In a Sea of Disparate Enterprise Systems, Business Process Management is a Connector

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1 BPM In a Sea of Disparate Enterprise Systems, Business Process Management is a Connector Contents Executive Summary... 1 BPM as Connector... 2 Enterprise Systems Are Like Continents Separate, And Hard to Travel Between... 4 BPM Is Like a Container Ship or Fiber Optic Cable That Connects the Continents... 8 The Future of BPM... 9 Executive Summary There are some business needs that cannot be fulfilled by traditional business process systems like ERP, document management, and CRM. For example, those systems do not function well with processes that cross organizational silos, encompass roles different than those on the corporate organizational chart, and/or rely on workflows that weren t previously defined and are difficult to standardize. Therefore, those kinds of processes are often not run within an enterprise system, and that results in a loss of business intelligence because the intelligence gets stored within individual accounts and documents. But there is a category of enterprise systems that does function well across departments, can encompass roles that are not traditionally defined, and does model workflows that were not previously defined and are difficult to standardize. That category of enterprise systems is called business process management (BPM), and one of its most significant value propositions is the ability to capture business intelligence that is otherwise lost, to model workflows and, as a result, to allow the enterprise to complete more tasks with fewer errors. For example: When the director of marketing asks, How do I manage all the different campaigns I have across products and across regions? the answer is BPM. BPM helps that marketing director monitor his 52 campaigns and market launches around the world. BPM helps the marketing director stay on track, retain process intelligence and record how and why decisions are made. BPM can help the marketing director identifies ways to make the processes more effective and more efficient. Too often, however, the marketing director (or his counterpart in sales, product development, quality assurance), sees clearly the value of BPM but cannot convince the IT leaders, who eschew BPM as another island enterprise system in a sea of them. But BPM should not be yet another island. It need not and should not exist independently from the organization s ERP, CRM, and document management systems. Instead, a BPM system connects the ERP, CRM, and document management islands across the company. For that, the BPM system must be integrated with the others so that business and IT are connected and aligned Persistent Systems Ltd. All rights reserved. 1

2 So this whitepaper is written for both the business and the IT sides of the enterprise. Specifically, it is geared toward business function leaders as well as IT leaders (including the CIO). We will explain why the status quo enterprise systems as disparate continents is not effective, and how BPM fills the holes that enterprise systems leave behind. We ll show examples of organizations that have leveraged BPM as a connector for the enterprise systems, and how integrated BPM has enabled these companies to be more effective and more efficient. Key takeaways: Enterprise systems (ERP, CRM, document management) are like disparate continents information does not easily get from one to the other, which results in a loss of business intelligence and sub-optimal process coordination. Business process management (BPM) helps the enterprise retain and leverage business intelligence by allowing users far more flexibility and working well with processes that cross departments and do not conform to pre-defined roles. But BPM does not negate the other systems value, and it does not require duplicating data across systems; in fact, BPM need not and should not be another island. It can and should be integrated with the other business systems. BPM as Connector When Michael Hammer and James Champy published Reengineering the Corporation in 1993, ERP and CRM were very new concepts to describe what was still an essentially hypothetical integration of discrete business process applications. Since Hammer and Champy and countless others after them convinced corporate executives that effective, efficient business processes were critical to the success of the organization and that they could, and should, be managed, the software developed to facilitate business processes like human resources, finance, marketing and sales grew into discrete, behemoth, institutionalized structures themselves. What began as an attempt to integrate and make efficient business processes across the enterprise evolved first into islands and then into continents, isolated from one another and not easily traveled between. In this context it is easy to see why corporate executives from the business and from IT would regard process management solutions as yet another attempt to construct an island in a sea of them. But BPM solutions are actually designed to serve as to follow the continent analogy cargo container ships or fiber optic cables that connect the corporate islands of ERP, CRM, document management, and other enterprise systems. Business process management solutions help the enterprise retain and leverage business intelligence by allowing users far more flexibility and working well with processes that cross departments and do not conform to per-defined roles. Business process management solutions help the enterprise retain and leverage business intelligence by allowing users far more flexibility and working well with processes that cross departments and do not conform to per-defined roles Persistent Systems Ltd. All rights reserved. 2

3 Figure 1: The Relationship between BPM and Enterprise Systems Among the range of disparate systems within the corporation, BPM is the foundation on which decisions can take place, and can be enacted across or in concert with other corporate functional systems. Imagine a transoceanic container ship: it picks up a container that s a piece of information from one ERP system. The ship carries it across the ocean to another ERP system, or the CRM system, or whatever other disparate enterprise system. Along the way, as the container is sitting there on the ship, the BPM solution is monitoring, checking, sending notifications to the right people about the container as it moves through the ocean. Like the container ship, BPM is the one enterprise environment that not only facilitates picking up information in one place and dropping it off in another, but acting upon it in between. BPM is the foundation on which decisions can take place, and can be enacted across or in concert with other corporate functional systems. Beyond monitoring, checking, and sending notifications about the information in transit, BPM can perform additional functions that other systems cannot perform cost-effectively. Configuring an ERP system, for example, to every process of the company would be prohibitively expensive. BPM can manage the processes that aren t part of the ERP system s core or even extended functional capabilities. So BPM is a connector, but it also has its own set of functionalities; it is designed to facilitate enterprise business processes in the most effective way possible. So while BPM is not an system, it does however utilize functionality to achieve its process goals. It s not a project management system, but it highlights the tasks that are coming through. It s not a document storage system, but it has document management capabilities Persistent Systems Ltd. All rights reserved. 3

4 Why it matters In most business environments like the world with far-flung continents and no easy way to get between them users can t easily collaborate with other users in the context of business processes. That means valuable insights are lost. Because users can t see into other systems, narrow-sighted decisions are made. Time to market is delayed, which means a slow competitive response. Customer service suffers. Budgets are overrun. In other words, business processes as usual are significantly sub-optimal, and corporate executives need to take note. Enterprise Systems Are Like Continents - Separate, And Hard to Travel Between BPM solutions are not designed to take the place of SAP or Oracle or Salesforce.com or . Instead, BPM is designed to fill the holes, to meet the needs that the enterprise systems do not. In doing so, BPM solutions actually maximize the effectiveness of the enterprise systems. Because users can't see into other systems, valuable insights are lost and narrow-sighted decisions are made. Time to market is delayed, resulting in a slow competitive response and customer service suffers. So what are the holes that enterprise systems create, the needs they cannot meet? There are four that we ll discuss here: 1. Enterprise systems are built for specific purposes 2. They don t function well across departments 3. They have to conform to pre-defined corporate roles and standardized, pre-defined processes 4. Enterprise systems typically do not manage unstructured data well Enterprise systems are built for specific purposes Enterprise systems like Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and document management are built for specific purposes. Oracle and SAP are built to enable to integration and management of core areas of the business. Salesforce.com is built to manage the enterprise s interactions with current and prospective customers. SharePoint is built to allow individuals across the organization to share information. And while the large ERP systems, for example, come with modules for different areas of the business (HR, manufacturing, accounting, etc.), each is nevertheless designed just for its predefined purpose, and is very expensive to implement. Because these systems are dedicated for specific purposes, with specific functions, those functions tend to be limited to the experts within a system. Oracle, for example, is built for the finance community, to run financial metrics. You re not going to necessarily jump right into it from sales. Furthermore, while most enterprise systems have modules that can add functionality for multiple departments, those modules are incredibly expensive. When it is not cost-effective to implement a given module, that creates a functional hole within the enterprise system that has to be accounted for; usually through manual intervention. BPM solutions, in contrast, are built for the purpose of taking those manual processes and applying automation to them so they can be more efficient and cost-effective. The software is highly configurable in terms of which processes it manages, across which workflows and for which departments. As a result, the BPM solution can be utilized across departments and by a range of individuals within a given department. Because ERP systems are dedicated for specific purposes, with specific functions, those functions tend to be limited to the experts within a system Persistent Systems Ltd. All rights reserved. 4

5 Enterprise systems don t function well across departments While enterprise systems are designed to facilitate the integrated management of the business, they are often used across departments only as data repositories. And for that reason, it is not at all uncommon for an enterprise to have multiple ERP systems (maybe SAP on the front-end and Oracle on the back-end, for example) or multiple versions of a single ERP system (the IT department works on one, manufacturing on another, one region on one and another region on another). Either way, the system doesn t work well across the business; business functions are still siloed. Figure 2: The Enterprise Collaboration Problem As the container ship that travels between continents, the BPM solution facilitates communication across the business, bringing disparate processes together to create a single version of the truth, a single system for collaboration Persistent Systems Ltd. All rights reserved. 5

6 Enterprise systems have to conform to pre-defined corporate roles and standardized, pre-defined processes Because most enterprise systems are designed by module, they are not particularly flexible; they are designed with pre-defined user roles and pre-defined processes. If it happens that the enterprise system aligns with your enterprise, then you ve lucked out. But if your process is defined by steps 1, 2, 3, 4, and 5 and the ERP system has the process defined as steps 1a, 1b, 1c, 2a, 2b, then you either bought more system than you needed or you have to actually create a, b, c subprocesses to fit within the ERP system you have to change your processes to conform to the tool and that can add significant extra cost. Furthermore, most enterprise systems are comprised of modules for each type of process or functionality with each module very expensive to implement. So for the organization that has only purchased Module A and Module C of the ERP system, how does the business account for the functionality of Module B? Likely with manual processes. In that kind of environment, a business process management solution is the connector between Module A and Module C, replacing Module B with automated process steps that make sense for your organization. Business process management solutions are configured around your specific processes so they have to be flexible, to be molded to your organization s processes and user roles. You define the way that you work, and the BPM solution will help you stay on track. Creating and managing business information in the context of information that already exists what ERP, CRM, and document management systems do is very important, but don t meet all of the business needs. That s where BPM comes in. Business process management solutions are configured around your specific processes so they have to be flexible, to be molded to your organization s processes and user roles. You define the way that you work, and the BPM solution will help you stay on track. Enterprise systems typically do not manage unstructured data well Because of the lack of flexibility and the fact that user roles and processes are pre-defined, enterprise systems do not work well with unstructured data approval processes, documents, iterations, anything created after the beginning and before the end of the process. This is an increasingly significant deficiency, as unstructured data is growing % per year (compared 1 to a 30-40% growth rate for structured data). As a result, organizations are faced with challenges such as: Managing digital assets, notifications and annotations, which are exchanged in an unstructured manager and are not included in enterprise systems Human centric processes affecting the efficiency of organization Collaborating between disparate enterprise systems Empowering the workforce to make decisions on the move According to Gartner, By 2013, dynamic BPM will be an imperative for companies seeking process 2 efficiencies in increasingly chaotic environments. 1 IDC 2 Gartner, Gartner Reveals Five Business Process Management Predictions for 2010 and Beyond, 13 Jan room/id/ Persistent Systems Ltd. All rights reserved. 6

7 Where enterprise systems manage only the data generated at the beginning or end of a process (a SKU approval at the end of product development, for example), BPM can also manage the unstructured data all of the s back and forth, the design ideas sent as image files that was created in the course of developing the product; BPM creates a record of the decision process and maintains the data behind the decision. It is critical to have a record of how decisions were made not just to have it, but because decision making and the data it creates is input into the end result. For example, one Fortune 500 company until just a few years ago was quoting its deals (tens of millions of dollars) in Excel. Before they implemented a BPM solution, it was impossible to control the versions of the quotes and to understand retrospectively who had made decisions and why the decisions were made. Sometimes, sales managers were not even working off of the same version of a quote. In this instance BPM was incredibly powerful as the sole source of truth for a customer quote. Going back and forth with Excel files between multiple managers over has the potential to create multiple versions. The BPM solution keeps track of versions, approvals, changes everything that happens within the quoting process. The power of BPM as a connector does not mean that BPM exists to replace enterprise systems. Indeed, ERP, CRM, and other enterprise systems are vital for many organizations. Rather than replacing those, BPM takes common elements from each enterprise system (the continents, in our analogy), ties in to both, and replaces with automation the manual steps that used to exist in the voids between enterprise systems. Because BPM can tie in to each enterprise system, it can work across environments effectively, and serve the role of connector. Unlike enterprise systems, BPM is specifically designed to bring unstructured data into the formal process flow, to institutionalize the business intelligence there (taking, for example, conversations that happen by and putting them into the BPM system). BPM enables the configuring of a repeatable process flow, reflective of the enterprise s specific business processes rather than what was pre-defined by a platform or system. That makes it possible to go back and see what was done, when, by whom, and why; it also enables process improvement, as you can go back and analyze the process, report on it, learn from it, and adjust it as your processes evolve. BPM enables the configuring of a repeatable process flow, reflective of the enterprise's specific business processes. It also enables process improvement, as you can go back and analyze the process, report on it, learn from it, and adjust it as your processes evolve. Being able to retain and leverage that business intelligence means the enterprise can do more tasks with fewer errors Because of the four holes mentioned here, business intelligence is lost; it falls through the cracks of the enterprise systems, or it s not well-tracked from point A to point Z and that extends the cycle time of business processes and makes them prone to errors. So by implementing business process management solutions that connect the continents of ERP, CRM, document management, etc., the enterprise can tighten up its processes, retaining business intelligence, reducing cycle time, and reducing errors Persistent Systems Ltd. All rights reserved. 7

8 BPM Is Like a Container Ship or Fiber Optic Cable That Connects the Continents Clearly, there are significant process holes left behind by enterprise systems like ERP, CRM, and document management holes that a business process management solution can fill. But that does not mean that BPM is a replacement for ERP, CRM, or document management systems it is not. Rather, it is a complement to the systems, and to ensure that BPM works as it should, it must integrate with the enterprise systems. BPM connects disparate enterprise systems Many corporate executives, faced with a conversation about implementing BPM, will say something like, But we already have two very expensive ERP systems. Or BPM will become just another island. In essence, Prove to me that BPM will do something different than what I already have. Without BPM, in a corporate environment with multiple enterprise systems (and multiple versions of those systems) multiple, disparate continents data is typically doubleentered on a regular basis. That is incredibly inefficient, but it s also dangerous. Which is the primary version of the truth? How do users know which is the most up-to-date, accurate version of the data? In this case, the value proposition of BPM is that it acts like a container ship or fiber optic cable, connecting these disparate continents. If the CIO says, But we already have two very expensive enterprise systems then the question becomes, But do they talk to each other? If the answer is no, you are forced then to take manual intervention in some way to overcome those gaps in connectivity. That is problematic at best, dangerous at worst, for all the reasons mentioned Section 3. BPM replaces that manual intervention to connect the enterprise systems. It ties into each enterprise system to enable decisions to be made with a full view of information from those systems. You can t make a decision looking only at your CRM system or your ERP system; you need to see into both. BPM facilitates the process flows that allow you to get the information you need to make decisions better and faster. Case Study How BPM Helped CPG Company Retain and Leverage Business Intelligence Challenge Reliance on paper-based systems for design and development, leading to delay in decisions and increased time to market Chargebacks due to labeling errors, mistakes in bills of materials, and multiple rounds of rework for artwork arising from inefficiencies across design, materials, and structures No proper cost tracking and delays by manufacturing systems resulting in an inability to measure and correct flawed processes Solution Replaced paper-based routing system with real-time web-based solution Provided complete visibility into all assets at all times in a central, secure environment, creating a single version of the truth Introduced digital job bag to manage all elements of Client s digital assets: version control, label control, size, structure, graphics, text, etc. Centralized, globally accessible content management system Helped gain enterprise-wide visibility into the status activities and tracks process metrics Enabled light touch integration with existing Product Master Data system via web services Infused a widespread adoption of the solution due to intuitive interface Delivered as a secure, hosted solution on the Cloud Results Reduced artwork revisions by 54% Reduced artwork origination issues to less than 1% Increased tasks from average of 700 to 7,000 per day Reduced occurrences of missed launch targets Processed over 1 million transactions Managed over 175,000 files Increased process management capability to average of 2,500 processes Cost savings of $1.7 million 2013 Persistent Systems Ltd. All rights reserved. 8

9 In this context BPM is the cargo container ship or fiber optic cable that travels from one continent one enterprise system to the other, reducing cycle time and, often, reducing error. Any kind of information that was previously hand-carried from one shore to the other (manually re-entered or transferred) can now be put on the container ship, where it can also undergo additional process manipulation or analysis. Many of the process steps you do manually today, BPM should be able to automate to some extent. If it s decision cycle time, moving information, cause and effect, evaluation all those things that you write in your notebook and enter into Excel it can be put into a BPM system. BPM connects the continents of the business enterprise so that everyone is on the same page. They re individual business units or functions, but they contribute to the larger whole, to the corporate information system. The business as a whole benefits by having more information within the BPM system, to repeat the analogy, flowing on the container ship or through the fiber optic cables. BPM connects the continents of the business enterprise so that everyone is on the same page. They re individual business units or functions, but they contribute to the larger whole, to the corporate information system. Implementing BPM requires the right expertise Implementing a business process management solution setting the container ship on its course requires someone who understands the BPM solution as well as the enterprise business situation and can properly envision and implement the appropriate solutions within that business context. Implementing a business process management solution is not about throwing another system at the problem, so it requires a consultant who understands the BPM solution as well as the pain points of the business. With this kind of expertise, the consultant can take leverage BPM to develop an appropriate solution to mitigate or eliminate the organization s pain. That is typically not the corporate IT guy. So organizations must look to consultants who live within and between BPM and the enterprise systems. Leveraging the expertise of a seasoned consultant helped the large corporation that had been managing its quoting process in Excel connect into Salesforce.com. The sales team doesn t have to key Salesforce data into the BPM system; it s automatically translated on the back end. Now the sales team can leverage the same kind of information for 9 quotes or opportunity types, and is turning around quotes in 2 months instead of 6. The Future of BPM As more organizations leverage business process management solutions, as Gartner predicted they will, BPM will continue to evolve. What we ve talked about here is breaking down the silos that separate enterprise systems, connecting those systems with BPM, and driving toward an environment that allows data to be accessed from multiple locations (in the cloud). Then the next step is utilizing the ability to leverage the power of the portable device taking the decisions to where business is, to the point of action. As the demand for social-like applications in business continues to escalate, finding a way to allow individuals to perform business functions from mobile devices will become a business imperative. Just as the enterprise systems like ERP and CRM must be integrated with BPM, so will enterprise collaboration applications need to be integrated as well. Users can collaborate on activities, track tasks, take and initiate actions, access records and reports all of the functionality necessary within a given process. As reliance on mobile devices increases, so too will the need to make decisions from those devices. BPM is already well set-up to facilitate that kind of decision making. Then the next step is utilizing the ability to leverage the power of the portable device taking the decisions to where business is, to the point of action Persistent Systems Ltd. All rights reserved. 9

10 About Persistent Systems Established in 1990, Persistent Systems (BSE & NSE: PERSISTENT) is a global company specializing in software product and technology services. For more than two decades, Persistent has been an innovation partner for the world's largest technology brands, leading enterprises and pioneering start-ups. With a global team of more than 6,000 employees, Persistent has 300 customers spread across North America, Europe, and Asia. Today, Persistent focuses on developing best-in-class solutions in four key next-generation technology areas: Cloud Computing, Mobility, Analytics and Collaboration, for telecommunications, life sciences, consumer packaged goods, banking & financial services and healthcare verticals. For more information, please visit:. India Persistent Systems Limited Bhageerath, 402, Senapati Bapat Road Pune Tel: +91 (20) Fax: +91 (20) USA Persistent Systems, Inc Laurelwood Road, Suite 210 Santa Clara, CA Tel: +1 (408) Fax: +1 (408) info@persistentsys.com DISCLAIMER: The trademarks or trade names mentioned in this paper are property of their respective owners and are included for reference only and do not imply a connection or relationship between Persistent Systems and these companies Persistent Systems Ltd. All rights reserved. 10