Benenden Healthcare Society BPM case study #appianforum

Ian Grant of Benenden Healthcare Society, a UK not-for-profit, user-pay healthcare provider with almost a million members. They had a need to improve their business agility, and identified that they needed a new case management system as well as better auditability of the decisions made within processes. They reengineered their processes first, then had their three short-listed vendors build out those processes to see how quickly (and well) it could be done; Appian was the unanimous choice of the selection panel.

They created Service Management System (SMS) to document and manage all interactions with members. Typically, when a member calls in, the service rep accesses all previous case data for this member, gathers some information about what is wrong with the member in layman’s terms – so that the service rep doesn’t have to be a clinical expert – then the rules and processes built into SMS present the services available to that member, and generates the necessary paperwork and follow-on processes. When they go live (soon), they expect to reduce their service rep training time from months to three weeks, and improve their customer satisfaction rating from 95% to 99%. They’ve created some lightly-customized user interfaces that allow for fast information gathering and problem resolution.

During implementation, they completely ignored the current state, and only considered the to-be processes and functionality. Although they had a waterfall requirements process up front with formal signoff, they moved into a more iterative prototype development cycle (although one that seems to have taken a year, so not so agile).

They’ve already achieved two million GBP in savings through renegotiations with their service providers based on their expected future-state process, as well as seeing some improvements across all processes. This is fairly common, since the act of examining and reengineering a business process almost always has the effect of improving it since many of the inefficiencies will be exposed and resolved even before any technology is brought to bear on the processes.

They have involved 85% of the entire user base in some way in the creation of the new system, which has resulted in a high degree of user buy-in since they developed the requirements themselves. They’ve already identified their requirements for the next phase, and are creating the development plan now to deliver that by the end of next year.

I’m left with the impression that there is still a lot of waterfall methodology at Benenden; whether that hinders their efforts will be seen once they’ve rolled out the first version.

Lean Process Improvement Revisited #appianforum

As with Jim Sinur, my schedule is overlapping with that of Clay Richardson of Forrester several times this month. This morning, I heard some new material from Jim, but Clay had much the same presentation that I saw him give at the Forrester Business Technology Forum a couple of weeks ago so I don’t have a lot to add here, although it’s worth reviewing the original post since he had a good presentation on the implications of Lean principles on BPM.

He did have a new bloated-lean-anemic case study about the Territory Insurance Office based on Tom Higgins’ presentation at the BTF; hopefully we’ll see a paper from Clay on this soon.

Appian 6 Release #appianforum

Malcolm Ross was up next to give us an update on Appian 6, being released in GA this week. I had a briefing a few weeks back, so I’ll include my notes from that here for a more complete view.

Appian 6 application marketplaceTheir claim is that Appian 6 is the fastest way to deploy process applications through rapid design and collaboration, rapid deployment, rapid process improvement cycles; they claim that they can complete a production pilot before the big BPM vendors can install their product (I think that they could have the pilot complete before the big guys could sign a contract, but that’s another story). In a nice illustration, one of the Appian tech guys installed and configured Appian 6 on another screen while Malcolm was giving his 30-minute presentation, including deploying an application with process models, forms, rules and reports.

They have some unique technology differentiators to support their speed claims: an integrated portal for creating composite applications and zero-code model-driven design for implementation speed; in-memory architecture for execution speed; easy import and export of applications between Appian systems and the Appian Forum online community using a marketplace paradigm; and seamless migration between their SaaS and on-premise solutions for scalability or changing requirements. To support that, they have a services team and methodology with a CMM-like maturity model built in, including a center of excellence for sharing best practices.

Appian 6 composite app including the ubiquitous Google mapThere have been a number of improvements to the end user interface: intuitive URLs for navigating directly to specific applications, collaborative discussion forums, and realtime user presence. As we heard earlier, the UI has been simplified with tabs across the top to access different applications and areas; in general, there is a lot more glue to pull together the components into complete applications. The portal allows for mashups to be created not just of Appian components and applications, but of other widgets using JSR168 and WSRP, and an application can include different composite interfaces for different roles: in my previous briefing, I saw an application that included different user interfaces for a loan representative, IT staff member, and IT manager, displaying the same data in a different manner depending on the role. Controls to edit the dashboard and create ad hoc reports can be exposed to specific user roles so that they can modify their own working environment; other roles are limited to what the application designer provides to them. The key thing about a composite application built in this environment is that it is task-driven: the process is baked right into the application.

One of the things that I like about this release is the ease of packaging, deploying and exchanging applications. An entire application, including all of its components such as processes and rules, can be exported at XML; this can be managed in a source code control system, or imported into another Appian system while maintaining unique IDs for the components across all systems. This allows applications to be easily moved to and from the Appian Forum marketplace, an on-premise Appian system and a SaaS Appian instance.

Clayton Holdings BPM Case Study #appianforum

Clayton Holdings, which provides risk analysis, loss mitigation and operational solutions to the mortgage industry, have been using Appian’s SaaS solution, Appian Anywhere, for more than a year, and John Cowles from Clayton was here to tell us about their experiences. They have 135 users over 3 business units, with another business unit coming online soon, kicking off 40,000 process instances per month across 50 different process models. They’re doing all of the build and maintenance with 2 primary resources; considering that their first roll-out only took about six weeks, they’re doing a lot quickly without a lot of resources.

They had a number of business challenges, many of them triggered by the meltdown of their financial/mortgage client base that reduced the amount of work that they had and called for tighter controls. They didn’t have a lot of visibility into their processes and metrics, and many of their key processes were manual; typical training time for the business processes was about six months, yet they had a high attrition rate that meant that people were leaving just as they became capable at the processes. With little internal IT bandwidth and slashed budgets, they decided on a SaaS solution to allow them to try out BPM without a lot of up-front costs or IT efforts.

They had some specific goals for their BPM implementation, particularly around having process visibility (and auditability) and reducing training time, plus reducing process variability by making decisions based on metrics. Their initial project team was the EVP of business operations, about eight subject matter experts, two process efficiency team members and one business analyst.

They do monthly releases with new or modified process models or UI enhancements; most processes are kicked off using web service calls driven by exceptions from Clayton’s internal systems, although they don’t integrate from Appian process instances back to the internal systems. Users can also instantiate processes manually from their dashboard as required, but most are created from the nightly batch of web service calls.

They see Appian Anywhere as a platform for building applications, and hope to replace some of their traditional development with assembly of components into applications using Appian.

Some of their benefits: 38% less headcount in spite of an increased workload to manage delinquencies, 100% more average value adds (e.g., where they detect a previously-overlooked revenue opportunity for their customers such as a penalty payment) per FTE, and the ability to shift the workload to geographic areas with lower costs because it’s all in the cloud. They have much better process monitoring, including reporting on their key metrics, and because of that have identified other process improvement opportunities.

Their lessons learned and best practices:

  • Focus on change management and process management early
  • Find net promoters and over-communicate rather than under-communicate
  • Limited or no system integration in first releases
  • Prototype everything
  • Frequent releases, e.g., monthly
  • Challenge the desire to simple push current variability into the new tool, i.e., don’t just pave the cowpaths
  • Emphasize the reporting desires up front since it influences design
  • Resist temptation to start at detailed level of a process

In the future, they plan to bring in another business unit and focus on integrating Appian with internal systems in order to reduce manual rekeying of data between systems. They’re also going to look at some internal process, such as HR and Legal.

Appian Corporate Update #appianforum

Matt Calkins gave us a brief address at the customer dinner last night, but there are many more people here today, and he provided a more in-depth review of the corporate picture. Amongst other indicators are a revenue increase of 150% and active customer increase of 58% in 2009: I’m seeing numbers like this from many of the midsized BPMS vendors, supporting my impression that the BPM market continues strong even in the face of an economic downturn.

Their new corporate slogan is “BPM Accelerated”, referring to both speed of creation and operational speed. Speed to create results in quick ROI and reduced risk while satisfying constituencies; speed to operate results in customer satisfaction, better cost structure and enables the optempo opportunity to adapt to changing conditions. Given their new professional services offerings “Live in 10” and “Live in 20” – meaning a fully operational production system in 10 or 20 days – supports their goal of implementation speed.

Appian is creating a new BPM implementation methodology based on the idea that great processes evolve, they’re not invented: the ability to gradually change a process in order to optimize it is a key factor. I completely agree with this very Agile tenet: if you can’t change your processes gradually over the first few months of operation, they will be unable to properly support your business.

He highlighted some of the new features in Appian 6, such as an application focus both in user interface and deployment. He also emphasized the benefits of their real-time architecture, that allows for subsecond response time for process data, rules and reports from the instance data stored in Appian’s proprietary database combined with the full business data in a relational database. They’ve taken a page from Google’s book and made their UI as minimalist as possible, displaying only the features that the user really needs, in order to make BPM as easy to use as email.

The old Appian Access online community has been rebranded as Appian Forum, and expanded to include a library of free applications (created by Appian, partners and customers) with a starting point of 25 applications contributed by Appian based on customer requests: again, speeding time to implementation for these types of processes.

Don’t Underestimate the Impact of BPM #appianforum

It’s the third time this month that I’ve been at a conference with Jim Sinur of Gartner, and he’s giving the opening keynote here at Appian’s user conference. Although a lot of the local people are held up due to weather and traffic today, they’re expecting over 300 people here: a huge success given the poor attendance and even cancellations that we’ve seen with other BPM events this year.

He started out with some stats on the companies who submitted their achievements for Gartner’s BPM excellence awards: some outstanding examples of executive support and ROI, although you have to keep in mind that these are self-selected as “excellent”. There were, however, some unexpected results and out of the box thinking, where benefits from one organization were used to help those who were less fortunate, or unstructured processes were used to gain process improvement.

Unstructured processes used to handle exceptions within a more structured process are no longer considered unusual, but are a standard part of many processes that need to adapt to shifting conditions: they need to be considered an integral part of a business process rather than something to be avoided. Today’s agile processes allow businesses to deal with known exceptions, by allowing rules or processes to be changed on the fly, but future-thinking organizations have to be looking for unknown exceptions, and allowing their processes to be adapted for any scenario that might arise. There’s a huge amount of information that drives these scenarios and their early detection, including events from multiple disparate systems: the key is to look for patterns and understand the impact that they will have on your organization.

He outlined four disciplines of pattern-based strategy:

  • Pattern seeking, to seek and exploit signals that apply to you, particularly through collaborative knowledge
  • Optempo (operational tempo) advantage, to dynamically match organizational pace to changing conditions, requiring a harmonized and synchronized view of patterns across the organization
  • Performance-driven culture, to adapt to changing patterns in order to achieve target results
  • Transparency, enabling pattern-based strategy by exposing signals earlier

BPM is one of the technologies that helps organizations to adapt to the patterns, once they have been discovered and modeled in a seek-model-adapt cycle. We’re moving from managing processes to managing chaos, and pattern-based strategies are part of that.

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.

Appian Forum: Wrap-up

Samir Gulati returned for a brief wrap-up of today’s event before we headed for cocktails and the technology showcase, with Malcolm Ross describing the technical sessions that will be held over at Appian headquarters tomorrow, and Matt Calkins thanking us all for being here.

There are sessions tomorrow targeted primarily at their customers, including one-on-one executive briefings, so I’ll be headed over to the Gartner BPM summit in the morning instead.

I was impressed with Appian’s first user conference, which had great content and was well-run. Kudos to the whole team.

Appian Forum: Mercer

Chris Gardner, VP of Development at Mercer (who provide HR consulting, HR outsourcing and investment management services), presented the last session of the day; Mercer Outsourcing, with which he is affiliated, provides HR benefits administration.

They rolled out their first 3 processes in April of this year, with the BPM projects involving IT, their operational effectiveness practice and the operational units. Their key drivers are to drive out costs through increased productivity, increase automation of process steps and integration between systems, and standardize processes. Previously, it was difficult for them to reuse or even standardized processes across clients, and many processes required that disparate systems be integrated through human effort. Although in many cases, they thought that they had standardized processes, forcing them onto a common platform exposed their process variability and allowed them to address it directly.

Their benefits from implementing BPM include reduced errors, reduced cycle time, increased SLA attainment (hence reduced penalties for violating SLAs), and greater user productivity (and therefore reduced staffing requirements per client, key since their business in expanding). Automating steps and standardizing processes also allows them to offshore some parts of their processes, reducing costs even further.

Unlike most of the other case studies today, which focused on the human workflow side, they make extensive use of web services for increased automation and, where possible, straight-through processing. One of their projects was an unattended data extraction and file transmission application, where data was extracted from their system via web services calls to an ETL tool, PGP encryption, and FTP of the resulting file to the appropriate third party. Now, the only time that a person is involved in this process is for exception handling, and they have it rolled out to 60 client teams transmitting more than 500 files per week, with 85% of the transmissions being completely hands-off. This creates very different process design challenges than with primarily human-facing processes, such as handling web service unavailability. Even for the hands-off processes, they generate various reports directly from Appian as input to their compliance requirements.

The second application that they’ve implemented manages inbound data files, where Appian acts as an orchestration engine coordinating tasks spreading across their own proprietary systems and other commercial systems. They surface many of the errors and exception handling through Appian, which is  exactly what you should be using an orchestration engine for.

He was very excited to hear about Appian’s earlier announcement about ShareBase, since he feels that they have a lot of intellectual property that they share without compromising their own proprietary methods and processes, and encouraged other clients to participate fully in this.

Appian Forum: Accelerating BPM Adoption Through An Integrated Business Framework

I skipped out on the breakout sessions this afternoon, but am back here for Michael Melenovsky — formerly with Gartner, now senior BPM leader at Satyam — discussing how to accelerate BPM adoption through an integrated business framework: more of a methodology framework than a code framework, however.

He listed the three ways in which BPM projects are initiated, and how that influences the approach to be taken:

  • Executive leadership, where an executive goes to seminar or reads an article on BPM, and says “hey, let’s get us some of that”. The objective is strategic alignment and increasing corporate performance; because it’s very top-down, it’s only possible to push down the ideas so far, and often they’re not implemented.
  • Middle management, with the goal of operational improvement and cross-departmental coordination, with the BPMS seen as a tool for modeling processes and standardizing work procedures.The key challenge here is getting buy-in from both the top and bottom.
  • Line of business management, with the objective of improving productivity, decreasing costs, increasing quality, and providing greater agility. The BPMS is seen as a development platform, and 80% of these projects are driven by the IT department. There is no comprehensive vision, and implementation can take a long time.

He points out that the process layer makes explicit the role that people and systems play at each step of the process. Instead of a world where the IT organization must interpret the process, there is little visibility beyond a department’s boundaries, and it takes a long time and technical resources to change a process, the addition of a process layer makes the process model explicit and allows the model to drive the process execution, with process changes made by non-technical people.

There are three different perceptions of BPM, between business people, IT people and process people in terms of what creates the competitive differentiation and the best way to approach BPM. Each of these has a bias, and it turns out that the process people are the best ones to own a process, not the business people as is commonly assumed. The process people can form a bridge between IT and business, and keep the focus on the process rather than either the people or the systems involved in those processes.

He presented some sample requirements that might be included in a BPM project:

  • Business analysts and IT can collaborate around a single executable process model
  • Business can simulate the performance of the process for optimization purposes
  • Real-time monitoring and analytics
  • Task analytics guide human resources in task prioritization
  • Automated human workflow with simple to use task routing
  • Search capabilities for operations to review standard work procedures
  • Task user interfaces that are built quickly using an integrated composite application framework
  • Business rules and policy management for non-technical users to manage and modify

BPM provides value to both business and IT: we usually focus on the business benefits, but IT benefits through reduced solution development time, a more comprehensive architecture (usually in conjunction with SOA initiatives), reduced application maintenance costs, and shifting attention to higher-value topics instead of always being down in the code trenches.

He listed six critical success factors for BPM:

  • strategic alignment
  • culture and leadership
  • people
  • governance
  • methods
  • information technology

These aren’t specific to BPM, of course: any project with a significant technology component will rely on the same factors.

He showed a pyramid with a strategy layer at the top, followed by processes, applications, transactional systems, and tools; most companies are missing the process layer, hence try to go directly from strategy to applications, with high-level business executives stating that they need a specific solution, rather than stating their requirements in terms of a business process.

He walked through the participants in a cross-functional BPM project team, and finished up with getting started with BPM:

  • identify key stakeholders
  • define BPM in the context of benefits
  • determine the phases of value that BPM will deliver
  • develop a 3-year BPM roadmap

Satyam, of course, offers strategy and solution frameworks for BPM projects.