Effective Business Process Management

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1 Effective Business Process Management Peter B. Lange Senior IT-Architect, Nordic ECM Practice Lead 5/25/2009

2 Objectives IBM Enterprise Content Management Introduce BPM and the value of it Show examples of how effective BPM improves the performance, visibility, and agility of business processes and facilitate business innovation Link BPM to related business initiatives like LEAN Introduce the Smarter Business Operations concept that based on ECM and BPM transforms and streamlines the operations of e.g. insurance companies 2 5/25/2009

3 What is Business Process Management? BPM is a discipline consisting of software and expertise to improve the performance, visibility, and agility of business processes and facilitate business innovation Business Processes Sales Software Improved Performance Expertise Finance Customers Operation s Greater Visibility Agility and Innovations Partners BPM continuously improves processes and aligns functions that span business, IT systems, manual tasks, and information 3 3 5/25/2009

4 The Value of BPM Workforce Work better and more efficient Business Analysts Continous process optimization IT Quicker implementation of changing business requirements Management More insight, quicker and better business decisions 4 5/25/2009

5 BPM starts and ends with business value Optimize Track metrics to measure process performance Harvest data to optimize process performance Achieve insight and receive alerts to small problems before they become big ones Collaboration Execute Define Automate processes improve profitability Leverage Content for Decision Making Facilitate human interaction to increase work efficiency and reduce errors Deploy on a SOA platform Align business strategy and execution Communicate effectively between business and IT Collaborate to improve business process design Leverage industry standards and frameworks Business Strategy Understand Assess, capture, and analyze core behavior Understand value processes Identify redundant, duplicated, and inefficient processes Process Governance 5 5/25/2009

6 Organizations Address Critical Business Needs With BPM Business Needs Common BPM Adoption Patterns Greater efficiency and reduced costs End-to-End Process Automation Real-time visibility for smarter decisions and actions Transform Insight into Action Faster and easier response to change Adapt and Respond Dynamically 6 6 5/25/2009

7 Process Automation Combines Scalability and Reliability with Process Flexibility Seamlessly automates manual tasks, IT systems, and information Manual Tasks Information Accommodate demanding, transaction intensive processes Standards-based reusable components for process flexibility Automated Process IT Systems 7 7 5/25/2009

8 Transform Insight Into Action To Capitalize on Opportunities and Mitigate Risks Real-time process visibility consolidated into customizable, role-based dashboards Business leaders monitor process KPIs and receive alerts 8 5/25/2009

9 Adapt and Respond Dynamically Deliver the fast response businesses need Analytics Sales goals are at risk Close the gap between changes and the time it takes to implement them Rules Modify product offerings Policies Change in-flight processes Direct Deploy Now Predictive KPIs Empower business users to take the wheel IT establishes governance Drive faster change with fewer IT resources 9 5/25/2009 9

10 Insurance Operations That Adapt and Respond Dynamically Pain Point Costly and inefficient processes What s Smart? Automated processes, gain critical insights, reuse assets, and accelerate the pace of change for operational improvements Smarter Business Outcomes Globally optimized claims process with reduced processing costs, faster claims cycle times and improved visibility $50 million in projected annual savings Fact: Independent agents send up to 80% of their business to their top two preferred carriers /25/2009

11 BPM Related Initiatives and Capabilities Initial Siloed Aligned Process Driven Continuously Optimized Autonomic Smarter Finance Six Sigma Lean Modeling Execution Service Oriented Architecture Performance Agility 25 May 2009 Bo Ebro Christensen /25/2009

12 Working for a smarter planet /25/2009

13 Sample Savings low hanging fruits Insurance company: 10% of outbound documents are reminders to customers about providing documentation, returning forms or returning signed documents Considerable amount of time spend on follow up and producing reminder documents Implementing an automated reminder process: 3 person months effort Savings 200 k /year 13 5/25/2009

14 Saving Sample Smarter Finance Infrastructure for Smarter Finance Goal of Smarter Finance: Improve customer service Decrease process time Improve customer satisfaction Reduce operational cost Method: Replace physical documents (=paper, , phone calls, forms, SMS, voic ) with electronic documents triggering optimized business processes Savings 30-40% of administrative work (case workers, prep team, mailroom, archive) 14 5/25/2009

15 Why is this Operations of the Future? In the future, operations will be driven by automated task processing Mailroom Prep Index Route Process Application Output and Storage Traditional Paper Operations (Human Centric) Data 50 60% Workflow Enabled Operations (Content Centric) Filenet Data 15-30% Operations of the Future (Integration Centric) TIFF Input Management XML Process Server / Fabric Automated Operational efficiency limited by Knowledge worker being the Integration layer between Documents and Applications Document recognition, work task automation maps, and exposed SOA Services enable Lights Out Automation and intelligent work task assignments Data 5-10% Processes Services 15 5/25/2009

16 IOF is designed around customer centricity and moves resources, workload management and processes into this direction while strengthening the automation layer. Customers Customers (Self-Service) Self-Service workload: ~ 10 % On-site support & Front Office workload: ~ 10 % On-site support & Front Office workload: ~ 20 % Back office workload: ~ 60 % Back office workload: ~10 % Automation workload: ~ 30 % Automation workload: ~ 60 % Today s dominant model for the allocation of resources and capabilities Insurance Operations of the Future 16 5/25/

17 According to the client s preferred change strategy IOF can result in a major transformation effort. Overall objectives: KPIs: How to get there: Self-service Effective client interactions based on technology Cost effective resolution of standard service requests About 10% of all business transactions resolved automatically Client satisfaction stable Resolution time improved Specialized technology Seamless processes On-site support & Front Office Efficient and effective client interactions (policy-holders and agents) Fast resolution of standard service requests About 20% of all business transactions resolved here Client satisfaction improved Resolution time improved Re-skilling Restructuring the organisation Training Continuous improvement Back office Business support requiring specialist know-how (insurance, health, taxation, etc.) Fast resolution of nonstandard service requests About 10% of all business transactions resolved here Resolution time improved Specialist know-how continously enhanced Restructuring the organisation Training Continuous improvement Introduction of SLAs Automation High level of cost effective routing of business transactions in client organisation Automated resolution of standard business transactions About 60% of all business transactions resolved automatically Digitization of unstructured data Transformation of legacy application to SOA Introduction of SLAs With the adaptation of business processes towards this concept additional sourcing options can be considered individual to the client. 17 5/25/

18 Operations of the Future Solution Concept Service Orientation enables a transformation from document centric workflows to completely automated processing of inbound mail, , calls, and faxes Agents Customers On-site Support Self Service mail Telephone Input Management 1st Level (CSR) Automation Back 2nd Level Office (Specialist) Output Management mail Telephone On-site Support Self Service Agents Customers Process Choreography and Management Business logic, business specific functions, data, employees IT-Infrastructure 18 5/25/2009

Accellerate BPM using Industry Models Business Analyst Solution Architect Data Modeler Process Modeler Project Manager Data Models Service Oriented Architecture Process Models Service Models Industry

19 Accellerate BPM using Industry Models Business Analyst Solution Architect Data Modeler Process Modeler Project Manager Data Models Service Oriented Architecture Process Models Service Models Industry models for Insurance and Banking contains hundreds of best practice processes Model Management Model Lifecycle and Governance Methodology Master Data Management Enterprise Data Warehouse Business Intelligence Enterprise Applications Entity Analytics 19 5/25/2009

20 Summary IBM Enterprise Content Management Introduced BPM and the value of it; it is always for the business Shown examples and patterns of how effective BPM improves the performance, visibility, and agility of business processes and facilitate business innovation Linked BPM to related business initiatives like LEAN Introduce the Smarter Business Operations concept that based on ECM and BPM transforms and streamlines the operations of e.g. insurance companies 20 5/25/2009

IBM Software IBM Business Process Management Suite. Increase business agility with the IBM Business Process Management Suite

IBM Software IBM Business Process Management Suite Increase business agility with the IBM Business Process Management Suite 2 Increase business agility with the IBM Business Process Management Suite We