Category: conferences

PegaWorld: Mhayse Samalya, Farmers Insurance

The next keynote was Mhayse Samalya, EVP of Farmers Group and president of Farmers Business Insurance, discussing how to create agility in small business insurance. They write a lot of insurance business in the US, operating under various brands including Farmers and Zurich. They’re better known for their personal insurance and larger commercial business, but have been building their commercial lines for small businesses of less than 50 employees: a $96B opportunity that is not dominated by any particular insurer. Samalya took this as a challenge to become #1 in small business insurance through a number of factors:

  • Good product lines
  • Expertise in the small speciality businesses
  • Predictive analytics to understand and model the market
  • Improve underwriting sophistication relative to small business
  • Create targeted offerings by agent segments (captive versus independent)

A big part of this was creating the right agent experience: simplifying and demystifying it with pre-filled forms that eliminate some questions, and automate the pass-through rate with automated underwriting decisions and automated pricing. This dramatically reduced the time required to achieve a bound policy, and freed up the underwriters’ time for dealing with more complex interactions.

They focused on incremental success, and achieved a number of significant milestones in agent expansion and new business growth during 2007 and 2008:

  • Restaurant product: reduced time to bind a policy from 14 days to 14 minutes
  • Auto product: increased close rate by 5%
  • Umbrella product: increased new business by 70%
  • 1000 new agents writing commercial business

Next, they’re focusing on improving efficiencies by rolling out endorsements and renewals processes directly to the agents in the coming quarters, with an expected pass-through rate of more than 60%. It’s important to note that they focused on building their business first, then on efficiency.

Their lessons learned have relevance far outside of insurance, and could be applied to any BPM initiative:

  • Focus on the desired business results
  • Eliminate the non-value added business steps, noise and red tape
  • Put business change in the hands of the business
  • Rapidly prototype and iterate the targeted solution
  • Test, monitor and respond quickly to the market

They found it critical to build the right team, with a single empowered owner across business and IT (they had a VP-level position here that was actually part of the team, not a distant oversight position), a dedicated cross-functional core team, and in-depth participation from agents and underwriters. He also alluded to a relationship with Pega that had part of their compensation linked to Farmers’ business success metrics (e.g., pass-through rate).

The result: small business commercial insurance has gone from being a non-starter to the fastest-growing, highest-profile product line at Farmers; they’ve moved from a 2% market share to a 3-4% market share, which ties them with the biggest players in this market.

I work a lot with insurance so found all this to be fascinating, but Samalya made it interesting for everyone. If this is an indication of the caliber of presentations that we can expect at PegaWorld, it’s going to be a great conference.

I really like the presentation screens: most of the screen is taken up with the slides, but there’s a window near the top with the live video of the speaker in case you can’t see him directly at some point. This will also make it easy for Pega to publish these presentations with slides and video feed; it would be great to have some of these publicly available on demand.

PegaWorld: Alan Trefler keynote

I’m at PegaWorld in Washington DC for the next two days, back at the new and enormous Gaylord National hotel where the Gartner BPM summit was held a few weeks back. I think that the attendance here is more than at Gartner: I’ve been told that it’s 850 and Pega is claiming this as the largest BPM industry event, although not sure how many no-shows there will be with the recent economic downturn. The presentation of the conference needs a bit of a facelift: the loud rock music and flashing lights at 8:30am is so Bubble 1.0, and seems out of place these days, as well as being an unwelcome assault on the eyes and ears first thing in the morning.

Alan Trefler opened the day talking about change, picking up on the theme of “build for change” that we’ve been hearing from analysts and vendors for the past months. He started out, however, with a retrospective of Pega’s 25 years. We heard about their first offices in an older building in Cambridge, where they had to hoist their VAX 750 up an unused elevator shaft since the building no longer had a working elevator — having worked with 750’s in that same era, I immediately gained respect for these guys, since those were about the size (and elegance) of an industrial washing machine. He talked about how they’ve done a complete rewrite of the product 4 times over the years, keeping it fresh for new customers while supporting old ones; it’s a good measure of the company’s ability to do this that one of their first customers, Citi, is still with them after 25 years. I plan to spend some time listening to their customers this week to get a better idea of how well they’re really doing with that, since older vendors are often at a innovative disadvantage due to the efforts required to support their legacy.

He also highlighted their partners, which include — surprisingly — OMG: how can OMG afford to sponsor a vendor conference, but can’t afford to pay expenses for the speakers to attend their own BPM Think Tank? Or even, until some arms were twisted, not offer free Think Tank admission to the speakers?

He’s had time to tune his talk for the financial market disasters of the past few weeks, discussing how BPM is both pragmatic and strategic in new business, customer relationship management, the transaction servicing backbone, and risk, fraud and compliance. He discusses BPM as being made up of processes, rules and user intent: this last point is key, since I’m seeing a stronger focus by many vendors on the user experience of process participants. Pega’s paradigm for getting to a BPM solution is in three steps:

  1. Directly capture objectives, as opposed to the creation of lengthy user requirements documents. I completely agree with this, since having business people trying to invent a new world for themselves when they don’t even know what the technology can do, then agree to no changes without a change order, is a ludicrous practice that should be banned. Pega advocates a much more agile methodology that takes advantage of a model-driven environment. I wonder what some of their large partners think of the idea of scrapping the entire (lucrative) process of business requirements gathering.
  2. Automate the programming, including both the process logic and the user intent, by dynamically binding processes, logic and the user experience. In other words, have the process and logic models generate the user experience, yet still have that user experience be customized for the customer’s environment.
  3. Automate the work, which seems like a rather obvious part of the BPM equation.

He moved on to Pega’s commitment to continuous improvement and innovation, and how they’re integrating both customers and their own sales/delivery team to bring new ideas back into product development. They have a very specific implementation methodology that they see as a competitive advantage by shortening the implementation cycle, and they’re working to streamline that cycle further. He touched briefly on some of their new stuff: the platform-as-a-service offering that was announced a few weeks ago, their Internet Application Composer for integrating BPM capabilities into existing websites, their Web 2.0-type Integrated Work Manager portal, the Business Intelligence Exchange for accessing their somewhat opaque data structures, and the Virtual Enterprise Repository that will be particularly important for sharing across instances when the PaaS offering is rolled out.

Trefler’s a great speaker: very relaxed, informative, engaging and just funny enough. Of course, it’s easier to be relaxed when you’re at the top of both the Gartner and Forrester BPM evaluations.

Logistics summary: there’s wifi but no power.

Disclosure: Pegasystems is paying my travel expenses for me to attend PegaWorld, but has no editorial control over what I write while I’m here.

BPM Think Tank: On-Demand BPM Vendor Panel

George Barlow of Appian, Jim Rudden of Lombardi, Bino Jos of Intalio and Derek Miers of BPM Focus discussed the intersection of BPM and SaaS. Appian has Appian Anywhere and Lombardi has Blueprint, Derek has opinions about everything, but I’m not sure why a process expert from Intalio (who appears to have little understanding of where they fit from a SaaS standpoint, which is more a matter of being able to use cloud-based servers such as EC2 rather than a multi-tenanted hosted offering, and talked about everything except SaaS) ended up on this panel.

Paul Vincent of TIBCO popped up with a question about whether everyone would soon be doing BPM in the cloud; the panel responded that that’s not really the target, but rather to lower the entry costs for SMBs or departments within larger enterprises, or to provide some of the inter-enterprise collaborative functionality.

There was a discussion about the need for standards in a SaaS offering (I think triggered by Fred Cummins); BPMN is seen as important, although that’s really independent of on-demand versus on-premise.

BPM is perceived as being good in a down market, when companies are trying to cut headcount and become more efficient; SaaS is also good in a down market since there’s little or no capital outlay. In some cases, where the full BPMS is available both on-demand and on-premise (as with Appian), SaaS is the gateway drug to on-premise licensing.

George and Jim are the big contributors here: first of all, they’re both pretty smart guys, they have some major points of disagreement to liven up the conversation, and they’re the only two on the panel who actually have on-demand BPM services.

As always, it’s difficult to blog about a panel since it’s a bit disjointed, plus I had to do a wrapup of my roundtable sessions immediately following and had to comb through my notes with one brain while listening to the panel with the other. Oh, wait, maybe that’s the problem…

BPM Think Tank: Business Benefits of BPM Standards

Derek Miers gave a short session that was supposed to be about the business benefits of BPM standards, but ended up as a bit of a BPM standards bun fight. As I mentioned in my first post this morning, I think that Think Tank needs more about standards, I’m just not sure that a few minutes of unstructured debate — mostly from vendors who are involved in the standards process — really satisfies the need.

BPM Think Tank: Enterprise Rent-A-Car

Pat Steinmann of Enterprise Rent-A-Car, who I saw speak at the Appian conference last month, was here to retell the story of their IT services requests process.

Go back and read my original post for some of the details, I won’t repeat them here, but it’s important to understand the significant benefits that they’ve seen from this: the lag time for opening IT requests decreased from 3+ days to 2 hours, and employee training decreased from 9 months on their old AS/400-based system to 1 hour. Their focus was to allow employees to focus on performing activities that add value, and not on the administration and management of those activities.

Pat was in my roundtable this morning on achieving collaboration between business and IT in BPM projects, and provided good insight into how they’ve done this. I’ll be summing up the roundtable at the end of the day, since we’re running the same subjects a second time immediately after this.

BPM Think Tank: Jim Sinur Keynote

Jim’s back at Gartner, and one of his first public presentations since his return was here at the opening keynote, talking about the economics of business process and how global competition leverages local benefits. He wrote this material before the past two weeks of financial market Armageddon, but it’s general enough that it works across a wide variety of economic climates: the rise of the East, extreme competition, and the need for greater productivity through working smarter, not harder.

He looked at how BPM delivers productivity at both a macro and micro level. At the macro level:

  • Looking at process helps understand current productivity rates on end-to-end processes
  • Projecting processes under new strategies helps understand where productivity might go
  • Implementing new policies/rules will guide how productivity will improve
  • Processes have to operate within business constraints and governance policies
  • Processes show that productivity-driven approaches are as important as market-based approaches

Processes occur across all boundaries, whether internal to an organization or across the firewall to partners, suppliers and customers.

At the micro level, BPM delivers productivity in a number of ways, as shown in a recent Gartner survey:

  • Improves process quality
  • Improves customer satisfaction
  • Engenders continuous process improvement
  • Reduces costs
  • Improves the customer experience
  • Improves business agility

Further down on the list was “supports moving to SOA”, something that’s stressed by the vendors but not considered so important (yet) to the customer organizations.

He showed that processes occur in multiple contexts, such that one person’s process is another person’s subprocess; this highlights the benefit of having a BPM center of excellence to encourage the development of reusable subprocesses.

There were additional results from that recent survey, such as the market penetration of BPM (38% of large organizations have it or are planning for it, although I take “planning for” numbers with a huge grain of salt), top five results (most BPM adopters experience those from the list above), funding (mostly from the business side), and amount of change (83% have significant change). There’s so much that isn’t said in this summary, however, such as the nature of the processes being implemented, and how the “significant change” is enacted.

Others in this industry will be interested (although maybe not pleased) to hear that Jim used the terms “human interaction management” and “BPM 2.0”, but with his own definitions.

Jim has a very friendly, folksy style, but I found his presentation a bit too meandering and unfocused, as well as light on new content.

As for the conference in general, there’s only 40 people in the room, which is a horrendously low turnout; I’ve heard that there are only 70 registered in total, including all the vendors who are just here to run their booth. That means that the 12 simultaneous roundtables coming up next will have at most 6 people each, and more likely 3-4 each (including the moderator), which may not be sufficient critical mass for a good discussion.

I think that Think Tank needs to return to a more standards-focused agenda, where people who are already involved in BPM can meet to exchange ideas on BPM standards and other deeper issues, rather than trying to put forward a more general, business-focused BPM conference that competes (and not very well at all) with other general BPM conferences such as Gartner, Brainstorm and IIR. I’m as much to blame for this as anyone, since I was on the program planning committee for Think Tank, but I wasn’t as involved in the agenda development as I should have been due to other commitments, and by the time that I noticed the direction it was taking, it was too late to do much other than fine-tuning.

There’s conference wifi in the meeting rooms but it requires a conference code that we don’t have (FAIL) but there’s more open wifi in the public areas of the hotel so I’ll be posting sporadically throughout the day when I get a chance to wander into a hot zone.

The fall schedule

I have my fall schedule mostly sorted out, and here’s my confirmed lineup so far:

  • OMG BPM Think Tank, October 6-7, Chicago. I’m on the program committee, and will be leading a roundtable on achieving collaboration between business and IT in BPM on the first day.
  • PegaWorld, the Pegasystems user conference, October 19-21, Washington DC. I’m just there as an observer and analyst/blogger.
  • Ultimus user conference, October 22-24, San Antonio. I’ll be giving a keynote on the afternoon of the first day. And yes, I know that you can’t get from DC to San Antonio.
  • Business Rules Forum, October 26-30, Orlando. I’ll be giving a presentation on mixing rules and process on the 28th.
  • SAP BPM, November 17-19, Las Vegas. I’m giving a Jumpstart pre-conference session, an introduction to BPM, on the 16th.

Look me up if you’re at any of these events.

Disclosure: with the exception of the OMG event, my travel expenses are paid for by the conference organizers; in the case of the SAP conference, I’m also being paid to deliver this half-day training session.

Comparing BPM conferences

The fall conference season has kicked off, and I’ve already had the pleasure of attending 3 BPM conferences: the International BPM conference (academic), Appian’s first user conference (vendor), and the Gartner BPM summit (analyst). It’s rare to have 3 such different conferences crammed into 2 weeks, so I’ll sum up some of the differences that I saw.

The International BPM conference (my coverage) features the presentation of papers by academics and large corporate research labs covering various areas of BPM research. Most of the research represented at the conference is around process modeling in some way — patterns, modularity, tree structures, process mining — but there were a few focused on process simulation and execution issues as well. The topics presented here are the future of BPM, but not necessarily the near future: some of these ideas will likely trickle into mainstream BPM products over the next 5 years. It’s also a very technical conference, and you may want to arm yourself with a computer science or engineering background before you wade into the graph theory, calculus and statistics included in many of these papers. This conference is targeted at academics and researchers, but many of the smaller BPM vendors (the ones who don’t have a big BPM research lab like IBM or SAP) could benefit by sending someone from their architecture or engineering group along to pick up cool ideas for the future. They might also find a few BPM-focused graduate students who will be looking for jobs soon.

Appian’s user conference (my coverage) was an impressive small conference, especially for their first time out. Only a day long, plus another day for in-depth sessions at their own offices (which I did not attend), it included the obligatory big-name analyst keynote followed by a lot of solid content. The only Appian product information that we saw from the stage was a product update and some information on their new partnership with MEGA; the remainder of the sessions was their customers talking about what they’ve done with Appian. They took advantage of the Gartner BPM summit being in their backyard, and scheduled their user conference for earlier the same week so that Appian customers already attending Gartner could easily add on a day to their trip and attend Appian’s conference as well. Well run, good content, and worth the trip for Appian customers and partners.

Gartner’s BPM summit (my coverage), on the other hand, felt bloated by comparison. Maybe I’ve just attended too many of these, especially since they started going to two conferences per year last year, but there’s not a lot of new information in what they’re presenting, and there seems to be a lot of filler: quasi-related topics that they throw in to beef up the agenda. There was a bit of new material on SaaS and BPM, but not much else that caught my interest. Two Gartner BPM summits per year is (at least) one too many; I know that they claim to be doing it in order to cover the east-west geography, but the real impact is that the vendors are having to pony up for two of these expensive events each year, which will kill some of the other BPM events due to lack of sponsorship. Although I still think that the Gartner BPM summit is a good place for newbies to get a grounding in BPM and related technologies, having a more diverse set of BPM events available would help the market overall.

If you’re a customer and have to choose one conference per year, I’d recommend the user conference put on by your BPM vendor — you’ll get enough of the general information similar to Gartner, plus specific information about the product that you’ve purchased and case studies by other customers. If you haven’t made a purchasing decision yet and/or are really new to BPM, then the Gartner BPM summit is probably a better choice, although there are other non-vendor BPM events out there as well. For those of you involved in the technical side of architecting and developing BPM products at vendors or highly sophisticated customers, I recommend attending the International BPM conference.

Gartner BPM: Global 360/Carlson Marketing

Robert Lang of Global 360 to talk about an implementation at Carlson Marketing, a travel, meeting and event planning company. They had a lot of paper-based processes that included hand-offs between departments with complex approval processes; not only was the basic process difficult to manage, but changes to a customer proposal were difficult to execute efficiently.

They used Global 360, SharePoint (as a portal), InfoPath (for complex forms UI) and SQL Server to implement their travel proposal request process, including automating the routing of work requests related to the proposal process. They automated some operations, and made other operations considerably more efficient by maintaining a common folder for the proposal that could be accessed by any relevant participants. They allowed for spawning related but independently-executing processes.

Their benefits:

  • Faster processing of proposal requests
  • Better accuracy in data collection
  • Less rekeying of data
  • Consolidation of data into a centralized database for historical analytics
  • Improved turnaround time by 30%
  • Reduced number of personnel required to process a proposal request by 19%
  • Ability to identify and address bottlenecks in the business process
  • Dynamically reconfigure and reassign staff to optimize work

They plan to use Global 360 for other projects, including A/P, HR and their call center.

That’s it for me for this Gartner BPM summit: after spending most of the last 2 weeks traveling to 3 conferences, I’m skipping the vendors’ parties tonight and the last half-day of content tomorrow morning. I’ve been thinking about a wrap-up post comparing the 3 very different conferences — one academic, one vendor and one analyst — so watch for that over the next few days.