Magazine Article | December 1, 2005

BPM Gains Traction

Source: Field Technologies Magazine

Now more than just a buzzword, BPM (business process management) has become a viable means for businesses to improve internal efficiencies and gain competitive advantage.

Integrated Solutions, December 2005

In the June 2004 issue of Integrated Solutions magazine, I wrote our publication's first Understanding Technology column on BPM titled, What's The BPM Buzz All About? In the article I explained the inherent differences between BPM and workflow, examined the purpose of BPM technologies, and explored whether or not the hype surrounding the BPM concept was well founded. Well, a year and a half has passed and interest in BPM is stronger than ever. Moreover, countless business cases now exist that prove BPM technologies deliver solid business benefits.

For 2006, it is no longer a question of whether BPM is here to stay, but more a question of what the technology can do for your business today and what shape the technology will take moving forward. In this Understanding Technology installment, I will discuss the essential features in a BPM suite, how these features can impact your business, and how to know when your business is ready to take advantage of the technology.

"BPM represents the convergence of a number of approaches to process management and automation that have existed for several years," says Bill Priemer, executive VP and COO of Hyland Software. "Ideally, these capabilities should help organizations achieve maximum efficiency in any given process by enabling them to model a process, execute it, evaluate its efficacy, and then adjust that process quickly without having to alter software code." To provide this capability, a BPM software suite must provide features that enable automation, integration, and optimization of business processes in the base price of the product.

Automation features include modeling tools that enable organizations to create "what if" scenarios to simulate the effects of changes to a process. For example, an insurance carrier can use modeling tools to determine the impact to downstream processes if changes were made to a front end claims process. These automation features should also enable users to create event-based architectures which can sense and automatically kick off processes in response to certain events or parameters.

The integration features of a BPM suite should provide several connectivity options to allow the technology to become a natural component of your organization's IT infrastructure. In other words, you should be able to incorporate BPM and still leverage your existing investments without extensive programming requirements. "The integration capabilities of a BPM suite must go beyond just EAI [enterprise application integration] connectivity," says Chris Preston, VP of product marketing for FileNet Corporation. "Integration must take a broader view to include portal connectivity, repository connectivity, rules engine support, and support for SOA [service-oriented architecture] and Web services."

Optimization features include tools such as Business Activity Monitoring (BAM) that provide business managers with visibility into what is occurring in a process in real time. The ability to immediately identify issues that are slowing down the handling of time-sensitive information enables managers to make immediate adjustments and continually improve processes.

Increasingly, BPM applications are being used to help evolve the operational focus from back office operations to more customer-facing activities. "The most interesting trend is the movement away from strict process management to a real focus on performance management," says Preston. "BPM optimization services, coupled with a process execution engine, are fueling this trend by enabling companies to actively drive the performance of their organization. For example, businesses are now aligning and managing key performance indicators including cycle time, cost per transaction, and service response time in line with documented business objectives such as productivity gain expectations and customer satisfaction benchmarks."

Performance management capabilities not only allow businesses to maximize internal efficiencies to reduce operating expenses, they also help companies increase revenue opportunities. "Companies today are focused on growth, and they are using BPM technologies to bring new products and services to market more quickly," says Hyland's Priemer. "The flexibility that BPM tools provide allows IT departments to focus their resources on enabling the delivery of new products, rather than focusing on administering hard-coded integration between multiple systems."

For example, a large healthcare organization uses a BPM solution to process Medicaid claims for state governments. The company's BPM tools provide it with the flexibility to quickly adapt and deploy processes to meet the needs of multiple new clients. They also help reduce training times, prevent necessary actions from being overlooked, and set parameters that prevent actions that do not comply with specific federal and state healthcare regulations.

While BPM technologies provide tools that help businesses continually improve their effectiveness, few of these techniques would be successful without a solid underlying content management process. "Content is an invaluable part of the BPM equation that drives business performance," says Preston. "Not all data is created equally, but all processes rely on some type of content -- whether it be structured content, which resides in a database, or unstructured content, which includes photos, images, faxes, and forms. Processes can be, and often are, triggered by changes in content that is part of a transaction [e.g. a new application, claim, or invoice is received or a technical document is revised]. Both systems and personnel need access to the structured and unstructured information pertinent to the process at hand."

By linking processes with the creation, management, and delivery of content, businesses can facilitate and accelerate information exchange, and more quickly respond to business or transaction events. The right information must be aggregated and delivered to the right people or systems at the critical moment when a decision must be made. This speeds the overall decision-making process and helps companies manage exposure to risk by first enabling the right decision to be made, and then capturing how and why that decision was made. This can assist companies that face regulatory requirements imposed by laws such as Sarbanes-Oxley and HIPAA (Health Insurance Portability and Accountability Act).

While BPM technologies are becoming entrenched in larger enterprises and gaining traction in the midmarket, complete BPM solutions are far from being a necessary course of action for all businesses. "Businesses must look beyond the hype and determine which BPM technologies can add tangible and immediate value to their business," says Priemer. "Organizations must be honest with themselves as to whether or not they will make use of much of the functionality that BPM delivers."

For example, the treasury management operations of large banks feature systems and processes that simply don't change without lengthy assessments and testing. If your organization is structured similarly, the notion of real-time changes to business processes is unrealistic. In instances like these, organizations should consider more pragmatic, if somewhat less sexy approaches. Mature, proven, and enterprise-class workflow systems don't just route documents anymore. They feature Web services and rich API (application program interface) sets that can easily automate system-to-system, as well as human-to-human interactions, for business processes that don't require real-time process transformation. Businesses that see a need for BPM, but have yet to establish a solid content management strategy, should first lay a groundwork of solid ECM and workflow technologies that will allow more sophisticated BPM solutions to be added over time.