Did IT Work? BPM is finally aligning business and IT

Did IT Work? BPM is finally aligning business and ITBy Stephen Pritchard

Published: November 2 2009 16:44 | Last updated: November 2 2009 16:44

Ensuring that IT is in step with the business is a constant challenge and any tool that allows applications to be developed for the business quickly, using terminology that line of business managers understand, will find a ready market.

One such technology – perhaps the only such technology – is business process management. BPM is not specifically an IT term: rather it is a management practice that sets out to look at how a business runs its processes, improve them, and ensure that the company then keeps running according to that best practice.

IT’s role in BPM is most often associated with a set of development tools that translate business processes or workflows into software. Usually these tools work by modelling the business process visually, so that both IT and non-IT people can see how the application will work.

Once the workflow has been captured, the BPM tool then produces the code for a the new software application in a semi-automated way. The idea is to speed up development times, and even allow non-IT specialists to develop quite complex business applications.

Such is the appetite for business process improvements that companies are continuing to invest in BPM, despite the strictures being placed on other parts of the IT budget.

According to industry analysts Gartner, 37 per cent of companies in North America and western Europe are either thinking about investing in BMP, or have already done so.

One of the attractions of BPM, says Michele Cantara, vice president in Gartner’s business of IT research division, is that projects do not have to be on a very large scale in order to produce a return on investment. “Half of the companies in our BPM awards broke even in the first year,” she explains. “These are not large, intergalactic projects. In terms of project costs, the budget is usually in the range of $400,000 to $600,000.”

Often, BPM projects will be significantly smaller than that. As Ian Gotts, chief executive of Nimbus Partners, a BPM vendor, points out, early stage projects are often in the £30,000 to £50,000 range. This can extend to multi-million pound projects with a two to three year implementation period in industries such as the utilities “where the business case justifies it”.

However, both vendors and analysts agree that early-stage BPM works best where the tool is used to capture a structured business flow with well-defined information. It becomes more difficult to model business flows that depend heavily on human decision-making or judgments, or where information is contained in documents or media files rather than databases.

“Companies focus on process improvements, and so they look [first] at documented or automated processes,” says Ms Cantara. “They don’t necessarily look at human tasks that are part informal work processes; they don’t necessarily look at processes that are more ‘squishy’, ad hoc or collaborative, that might vary from individual to individual or situation to situation.”

None the less, companies are finding that business process management is enabling them to tackle projects more quickly and efficiently than before.

“Modern BPM is a tool that enables a different conversation with the business. It is a visual tool that lets you build both complex and simple business processes in very visual way,” says Toby Redshaw, CIO of Aviva, the insurance company.

Aviva currently has 23 live BPM projects. One, the “Joiners, movers and leavers” system, tracks staff across their time with Aviva, from both an HR, and an information and systems access, point of view. It was built in less than 12 weeks using BPM tools from Lombardi.

“It is an important project from an HR but also a controls perspective,” says Mr Redshaw. “We took a process that is complex and difficult, and we delivered in eight weeks with three weeks testing.”

Mr Redshaw believes that development through BPM is, on average, three times faster than conventional development, and business users are more satisfied with the results.

“They say ‘you IT monkeys finally sent us people who speak our language’,” he says, although he points out that the effectiveness of BPM really comes from the more visual and iterative methods it forces upon both business and IT teams.

BPM was also the route taken by another insurance company, Skandia, when it came to modernising its workflow for handling customer correspondence. Originally, staff would log incoming post into a database, which created work items for distribution to departments. These were then transferred to a number of end user systems.

By using BPM, Skandia was able to centralise its processes into a single workflow system and remove a large amount of laborious administrative tasks, freeing up employees to spend more time with customers.

“Workflow [a BPM product from vendor Tibco] has automated that,” explains Tim Mann, platform development director at Skandia. “The post is scanned in, and the workflow system knows where to send it. It tells a supervisor [which tasks are waiting] and moves on. It has replaced several end-user systems and human supervision.”

Improvements to local workflow methods are saving Skandia £250,000 a year, and rolling the system out to 10 customer services teams equates to £300,000 in productivity savings. Increasing business volumes at the insurer meant there were no job losses, but the business is “doing more with the same resources”.

In addition, Skandia expects to save £150,000 annually by reducing its reliance on paper, bringing lower costs for printing and also transport and storage.

A further benefit, Mr Mann suggests, comes in the form of improved staff satisfaction. “Staff feel more engaged,” he says. “A lot of the work, when it was paper based, was repetitive. Workflow helps them get through it, and allows them to spend more time dealing with policyholders by e-mail or on the phone. Good customer service is about having good people on the phone; that is where we add value.”

Skandia’s experience supports the argument that BPM can work for smaller, more localised projects as well as for larger, business-wide projects. “A lot of it is about streamlining processes, and changing the way you are working, layering technology over the top and making it much more smooth and efficient,” says Mr Mann.

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