CIO Insight recently published a survey on business process improvement wherein 66% of the respondents state that BPI is their #1 priority. There’s a lot of stats in here to paw through, such as 62% stating that data integration problems are significantly slowing down their BPI efforts — no real surprise there — and the general conclusion that BPM and related software aren’t consistently effective. Considering that over 40% state that they don’t use a BPMS or business process modelling tools and have no intention of using one any time soon, it’s also not surprising that the survey concludes that a lot more could be done in terms of automating processes.
Category: process
business process management
IBM’s Virtual Jam on SOA and BPM
The Virtual WebSphere BPM User Group is hosting a 2-day Virtual Jam on the BPM with SOA forum. I heard about this from Bruce, who points to the registration page; note that you have to join the Global WebSphere Users Group Community, then join the Virtual WebSphere BPM User Group (there’s a not-so-obvious link to join on the aforementioned registration page). If you survive all of that, hop on over to the forum site and see what’s being posted; the jam runs through the end of day tomorrow.
Someone from IBM has appeared to have seeded a bunch of discussion topics, but there’s not a lot of participation yet. I’m not sure that a forum is a good place to hold a 2-day jam, since the cycle time of people checking and responding to forum posts can be a bit long for that. That being said, there are a few good topics running.
Nike BPM webinar
BPM? Just do it!
I’m sitting in on a webinar about how Nike implemented BPM in their credit claims department, and it turns out that “just do it” is more than just an ad slogan, it’s their internal mantra as well. That means that they’re always looking for a better way to do things. Like most other large multi-nationals, their infrastructure grew organically until they reached a point where they had to do some serious retrofits in order to be able to operate like a truly global organization rather than an American company with operations in other companies (a distinction made by the speaker from Nike, which is also one that I’ve used many times to describe businesses that don’t quite get how to work internationally). The speaker, Jim Sarvay, was the executive in charge of credit claims (whose last name that I missed) was the project manager on the BPM implementation.
The process discussed in today’s webinar is the credit claims process part of their supply chain, which is basically any time that a customer pays less than the invoiced amount, which can be due to any part of the supply chain process — either within Nike or at the customer — being broken along the way.
On of Jim’s slides was titled “Speed Matters. Slow Sucks.”, which pretty much sums it up for any type of supply chain process, and if you don’t have a handle on what’s slowing your processes down and how to fix it, then it’s going to suck. In Nike’s case, they had a number of parts of the process that weren’t integrated with their main SAP system, particularly communications with their suppliers and customers: it was the usual mix of e-mail, EDI, faxes, paper documents and everything else that you could imagine.
Their strategy for fixing their supply chain problems centred around four factors: documents (content available in a central repository), people (the right person doing the right job at the right time), internal controls (processes supporting policies), and process (flexible, repeatable best practices to improve cycle time).
They picked Global 360 for BPM, with Fillmore Technology doing the implementation based on Global 360’s recommendation. They also looked at IBM and FileNet, and although the Jim didn’t originally talk about their criteria for making the decision, he said that Global 360 worked best for them. In the Q&A at the end of the webinar, there was a question about how the vendor was selected; apparently, Global 360 was Jim’s last choice after reviewing the proposals, but jumped to top spot after responding to questions and giving a demo partnered with Fillmore, wherein they proved that they were focussed on solving the business problem rather than selling a product. From what he said, it sounded like one of the other two vendors was the incumbent document management vendor and was unseated, although that wasn’t perfectly clear.
He listed their organizational success factors: a compelling story, executive support, a dedicated cross-functional team, and superior consulting and tools (he said some very nice things about Fillmore Technology, who did the implementation). Their results were pretty impressive: a 6-month payback on their investment, reduced cycle time to 1-15 days from the 120 days that it used to be, and improved relationships with their customers because of the faster claims resolution process. They’re now looking at how they can roll BPM out to other parts of their organization, both in other claims areas and in different applications such as foreign trade/customs documents and order management processes, and seem pretty pumped about the potential to see the same type of wins in other deployments.
They did a staged implementation over a matter of months, with the first stage rolled out in about 5 months from project approval, and the entire planned scope deployed in about 10 months. After that, they started integrating other systems, such as inbound faxes, over the next several months.
Their lessons learned:
- Consider policy first, then process, then people, then tools
- Get senior management buy-in
- “Eat the elephant one bite at a time” — this is so key, and something that I’ve written about many times before: do something small as quickly as possible, then add functionality incrementally
- Rent experts — how can I disagree with this? 🙂
- Leave the rocket scientists at home — in other words, it’s not as complicated as you think it is; keep it simple
- Build a team that you trust and have confidence in — provide direction and support, listen to what they need, and stay out of their way
Aside from the obvious lessons about implementing a successful BPM rollout, this webinar definitely showed the power of an enthusiastic end-customer presentation in getting your message across. If you’re a vendor, consider finding a customer like Jim at Nike to talk about what they’ve done and how successful it was, rather than hiring yourself an analyst for a webinar — it makes all the difference in the world.
The webinar was hosted by Fillmore; I’m not sure if they’ll have a replay available, but you can check their site or maybe someone from Fillmore would be kind enough to add a comment to this post with the replay information.
Nike uses BPM to improve credit claims — webinar tomorrow
I met David Duignan of the Fillmore Technology Group at the ABPMP meeting that I crashed in San Francisco earlier this year — David’s involved in the San Diego chapter. He sent me an email a couple of weeks ago, and a reminder today, of a webinar that they’re having tomorrow about how BPM is used in Nike’s credit claims department.
I have no idea what BPM product that they’re using for this, since Fillmore is a Global 360 partner and also appears to be a Lombardi partner, but they claim to have made some huge cost-saving improvements in the credit process. From the webinar description:
Learn how Nike automated its processes while enhancing visibility and accountability that:
- Increases their recovery payments
- Reduces claims resolution times
- Increases the processing of more claims
- Prioritizes claims more effectively
- Reduces customer account manipulation
You can sign up to attend here.
Is Anyone Executing Those Processes?
There’s just something about that mid-Western accent that I find endearing, and when Roy Massie from SunGard first pronounced “insurance” as a two-syllable word, I was hooked. Roy’s was the last non-Proforma presentation of the conference, and he was the only partner speaking (although I suppose that technically speaking, HP Consulting is likely a partner). If you’ve read Column 2 much in the past, you know that I have had a big focus on systems integration and implementation, so I was very interested in what SunGard had done to integrate ProVision with their products.
First of all, who knew that SunGard even had a BPMS product? Apparently the product of an acquisition, it doesn’t show up on the SunGard site, but has two other sites where it lives. Although SunGard did show up as a niche player on Gartner’s Magic Quadrant back in 2003, they’re not there any more; I imagine that niche might be limited to only SunGard customers for their other systems. I’ve seen SunGard transaction processing systems (not including any BPM functionality) in many of my mutual fund and other financial customers, so this isn’t a completely unexpected leap.
What was unexpected was the audience response when Roy asked the audience how many of them export their processes from ProVision to a BPMS for execution; I was sitting more than halfway back in the room, and there were no hands up in front of me. I didn’t turn quick enough to count, but Roy said “a couple of you” when characterizing the response. My question is if ProVision users aren’t pushing their process models through to a BPMS for execution, aren’t they missing a lot of value? And what, exactly, are they doing with those process models? Or is this just exposing my bigotry over what process models are good for?
The integration seems pretty straightforward, and based on later information, is similar to what is done by other BPMS vendors: processes are modelled in ProVision, then exported using Proforma’s open Common Interchange Format (CIF) and imported into SunGard EXP Process Director.
I did like Roy’s description of practices (determined by experienced specialists) versus procedures (executed by trained workers), and how they combine to make up processes. I also liked his phrase “enterprise technology sprawl”, and his discussion of how an unstructured collage of technologies can start to dictate business processes. He made the great point that all compliance initiatives are based on process transparency, and (referencing the Aloha Airlines presentation about how they started modelling their business in order to organization themselves out of bankruptcy) that a near-death experience is a great motivator.
Six Sigma and Proforma
Day 2 of the Proforma conference included three additional customer presentations, one from a partner, then all the exciting stuff about the upcoming product release.
Following on the heels of the panel at the end of day 1, in which Paul Harmon and Geary Rummler slammed Six Sigma, Deb Berard from Seagate spoke about their successes with Six Sigma and Proforma. Seagate has been using Six Sigma since 1995, and has been seeing a lot of success with it and Lean — not surprising for a manufacturing organization, which is where Six Sigma originated. They use the Six Sigma framework in ProVision, and their initial process analysis and modelling efforts led to the improvement of some of their product development processes. Based on that success, they then pushed it out to an enterprise-wide initiative.
The only thing that I really had an issue with was her calling ProVision a business process management system (BPMS), which it’s not: it’s a modelling suite. Although BPM still doesn’t have a fully accepted definition, I believe that BPMS has a very specific meaning.
Proforma Conference Day 1: Geary Rummler x 2
Our after-lunch keynote on the first day was by Geary Rummler, co-creator of the well-known Rummler-Brache methodology and author of Improving Performance: How to Manage the White Space in the Organization Chart. In case you’re not getting the significance of this, the original swimlane diagrams are more properly called Rummler-Brache diagrams.
Rummler retired from Rummler-Brache a few years ago, then after “failing at retirement” as he put it, went back into practice the Performance Design Lab. His talk was a bit rambling, and he had 84 slides for a one-hour presentation, but I’m quite sure that he’s forgotten more about process than most of us will ever know.
He talked about how “as-is” process maps tend to drive out issues into the open, something that I have seen time and time again: management looks at what you’ve documented as their current process, and they say “We do that? Really?” One of the prime examples of this was a financial institution that I was working with on an BPM project a few years back. I documented all of their current processes on the way to the proposed processes, including their paper handling procedures. They sent the original of all transaction documents offsite in order by date, but made a photocopy of each document and filed it locally for reference by account number. Of course, we planned to replace this with a document scanning operation, but I felt obligated to point out a pretty major problem with their current process: since they were so behind in their local filing, the photocopies of the documents were just being boxed in date-order and stored onsite, which made the account-order files useless for any recent documents. Furthermore, they had stopped sending the originals offsite some months before that, so they now had both the original documents and a photocopy of each document, stored in the same order but in separate boxes, kept onsite. The management in charge of the area was truly shocked by what was going on, and I think that my fees were covered just by what I saved them in photocopy costs.
Back to Rummler, he showed a diagram of a business — any business — as a system, with financial stakeholders, the market, competition, resources and environmental influences as the inputs and outputs (since you can search the Proforma site and find the full presentation, I don’t think that I’m spilling the beans here to include one of the diagrams). I like this view, since it simplifies the business down to the important issues, namely the interactions with external people and organizations. He also spent quite a bit of time on the processing system hierarchy: the enterprise business model at the top, the value chain extracted from that, the primary processing systems derived out of the value chain, the processes from each primary processing system, and the sub-processes, tasks and sub-tasks that make up each process.
He went into organizational structure, specifically showing departments/resources on one axis and processes on the other, to illustrate how process cut across departments, but making the point that most organizations are managed by department rather than having true process owners.
There was one quote in particular that stuck with me: “Visibility is a prerequisite to optimizing and managing systems.”
We had a second dose of Rummler in the wrap-up panel on Day 1, where he joined Paul Harmon of BPTrends and one of the Proforma team who was filling in for the missing Aloha Airlines representative.
Harmon stated that none of the major business schools have any courses on process, but that they’re all function-based, and that most CEOs don’t see process as their primary concern. Rummler agreed, and made the point that being functionally-oriented, or siloed, leads to sub-optimization of the organization. Harmon’s initial comment led me to wonder if it’s necessary to have the CEO want to “do process”, or if a process approach is just an implementation detail, but Rummler ended up addressing exactly that issue by saying that it is necessary because methodologies are competing directly for the CEO’s attention, and it’s not always possible for the CEO to distinguish between the different methodologies at that level. Harmon made quite a rant against Six Sigma, saying that “Six Sigma people don’t understand high-level process”, blaming the widespread acceptance of Six Sigma on Jack Welch and GE strong-arming their suppliers into using it, and stating that Six Sigma people could be converted into a business process view, as if they were some sort of cult that had to be deprogrammed. I’m not sure that I would take such a hard line on Six Sigma versus a process-centric organization; “process” can’t be so easily pushed into an organization as Harmon implied since it’s not a methodology, it’s a pretty fuzzy concept that a lot of consultants like to bandy about.
At the end of the day, I’d have to say that I also disagree with Harmon’s assessment that BPMS is still very early market. Although it’s not a mature market, I think that to call it “very early” is ignoring the many successful products and implementations that have been done in this space over the past several years.
Seeking a BPM definition
The last customer presentation of Day 1 at the Proforma conference was Mary Baumgartner Vellequette from Genentech‘s Corporate Treasury division. Through curiosity on both of our parts, Mary and I later toured the show floor of the International Lingerie show that was going on down the hall, although they were in the process of tear-down so we didn’t see as much as we would have liked. 😉
Mary had some great material on establishing BPM programs within an organization, including governance, but the more that I listened to her, the more I realized that we still have a definition gap: her BPM (which does mean business process management) doesn’t really include one of the main foci of my BPM, namely the systems used to help automate business processes. Hers is really about analyzing and modelling the processes, integrating them into an overall architecture, documenting and communicating the processes, business reorganization and other non-automation tasks. Only on her long-term plans does she mention “business process automation” tools.
She does include some BPM measures and direct/indirect benefits in good detail, helpful to anyone who is looking to establish ROI for their BPM project. She also steps through the BPM project process in detail, discusses change management and how to map process improvements to organizational change.
I am left with the feeling that we still don’t have a comprehensive definition of business process management: although I consider everything that Mary talked about to be part of BPM, I also consider the process automation and BPMS to be a significant part.
Dispensing with the As-Is
Sometimes I don’t pick up a lot from a presentation, or at least I don’t write a lot of notes about what I learned from it. Bill Riordan from HP talked about modelling customer support centre processes, but I came away with only a few points.
First, the term “happy path”, which in process modelling, means the best-case/simplest route through a process map, originated at HP. Who knew.
Second, and likely more relevant to those who aren’t as fascinated by process modelling trivia as I, is that they didn’t do any “as-is” process modelling, only the “to-be” models. That way, they were able to completely bypass the “but that’s the way we do it now” argument for not changing things. That really harkens back to the days of business process reengineering, where everything old was tossed out and the new processes started from a completely clean slate.
Modelling for the masses
Cheryl Hamrick of Tennessee Valley Authority didn’t really tell us about their specific usages of Proforma, but took us through how they spread the use of Proforma through the enterprise. From conversations that I had at the conference, it seems that most organizations are using Proforma within a relatively small group; other people involved in modelling might use Visio or other tools, which then have to be imported or recreated within Proforma in order to include it in the global models. TVA didn’t want to do that, however, so decided to bring modelling to the masses. Cheryl had a fabulous description of why you want to reconsider doing business modelling in the same old way (in this case, “we” is a centralized business analysis group, and “the customer” is the business unit under analysis):
- We have to learn the customer’s current process from scratch, whether we revise it or replace it
- Then, the customer has to learn how to interpret the models
- We can be seen as an intrusive, external critic
- TVA has hundreds of complex processes, which could take years to model
In other words, it takes a long time and annoys a lot of people. Furthermore, the models are outdated as soon as the analysis team leaves the premises, with no way to feedback changes or collaborate on business models, which impacts business agility.
Their answer to this was to train the business units use Proforma directly, and it sounds like they’re having some good success with that. The business units actually liked being able to do this themselves, and it allowed the central team to push out enterprise standards for modelling and have the business units do some of the modelling themselves. They’re not trying to turn the business users into analysts, but having their direct involvement makes for happier business units, and more accurate and up-to-date models.
Proforma is releasing a web viewing capability in their Series 6 that should help this out as well, since it allows for viewing and limited updates by anyone with a valid login, without requiring a licence for the web users.
N.B.: Windows Live Writer, which I use for creating these posts, has been giving me a lot of grief lately over my spelling of “modelling”. I know that this is beta software, but give me a break and detect that my standard dictionary is Canadian, eh?