Achieving Process Innovation with Business Process Management and Operational Decision Management

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1 Achieving Process Innovation with Business Process Management and Operational Decision Management

2 Agenda Achieving Process Innovation A focus on Process Efficiency & Effectiveness Empowering the business Business & IT Collaboration Next Generation Business Rules Case study examples Lunch Demo 2

3 3 Setting the stage for Process Innovation MasterCard Video From Impact conference, May 1 st, 2012

4 Business Process Effectiveness is the Top Priority for Executives McKinsey s Global Technology Survey found that Improving business process effectiveness ranked as the #1 priority for executives McKinsey Global Technology Survey, December 2011, How IT is Managing New Demands 4

5 McKinsey Global Technology Survey: Process is Still King Process effectiveness and efficiency ranked #1 and 2 overall Even in strategic intent, respondents ranked process above creating new products and services 5 McKinsey 2011 Technology Survey of 927 IT and non-it Executives, December

6 Effective and Efficient Processes Deliver Significant Results Horizon Healthcare speeds up payments to members and providers while achieving over 300% return on investment City of Madrid reduces emergency response time by 25% through end-to-end co-ordination of emergency and municipal services Globe Telecom increases promotion related sales by 112% through an improved customer experience and more effective campaigns 6

7 but Process Defects can Topple Major Global Companies Between now and year-end 2014, overlooked but easily detectable business process defects will topple10 Global 2000 companies ~ Gartner 7

8 Doing More with Less Engagement & Self-Service New Application Developers Rest of IT Business Participants 240x Leveraging your knowledge workers can be a huge opportunity

9 9

10 Imperatives of User Empowerment: Achieve clearer line-of-sight to business operations Align business operations with strategic intent in the face of change Foster cross-functional and cross-divisional outcomes 10

11 Focus on Business Operations to Connect the C-Suite to Execution Chief Customer Officer Chief Risk Officer Chief Commercial Officer Chief Medical Information Officer Chief Clinical Innovation Officer Processes unify the organization around a common set of shared interests 11

12 Start at the Point of Greatest Need Typical entry points to achieve process innovation Product Development Reduce time to market of new products & services Streamline production procurement sourcing Go-to-Market Dynamic pricing to respond to market conditions Leverage customer insights for target marketing Order to Cash Account opening process automation Automated order processing & fulfillment Insurance Automated claims processing Improved fraud detection Healthcare Improved patient care Personalized fitness & nutrition Banking Reduced loan processing times Financial risk & regulatory compliance Government Customs & border control Improved public safety Energy & Utilities Power grid management Energy consumption management Retail Retail distribution supply chain automation Customer loyalty programs Travel & Transportation Online ticketing & reservations Travel & hotel pricing management Manufacturing Manufacturing production quality & control Reduced manufacturing production time 12

13 Process Innovation in Action bridging the silos Interconnecting the design and execution of business operations Go to Market Dynamic pricing to respond to market conditions Leverage customer insights for target marketing Go to Market Business Partners Managed Services Product Development Reduce time to market of new products & services Streamline production procurement sourcing Customers Order to Cash Product Development 13 Order to Cash Account opening process automation Automated order processing & fulfillment

14 An Enterprise View of Synchronized Business Operations Go to Market Dynamic pricing to respond to market conditions Leverage customer insights for target marketing Go to Market Business Partners Managed Services Product Development Reduce time to market of new products & services Streamline production procurement sourcing Go to Market Customers Order to Cash Order to Cash Product Product Development Development Order to Cash Account opening process automation Automated order processing & fulfillment

15 15

16 The Ottawa Hospital Realizes Process Innovation CEO Mandate Before Become a top 10% performer in Quality of Care and Patient Safety in North America New Role: Chief Medical Information Officer After Needed patient focused processes to improve quality of care with better visibility Improvements in patient flow through electronic closed-loop consults and easy access to patient information Lack of timely information to staff at the point of care & across operational areas Circle of Care visual interface improves communication and collaboration within the care team Need to improve key metrics: Patient wait times, Discharge rates, Instances of relapse Benchmarking process execution to use historic and real-time data to make better patient care decisions What we are doing is putting process orchestration and process models in place, so that you can literally see the characteristics of the hospital system and you can then influence that. 16 ~ Dale Potter, Senior VP and CIO, The Ottawa Hospital

17 Business As Usual Begs for Operational Improvement Account Administration 1 Customer Service 3 Finance and Ops 6 Executive Management 1 2 Unstructured tasks and communication (paper or ) Inefficient working environment spans systems 2 Invoice Reconciliation Teams 3 4 Inconsistent prioritization Incomplete or inaccurate data flow between systems Lack of real-time response to business events Poor Visibility Into Process Performance 17

18 Process Innovation Helps Control the Chaos Customer Service Account Administration Finance and Ops Risk Management Teams Executive Management What to do? How to do it? When to do it? 18

19 Why Business Process Management? Organizations had more than 90 percent success rates on BPM projects. Successful projects had no less than 10% internal rate of return, 78% had more than 15% (some as high as 360%) 67% of the projects were completed in less than six months, 50% in less than four months. 77% of the projects had returns greater than $100,000 per project. 80% of the respondents felt an increase in competitive advantage. BPM s value to the company was higher than ERP, CRM and SCM. Source: Justifying BPM Projects, Gartner IBM Corporation

20 IBM s Solution for Business Process & Decision Management Blueworks Live Business Process Manager Process Center Operational Decision Management Decision Center Process Server Decision Server Management of all process components Management of business rules & events Business Monitor Simplicity! Power! Visibility! Governance!

21 21 IBM Confidential

22 Combining BPM and Decision Management Extends Agility Example: Auto Insurance Application Process IBM Business Process Manager IBM Operational Decision Management 22 The best combination to support When / What / How types of decisions and coordinated tasks/activities

23 Business Challenges at Lincoln Trust Company Leading independent provider of trust and custodial services with the ability to administer individual and corporate retirement accounts holding traditional and alternative assets Paper overload 100,000+ client requests per month each generating a paper-based process instance Poor IT-business relationship Knew paper problem was a process problem but limited IT/Business collaboration prevented improvement 23

24 Partnering for Process Innovation Lincoln 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: 1 Quickly address key pain point Common shared process for document imaging and automation using content management tools Removed physical paper from 145 company processes 2 Business-led automation for full business processes Business teams created as-is and to-be process models using BPM Blueprint IT teams implemented automated workflows for 15 processes including service requests, plan establishment, and distributions 24

25 Best practices from Lincoln Trust Rich teaming between business and IT drives process innovation 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 million in savings to date 120% ROI in one year 25% increase in employee productivity 50% - 75% reduction in cycle times 25

26 Visibility Built-in process monitoring and analytics simplify effort of process optimization Rapidly meet market demands through advanced modeling, deployment, and monitoring of processes Real-time control of tasks allows you to improve process outcomes while inflight Federated visibility across all process participants on various mobile devices 26

27 Visibility Improved in IBM BPM v8 Achieve clearer line-of-sight to business operations Process Portal Process Portal notifies business users of actions required Full Google-type search finds what you need quickly 27

28 Collaboration Through IBM BPM v8 Foster cross-functional and cross-divisional outcomes Connect with experts directly within process coaches See expert edits directly in coaches, even across multiple languages 28

29 Governance Adapt your business and manage change confidently Turn your operations into opportunity Unified model driven environment Stay in synch through out the entire lifecycle from model design to deployment Federated Process Center s to manage process deployment visibility and control across all environments Unified tools & repository support large-scale sharing, versioning, and reuse of assets 29

30 Governance Through IBM BPM v8 Align business operations with strategic intent in the face of change Snapshots provide reliable version management 30

31 What is Operational Decision Management? Manage business policies Operationalize enterprise intelligence Empower business users to manage change Apply Operational Decision Management To flexibly and reliably manage repeatable, automated decisions When decisions change more frequently than processes To increase straight-throughprocessing When decision services must be shared across systems To manage and govern large numbers of rules When real-time events require immediate actions 31

32 Decision Management is a business discipline that enables organizations to automate, optimize and govern repeatable business decisions. Business Processes, Applications & Solutions Operational Decision Management Decision Services Analytical Decision Management Policy Regulation Best Practices Know-how Business Rules & Events Predictive Analytics & Optimization Risk Clustering Segmentation Propensity Scenario Analysis & Simulation Internal & External Data 32

33 Automate Highly Variable Decisions with Precision WebSphere Operational Decision Management Eliminate decision silos Make decision logic accessible to Business and IT Implement fine-grained, context-specific logic Operational Decision Managment Where Business Rules Typically Exist User Tools Rules and Events are Defined, Analyzed and Maintained Applications Documents Decisions are Stored and Shared Rule Repository People Processes Rule Server Decisions are Deployed, Executed and Monitored 33

34 How Decision Management Works: Customer Acquisition Detect Decide Respond Multi-channel quote requests Internet Event Pattern: Customer requests a series of quotes with increasing deductibles Business Rules: Customer good prospect, find best promotion Make a personalized offer Call Center Event Correlations Event Pattern: 2 web quote requests and 1 direct contact in 3 days Business Rules: Determine best product Trigger agent call back to assist Agency Event Pattern: Same vehicle ID with different addresses on phone & Web request: Business Rules: Is customer gaming the system? Seek clarification 34 Events Rules Decisions

35 35 Customer Video

36 WorkSafe Victoria Improves Operational Efficiency Client Pains Australian state social service agency dedicated to employee worker safety and compensation Ensure timely workplace claims processing for citizens Identified a specific project that would benefit from automated workflows and decision points Business Outcomes Improved efficiencies, higher levels of customer service and worker safety Significant improvement in fraud detection Estimated payback of 6 months Save more than $100 million dollars Delivering outstanding workplace safety together with quality insurance protection to workers and employers 36 Process automation and business rules software to increase efficiencies and cut costs while helping Victorian workers return home safe every day

37 Swiss Customs Uses Business Rules to Validate Declarations Approval is indicated automatically OR further electronic clarification requested Swiss dealer imports products (cars) from Germany to Switzerland Dealers electronically track goods from manufacturer to final sale 37 Within seconds of a declaration submission, data is validated and response is returned Customs declaration is an electronic document with over 200 fields that describes the imported good

38 Swiss Customs - Partnership between Business and IT Natural language syntax allows business users to author rules Rules available to business users through Web interface or developers through Eclipse Rules are hosted in a central repository for easy access and transparency Rules are tested, with simulations, before deploying to production Rules can be updated quickly in response to policy or regulatory changes 38

39 Swiss Customs Reduces Manual Intervention to Under 4% Faster, more accurate, border checks resulting in over 96% straight-through processing 96.5% straightthrough processing Scalable system that validates 200,000 customs declarations daily Ability to reuse decision services across several customs processes 3.5% manual intervention Customs officers directly update the rules themselves to respond to regulatory changes System is responsible for accurately collecting tariffs of 23B Swiss Francs/year The quick and accurate validation of customs declarations with the IBM rules platform enables straight-through processing without human intervention, saving significant time and resources for both government and business. ~ Stefan Huesemann, Principal Consultant at Innovation Process Technology AG 39

40 Visibility Through Operational Decision Management v8 Achieve clearer line-of-sight to business operations What s New quickly displays deployed assets IBM ODM Decision Center Search can return rules, tables and folders Full text search across all decision assets 40

41 Collaboration Through Operational Decision Management v8 Foster cross-functional and cross-divisional outcomes Decision Center enables collaboration on assets of interest and change notifications 41

42 Governance Through Operational Decision Management v8 Align business operations with strategic intent in the face of change IBM ODM Timeline enables a quick view of version history Decision Center Department 1 42

43 Deployment Options to Accelerate Process Innovation Decrease your time to achieve process innovation with Cloud Deployment flexibility with BPM and ODM on System Z BPM on the Cloud BPM v8 on System z ODM v8 on System z 43

44 Empower Business Users by Extending Access to Mobile Flexible access promotes broad adoption BPM for Mobile ios App provides access to both IBM BPM and Blueworks Live 44

45 45 Odyssey Logistics Customer Video

46 Odyssey Logistics Provides End-to-End Transportation Solutions Connecting individual transportation providers into a complete delivery network Challenges Choose the best transportation options given each customer s unique needs across the globe Implement customized logistics processes to provide full service to customers expanding globally Benefits Increased productivity upwards of 300% for certain logistics operations Reduced errors by more than 10% Meet or exceed customer KPIs in areas of ontime deliveries, invoice turnaround and error-free shipping Solution for Process Innovation Pre-constructed processes based on sets of common activities that can be quickly customized for local needs Business rules reduce complexity by managing rate structures, routing guides and carrier information Software Offerings: IBM Operational Decision Management IBM Business Process Manager 46 Process innovation allows an organization like OL&T to go in to a customer and figure out how to work with them versus trying to overlay a very specific rigid model on our customers ~ Russell Marky, Senior Vice President, Global Business Technology, OL&T

47 IBM Business Process Mgr v8 The simplest way to get started with BPM Process Discovery Modeling 47 for Documentation The quickest way to deliver robust process applications Process Implementation Modeling for Execution

48 48

49 IBM Business Process Manager v8 Social Mobile Coaches Portal Business Space Optional Microsoft Add-ons Process Server Core BPM Advanced Integration Performance BPMN Process Rules BPEL ESB Adapters Data Warehouse Deploy Measure Governance / Visibility Define Improve Shared Assets Server Registry Process Center Versioned Assets Network Multiple Process Centers Process Designer / Optimizer Process Center Console Integration Designer

50 What s New in IBM Business Process Manager v8? Social Collaboration Mobile Access Content Access Defining social collaboration for BPM A cutting edge process portal A Coach Designer UI Builder that is 10x better than our closest competitor Getting end-users excited about IBM BPM Making it easy for processes to interact with content in ECM systems IBM, Sharepoint, and others 50 Enhanced Governance A great Mobile App Providing the APIs customers need to realize their mobile strategies Worklight recently acquired, delivering the most powerful enterprise mobile platform No other vendor can provide what we already do to enable BPM from departmental to enterprise-wide We ve raised the bar significantly for competitors who even try zos 2012 IBM Corporation

51 Expanded Process Management on zos IBM BPM on zos V8 Enhancements: zos Process Design Tooling Enhance design tools to make it even easier to use with existing COBOL & CICS programs Extend out-of-box adapters with support for WOLA, 2-way integrations with IMS, etc. Administration & Installation Leverage co-location with CICS, IMS, or DB2 for superior performance, scalability, and access to data Simplify operations by centralizing process assets for high volume process automation with high availability & quality of service Modernize existing mainframe applications by adding a layer of process versus rip-andreplace Support zos-specific monitoring, problem determination, and system administration Simplify additional installation scenarios on zos Optimization & tuning of IBM BPM performance on zos JVM

52 WebSphere Operational Decision Management Manage Decision Center for Business Space Business & Enterprise Consoles Social Rule Solutions for Office Decision Artifacts Access and Control Decision Center Versioned Assets Define Update Governance / Visibility Deploy Measure Rule Execution Event Execution Decision Monitoring Connectors Decision Server Web Services API - GUI Rule Designer Event Designer Decision Server Console Design POS Enterprise BPM CRM Application Devices Monitor

53 WebSphere Operational Decision Management for z/os, V8.0 Integration and governance enhancements Testing, Simulation and decision audit support for an extended decision governance Direct Support for COBOL to WAS for z/os allowing the best deployment option to be selected Rule execution support for IMS batch processing regions allowing natural decision invocation zres Topology Enhancements for creating multiple stand alone servers with fail over on connection failure Brings decision governance at the business users level while simplifying technical integration

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