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.
Copyright The Financial Times Limited 2009. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.
Showing posts with label BPM. Show all posts
Showing posts with label BPM. Show all posts
Monday, November 02, 2009
Wednesday, January 14, 2009
Look to the clouds as the perfect storm rages
Look to the clouds as the perfect storm rages
By Jon Pyke, chief strategy officer, Cordys
Published: January 14 2009 16:50 | Last updated: January 14 2009 16:50
The change that the world is currently going through is what recessions are all about. Fast, inevitable and unavoidable. But we do not have to be passive onlookers while these forces do their worst.
To lead in this business environment is to embrace change. That means the underlying business processes and operations must be both thorough and quickly adaptable. It is no longer just what you do that counts, it is how you do what you do – and how quickly you can modify your methods to take on new opportunities and challenges.
Organisations need to transform themselves into agile operations but, unfortunately, the IT organisation, responsible for facilitating changes demanded by the business, often falls short.
Many studies and surveys show that changes to IT infrastructure and applications are fraught with complexity, costing more and taking much longer than anticipated. It is not uncommon for an IT organisation to take five or more years to make significant enterprise-wide changes.
Another issue straining relationships between business and IT is the difficulty in finding common ground for the communication between the two areas of the organisation. Business people often have a poor understanding of the existing business processes that they wish to improve, and very limited visibility into how effective these processes actually are. They also often lack sufficient technical expertise to specify their requirements.
This constant friction resulted in what is known as the “IT Gap”. Instead of being in a position to help the business become more competitive, IT has to invest most of its budget (historically greater than 70 per cent) in maintenance of existing legacy systems and applications.
Being able to invest more in “new development” and innovation to increase business agility and efficiency are top priorities for most progressive CIOs.
One way to help organisations become more efficient and agile is business process management. BPM is designed from the outset to enable businesses to discover how their processes work, how to measure them, and optimise them but also to execute them and change them when needed.
The technology has a chequered past which has resulted in a hotch-potch set of solutions growing out of an older technology, workflow automation, and a strictly IT solution known as enterprise application integration. Attempts to create a credible BPM solution by stitching together workflow and EAI technologies has yielded poor results.
Now is the time to take advantage of this new opportunity. The “perfect storm” we are in is bringing to the fore new ways of working, transforming the relationship between IT and business – and at its centre is “the cloud”.
Computing is fast becoming a cloud – a collection of disembodied services assembled from anywhere and detached from the underlying hardware. Businesses are becoming more like technology itself: more adaptable, more interwoven and more specialised.
On one level, the cloud will be a huge collection of electronic services based on standards. Many web-based services are built to be integrated into existing business processes. IT systems will permit organisations to become more modular and flexible and this will lead to further specialisation. In the cloud it will become even easier to outsource business processes, or at least those parts of them where firms do not enjoy a competitive advantage.
This also means that companies will rely more on services provided by others.
There will be not be just one cloud but a number of different sorts: private and public, which themselves will divide into general-purpose and specialised. People are already using the term “intercloud” to mean a federation of all kinds of clouds, in the same way that the internet is a network of networks. And all of those clouds will be full of applications and services.
It will take time to move towards this paradigm and the organisation cannot close its data centres and throw away its old systems overnight. The migration needs to be systematic and thorough.
As a final point we should turn the clock back 10 years to when the world was obsessed with the millennium. While organisations were checking millions of lines of code two students took another look at an everyday problem.
The students focused on how searching across the internet worked. The main search engines of the day were turning themselves into web portals and destinations. The students came up with an elegant solution and Google was born.
Copyright The Financial Times Limited 2009
By Jon Pyke, chief strategy officer, Cordys
Published: January 14 2009 16:50 | Last updated: January 14 2009 16:50
The change that the world is currently going through is what recessions are all about. Fast, inevitable and unavoidable. But we do not have to be passive onlookers while these forces do their worst.
To lead in this business environment is to embrace change. That means the underlying business processes and operations must be both thorough and quickly adaptable. It is no longer just what you do that counts, it is how you do what you do – and how quickly you can modify your methods to take on new opportunities and challenges.
Organisations need to transform themselves into agile operations but, unfortunately, the IT organisation, responsible for facilitating changes demanded by the business, often falls short.
Many studies and surveys show that changes to IT infrastructure and applications are fraught with complexity, costing more and taking much longer than anticipated. It is not uncommon for an IT organisation to take five or more years to make significant enterprise-wide changes.
Another issue straining relationships between business and IT is the difficulty in finding common ground for the communication between the two areas of the organisation. Business people often have a poor understanding of the existing business processes that they wish to improve, and very limited visibility into how effective these processes actually are. They also often lack sufficient technical expertise to specify their requirements.
This constant friction resulted in what is known as the “IT Gap”. Instead of being in a position to help the business become more competitive, IT has to invest most of its budget (historically greater than 70 per cent) in maintenance of existing legacy systems and applications.
Being able to invest more in “new development” and innovation to increase business agility and efficiency are top priorities for most progressive CIOs.
One way to help organisations become more efficient and agile is business process management. BPM is designed from the outset to enable businesses to discover how their processes work, how to measure them, and optimise them but also to execute them and change them when needed.
The technology has a chequered past which has resulted in a hotch-potch set of solutions growing out of an older technology, workflow automation, and a strictly IT solution known as enterprise application integration. Attempts to create a credible BPM solution by stitching together workflow and EAI technologies has yielded poor results.
Now is the time to take advantage of this new opportunity. The “perfect storm” we are in is bringing to the fore new ways of working, transforming the relationship between IT and business – and at its centre is “the cloud”.
Computing is fast becoming a cloud – a collection of disembodied services assembled from anywhere and detached from the underlying hardware. Businesses are becoming more like technology itself: more adaptable, more interwoven and more specialised.
On one level, the cloud will be a huge collection of electronic services based on standards. Many web-based services are built to be integrated into existing business processes. IT systems will permit organisations to become more modular and flexible and this will lead to further specialisation. In the cloud it will become even easier to outsource business processes, or at least those parts of them where firms do not enjoy a competitive advantage.
This also means that companies will rely more on services provided by others.
There will be not be just one cloud but a number of different sorts: private and public, which themselves will divide into general-purpose and specialised. People are already using the term “intercloud” to mean a federation of all kinds of clouds, in the same way that the internet is a network of networks. And all of those clouds will be full of applications and services.
It will take time to move towards this paradigm and the organisation cannot close its data centres and throw away its old systems overnight. The migration needs to be systematic and thorough.
As a final point we should turn the clock back 10 years to when the world was obsessed with the millennium. While organisations were checking millions of lines of code two students took another look at an everyday problem.
The students focused on how searching across the internet worked. The main search engines of the day were turning themselves into web portals and destinations. The students came up with an elegant solution and Google was born.
Copyright The Financial Times Limited 2009
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