Tag: Gartner

Last session of the day, a panel with Jim Sinur, Elise Olding and Michele Cantara on using BPM to survive, thrive and capitalize in a turbulent economy. I realize that this session has the same title as a webinar that Cantara and Janelle Hill did a while back, and there’s a lot of repeat material from that so I won’t bother to recapture it here. There’s a link to the webinar replay in that post, and I recommend checking it out if you weren’t here in Orlando today.

Off to the vendor showcase; that’s it for day 1 of the Gartner BPM summit.

Elise Olding and Carol Rozwell kicked off the afternoon with a session on the hidden costs of unstructured processes: although a lot of focus of BPM efforts (time and money) is on structured processes, as much as 60% of an organization’s processes are unstructured – and probably also unmonitored, unmanaged, unknown and unruly.

Gartner defines unstructured processes as “work activities that are complex, nonroutine processes, predominantly executed by an individual or group highly dependent on the interpretation and judgment of the humans doing the work for their successful completion”, and notes that most business processes are made up of both structured and unstructured processes. Unstructured processes are costing organizations a lot of money in lost productivity, lack of compliance and other factors, and you can’t afford to ignore them. Although most processes aimed to meet regulatory requirements are structured, unstructured processes provide a company’s unique identity and often its competitive differentiation, as well as supporting operational activities.

In order to start managing unstructured processes, you need to get some visibility into them; start by understanding the critical path through the process. This can be a bit tricky, since as you start to map out your unstructured processes, there will be some points at which the process participant just has to wing it and make their own decisions. These are, after all, knowledge workers, and it’s not possible (or desirable) to map every possible process permutation. Instead, map the structured portions of the process, then the points at which it becomes unstructured, but don’t try to overengineer what happens in the unstructured parts. The unstructured parts can be modeled by the notification mechanism (how someone is notified that a piece of work requires attention), the information provided to the participant to allow them to complete the unstructured work, and how the outcome is recorded.

They presented a number of analysis techniques for getting to the heart of unstructured and folklore processes:

• Observe work being done, and challenge tasks that don’t make sense. Keep asking “why”.
• Use storytelling (“tell me what happens when…”) to uncover decision-making logic, methods and best practices: these types of narratives are not well-captured in standard process documentation.
• Analyze the unstructured interactions between people (e.g., customers and CSRs) and extract the themes and patterns. Rozwell wrote a report “Business Narratives Supplement Traditional Data Analysis” that discusses one technique for doing this, although it wasn’t quite clear what it was from the discussion.
• Get clarity around roles and who is the decision-maker in any given process.

There are a variety of different areas of knowledge that you need to consider when analyzing unstructured processes, from identifying what metadata is used for collaboration, to looking at alternative analysis techniques such as mind mapping and social network analysis. Understanding collaborative technologies is also key, since unstructured processes are often collaborative in nature, and make use of the participants’ social graphs.

Their final recommendations are to keep an eye on the technologies that can support unstructured processes, but not to go overboard on monitoring and managing these processes.

Alan Trefler of Pegasystems gave his traditional lunch address – entertaining as always, starting with a “White Rabbit” audio clip – with an Alice in Wonderland theme of how we have to chase our business goals down whatever rabbit hole that they disappear down. Continuing on the theme, he contrasted the “one pill makes you larger” end of the spectrum with monolithic applications, and the “one pill makes you small” end of point solutions, and how you need to look at something in the middle. Don’t be afraid to ask for advice (even from hookah-smoking caterpillars), watch for those delusional Mad Hatter software salespeople, and be sure to meet the needs of the Red Queen boss lady so that you don’t get your head chopped off in the process.

Trefler is a former chess champion, so it’s inevitable that he introduced an Alice-themed chess analogy when examining his recommended steps for implementing BPM:

• Directly capture objectives, so that your BPM implementation is focused on business intents and goals.
• Automate the programming: the computer can write code much better than human beings, which is much less expensive in the long run even if off-shoring development appears to make it cheaper up front. In other words, use a system that allows for model-driven development and zero-code (or near-zero-code) deployment.
• Automate the work wherever steps can be automated.

I love the term that he introduced: “heritage systems”, which are just legacy systems that we like a little bit better, probably because we’ve wrapped them to allow them to be more easily integrated with other systems and processes.

For the next couple of days, I’m at the Gartner BPM Summit in Orlando. Jim Sinur and Janelle Hill gave the opening keynote this morning on BPM in times of rapid change, starting with a view of the global economy: basically, it’s down this year, although not as bad as expected, and the leading economic indicators are starting to trend up.

Gartner did a survey of CEOs in late 2008, and found that their top priority is shifting back from cutting operating costs to increasing revenues, although only by a slim margin. The resulting message: the time to return to business growth is now, and leveraging BPM to assist growth can provide a first-mover advantage if the economy does trend up in 2010 as predicted. BPM still provides assistance in restructuring operations (including mergers and acquisitions) and cutting costs that goes along with a down economy, so you might as well leverage what you’re already using to cut costs, and start looking forward and repositioning for growth. In many cases (in my experience), improving business processes using BPM has the impact of reducing costs of the specific processes, which can either translate to reduced operational costs through reduced headcount, or increased revenues due to the increased capacity of the process to handle new business: these are just two sides of the same process improvement coin.

Going into 2010, most large enterprises have already completed their cutbacks – reduced headcounts, reduced infrastructure, renegotiated contracts and elimination of redundant technologies – but their budgets are going to be pretty flat. If you already have a BPMS in your organization, then this might mean some incremental expansion, but if you don’t, you need to look at how to justify the technology acquisition. Fortunately, that’s getting easier as the capabilities of the BPMS products expand: consider the value of process modeling (reduced redundancy and better use of people in the process) as well as process and application orchestration (automating the linkages between many existing applications) and composite application development environments (bringing together many applications into a single user view).

Focus on improving processes that defend revenue and cash without impacting customer experience, such as order-to-cash, sales processes, and customer service. Depending on your industry, this could also be the time to take some risks in order to gain that first-mover advantage: reconsider institutionalized behaviors and what you might think of as best practices, and see if there’s an innovative way to improve processes that provide a competitive edge. There should be no processes that are immune to change: challenge the status quo. I see this all the time with how companies are embracing social media in addressing customer relationships: the ones that are successful at it are those that throw away all the old ideas about how companies communicate and interact with their customers. These customer-facing processes are no longer about executing transactions, they’re about coordinating social interactions and developing social relationships.

The hot button these days is unstructured processes (which I’m sure that we’ll hear a lot more about this week), and how some new BPMS functionality allows for dynamic collaboration instead of, or within the context of, a structured process. This provides methods for gaining visibility into processes that might exist now only in email or other ad hoc methods, and likely aren’t managed well in their current state.

It’s not good enough, however, to use old-style BPMS/workflow products: you need to be considering products that have model-driven development, composite application development, process discovery and optimization, and customized dashboards for different roles and personas within a process. Otherwise, you’ll just be stuck back in the same old waterfall development methodology, and won’t achieve a lot of benefit from BPM. Interestingly, Sinur and Hill highlighted three specific products to show examples of what they consider BPMS innovation: Vitria’s composite application development, Pallas Athena’s process discovery and simulation, and Global 360’s persona-based user interfaces.

In the recession of the 1980’s, business process reengineering was a high-profile, strategic activity with top executives involved; as the recession eased, the executives’ interest in BPR waned. The same cycle will repeat now: executives are very interested right now in process improvement and BPM, but that’s not going to last when the economy starts to recover, so you may want to take advantage of their interest now and get something going.

You can track the Twitter backchannel for the Gartner BPM summit here.

Michele Cantara and Janelle Hill hosted a webinar this morning, which will be repeated at 11am ET (I was on the 8am ET version) – not sure if that will be just the recording of this morning’s session, or if they’ll do it all over again.

Cantara started talking about the sorry state of the economy, complete with a picture of an ax-wielding executioner, and how many companies are laying off staff to attempt to balance their budgets. Their premise is that BPM can turn the ax-man into a surgeon: you’ll still have cuts, but they’re more precise and less likely to damage the core of your organization. Pretty grim start, regardless.

They show some quotes from customers, such as “the current economic climate is BPM nirvana” and “BPM is not a luxury”, pointing out that companies are recognizing that BPM can provide the means to do business more efficiently to survive the downturn, and even to grow and transform the organization by being able to outperform their competition. In other words, if a bear (market) is chasing you, you don’t have to outrun the bear, you only have to outrun the person running beside you.

Hill then took over to discuss some of the case studies of companies using BPM to avoid costs and increase the bottom line in order to survive the downturn. These are typical of the types of business cases used to justify implementing a BPMS within conservative organizations in terms of visibility and control over processes, although I found one interesting: a financial services company used process modelling in order to prove business cases, with the result that 33% of projects were not funded since they couldn’t prove their business case. Effectively, this provided a more data-driven approach to setting priorities on project funding, rather than the more common emotional and political decision-making that occurs, but through process modelling rather than automation using a BPMS.

There can be challenges to implementing BPM (as we all know so well), so she recommends a few things to ensure that your BPM efforts are successful: internal communication and education to address the cultural and political issues; establishing a center of excellence; and implementing some quick wins to give some street cred to BPM within your organization.

Cantara came back to discuss growth opportunities, rather than just survival: for organizations that are in reasonably good shape in spite of the economy, BPM can allow them to grow and gain relative market share if their competition is not able to do the same. One example was a hospital that increased surgical capacity by 20%, simply by manually modelling their processes and fixing the gaps and redundancies – like the earlier case of using modelling to set funding priorities, this project wasn’t about deploying a BPMS and automating processes, but just having a better understanding of their current processes so that they can optimize them.

In some cases, cost savings and growth opportunities are just two sides of the same coin, like a pharmaceutical company that used a BPMS to optimize their clinical trials process and grant payments process: this lowered costs per process by reducing the resources required for each, but this in turn increased capacity also allowed them to handle 2.5x more projects than before. A weaker company would have just used the cost saving opportunity to cut headcount and resource usage, but if in a stable financial position, these cost savings allow for revenue growth without headcount increases instead.

In fact, rather than two sides of a coin, cost savings and growth opportunities could be considered two points on a spectrum of benefits. If you push further along the spectrum, as Hill returned to tell us about, you start to approach business transformation, where companies gain market share by offering completely new processes that were identified or facilitated by BPM, such as a rail transport company that leveraged RFID-driven BPM to avoid derailments through early detection of overheating problems on the rail cars.

Hill finished up by reinforcing that BPM is a management discipline, not just technology, as shown by a few of their case studies that had nothing to do with automating processes with a BPMS, but really were about process modelling and optimization – the key is to tie it to corporate performance and continuous improvement, not view BPM as a one-off project. A center of excellence (or competency center, as Gartner calls it) is a necessity, as are explicit process models and metrics that can be shared between business and IT.

If you miss the later broadcast today, Gartner provides their webinars for replay. Worth the time to watch it.