Process Improvement ~ Patterns for Success

1. Process Improvement ~ Patterns for Success David Keyes BPM Sales Executive IBM Software Group, North America

2. Agenda • The Complexity Challenge • Patterns for Success • Business Process Management • Business Rules Management • BPM plus Business Rules Mgmt • Business Events with Business Rules • Break • BPM in Action - Demo • 11 Habits of Highly Successful BPM Projects 2

4. Have You Experienced this Issue? Complexity Complexity IT Budget IT Budget 4

5. Complexity exists internally within organizations…… Insurance Carrier AutoLOB Internal Employees Finance CommercialLOB Sales HomeLOB Marketing 5

6. ….and externally within the broader business network Companies need end-to-end process management Partners &Re-insurers Agents & Producers Insurance Carrier InternalEmployees Con-sumers AutoLOB Con-sumers CommercialLOB HomeLOB DMV Out- sourced Service Providers Financial Institutions 3rd PartyServices To orchestrate human tasks… … to increase visibility… … to manage exceptions and cases… … and for scalable transactions… … everything you need to manage end-to-end business networks 6

7. Can Your Processes Handle Change, Uncertainty and Complexity? Transformation Today Means: • Simpler Business Led Change • Full Process Visibility and Governance • Optimized Processes and Decisions Agile Processes and Decisions withBusiness Process Management 7

8. Process is everywhere Campaign Management Account Opening Vendor On-boarding Claims Processing Order Fulfillment Customer Problem Handling 9

9. Agenda • The Complexity Challenge • Patterns for Success • Business Process Management • Business Rules Management • BPM plus Business Rules Mgmt • Business Events with Business Rules • Break • BPM in Action - Demo • 11 Habits of Highly Successful BPM Projects 11

10. Key Technologies for Process Improvement Event Event Event Correlate business events and detect critical business situations Monitor and report on data to provide real-time insight Derive deep understanding of data with analytics data data Orchestrate business processes and human task applications Automate high-volume operational decisions with business rules data data • Business Process Management improves the orchestration of people and systems • Business Event Processing improves situational awareness and response • Business Rule Management improves the quality of automated decisions • Visibility and Analytics enables continuous process improvement 12

11. Solution Pattern 1Business Process Management Monitor and report on data to provide real-time insight data data Process is invoked Orchestrate business processes and human task applications ApplicationServices and Data data data • Business Process Management improves the orchestration of people and systems 13

12. 1 3 6 5 2 4 Typical process problems Customer Service Finance and Ops Account Administration • Unstructured Tasks and Communication (ex Paper or email) • Inefficient Working Environment Spans Systems • Inconsistent Prioritization • Incomplete or Inaccurate Data Flow Between Systems • Lack of Control Over System and Business Events (Exceptions) • Poor Visibility Into Process Performance 1 Executive Management 2 3 Invoice Reconciliation Teams 4 5 6 14

13. BPM brings order to the chaos Finance and Ops Executive Management Account Administration • Automate workflow & decision making • Reduce errors and improve consistency • Standardize resolution across geographies • Leverage existing systems and data • Monitor for business events and initiate actions • Real-time visibility and process control • Customer Benefits: • Huge Reduction in Manual Work, Errors • Faster, More Consistent Issue Resolution • Easier to Manage the Business • Consistent Case Handling 1 Risk ManagementTeams 2 Customer Service 3 4 5 6 15

14. Billing ERP CRM Imaging BPM Leverages a Service Oriented Architecture (SOA) Finance & Ops • BPM can abstract the “business process” from underlying systems and services. • Over time, IT can consolidate those services into a common set of services within one SOA layer. • Users of the process are not affected as services and systems are merged, replaced, or updated. Invoice Reconciliation Teams Executive Management Customer Service Account Administration BPM SOA Systems

15. Process Improvement Requires A “Third Way” Flexibility BPM Process-improvement requirements are likely to be unique, which favors build rather than buy. And the timeframes and costs of both are often not compatible with process improvement, so a ‘third way’ is required. Build “Third Way” + + - - Customized Unique High TCO IT bandwidth Buy + + - - - Reduced time Initial Cost Standard Feature set Reliance on vendor Response to Change Low cost/time

16. The Full Spectrum of BPM is Daunting Highly complex processes typically found in global enterprises Somewhat complex processes common to global & mid-market companies Simple processes common to all sizes of businesses IBM Business Process Manager Process Complexity IBM Blueworks Live Individual Processes 2.5% 22.5% 75.0% 18

17. How is Process Discovery done today? 19 • Figure it out yourself • Lock the team in a conference room for day(s) • Sticky notes • Butcher paper • Whiteboard drawings • Back and forth till you finally understand your process • Scribe it all down • Convert it to a diagram/drawing

18. Accelerate Change by Improving the Way You Work Streamline, document, and run processes • Anyone can improve a process • Automate work run through email • Easily document processes • Gain control and insight • Instant dashboards for visibility • Reporting for improved governance • Collaborate for better results • Team up in secure private workspace • Leverage public expert community The best way to engage line of business users in process discovery, documentation, and simple process automation Simple. Social. SaaS. http://BlueworksLive.com 20

19. Business challenges at Lincoln Trust Company Leading independent provider of trust and custodial services • Paper overload • 100,000+ client requests per month each generating a paper-based process instance • Poor IT-business relationship • Paper problem was understood but limited IT/Business collaboration prevented improvement 21

20. Partnering for process improvementLincoln Trust developed an aligned process focus across the company Joint LOB-IT executive steering committee and a small BPM team developed a 2-part strategy for process improvement: Quickly address key pain point Business-led automation for full business processes 2 1 • Common “shared process” for document imaging and automation using content management tools • Removed physical paper from 145 company processes • Business teams created “as-is” and “to-be” process models using IBM Blueworks Live • IT teams implemented automated workflows for 15 processes including service requests, plan establishment, and distributions 22

21. Process Improvement Benefits at Lincoln Trust • Best Practices • Build a partnership between business and IT • Focus on business value – be willing to trade-off for an initial project • Include process analysis skills on BPM teams, but don’t over-analyze • Results • $2.2 millionin savings to date • 120%ROI in one year • 25%increase in employeeproductivity • 50% - 75%reduction in cycle times 23

22. Introducing a new solution to a complex problem Embrace complexity, adapt quickly and exceed expectations Simplicity Power Simple, easy-to-use modeling using standard BPMN Immediate“playback” for rapid collaboration Process rule editor uses ILOG language Industry standard BPEL orchestration Built-in ESB and integration adapters Transaction support Governance Visibility Single repository of all process assets “Toolkits” for sharing assets Simple snapshot versioning (1-click) Centralized deployment control center (1-click) Real-time process scoreboards “Heat maps” show bottlenecks in process model Real-time reports delivered within process “coaches” 24

23. 25 IBM Business Process Manager V7.5 Design Improve Deploy Measure Process End-Users Process Owners Business & IT Authors IT Developers Process Designer Integration Designer Authors & Administrators Process Center Governance of Entire BPM Life Cycle Versioned Assets Shared Assets Server Registry BPM Repository Process Server BPMN Rules Monitoring BPEL ESB Out-of-box Process Portal ConfigurableBusiness Space Optional Microsoft Add-ons 25

24. IBM Business Process Manager Leverages SOA Infrastructure Billing ERP CRM Imaging Finance & Ops Invoice Reconciliation Teams Executive Management Customer Service Account Administration IBM Business Process Manager Advanced Edition BPM SOA Systems

25. Different configurations match typical entry points or stages in a company’s BPM program Complete set of advanced BPM capabilities Advanced • Extended support for high-volume process automation, with high quality-of-service • Built-in SOA components for extensiveenterprise-wide service integration, orchestration Configured for typical BPM projects Standard • For multi-project improvement programs, with high business involvement • Basic system integration support • Rapid time-to-value: improved user productivity Configured for first BPM project Express • For small number of users – single server,no clustering • Low entry price • Install in a few clicks 27

26. Solution Pattern 2Business Rules Management Monitor and report on data to provide real-time insight data data Business Applications and Processes Application is invoked Derive deep understanding of data with analytics data data Automate high-volume operational decisions with business rules • Business Rules Management improves the quality of automated decisions • Applications and processes use decision results 28

27. Automate Highly Variable Decisions with Precision WebSphere ILOG Business Rule Management System Processes People Applications • Eliminate decision silos • Make decision logic accessible to Business and IT • Implement fine-grained, context-specific logic Business Rule Management System Where Business Rules Typically Exist Rules are Defined, Analyzed and Maintained User Tools Rules are Stored and Shared Rule Repository Documents Rules are Deployed, Executed and Monitored Rule Server 29

28. Business Rules Management using Tools Familiar to the Business to Promote Collaboration Managing Rules in Microsoft Word and Excel!

29. Solution Pattern 3Combining BPM and Business Rules Mgmt Monitor and report on data to provide real-time insight data data Process is invoked Orchestrate business processes and human task applications Application Services and Data Derive deep understanding of data with analytics data data Automate high-volume operational decisions with business rules • Business Rules Management improves the quality of automated decisions • Business Process Management improves the orchestration of people and systems 32

30. Two-Pronged Approach to Process Improvement Rules Management Process Management 33 • Defines and orchestrates the end-to-end process • Combines automation with user interaction • Is fundamentally concerned with operational efficiency of the organization • Defines and executes specific decision points in processes and applications • Is focused on automating and improving decisions • Is fundamentally concerned with the operational intelligence of the organization

31. BRMS Enables a Consistent Implementation of Business Policies BRMS User Tools Rule Repository Execution Server • Streamline processes • Facilitate change • Re-use decision assets • Maximize automation • Improve governance Traditional/Vertical Application Transparent Decision Service Applications & Processes Business Decisions 34

32. Case Study: HealthNow Improved Member Enrollment Processing • Process Management Selected WebSphere BPM to: • Improve operational efficiency & accuracy • Improve process orchestration across multiple systems and decrease process costs • Deliver end-to-end process visibility • Rules Management Selected WebSphere ILOG JRules for: • Straight-through eligibility determinations • Compliance enforcement • Accelerate implementation of decision changes • New Enrollment System Benefits • Time-to-market gains of over 50% • Ability to introduce new policies into systems in days rather than weeks or months • Reduction in enrollment time and costs • Increased business and IT collaboration • Comprehensive audit trail • Situation • Multiple legacy systems • Highly manual, disjointed processes • Difficulty in adapting systems to meet new regulatory and customer requirements 35 “…enabled us to automate, optimize and monitor critical business decisions within core processes” John Walsh, Chief Enterprise Architect, HealthNow New York Inc 35

33. Common Use Cases Improve Workflow Claims handling, end-to-end loan origination, grants approval, customer service / call center, engineering change management Handle Business Exceptions Billing disputes, invoice reconciliation, distressed shipment rescue, proactive error reduction Compliance Oversight Disclosure filings, legal reviews, permit approvals Improve Visibility Bridge siloed applications, unified user interface, end-to-end monitoring Straight-through Processing Eligibility determinations, pricing calculations, promotional offer selection, claims assessment and benefits determination Risk Mitigation Credit eligibility determination, liability calculations, fraud assessment, product configuration review Compliance Oversight Multi-level regulatory requirements enforcement, contractual terms administration, legal document selection Decision Support Service level assignment and case prioritizations, product recommendations, self-service problem resolution Rules Management Process Management 36

34. Solution Pattern 4 Combining Business Events and Business Rules Event Event Event Correlate business events and detect critical business situations Monitor and report on data to provide real-time insight data data Orchestrate business processes and human task applications Derive deep understanding of data with analytics data data Automate high-volume operational decisions with business rules • Business Events Processing improves situational awareness and response • Business Rules Management improves the quality of automated decisions 37

35. Business Event Processing and Business Rules Management Together : Additional Insight for Action Decide (BRMS) Detect (BEP) Event Sources Evaluations Correlations Actions Actions BEP - Detects when events or patterns of events occur to notify people or systems to take action BRMS - Decides business outcome through execution of business rules against available data 38

36. Automate and Improve High-Volume Operational Decisions IBM WebSphere Decision Server v7.1 • WebSphere Decision Servercombines • WebSphere Business Events and WebSphere ILOG JRules • Detect critical events across the business network and automate precise, context-specific decisions WebSphere Decision Server Combined rules and events capabilities to power flexible decision management solutions • Major American Utility Company delivers electricity to 2 million customers in a 5,000-square-mile area • Smart Grid is a top priority: • Business Events Processing is used for detecting events and event patterns from Smart Meters as they occur • Business Rules Management increases automation of follow-up decisions on Smart Meter alerts, based on the collective knowledge of operational subject matter experts Can be used for fully automated interactions, or… …for decision support in the back-office, or… … to provide decision guidance for personal interactions with customers 39

37. “Complexity should not be viewed as a burden to be avoided; we see it as a catalyst and an accelerator to create innovation and new ways of delivering value.” Juan Ramon Alaix, President, Pfizer Animal Health Think big Start small Scale fast 40

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