Going Beyond Process Modeling, Part 1

I recently wrote two white papers for Bizagi on going beyond process modeling to process execution: Bizagi is known for their free downloadable process modeler, but also have a full-featured BPMS for process execution.

My papers are not at all specific to Bizagi products; the first one, which you can find here (registration required) outlines the business benefits of automating and managing processes, and presents some use cases. In my experience, almost every organization models their processes in some way, but most never move beyond process analysis to process management. This paper will provide some information that can help build a business case to do just that.

The second paper will be released in a few weeks, covering a more technical view of exactly how you go about starting on process automation projects, and moving from an initial project to a broader program or center of excellence.

We’re also scheduling a webinar to expand on the concepts in the paper, I’ll post the date when that’s available.

If you want to learn more about how Bizagi stacks up in the BPMS marketplace, check out the report on Bizagi from the Fraunhofer Institute for Experimental Software Engineering. available in both English and German. Spoiler alert: relative to the participating vendors, Bizagi scored above average in six of the nine categories, with the remaining around average. This is a more rigorous academic view than you might find in a typical analyst report on a vendor, including test scenarios and scripts for workshops where they created and ran sample process applications. Fraunhofer sells a book with the complete market analysis of all vendors studied, although I could only find a German edition on their site.

Effektif BPM Goes Open Source

On a call with Tom Baeyens last week, he told me about their decision to turn the engine and APIs of Effektif BPM into an open source project: not a huge surprise since he was a driver behind two major open source BPM projects prior to starting Effektif, but an interesting turn of events. When Tom launched Effektif two years ago, it was a bit of a departure from his previous open source BPM projects: subscription-based pricing, cloud platform, business-friendly tooling for creating executable task lists and workflows with little IT involvement, and an integrated development environment rather than an embeddable engine. In the past, his work has been focused on building clean and fast BPM engines, but building the Effektif user-facing tooling taught them a lot about how to make a better engine (a bit to his surprise, I think).

The newly-launched open source project includes the fully-functional BPM engine with Java and REST APIs; the REST APIs are a bit minimal at this point, but more will come from Effektif or from community contributions. It also includes a developer cloud account for creating and exporting workflows to an on-premise engine (although it sounds like you can create them in any standard BPMN editor), or process instances can be run in the cloud engine for a subscription fee (after a 30-day free trial). They will also offer developer support for a fee. Effektif will continue to offer the existing suite of cloud tools for building and running workflows at subscription pricing, allowing them to address both the simple, out-of-the-box development environment and the developer-friendly embeddable engine – the best of both worlds, although it’s unclear how easy it will be for both types of of “developers” to share projects.

You can read more about the technical details on Tom’s blog or check out the wiki on the open source project.

This definitely puts Effektif back in direct competition with the other open source BPM projects that he has been involved with in the past – jBPM and Activiti (and, due to it forking from Activiti, Camunda) – since they all use a similar commercial open source business model, although Tom considers the newer Effektif engine as having a more up-to-date architecture as well as simpler end-user tooling. How well Effektif can compete against these companies offering commercial open source BPM will depend on the ability to build the community as well as continue to offer easy and compelling citizen developer tools.

Process Intelligence at KofaxTransform

It’s after lunch on the second (last) day of Kofax Transform, and the bar for keeping my attention in a session has gone up somewhat. To that end, I’m in a session with Scott Opitz and Rich Rabin from the Kofax Altosoft division, but not sure it’s going to meet that bar since Opitz started out by stating that what the TotalAgility (KTA) sessions call process is a much more complex than what they call process, and I’m a bit more on KTA’s side of this definition.

Altosoft process intelligence is really about the simple milestone-based monitoring processes of operational intelligence, with the processes being executed on multiple systems, more like SAP’s SAP Operational Process Intelligence based on HANA or IBM Business Monitor; you rarely have all of your process milestones in a single system, and even if you do, that system may not have adequate operational intelligence capabilities. Instead, operational intelligence systems pick up the breadcrumbs left by the processes — such as events, database records or log files — and provide an analytics layer, usually after importing that data into a dedicated analytics datamart.

There are really two main things to measure with process intelligence: performance and quality/compliance. To get there, however, you need to know what the process is supposed to look like in order to measure patterns of behavior. Altosoft’s process intelligence does what they call “swimlane analysis” — looking at which tasks are done in which order, a form of process mining discovery algorithm since there is no a priori process model — to identify operational patterns and derive a process model from runtime data, showing the most common/expected paths as well as the outliers. Not just process mining as an analysis tool, it then shows the live process monitoring data points against those models, and provides some good interactive filtering capabilities, allowing you to find missing steps that may indicate that the task wasn’t performed or (more likely for steps with manual logging) that the task was not documented.

Since the Insight platform is a complete BI environment, this information can also be combined with more traditional BI analytics and dashboards, providing real-time alerts as well as historical analysis. They also have ways to use a predefined process model and measure against that; this then becomes more of a conformance analysis to see how closely the actual runtime data matches the a prioiri model.

TotalAgility Product Update At KofaxTransform

In a breakout session at Kofax Transform, Dermot McCauley gave us an update on the TotalAgility product vision and strategy. He described five vital communities impacted by their product innovation: information all-stars who ensure that the right information is seen by the right people at the right time, performance improvers focused on operational excellence, customer obsessives who focus on customer satisfaction, visionary leaders who challenge the status quo, and change agents using technology thought-leadership to drive business value. I think that this a great way to think about product vision, and Dermot stated that he spends his time thinking about how to serve these five communities and help them to achieve their goals.

TotalAgility Product VisionTotalAgility is positioned to be the link between systems of engagement and systems of record, making that first mile of customer engagement faster, simpler, more efficient, and customer-friendly. It includes four key components: multichannel capture and output, adaptive process management, embedded actionable analytics, and collaboration. Note that some of this represents product vision rather than released product, but this gives you an idea of where they are and what they’re planning.

Multichannel capture and output includes scanning in all forms, plus capture from electronic formats including documents, forms and even social media, with a goal to be able to ingest information in any type and any format. On the processing and output side, their recent acquisitions fill in the gaps with e-signature and signature verfication, and outbound correspondence management.

TotalAgility Product Components and SPAsAdaptive process management includes pre-defined routine workflows and ad hoc collaboration, plus goal-based and analytics-driven adaptive processes. These can be automated intelligent processes, or richer context used when presenting tasks to a knowledge worker.

Embedded actionable analytics are focused on the process at hand, driving next-best-action decisions or recommendations, and detecting and predicting patterns within processes.

Collaboration includes identifying suitable and available collaborators, and supporting unanticipated participants.

AP AgilityThe goal is to provide a platform for building smart process applications (SPAs), both for Kofax with their Mortgage Agility and other SPAs, and for partners to create their own vertical solutions. McCauley walked through how Kofax AP Agility uses the TotalAgility platform for AP processing with ERP integration, procurement, invoice capture and actionable analytics; then Mortgage Agility that brings in newer capabilities of the platform such as e-signature and customer correspondence management with a focus on customer engagement as well as internal efficiencies.

TotalAgility Deployment OptionsHe walked through deployment options of on-premise (including multi-tenancy on-premise for a BPO or shared service center) and Microsoft Azure public cloud (multi-tenant or own instance), and touched on the integration into and usage of Kapow and e-signatures in the TotalAgility platform. They’re also working on bringing more of the analytics into TotalAgility to allow for predictions, pattern detection, recommendations and other analytics-based processing.

TotalAgility Innovation ThemesGoing forward, they have four main innovation themes:

  • Platform optimization for better performance
  • Portfolio product integrations for a harmonized design time and runtime
  • Pervasive mobility
  • Context-aware analytics

KofaxAgility Mobile Extraction InnovationHe showed some specific examples that could be developed in the future as part of the core platform, including real-time information extraction during document capture on a mobile device, and process improvement analytics for lightweight process mining; the audience favorite (from a show of hands) was the real-time extraction during mobile capture.

KofaxTransform 2015: Day 2 Customer Keynotes

I had a chance to hear Tom Knapp from Waterstone Mortgage speak yesterday at the analyst briefing here at Kofax Transform, and we have him to kick off this morning’s keynote. They started their journey with Kofax a year ago, and participated in the Kofax sales kickoff in January of this year to show their use of Kofax Mortgage Agility. It will be going beta this month in a couple of their branches, and rolling out across all branches later this year. They are looking to improve the loan process pipeline, which goes from loan application to initial processing to underwriting to approval to closing; they started their improvement process by examining what data and documentation is required at what step in the process, and the challenges in collecting those documents, such as replacing illegible documents and clarifying the applicant’s cash flow. Given that time to correct documentation errors can be from 2 days to 4 weeks, this can cause problems because there is typically a fixed closing date that needs to be met for funding. He expects the market to shift so that millennials will dominate household formation, and therefore the mortgage market, and that smartphones are a key way for those potential customers to perform their financial transactions. There are also some changing mortgage regulations in the US that deal with costs and fee disclosure, and getting better information earlier in the process helps Waterstone to make those disclosures as required.

They expect four major classes of benefits from implementing Mortgage Agility:

  • Market: improved borrower experience, and a consistent borrower portal for life of loan
  • Technology: leveraging mobile capture, e-disclosure and e-signatures
  • Loan process flow: lifting data from documents to populate application, eliminating paper where possible, use intelligence and automation in the process to assist underwriter and other knowledge workers
  • Compliance: support new regulatory and compliance requirements

Waterstone has not implemented Mortgage Agility yet, so we will have to wait until next year to hear about their success.

Next up was Tim Dewey from Safe-Guard Products, talking about their journey in transforming claims processing for today’s connected customer. They sell automotive-related insurance, including such products as wear-and-tear during a lease, and wheel insurance. (As a non-car-owner, I didn’t even realize that these things existed.) They wanted to improve the claims process by reducing service “friction”, particularly in handoffs, touchpoints, and requesting information from the customer; and in improving the customer experience. To address the service friction, they created a new adjudication process using Kofax TotalAgility, with new job roles to match the claims process and reduce handoffs and touches, plus automation of the content management. For customer engagement, they created a self-service capability for all stakeholders, allowing both document uploads and status checks, plus automated milestone notifications to the customer; as an aside, this also improves back-office efficiency by reducing status calls and paper handling.

They measured performance before and after, so can tell how well this is working: significant improvements in claim touches and adjudication cycle time, and reduced customer calls. They are working to improve this further through more back-office automation and additional transparency and self-service. A great success story.

We finished the keynote with a panel moderated by Anthony Macciola, Kofax CTO, including Knapp and Dewey, plus Craig LeClair from Forrester and Dave Caldeira, Kofax Product Marketing. Some discussions on disruption in business — again, supposedly “millennial”-related — and the value proposition of improving the first mile of business that Kofax is addressing. Macciola gave a shorter version of the product capability briefing that we heard in the analyst session yesterday, which you can read about at that post, then had Knapp and Dewey share their experiences in digital transaction management.

I’ll be sticking around for the rest of the day and will be blogging from some of the breakout sessions; looks like there’s a great lineup.

As an aside, the “us versus them” discussions about the millennials is getting a bit tired. We really need to stop this characterization, because everything that Knapp, Dewey and Macciola said about millennials is also true for me and many other Boomer/Gen Xers that I know — smartphone use (I am live-blogging from my phone and tablet right now), self-service (faster and more accurate if I do it myself), preferred modes of customer service (online and asynchronous so that I can get service even if I’m travelling and in other time zones), social media participation (did I mention that I’m blogging from my phone?) and more — and I’m 25+ years too old to hit the millennial demographic. I’ve written about this before, but can we stop having customers and vendors stand up at conferences and talk in a slightly bemused and condescending tone about how their adult kids use their smartphones? It’s really a split between those who embrace new technology and those who are dragging their feet (even senior executives in technology companies, who should be setting an example rather than resisting new technology and the ways of business that it enables), and although there is some degree of age correlation, it’s not so simple as just birth year. </rant>

Kofax Analyst Briefing And Portfolio Update

Following the Kofax Transform day 1 keynotes, we had a separate session for financial and industry analysts to be briefed on the products and financials.

After a brief introduction from Reynolds Bish, we had a detailed briefing on the Kofax product portfolio from Anthony Macciola, the CTO, focusing on the themes of digital transaction management and the first mile of business. The first mile is driven by customer expectations, allowing business transactions to become conversations. Customer demands, however, are exceeding the capabilities of many organizations, in terms of business culture as well as systems of record. Interactions need to be simple, easy, quick and informative, and companies need to be able to reach out and collaborate with a customer as part of the process. This brought him to a discussion of the Softpro and Aia acquisitions, which provide e-signatures and outbound customer communications management, respectively. These both have the ability to be rebranded and can be fully integrated into Kofax TotalAgility (KTA) applications, meaning that they can be used to create touchpoints with customers that are seamless, personalized, and contain closed loop identifiers for efficient processing of paper correspondence.

Outbound customer communications management provides a way to create outbound correspondence to customers by marrying configurable templates with customer-specific data fields — think of it as a super-sophisticated MS-Word mail merge. Macciola showed the Aia designer and how it is used to create reusable library assets such as headers, footers and body text using MS-Word for user familiarity and easy import from existing documents, then assemble those assets into templates. These can include closed loop identifiers such as bar code versions of customer and case IDs for rendering as printed documents that can be auto-rendezvoused with the case on their return, but it’s more interesting to look at the case of publishing as electronic documents with e-signature requirements embedded, including identifying and authenticating reviewers and signers, and orchestrating the “signing ceremony” process. These are pretty important additions to the Kofax portfolio for managing the first mile of customer engagement, where a customer needs to sign and return documents related to an account or transaction: the customer can choose to print and sign the document (or receive a printed document in the first place), then return it for scanning and rendezvous, or they can choose to sign it electronically in a secure environment that creates a PDF file that includes the signature plus audit trail information. Electronic signatures can be done as a written signature using a tablet (with finger or stylus), or with the customer keying in their name or other phrase in place of their signature, once authenticated.

Macciola referred to their platform as BPM — I always have a bit of trouble categorizing it, and tagged my earlier post with both ACM and capture — but also is using the “digital transaction management” terminology that we heard from Bish in this morning’s keynote, which includes inbound content processing (mobile, web, multi-channel, transformation), process orchestration (dynamic case management), process intelligence, information integration, and outbound customer communications management (content creation, e-signature and signature verification).

This was followed by a presentation by Thomas Knapp, SVP/CIO of Waterstone Mortgage, on how they are planning to use Kofax Mortgage Agility integrated with their Ellie Mae mortgage origination system, providing both the branch employee and customer experience. There are a lot of challenges with mortgage origination, in terms of data completeness and quality, customer experience and time sensitivity due to purchase closing deadlines. In the US, due to the involvement of mortgage-based securities in the financial meltdown a few years ago, there are a lot of new compliance rules that Waterstone needs to enforce along the way. They are also dealing with the rise of millennials in the generation of borrowers and their familiarity with technology (although there are many of us who are a lot older who also want an online, paperless experience), and need to have a consistent online experience for the entire mortgage lifecycle, not just origination. They are a “lighthouse” (early/beta) client for Mortgage Agility, and are just launching a beta version of their application this month, with a full rollout later in 2015; they are seeing challenges with the branch employees and their comfort with the technology as well as the technology itself. However, they expect this to be a true game changer for them, increasing operational efficiencies, saving time, boosting productivity, minimizing costs, and identifying opportunities for improvements and increased revenues. He summarized their expected benefits in terms of market, technology, loan process flow and compliance, with a great deal of automation as well as improving the customer experience. Good plans, although it will be critical to see the success of their rollout as it occurs.

We finished up the analyst briefing with a panel of Kofax executives: Reynolds Bish (CEO), Jamie Arnold (CFO), Howard Dratler (EVP sales) and Grant Johnson (CMO). From the Q&A, it’s clear that TotalAgility is still in the early stages of rollout to actual production environments with customers and partners, and their license deal for KTA discussed in this morning’s keynote is a way to nudge customers towards it. This will be a factor in Kofax’s success, since long-term support of the legacy products will eventually become a drag on technology resources and impact revenue and productivity. There was quite a bit of discussion about new sales teams and partner programs to better sell KTA as well as sales of some of the acquired products that are still offered on a standalone basis; as with other vendors, they are always looking to shorten the sales cycle as well as grow the sales pipeline based on the enhanced product portfolio. They are also actively working to expand their customer base beyond financial services, which has been their mainstay, although they continue to focus on banking as a key vertical with lots of opportunities for expansion within current customers with their mobile, e-signature and customer communication management products. Netflix is one of their high-profile customers in a new market segment, although it appears that they are relying primarily on their partner channel for approaching other verticals. In response to a question about cloud strategy, Bish stated that they see limited demand for (public) cloud because of the nature of the data being transmitted, which delayed the first cloud version of KTA to less than a year ago; although they have a bit of cloud exposure through their Kapow acquisition, they’ve been slow to market on this. They are seeing some demand from smaller companies that can’t afford the on-premise infrastructure, plus some incremental (rather than replacement) use cases within their existing large customer base for rolling out solutions more quickly than can be done internally.

We break for lunch now, and I have some spare time to hit a couple of the regular breakout sessions (or the pool) before a CEO roundtable later this afternoon.

Software AG Analyst Day: The Enterprise Gets Digital

After the DST Advance conference in Phoenix two weeks ago, I headed north for a few days vacation at the Grand Canyon. Yes, there was snow, but it was lovely:

Grand Canyon

Back at work, I spent a day last week in Boston for the first-ever North American Software AG analyst event, attended by a collection of industry and financial analysts. It was a long-ish half day followed by lunch and opportunities for one-on-one meetings with executives: worth the short trip, especially considering that I managed to fly in and out between the snow storms that have been plaguing Boston this year. I didn’t live-blog this since there was a lot of material spread over the day, so had a chance to see some of the other analysts’ coverage published after the event, such as this summary from Peter Krensky of Aberdeen Group.

The focus of the event was squarely on the digital enterprise, a trend that I’m seeing at many other vendors but not so many customers yet. Software AG’s CEO, Karl-Heinz Streibich kicked off the day talking about how everywhere you turn, you hear about the digital enterprise: not just using digital technology, but having enough real-time data and devices integrated into our work and lives that they can be said to be truly digital. Streibich feels that companies with a basis in integration middleware – like Software AG with webMethods and other products – are in a good position to enable digital enterprises by integrating data, devices and systems of all types.

Although Software AG is not a household consumer name, its software is in 70% of the Fortune 1000, with a community of over 2M developers; it’s fair to say that you will likely interact with a company that uses Software AG products at least once per day: banks, airports and airlines, manufacturing, telecommunications, energy and more. Their revenues are split fairly evenly between Europe and the Americas, with a small amount in Asia Pacific. License revenues are 32% of the total, with maintenance and consulting splitting the remainder; this relatively low proportion of license revenue is an indicator of a mature software company, and not unexpected from a company more than 40 years old. I found a different representation of their revenues more interesting: they had 66% of their business in the “digital business” segment in 2014, expected to climb to 75% this year, which includes their portfolio minus the legacy ADABAS/NATURAL mainframe development tools. Impressive, considering that it was about a 50:50 split in 2010. 2015-03-04 Boston Analyst Day WJ-WEB.pdf - Adobe Reader 07032015 103114 PM.bmpPart of this increase is likely due to their several acquisitions over that period, but also because they are repositioning their portfolio as the Digital Business Platform, a necessary shift towards the systems of engagement where more of the customer spend is happening. Based on the marketecture diagram, this platform forms a cut-out layer between back office core operational systems and front office customer engagement systems. Middleware, by any other name; but according to Streibich, more business logic is moving to the middleware layer, although this is what middleware vendors have been telling us for decades.

There’s definitely a lot of capable products in the portfolio that form this “development platform for digital business” – webMethods (integration and BPM), ARIS (BPA), Terracotta (in memory big data), Longjump (application PaaS), Metaquark (mobility), Alfabet, Apama, JackBe and more – but the key will be to see how well they can make them all work together to be a true platform rather than just a collection of Software AG-branded tools.

We had an in-depth presentation on their Digital Business Platform from Wolfram Jost, Software AG’s CTO; you can read the long version on their site, so I’ll just hit the high points. He started with some industry quotes, such as “every company will become a software company”, and one analyst firm’s laughable brainstorm for 2014, “Big Change”, but moved on to define digital business as having the following characteristics:

  • Blurring the digital and physical world
  • More influence of customers (on business direction as well as external perceptions)
  • Combining people, business and physical things
  • Agility, speed, scale, responsiveness
  • “Supermaneuverable” business processes
  • Disrupting existing business models

The problem with this shift in business models is that conventional business applications don’t support the way that the new breed of business applications are designed, developed, used and operated. Current applications and development techniques are still valuable, but are being pushed behind the scenes as core operational systems and packaged applications.

Software AG’s Digital Business Platform, then, is based on the premise that few packaged applications are useful in the face of business transformation and the required agility. We need tools to create adaptive applications – built to change, not to last – especially in front office customer engagement applications, replacing or augmenting packaged CRM and other applications. This is not fundamentally different from the message about any agile/adaptive/mashup/model-driven application development environment over the past few years, including BPMS; it’s interesting to see how a large vendor such as Software AG positions their entire portfolio around that message. In fact, one of their slides refers to the adaptive application platform as iBPMS, since the definition of iBPMS has expanded to include everything related to model-driven application development.

2015-03-04 Boston Analyst Day WJ-WEB.pdf - Adobe Reader 07032015 103731 PM.bmpThe core capabilities of their platform include intelligent business operations (webMethods Operational Intelligence, Apama Streaming Analytics); agile processes (webMethods BPM and AgileApps); integration (webMethods Integration and API Management); in-memory data fabric (Terracotta); and business and IT transformation (ARIS BPA and GRC, Alfabet IT Portfolio Management and EA Management). In a detailed slide overlaying their products, they also added a transaction processing capability to allow the inclusion of ADABAS-NATURAL, as well as the cloud offerings that they’ve released over the past year.

Jost dug further in to definitions of business application layers and architectural requirements. They provide the structure and linkages for event routing and event persistence frameworks, using relatively loose event-based coupling between their own products to allow them to be deployed selectively, but also (I imagine) to reduce the amount of refactoring of the products that would be required for tighter coupling. Their cloud IoT offering plays an interesting role by ingesting events from smart devices – developed via co-innovation with device companies such as Bosch and Siemens – for integration with on-premise business applications.

We then heard two shorter presentations, each followed by a panel. First was Eric Duffaut, the Chief Customer Officer, presenting their go-to-market strategy then moderating a panel with two partners, Audi Lucas of Wipro and Chris Brinton of Mosaic Data Science. Their GTM plan was fairly standard for a large enterprise software vendor, although they are improving effectiveness by having a single marketing team across all products as well as improving the sales productivity processes. Their partners are critical for scalability in this plan, and provide the necessary industry experience and solutions; both of the partner panelists talked about co-innovation with Software AG, rather than just providing resources trained on the products.

The second presentation and panel was led by John Bates, CMO and head of industry solutions; he was joined by a customer panel including Bryan Zigler of Boeing, Mark DuBrock of Standard&Poor, and Greg James of Outerwall. Bates discussed the role of industry solutions and solution accelerators, built by Software AG and/or partners, that provide a pre-built, customizable and adaptive application for fast deployment. They’re not using the Smart Process Application terminology that other vendors adopted from the Forrester trend from a couple of years ago, but it’s a very similar concept, and Bates announced the solution marketplace that they are launching to allow these to be easily discovered and purchased by customers.

My issue with solution accelerators and industry solutions in general is that many of these solutions are tied to a specific version of the underlying technology, and are templates rather than frameworks in that you change the solution itself during implementation: upgrades to platform may not be easily performed, and upgrades to the actual solution likely requires re-customizing for each deployed instance. I didn’t get a chance to ask Bates how SAG helps partners and customers to create and deploy more upgradable solutions, e.g., recommended technology guardrails; this is a sticky problem that every technology vendor needs to deal with.

AVPageView 07032015 111148 PM.bmpBates also discussed the patterns of digital disruption that can be seen in the marketplace, and how these are manifesting in three specific areas that they can help to address with their Digital Business Platform:

  • Connected customers, providing opportunities for location-based marketing and offers, automated concierge service, customer location tracking, demographic marketing
  • Internet of Things/Machine-to-Machine (IoT/M2M), with real-time monitoring and diagnostics, and predictive maintenance
  • Proactive risk and compliance, including proactive financial trade surveillance for unusual/rogue behavior

After a wrapup by Streibich, we received copies of his latest book, The Digital Enterprise, plus Thingalytics by Bates; ironically, these were paper rather than digital copies. Winking smile

Disclosure: Software AG paid my airfare and hotel to attend this event, plus gave me a nice lunch and two books, but did not otherwise compensate me for my time nor for anything that I have written here.

This week, I’m in Las Vegas for Kofax Transform, although just as an attendee this year rather than a speaker; expect to see a few notes from here over the two days of the conference.

AXA And The Digital Enterprise

Day 2 at DST ADVANCE 2015, and I’m attending a panel of three people from AXA on how their journey to becoming a digital insurance business. They define digital business as new ways of engaging with their customers: customers that are increasingly more demanding with respect to online and mobile modes of interaction. This is also driven by their need to reduce and simplify paper requirements, internally in their opertions and field sales force, and with their customers. The mandate for their digital enterprise transformation came from top management as an initiative both for better customer engagement and operational efficiencies.

There was a big cultural and change management component here to encourage their field agents and advisor channel to take advantage of the new digital tools, which in turn improves back office effectiveness by, for example, reducing NIGO rates because of rules-driven application forms. In their operations center, this resulted in shifts in resources, and changes to the type of people that they needed to hire and train: less heads-down data entry, and more tech-savvy knowledge workers. They also needed to effect internal cultural changes to become more flexible, and to have closer collaboration between business and IT.

Becoming a digital insurance business has changed a lot in how AXA’s products are created and rolled out, and also in their IT operations: they introduced the role of chief data scientist, and shifted from a waterfall software development methodology to Agile development and integrated business-technical SCRUM teams. Like many insurance and financial services, they have a lot of legacy systems that run their business, and a big challenge ahead of them is to upgrade those to more agile platforms such as their upcoming migration to AWD 10. They’re using Salesforce in some areas, and want to be able to leverage that further in order to reduce the reliance on internal legacy CRM, as well as introducing emerging technologies such as speech analytics that are piloted successfully in a regional center before being rolled out across the broader enterprise. Within IT, they are changing their methods to more of a DevOps model, with a particular focus on quality engineering. They have created some entirely new teams, such as mobile testing, to accommodate emerging technologies, and be proactive with external forces such as mobile OS upgrades.

One area where they have seen success is in offering incentives to drive adoption by the advisors, such as competitions between regions on adoption levels; some of the incentives for adoption and suggesting new digital enterprise ideas include financial and travel benefits. New advisors are required to use the digital services, and existing advisors are becoming sold on the benefits of using the new tools; in the future, they are considering a negative financial incentive for continuing to use paper in order to further drive adoption. In rolling out a new version of an advisor portal, they included a feedback option, then gave priority to implementing the feedback suggested by the advisors; when the advisors realized that they were directly impacting the development of their day-to-day tools, their participation increased even more.

Audience members in the insurance industry also talked about a shift to digital enterprise causing an increase in top-line revenue by expanding markets, not just retaining existing customers and reducing costs. The AXA team echoed this, and the need to envision and evangelize completely new business models rather than just working on incremental improvement.

Key success factors that AXA identified include the merging of business and IT, and engaging the field sales force in defining and developing the digital services in order to create the right things at the right time. It took about a year from the point of their first rollout to widespread adoption, but now the new capabilities and tools are adopted more quickly since the advisors know that this is going to help them sell more and reduce problems in the sales and policy issue cycle.

AWD 2015 Product Strategy

Roy Brackett and Mike Lovell from DST’s BPS (Business Process Solutions) product management gave us a review of what happened in 2014 and an update on their 2015 product strategy, following on from the bits that we heard from John Vaughn in the opening session.

DST has a ton of experience with the back office, since they run a huge outsourcing operation, but their current push is to also improve front office and customer-facing functionality. They are accelerating their release cycles, and providing detailed information via web conferences and technical briefings with customers. They’ve also mapped out a value journey for their customers for complex implementations: from defining outcomes and performance metrics to a solution design, proof of concept and production implementation.

With a large portfolio of products, including quite a bit of legacy still running at client locations, they have some product management challenges both in refactoring and modernizing platforms, and implementing newer technologies to keep up with the competition. Over three releases from June 2014 to January 2015, they added a number of capabilities:

  • UI widgets that use their RESTful services, including messaging between the widgets and with other applications
  • Advanced comments that allow threading and an activity feed view, bringing a more collaborative, social feel to authenticated comments within AWD
  • Variable timers that can be set at runtime
  • Multiple recipients on outbound letters, such as sending a broker or advisor a copy of a letter sent to a client
  • RESTful authentication
  • Security upgrades, including enforcing trusted sources for server data, and prohibiting JavaScript in comments
  • Separating out batch actions to improve performance

With their next releases, scheduled for April and beyond, they are adding or enhancing the following functionality:

  • Consume SAML-based web services
  • Communications editor for creating outbound correspondence
  • Updated platform support for WebSphere, Jbox, WebLogic, Oracle, WinSQL and IE 11
  • Updates to case management functionality including date functions, such as basing a date on the completion of dependencies, and adding case end dates
  • Early release of their Processing Workspace, which will mark the beginning of the end of their current portal UI; this improves real estate and navigation, and adds personalization for the primary workspace, worklists, search and attachment handling
  • Process analytics
  • Advanced workgroup management, rather than just a simple supervisor-worker hierarchy
  • Quality metrics and related analytics
  • Enhanced data transfer from AWD to the BI warehouse — there will be a session following this on the entire BI roadmap

There’s also some work being done on creating robust data centers under their Project Rainforest, which will be covered in sessions later today.

We pulled back from the details to look at the business problems that are front of mind for organizations: enhanced customer experience, process efficiency, targeted marketing (via analytics) and cost reduction top the list. Broken down by industry, DST’s big three customer verticals of banking/investments, insurance and healthcare are definitely focused on enhanced customer experience, but also concerned with risk and compliance more than the overall average. To address this, DST is doing significant product development in the vertical application solutions and accelerators that can help their target customers achieve value sooner.

DST has never been seen as an innovator in the BPMS market in terms of features, and their current roadmap isn’t going to change that view. However, what they do provide is a deep pool of domain expertise in their core markets, and solid products that solve the real business problems for those customers. This has allowed them to create extremely strong relationships with their customers, who rely on them to support existing practices while modernizing their technology.

Kicking Off #DSTAdvance15 – DST Update From @JCV816

Conference season always brings some decisions and conflicts, and this year’s first one (for me) came down to a decision between DST‘s ADVANCE in Phoenix, and IBM InterConnect in Las Vegas. DST had booked me to speak at this year’s conference right after last year, and when IBM combined Impact into InterConnect, the date moved from their usual March or April event to February, directly in conflict with DST. Also: Phoenix over Vegas? No competition.

DST has combined some of their smaller financial services events into ADVANCE this year, giving this a stronger than ever focus on financial services especially in the area of asset/fund management. This is a big chunk of their customer base, along with insurance, although many of the solutions that they offer — including their BPMS — cn apply to other verticals. I’ll be presenting later today about the challenges of onboarding, and how BPM, case management, smart process applications and other technologies can be applied to solve some of the business problems associated with these unpredictable, complex and risk-laden processes.

There were hands-on labs for customers yesterday, but the main conference started this morning with an opening session hosted by John Vaughn and featuring three of the senior management team, focused on the four key things that DST has been focusing on in the past year in order to help their customers with business growth and retention: transforming the customer experience, optimizing distribution, staying ahead of compliance risks, and providing smarter business process solutions. We heard a quick overview about their advances in customer experience; advanced analytics applied to distribution solutions leveraged by their acquisition of kasina; GRC solutions that extend into the distribution chain; and business process solutions including their onboarding, claims processing and AML/KYC frameworks, plus their upcoming AltServe offering for managing alternative investments.

Since DST has an outsourcing operation that processes a huge portion of the mutual fund and similar transactions in the US, and they are their own first and best customer, they know what they’re doing in creating technology solutions for managing the tough problems in financial services. As Vaughn pointed out during the keynote, a lot of the “easy” transactions are now being done outside your back office, either further up in the distribution channel or through customer self-service, meaning that the work being done internally includes more of the difficult, unpredictable business problems; their frameworks and solution accelerators are focused on many of those.

Lots of great sessions on the agenda today; I’m going to head to the BPM product strategy breakout to see what’s coming up