner to provide that value. But the
Internet is even changing the nature of consulting—enabling a new breed of independent, self-employed experts. Employed virtually, they usually work out of a home office
for most of the engagement. The point is that the on-demand model removes geographic boundaries, and therefore the support model needs to be consistent with that.
It goes even further than that. Any vertical domain specialist with a methodology can now embed his or her expertise into a flexible application delivered online. Consultants
can now work with a customer and dovetail with/leave behind a set of engagement specific artifacts, embedded with a way of working; one that encourages the customer
to adopt process-oriented working practices.
COnCluSIOn
Appian’s on-demand BPM platform, Appian Anywhere, is enabling knowledge workers within established organizations to experience the benefits of process management
without having to rely on an already overstretched IT function. They can now develop new applications or leverage out-of-the-box capabilities delivered by the Appian
Anywhere platform to coordinate work up and down the value chain. using Appian Anywhere, they are well placed to begin interacting with others through shared processes
and data exchanges.
Because the Appian Anywhere service lives in “the cloud,” it provides a natural collaboration space for business partners and customers alike, allowing them to take an
active role in the process. As a result, it reduces cycle time and provides complete visibility and traceability for work.
Finally, Appian Anywhere provides a robust platform to independent specialists and ISvs, allowing them to develop and deliver new applications, complete with effective commerce facilities that ensure they are paid for their endeavors. It provides unparalleled reach and scale advantages over traditional software delivery methods.
Whether a commercial business or application developer, the strategic implications of Appian Anywhere are enormous. By combining award winning Business Process
Management (BPM) capabilities with the Software as a Service (SaaS) delivery approach, Appian has delivered a major step forward in innovation. It not only affords the
opportunity to deliver sophisticated business functionality without scalability concerns, it is enabling all those involved to participate, up and down the value chain. But
more than that, it is heralding a sea change in the way applications are developed, delivered and supported. And visionary organizations that are looking to automate their
processes today can quickly leverage this innovation.
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Do you need BPM?
If your organization has any of the following issues, BPM suites provide the logical solution
1
Do your processes involve various disparate, stove-piped IT systems in disparate,
stove-piped IT systems in addition to human tasks?
BPM suites enable the orchestration of both human and system tasks in a single process. This enables an
organization to leverage existing legacy applications in a service-oriented architecture (SOA). For example,
the World Bank’s BPM-powered procurement solution integrates third-party applications like SAP and Lotus
Notes into the sourcing process to delegate tasks to requisition, appointment, and evaluation teams.
2
Do your managers complain about the Do your managers complain about the lack of
visibility into their processes, lack of visibility into their processes, initiatives, and projects?
Is there a lack of quantitative feedback?
BPM suites provide intuitive reporting dashboards that combine business activity monitoring (BAM) capabilities, user-defined Key Performance Indicators (KPIs), and real-time and historical process data to deliver
secure, quantitative feedback to process owners.
3
Do you have trouble identifying who or what is impeding your processes?
or what is impeding your processes?
BPM suites combine process model simulation, test-scenario tools, and robust analytics capabilities to
monitor processes throughout their entire life cycle, from design to completion. For example, the U.S. Marine Corps implemented Appian Enterprise and significantly reduced bottlenecks in their procurement
processes, resulting in real cost-savings of $9 million over 12 months.
4
Do you have process inefficiencies due to a lack of accountability and clear to a lack of
accountability and clear ownership of responsibilities?
BPM suites provide secure task management capabilities and process monitoring tools that allow
authorized users to identify who is responsible for what, how long assignments have remained unfinished,
and what process tasks lDo you have process inefficiencies due
5
After an organizational goal is reached, do you have trouble looking back and do you have
trouble looking back and figuring out exactly who did what?
BPM suites automatically generate extensive process audit trails that capture detailed information about
what happened when. This audit trail is essential for managing compliance-related processes, such as
Sarbanes-Oxley and Six Sigma. After an organizational goal is reached,
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6
Are you worried about employees inconsistently completing assignments throughout
the organization?
BPM suites encapsulate best practices and enforce management policies using a built-in rules engine,
ensuring that standard assignments are handled the same way, every time. BPM suites also offer forms
management tools, which help standardize the interface through which employees complete assignments.
7
Do you fear that your processes are not adapting to changing business not adapting to
changing business requirements because “this is the way they have always been done”?
BPM suites enable in-flight process modifications so that managers can add new work, reroute documents,
and adapt underlying business rules to update processes in real-time. Using in-flight process modification
tools to enhance process agility is one of the core goals of BPM suites and is quickly becoming a source of
sustainable competitive advantage for users.
8
Do your processes cross departmental and organizational boundaries, and organizational
boundaries, making assignment hand-offs and ownership responsibilities less clear?
BPM suites allow users to clearly map out inter-departmental or inter-organizational relationships, using
both rules-based and group-based management tools. This facilitates smoother workflow interaction and
increases end-user accountability across the extended enterprise.
9
Do you lack clear, measurable metrics for gauging employee metrics for gauging employee
performance?
BPM suites provide real-time analytics capabilities for assessing task completion time, optionally aggregated by employee, team, or department. These metrics enable managers to compare and group employee
performance across processes, time periods, and departments.
10
Do your processes frequently involve documents and forms as well as other structured and
unstructured content?
BPM suites ship with document and forms management capabilities so that modeling processes involving
the creation, modification, and approval of an organization’s enterprise content is seamless and secure.
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Getting Started with BPM
Once you’ve decided to embrace process improvement, where do you start?
The benefits of process improvement can be applied to just
about any facet of an organization. But where you start can have a big effect on how successful your BPM
initiatives are over time. Conceptually, the key is to “plan big, start small, and iterate.” This means selecting a manageable initial project with low process complexity and high impact to the business, promoting
your early successes, and pushing BPM best practices out to other areas of the business. The chart below
illustrates how to map business process areas to assess where the “sweet spot” is for a first-time BPM
deployment.
High
Process Exposure
- Revenue
- Cost
- Customer Service
- Cycle Time
Process Complexity
# of Process Steps
# of Process Participants
# of Integration Points
# of Transactions
# of Process Exceptions
# of Organizations
Low
High
The key issues to consider here are around the level
of exposure this process has for the business (processes that directly impact revenue, cost, or customers
are obviously high on this axis), as well as the level of
complexity of the process (including things like number
of process steps, integration points, people involved,
and more).
Promoting this early success (and the best practices
of that deployment) will help drive new BPM projects
across the organization. It is at this stage that you need
to seriously consider development of a BPM Center of
Excellence (CoE).
Ideally, you want to start with a high exposure, low
complexity process. High exposure means it will be
noticed by executive management, and low complexity means your chances for success are very good. An
initial deployment like this can usually be accomplished
through the professional services offerings of your BPM
vendor, and you can be up and running fairly quickly.
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The creation of BPM CoEs has a direct impact on the
level of success attained through BPM initiatives. A
report from research firm Forrester noted that “almost
half (49%) of the enterprises that reported clear and
measurable benefits from their BPM efforts had a BPM
COE in place; only 10% of the group reporting mixed
results had a BPM COE in place.” (“BPM Has Become
Mainstream,” K. Vollmer, Feb. 19, 2008).
BPM is more than just a collection of technologies;
it is a business management methodology that covers how people work with people, how systems work
with systems, and how the two camps work together.
Re-inventing business processes, therefore, is not a
single point of destination; it is a journey of continuous
process improvement. A BPM CoE is the guiding entity
that keeps all required components of the organization
in line with the BPM journey vision. An effective CoE
includes a “process visionary” who understands how
the processes of the firm currently drive bottom-line
profitability and performance, and how they can be
improved, as well as a BPM project manager, a BPM
tool expert, an enterprise architect and several domain
project experts, who are business people called in to
provide expertise on projects in their respective areas.
What is a BPM CoE?
A BPM CoE is a collection of methodologies, tools,
and techniques used by an organization’s experienced
BPM staff to improve BPM projects by achieving higher
rates of return on investment and minimizing the cost of
reengineered solutions. The idea is provide a layer of
process maturity over and above traditional technological process maturity. This layer insures that process
rigor is introduced into BPM project initiatives, just as
it is in other areas of business. For example, process
quality assurance in manufacturing orchestrates all the
Initiate
Plan/Fund
Req/Design
resources organized around production to minimize
defects, enhance production schedules, and minimize
costs, among other factors. Typically, a BPM CoE will
orchestrate people and processes across two departments within an organization, Business and IT. While
IT departments are almost always involved in any
technological aspects of the organization, their traditional relationship with Business departments has been
cyclical, on a project-by-project basis, with defined
start/end cycles. This is the very nature of projects and
sponsorship, where there is heavy engagement at the
start of the project, but less so during construction and
after completion. During that time, requirements always
change (because the business units have constantlychanging needs), and IT usually views this in the
context of projects, budgets, schedules, and resources
constraints. It is not hard to see why conflicts arise.
Usually, business units have to accept continuous
enhancement cycles (or enhancement packs) where a
bundle of business enhancements are translated into
mini projects AFTER the original project team has been
disbanded, the business analysts have left the project,
or the technology resources or partners are no longer
available. This greatly increases the risk and cost associated with process innovation and improvement.
The diagram below provides an example of a typical
technological project (BPM or otherwise).
Construct/Deploy
Support/Enhance
Enhance
Typical Business/IT Cycle
Figure 1 - Cyclical Nature of Business/IT relationship
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In contrast, a BPM CoE is continuous in nature. It
helps avoid the crests and troughs of regular projects
(regardless of methodology used), by ensuring that a
governance group exists from all touch points of a business process. Usually, the constituents are formed from
business units and IT departments with a focus on business process construction and improvement through a
thorough change management plan that follows best
practices in using BPM systems, BPM design and
construction, BPM transition and deployment among
environments (development, staging, production,
BPM training, and a BPM business support plan). The
diagram below provides an example of a BPM initiative
from a BPM CoE lens.
Why Companies Need a BPM CoE
Business Process Management Systems are now
considered mainstream technology for enterprises
seeking additional business benefits through technological advantage. These advantages vary from cost
cutting, efficiency gains, and even system replacement
to replenish outdated and out-powered technological infrastructures. The process involves commitment
from several departments as mentioned above, and a
dynamic that is ever-changing between business and
IT. Thus, companies have come to rely on process consultants to take on BPM initiatives of high importance
to the enterprise. The project cycle is typically heavy
on the professional services component, where responsibilities include analysis, design, implementation,
control and execution of the project. The heavy lifting to
bring the BPM initiative to fruition is left to experienced
and expert process consultants. While this can work, it
leaves several components of successful implementations to the process consultants, without much involvement from the enterprise. This can leave a big gap
once the BPM implementation is successful and the
system is in operational and maintenance mode, jeopardizing the ability to leverage that initial BPM success
to other areas and systems in the business.
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Figure 2 - Continuous Process Improvement
In many cases, enterprises take on the effort of change
management and/or bring additional business processes online without the experience of the process
consultants (perhaps relying on the typical product
training their team members go through). This usually leads to disappointment (depending, of course, on
the maturity of the internal processes, the skills of the
available staff, the sophistication of existing business
systems, and project management practices and maturity). Accordingly, most organizations end up relying on
some external process consultants anyway in order to
achieve higher rates of success.
A BPM Center of Excellence addresses the need for a
unified approach to BPM. Defining the complex relationships between various constituents of the system
on an ongoing basis helps govern the process and
people competing for resources and time, while ensuring quality in bringing more BPM initiatives online.
The BPM CoE is not one-size-fits-all; instead, it is an
evolution of best practices and processes as they relate
to what already exists in an enterprise. For example,
architectural review of the infrastructure – a scheduled
meeting where business gets a chance to pitch capacity increases or request impact assessment on systems
– of the infrastructure – is typically conducted periodi-
cally across every major technology initiative in an enterprise. This works, but it slows down or halts (until architectural group meets again) the speed and nature of change typically available with BPM Systems. In a typical
BPM CoE process, a representative of the architectural group may be present to play a buffer/filter role regarding
differently-size BPM initiatives. This significantly reduces bureaucracy and accelerates Business-IT cycles.
BPM CoE Framework
A BPM CoE framework borrows from Six Sigma continuous process improvement, and adapts it to the changing
needs of business stakeholders from one business process to another. This is important because the process
champions might be different during BPM initiative cycles, in that new buy-in needs to be secured and objectives
defined clearly. A brief framework is outlined below:
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g
g
g
g
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ssess, Adapt & Promote Success – In this phase, business needs are aligned with BPM capabilities,
A
and success metrics are defined.
F
orm Process Improvement Group – A BPM group is defined to own business processes from inception to deployment, and to continue through with regular improvement cycles measured against the
success metrics. This group will include process visionaries as representation of various process
constituents.
Identify BPM Projects and Improvement Opportunities – In this phase, non-BPM processes are identified and selected based on business needs or candidacy of the overall success plan, and improvements to the non-BPM processes as well as BPM processes are discovered and analyzed.
Agree on Business Objectives – The objectives of the business process and the particular initiative
has to be clearly defined by process owner groups and agreement of all participants must be secured
prior to commencing change.
S
ecure Executive Sponsorship – Sponsors and champions play a crucial role after identification of a
process selected for BPM initiatives or improvement. Securing buy-in, funding, and providing necessary support to push for success and meet measurable business metrics is essential.
R
apidly Model and Deploy – Using a flexible and powerful BPM system, these changes can be modeled and simulated and initial metrics collected for in-cycle improvements. The business changes materialize during this phase, with the ability of stakeholders and users to touch the system and conduct
dry-runs.
D
eploy and Measure Results – The completion of BPM deployment of a business process and actual
usage of the system in complete production mode. Monitoring of the metrics and systems, Business
Activity Monitoring, measurement of results against objectives and success criteria, and identification
of potential improvement based on actual data enters into a new BPM Improvement cycle.
A BPM CoE is essential for enterprises seeking to tap the powerful benefits of process innovation for streamlining operations and improving margins. A BPM CoE brings the advantages of “tried and true” methodology and
adapts them to BPM systems, while also ensuring a pan-organizational focus on the crucial elements of process
change, and executive sponsorship to get a project off the ground and drive it to completion. BPM success can
be achieved without a Center of Excellence, but the CoE enables faster BPM deployment cycles and minimizes
costly mistakes and overhead associated with typical enterprise development efforts. The CoE framework is flexible and dynamic depending on the business needs and the type of organization implementing BPM. As such, a
BPM CoE lends itself to best practices and continuous self-improvement through lessons learned during multiple
phases of BPM project cycles over time.
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BPMbasics.com is an independent resource for IT and business users to understand the benefits of business process
management (BPM) software, obtain industry specific examples of BPM applications, and experience in-depth learning
through newsletters, seminars and training. BPM Basics provides an overview of the BPM market and associated
terminology, industry resources to help end users expand their understanding of the applications and benefits of BPM,
and community features to foster knowledge-sharing and advance the industry as a whole.
BPM Basics also features the BPM Examples section (www.bpmbasics.com/bpmexamples.jsp), the industry’s only
independent repository of real-world BPM process solution examples. This section of BPM Basics provides a knowledge
center outlining how BPM is being used by companies today to solve business problems and move towards being
process-driven organizations. Grouped according to both vertical industries and functional business areas, BPM
Examples is an ever-growing repository designed to educate business and IT professionals on how BPM can be
applied, and to foment new ideas to expand the value of BPM for today’s businesses.
For more information, visit www.bpmbasics.com or email [email protected].
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