Decision Management And Next Best Action

Rob Walker, Pega’s VP of Decision Management (who joined Pega as part of the Chordiant acquisition), gave a keynote on day 2 of PegaWORLD about next best action. He started with a great visual of the analysis of a particular baseball pitcher’s stats, showing that there was some degree of predictability of what type of pitch (e.g., fastball, slider) will occur after an initial pitch of each type. In other words, if you knew those statistics, you would have a better chance of being prepared for a particular type of pitch once you were smoked by that initial fastball. Sticking to a baseball theme, he moved on to talk about the concepts behind Moneyball: using statistics to build a better team than you can with beliefs and biases. In other words, more data and a lot of analysis can give you a competitive advantage, an idea that holds value far beyond the realm of baseball.

He spoke about adding in all of that extra data and analytics to the customer view as “color” being added to the picture in order to make details more evident throughout the lifecycle. This can, for example, allow you to detect when a customer is likely to defect to a competitor based on their service history and behavior, or what new services that they are most likely to buy at a given time. Bring this next-best-action marketing to the Pega unified marketing portfolio, and you have this capability baked right into your processes and multi-channel customer communications. Instead of using an inside-out strategy of trying to determine the right market to target for a specific product, this allows for an outside-in strategy of maximizing the value of a specific customer through understanding their propensities, and doing it fast enough to make the next best offer in real time, while they are on your website or on the phone with your customer service or sales rep.

Zurich’s Competitive Advantage: National Underwriting Solution

I’m in the first breakout session of PegaWORLD day 1, and decided to hear Colleen Dugan and Jeff Gallimore of Zurich Financial Services talk about their underwriting solution implemented on Pega. Their original Pega pilot implementation in 2008 was rolled out in 74 days, which is pretty amazing: I know that all the BPMS vendors claim that you can do this, but few large companies can even get the contract executed in 74 days, much less the first production solution. That was just the beginning, of course: they’ve implemented a number of initiatives across their North American organization since then, and a lot of their success has been due to business change management rather than just the technology.

They initially selected BPM as a technology for their organization for a number of reasons:

  • Consistent workflows across the business.
  • Realign work with roles, allowing centralization and offshoring; a big part of this was offloading administrative and support tasks from underwriters, allowing them to be more customer-facing.
  • Transparency in transactions for improved customer service, which is especially important when the underwriter no longer does all of the work on a specific account or transaction; this allows anyone with an interest in the account or transaction being able to have visibility into it.
  • Management tools for measuring and monitoring performance, including SLAs, cycle time, and individual/team productivity metrics; this also allows for doing some tasks based on predictions, such as doing the administrative preparation for an account before the underwriter quotes the work, based on the past history with the account.

There was some resistance from the underwriters who perceived this as losing control and gaining Big Brother, but eventually they saw it as a way to offload the work to which they didn’t add value, allowing them to focus on serving their accounts better. That transition took a lot of change management work: everything from having the right leadership through ensuring that the proper roles are defined.

They identified a number of critical success factors, most of which are related to their organizational change management:

  • Fully defined and documented processes, both current and future state, allowing them to understand what is required for process improvement and transformation. In early cases where they plugged in BPMS before they did this, they just put structure around a process that didn’t necessarily work very well, or what we refer to as “paving the cow paths”. This also allows for identification of common processes across business units, which can significantly accelerate a technology implementation through reuse.
  • Clearly stated objectives that are communicated across impacted areas, so that all business units and users understand why this is being foisted on them, how they’re going to benefit, and why this isn’t just another piece of useless technology that they have to learn. (I’m paraphrasing here).
  • Engagement and buy-in of managers responsible for impacted areas, so that they understand both the higher-level organizational benefits as well as the individual team member benefits, and can be advocates for the new processes and technology.
  • Front line user subject matter experts to participate in design: these are the actual business users, not business analysts (who often report to IT and have never actually processed a transaction themselves), allowing the technical design team to see how the new designs will actually be used.
  • Fully defined change management strategy, more than just a communications plan.

They have developed a change readiness framework, focused on not implementing until they were “ready”, which is defined as the impacted audience being ready for change, having the support model in place, and sufficient confidence levels that benefits will be achieved. They consider seven areas of readiness on their checklist: process, people, product, market, benefits, training and technology.

In response to questions (but not as part of their presentation), they discussed a bit about the solution: a listener detects new email-based requests for renewals, endorsements and other transactions and creates a case in Pega, after which a person has to determine which work basket to assign each transaction – sounds like they could use some intelligent automated routing based on analysis of the email content. Once that initial intake has been done, however, BPM really shines in allowing them to split the work by role, send certain tasks offshore for cost reduction, and monitor everything that’s happening in order to ensure that work is being done effectively and within SLAs. Pega Professional Services did their first pilot implementation, but Cognizant is now their main Pega implementation partner.

Any user-facing BPM implementation changes the way that people work, and requires attention to change management. This was a great presentation on the change management factors that are often left unsaid in discussing BPM implementations, but can cause even a technically perfect project to fail.

Pega’s Intelligent Business Applications With @pegakerim

Kerim Akgonaul, Pega’s VP of product management, finished the day 1 morning keynotes with a view of what’s coming in Pega technology: social, mobile and predictive analytics. He stressed that all of the capabilities that customers need for managing work are built into their integrated PRPC platform, making it unnecessary to integrate several different technologies and components. On top of that, they offer industry frameworks for additional specific functionality, meaning that the actual solutions built on that are (in theory, at least) a thin layer on top of a thick base of standard functionality.

He walked through the high points of their recent technology advances: mobile, social, predictive analytics, decisioning, case management and user interface.

In the mobile area, they believe that it’s just another channel to be served by the same application: the same PRPC application definitions can be used to generate the UI for mobile platforms as well as standard desktop browsers, but with features specific to the device such as geolocation and camera.

Considering social capabilities, they allow for multiple external social media channels (such as Twitter) to be captured used in processing work, but also provide a some social features directly in their applications: Pega Pulse for a collaborative event stream view (similar to Appian Tempo and others), and direct feedback to allow a user to provide feedback to the developers directly from any screen.

In decisioning, they’re implementing a lot around next best action, which analyzes customer behavior and past transactions to determine what the customer is most likely to respond to positively, either while on the telephone with a customer service person or on the web. As with all of the other BPM vendors, who are all eagerly anticipating Gartner’s upcoming report on intelligent BPMS in which analytics plays a big role, Pega is really focused on analytics and how they can improve processes.

They’ve made a lot of headway on getting customers onto their cloud solutions, both as development/test systems and as operational systems; using their VPN tunneling, you can link a Pega cloud application directly to your internal systems. Furthermore, the applications are portable, making it easy to move from a cloud to an on-premise system. The last that I looked at their cloud solution, it was a bit clunky from a provisioning standpoint: implemented on Amazon EC2, it was not really self-provisioned or elastically scalable, although it did provide a viable cloud platform.

They’re showing off their new Case Designer for their case management capabilities; this was a bit clunky before, so I’m looking forward to seeing the new interfaces both for designers and users. In addition, they’re allowing for multi-page document scanning directly into a case, then use CMIS to push that into a content repository. There are some serious issues with that scenario, such as a lack of a chain of custody as well as (I’m guessing) some scalability limitations, but there are certainly situations where this would work.

He ended up talking about user interface, and using Pega as a development tool for building both internal and customer-facing applications. They’re pushing towards HTML5 for more portable, functional and lightweight interfaces.

I have a 1:1 chat with Kerim scheduled for this afternoon, which will give us a chance to dig into some of these a bit more, so stay tuned for that.

Relationship-Driven Customer Service At American Express

Jim Bush, EVP of world service at American Express, delivered a morning keynote here at PegaWORLD to talk about customer service, and how they’re transforming it to provide better value to their customers. 93% of those surveyed say that companies fail to exceed service expectations, which is a complete disconnect with the fact that companies that provide superior service will get 13% more customer dollars because of that. They looked at a new customer service paradigm to deal with the business realities: multiple integrated service touchpoints; experiences benchmarked across industries; consumer choice; increased regulatory scrutiny; and better-informed, more powerful consumers through social media and other means. The customers are back in the driver’s seat in most consumer-facing businesses.

AmEx responded to this by deciding to service customers, not transactions. That’s an important distinction: a specific incident (whether positive or negative) needs the context of the entire customer relationship in order to understand how to best address it. They now consider service to be not a business cost, but an investment in business growth, and focus on respecting and deepening the customer relationship. To do this, they reconstituted their service organization as World Service, with the goal to enable, engage and empower. No small feat, considering that their 20,000 customer care professionals handle hundreds of millions of customer interactions in 22 markets, 15 languages and eight engagement channels.

They have moved past the granular measurement of “how did we do on this transaction” to the net promoter measurement of “would you recommend us to a friend”, which changed how they think about the customer relationship. In fact, they have just trademarked the term “relationship care”.

I’m in the middle of reading United Breaks Guitars: The Power of One Voice in the Age of Social Media – a fantastic and funny read about one man’s journey through a customer service nightmare (and if you haven’t seen the “United Breaks Guitars” video, get on over to YouTube right now) – and one of the points that author Dave Carroll makes in the book is that managing customer service on a transaction basis tends to make companies ignore what they think are statistically insignificant events such as a specific bad transaction with a customer. That, in short, is exactly how not to treat a customer if you want to foster a relationship.

Thinking about the customer relationship rather than just servicing a specific transaction puts AmEx on the right track towards service innovation. They’re also looking at engaging customers through the channel of their choice, from paper to telephone to SMS. If a 162-year-old company can do this, every company has the potential to do the same, and yet many continue to put their head in the sand on turning their customer service around to actually serve the customer in the manner that the customer wants to be served. To serve the global citizen, AmEx combines relationship care with channel convergence, integrated technology, and a global scale with borderless solutions. Through that, they want to turn indifferent (although satisfied) customers into promoters and advocates for the brand. Not many of those customers will end up with the AmEx logo tattooed on their arm, but a single voice can go a long ways these days.

Oh yeah, and they use some Pega software.

Delivering Customer Centricity And Operational Excellence

PegaWORLD 2012 day 1 kicked off with a keynote by Alan Trefler on the changing ways in which organizations interact with their customers. In the keynote that I gave at the Appian conference a few months ago, I nailed this point as well, talking about my own experiences with two organizations: one that gets it, and one that doesn’t.

He talked about some of the customers that have implemented Pega since last year’s conference: lots of financial services, which is their mainstay, but many other verticals as well. He referred to BPM as “unfortunately named”: they consider BPM, CRM, business rules and case management all as part of helping their customers to deliver. Trefler is a former chess master, and talked about both chess and ping pong (while hitting ping pong balls into the audience of 2000 – impressive multitasking) as analogues for business: strategy and agility.

He believes that the traditional data-based 360 degree of a customer isn’t enough: you also need a 360 view of intent (why/what) as well as process (where/when/how). Adding intent and process into the data view of a customer enables “high definition” customer service (360 + 360 + 360 = 1080 – get it? Winking smile ) that allows for the holy grail of cross-channel interactions, cross-silo processes and operational efficiencies. This starts with having business and IT work together to capture business objectives using their DCO technique and tools, generating models without writing huge requirements documents, then move on to develop executing systems from those models. Great vision, but in practice it doesn’t always happen that way: I still see a lot of customers (of Pega and other vendors who promote model-driven development) stuck in old waterfall development models, and unable to break out of them due to culture, intertia and budget incentives. Not the fault of the vendors, but it remains a barrier to their success.

He finished up with more about their positioning and vision, including a quick view of their six Rs of managing work: receive, route, report, research, respond and resolve. Good start to the keynotes, and entertaining as always.

PegaWORLD 2012 Financial Services Special Interest Group

I thought I was going to spend the afternoon here in Dallas at the pool before the opening reception at PegaWORLD this evening, but there is a pretty active pre-conference program and I sat in on the financial services special interest group. In my role as a consultant to enterprises implementing BPM (which is usually a majority of my work), my focus is on financial services and insurance, so I wanted to hear what Pega is saying about what’s new for financial services. There were a number of presenters from Pega, including Tony Young and Rich Jefferson, both of whom are part of Pega’s financial services vertical.

Pega’s had financial services customers from the start, but they’re building out more customer service offerings so that they can do more than just transactional processes in the back office. From a past focus on improving operational efficiency, they’re also targeting both improving customer experience and driving revenue growth for their customers. To manage this in the financial services space, they have frameworks specifically for building financial services solutions. They are updating their frameworks to keep up with the underlying PegaBPM platform – mobile, integrated decisioning, federated case management – while modernizing and simplifying the product porfolio, bringing everything in to baseline on their financial services industry foundation (FSIF). There are also some new solutions that Pega has developed including capital markets onboarding, and partner solutions such as lending automation.

We also heard about some of the initiatives for creating community within companies for learning about and collaborating on Pega projects: at Wells Fargo, for example, they set up a closed LinkedIn group with information on educational webinars, regular meetings and other information. A closed group on LinkedIn (or other social networks) is a great way to get started when you’re a bit too small to support an internal center of excellence (COE) or community site, and also want to include external collaborators (assuming, of course, that your company network doesn’t block these sites). Pega has also set up private microsites for other customers, such as TD Bank, to act as a knowledge base. My only concern with having the vendor setting up these community spaces is that they tend to result in the client organization developing a vendor-specific COE rather than a broader-based BPM COE, which is usually not a good thing for supporting more general BPM initiatives within the organization, although it’s better than having no COE at all.

There are five booths at the conference just for financial services solutions, plus their customer centricity center and core PegaBPM booths; lots of things for financial services customers to see. There are also a lot of presentations to be delivered by financial services customers this week: American Express, Asya Bank, JPMC, Schwab, Wells Fargo and more.

Pega is claiming that there are 2,000 attendees registered (likely including their own people), which probably makes them a contender for the biggest BPM conference around; I know that my flight down this morning from Toronto was jammed with people talking about Pega, if that’s any indicator of the interest.

On a logistical note, if you’re trying to reach me here, don’t call or SMS my Canadian mobile number, because I swap in a US SIM chip when I travel to the US. Best way to reach me is by email or Twitter.

AWD Design Studio: Services And Automation with @smsj76

Simon James of DST gave what will be my last presentation of AWD Advance (in fact, I have to leave before the end to catch my taxi to the airport), looking at how services and automation are done in the Design Studio in AWD 10. This is a code-free (or code-light) environment for composite application development for process-centric applications. [Note to vendors: just because it’s done in a graphical environment doesn’t mean that it’s not code. Just sayin’.]

He walked through a number of examples of what could be done with their library of available services, and showed a bit of the environment used for this; this ranged from automatically adding comments to work items to performing various sorts of calculations, which sounded as if they were things that have caused headaches (and custom coding) for their customers in the past.

As I’ve pointed out in my posts about the other sessions, this is not cutting-edge technology, but it’s ahead of where most of DST’s customers are in their technology journey. Existing AWD customers can be upgraded to AWD 10 without changing their existing applications, but that won’t allow them to take advantage of the new features that we’ve been seeing this week: to do that, they need to redevelop their applications using AWD 10. Design Studio definitely makes that easier, but that may not be a popular idea with customers who are happy with their existing legacy applications built on older versions of AWD that run just fine on the AWD 10 infrastructure.

Consider the different types of AWD customers:

  • Customers for whom DST outsources at least part of their process and infrastructure, including “friends and family” (companies that are connected to DST through corporate ownership) as well as arms-length customers. These have, I believe, already been upgraded to the AWD 10 infrastructure, but for the most part are still running legacy AWD applications. These are likely to have their applications updated to AWD 10 on an ongoing basis, since DST has some degree of control over the application development and deployment.
  • Customers who use other DST transactional systems such as TA2000, tightly integrated with AWD. These will undoubtedly be convinced to upgrade the infrastructure, but may decide to stick with their legacy AWD applications unless they can see clear reasons why they need to take advantage of the new functionality. Rewriting their applications will take time and holds some degree of operational risk, so they may stay on the legacy apps (although on the new infrastructure in order to remain supported) for some time.
  • Customers who do not have tight integration between their transactional systems and AWD may also stick with their legacy applications; at the point that they are forced to upgrade (either because of support issues in the future, or because they need newer functionality), they may choose to evaluate other BPMS along with AWD. For DST, this represents a risk that they may lose a customer, or at least the BPMS part of their business, although the existing customer relationship may allow them to combat this.
  • Customers with no other DST products besides AWD. This is a big risk for DST, since there is little reason for them not to evaluate other BPMS at the point that they need to rewrite their applications. This is also true for new DST customers where they are only looking for BPM/ACM, not the other transactional systems, as they are more likely to find outside North America where the DST transaction processing systems are less commonly used.

DST has a lot of low-hanging fruit in the first two of these categories, and the existing relationship will probably see them through a lot of the third. However, the BPMS-only customers are going to be the challenge, since they will be selling AWD against other BPMS that are further along the technology curve. They do have some strengths, but their biggest strength by far is their existing customer base and the close relationships that they have with those customers.

That’s it for me and AWD Advance; this has been a really interesting view into a very different sort of BPM vendor, and I look forward to seeing how their technology matures and the path of their customers in the future.

AWD Monitoring Technical Deep-Dive

Great keynote at AWD Advance this morning by Captain Michael Abrashoff, author of It’s Our Ship, a book on leadership; I confess to tearing up a bit when he described how he supported and encouraged the young people who worked for him, and hope that I did a fraction as well when I ran a company.

Back to business, however, I’m in the technical session on AWD monitoring and business intelligence, following on from Kim Smyly’s introduction to the new monitoring yesterday, where Dirk Luttrell and Bob Kuesterteffan are giving us a peek under the covers for their new monitoring offering. They are implementing dimensional data modeling in their new offering – which, as I pointed out yesterday, is based on Oracle’s BI – in order to provide better business-based metrics and analytics. We got a brief tutorial on dimensional data models (star schemas in relational databases, or cubes in multidimensional databases), making me wish I was paying a bit more attention when my other half was talking about how he was implementing one of these in his data warehouse. In short, relational data models are organized around transactions, whereas dimensional data models are organized around business entities and information. Business entities are represented in fact tables, and dimensions are key to selecting, sorting, filtering and summarizing the data contained in fact tables.

The core AWD data is based on relational models, since it is a transactional system, but both the process and line-of-business data in AWD can be published to the dimensional (star) model for easier reporting and monitoring. If you’ve ever written a report or dashboard based directly on the process transactional data in a BPMS (which I have), you know that it’s not pretty: BI tools are optimized for dimensional data models, not relational transaction models. In the past AWD has allowed for reporting directly against relational models, but it was (is) not very flexible and could be prone to performance and scalability problems, requiring either extremely complex (and compute-intensive) queries, or denormalization and data duplication. Furthermore, it requires that report writers know and understand the underlying relational data model since they’re writing directly against that physical schema, which further locks in the core AWD product to that schema rather than being able to mask it behind a logical data schema.

In the new dimensional data model, they represent business entities directly: work items, queues, users and various other attributes of work including time dimensions. They also include a single line-of-business data dimension for all LOB fields (this seems like they are relational-izing their dimensional model, but I can understand the administrative and design complexity if they didn’t do it this way), so that fields such as account number can be used to cross-reference to other systems or for filtering, searching and sorting within the BI context.

They are creating the following fact tables:

  • Assigned work fact, with dimensions regarding when and to whom a work item was assigned and unassigned, and the current state regarding assignment and work selection. This is used, for example, to report on assigned work by user.
  • Completed work fact, which tracks work steps as they are completed, including duration, user experience level and other information about how the work was completed. This is used for reporting on work that was completed.
  • Locked work fact, tracking items when they are locked by users: who, when and how. As with assigned work fact, this is used for reporting on work locked by a particular user.
  • Login status fact, tracking when users log in and out, and whether they are currently logged in.
  • Queue fact, tracking work as it moves from queue to queue, and the status that each work item is in.
  • Suspended work fact, including when items are suspended and unsuspended, and who did it.
  • Work fact, which including historical information on work but includes a “current” flag to filter for just work that is in flight.

[This is probably way more detail about their dimensional data than you’re interested in, but I blog because I have no memory, and this is my only record of what I see here. That’s right, it’s really all about me.]

Given that the same underlying relational model will still be there in AWD, customers can continue to use the existing AWD BI (which would hit against those tables), but I’m guessing that a lot are going to want to move over in order to take advantage of the ease of use, performance and scalability of the new BI environment. They’re also planning on some future features such as scheduled report delivery; I’m not sure which of the new and upcoming features are based purely on the underlying Oracle technology, and how much that they’re building themselves, but if they’re smart, they’ll leverage as much of the Oracle BI package as possible. They also need to figure out how to integrate/publish to enterprise data warehouses, and work up full replacement functionality for the current BI product so that it can be retired.

Managing People And Work In AWD (with @amv0920 and @Arti_Acharya)

Management of users, roles and groups in AWD is fully featured, but has its roots in functionality that was created decades ago. There are currently 15 different screens used to manage users, roles and groups in AWD today, and in many cases, they need to be visited in a very particular order to make something happen.

DST is in the process of rewriting the user management functions, and Angela Veach and Arti Acharya (the experience designer) presented the wireframe designs in progress. This is greatly simplified in terms of the number of screens and in terms of the language used on those screens, such as:

  • Create a new user, specifying general attributes such as name, user ID, security level and work group. This can be done using another user or a model user as a template, such that privileges, experience levels and resources are inherited from the model.
  • Manage what they can work on, by assigning one or more roles, assigning individual privileges such as specific business areas or work types that are beyond the capabilities of the assigned roles, and assigning experience level.
  • Manage what they can see in AWD, by assigning security group, and additional individual resource access control grouped by product/capability.
  • Specify resource-specific attributes, which are the additional parameters required for the different capabilities to which they have access, e.g., the signature that will be used for correspondence generation if they have access to the correspondence capabilities.

They’re still working out the details on this, and are actively soliciting ideas from their customers in the audience. There are a lot of options here, such as whether selecting a model user should replace or augment the existing privileges on a user account.

This appears to be a new interface on the existing structure of users, roles, skills and permissions, rather than a new underlying structure, meaning that it doesn’t impact much in terms of operational functions (except a new dialog to select their primary workspace if they have been assigned to multiple), mostly just these administration screens. There is a still a very complex structure that needs to be well-understood by an administrator, but at least the administration screens will make it easier to implement. Lots of happy sysadmins in the audience.

As with case management, this is unreleased functionality still under development, likely to be released in 2013.

This was the last session of this first day of AWD Advance 2012; we’re off to the reception and conference dinners tonight, and will resume tomorrow. I have been assured that dinner will not involved Lipizzan stallions or palaces, although I might see a cow sometime before I leave tomorrow.

Case Management In AWD 10

Judith Morley presented on their new case management capability; she started from some pretty basic principles explaining knowledge work, so likely a fairly novel capability for most of the audience.

She described case management as a new application or user interface, meaning that the AWD 10 BPM capabilities are there as part of it, but it has additional capabilities such as collaboration, content, ad hoc processes and deadlines. This circles back around the ongoing discussions in the industry about the relationship between BPM and ACM; certainly, process is a part of ACM (even structured process), but it’s more than that. They did research with their own BPO companies and some of their customers spanning retirement, mutual funds, insurance and healthcare industries, and came up with four design imperatives for a case management solution:

  • A humane way of working with files
  • Reorienting yourself to a case: making it easy to pick up where you left off after some time away from the case
  • Immediate responsibility versus ultimate responsibility: understanding ownership and responsibility for meeting milestones
  • A system that suggests rather than dictates: supporting the knowledge worker rather than enforcing a specific process

The primary workspace now for knowledge workers (as defined in their profile) is a dashboard listing their top 10 tasks – as defined by what they own and due date – and a task forecast for the next three weeks, then their top 10 cases and the case workload of all members of the worker’s team. There are two other tabs for cases and tasks; on each of those are interactive filtered views of the cases and tasks in progress. Both cases and tasks are types of AWD work items (with a predefined process model, even if just a single-step user task), with tasks being children of cases; opening a case or a task takes you to a view of that work item with the related data, content and activity. Tasks can be added to a case by the worker, using a template, and content can be added at the case or task level. Messages get passed around between cases and their tasks to allow for processes to be started, paused and rendezvoused appropriately. Cases can be created from templates as well, where a case template contains one or more tasks of any degree of complexity. Both task and case templates are, in fact, templates: if they are changed, work that is already instantiated is not impacted. Furthermore, cases can be organized into folders as a collection mechanism, although folders are not routes as cases and tasks are.

This is not yet a released product: it’s scheduled for the end of 2012 or the beginning of 2013, and they are currently researching different representations that they might create of manager and team views, as well as reporting on knowledge work. This latter issue is one that I’ve been talking about a bit lately, and proposed it as one of the “unanswered questions” in my presentation on the nature of work at last year’s academic BPM conference.