mwd Best Practice Insight a d v i s o r s BPM Case study: Surrenda-link Investment Management Neil Ward-Dutton Premium Advisory Report September 2009

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1 mwd a d v i s o r s Best Practice Insight BPM Case study: Surrenda-link Investment Management Neil Ward-Dutton Premium Advisory Report September 2009 This report examines the implementation of Appian Anywhere at UK-based Surrenda-link Investment Management, a secondary life assets investment management company. MWD case study reports are designed to help organisations considering or actively working with BPM software understand how others have worked to obtain benefits from BPM implementation, and how they have worked to overcome challenges that have arisen along the way. All MWD s case study reports follow a standard model, and are researched using a standard process which is driven by senior MWD analysts. This report is published as part of MWD s premium BPM advisory subscription service. You can find out more about this service at MWD Advisors is a specialist IT advisory firm which focuses exclusively on issues concerning ITbusiness alignment. We use our significant industry experience, acknowledged expertise, and a flexible approach to advise businesses on IT architecture, integration, management, organisation and culture.

2 Case study: Surrenda-link Investment Management 2 Case study key facts Company Industry Current BPM goals Process scenarios Surrenda-link Investment Management (Surrenda-link) a UK-based innovative financial services company focused on the acquisition and fund management of traded secondary life assurance and endowment policies. Founded in 1990 the company employs around 100 people, and has 1bn funds under management or advice (as at 31/12/08). Financial services Re-engineer core life settlement buying process to reduce cost and risk; move towards ISO 9001:2008 certification; support the strategic goals of the company. Sequential workflow Straight-through processing Case management Content lifecycle management Collaborative process work Value chain participation Current approach Outcome BPM tools and suppliers used Surrenda-link has implemented an initial work phase with help from Appian s development resources to automate a targeted sub-process of one of the company s core business processes the process used to manage the purchase of US life policies. Now the company is managing the development and implementation of the end-to-end process. Surrenda-link is still early on in its implementation of Appian Anywhere in support of an improved life settlements buying process, but it can already see significant improvements both internally and for client service and quality. In return for its investment, Surrenda-link is already projecting around a 15% reduction in the effort required to carry out the complicated due diligence phase of a life settlement purchase. It s also strongly anticipating decreased financial risk, improved regulatory compliance, improved business flexibility and scalability, and reduced staff training costs. Appian Anywhere (Appian s on-demand BPM platform), Appian consulting.

3 Case study: Surrenda-link Investment Management 3 Company background Surrenda-link Investment Management is a UK-based life assurance policy trading company employing around 100 staff. Formed in 1990, the company has around 1bn of funds under management or advice (as at 31/12/08). Project background Surrenda-link has successfully grown very quickly in the past three years, and has identified the goal to further enhance and improve its asset acquisition software to support expected future growth (initially, the capability was delivered through a set of custom-built software applications). In 2007 an in-depth operational and strategic review identified four key targets: Re-engineer key business processes to reduce costs, speed delivery of services. Implement a new set of enabling IT applications based on off-the-shelf packages rather than custom-built developments. Attain ISO 9001:2008 certification for the company. Move to being a Centre of Excellence for its own clients, and be able to create a white label line of business offering its services wholesale to other financial services players. Surrenda-link started to implement the findings of this review in 2008 by revisiting its buying process for US-based life policies. The requirements for purchasing such a policy require specialist knowledge, and vary considerably depending upon (for example) the home state of the policyholder. The compliance and due diligence requirements are extensive to ensure a robust purchase process that acquires policies of suitable investment grade for investors. Implementation characteristics and status The process currently being addressed in the project is best described as having a case management style. The process is long and has many sub-processes, and each instance requires high levels of human input. Process instances can unfold in unpredictable ways, require repeated access to key policy documentation, and can require significant review. The main process participants are members of a policy buying team that numbers between 10 and 20 personnel. To date, Surrenda-link has significantly automated one key sub-process of the end-to-end US life settlement buying process during an extended proof-of-concept project which started in the summer of 2008 using the Appian Anywhere hosted BPM toolset and platform. Now, the company is extending this work to address the whole end-to-end process using the same technology. Surrenda-link decided to use Appian s hosted offering rather than implement Appian on-premise because although the company is a world-class financial services player in its area, it chose not to commit additional support overhead of maintaining BPM infrastructure in-house. Appian Anywhere gave Bruce Spicer (Head of Information Management at Surrenda-link) the opportunity to offload this risk. In his words, having the flexibility to use a hosted platform has been a super enabler in getting the project underway quickly and demonstrating early results. If performance and security targets continue to be met by Appian then Spicer is clear that his preference would be to continue to use Appian Anywhere, at least in the short-to-medium term, rather than moving to an on-premise installation. As well as broadening the formalisation of the end-to-end life settlement buying process and implementing process control through Appian Anywhere, Surrenda-link s next steps are also focused on improving the governance of business process (making sure the right framework is in place to help it manage process change) and starting to introduce packaged application replacements and enhancements for the existing custom-built systems.

4 Case study: Surrenda-link Investment Management 4 The approach Strategy As indicated in Project background above, Surrenda-link s drive towards ISO 9001:2008 certification (in its life settlement process, in addition to its existing certification in its endowment policy buying process) means that its BPM work is a strategic imperative for the company as a whole, as well as a key element of the IT strategy. In order to gain this further certification the company will have to prove that it has firm processes in place as part of its service delivery. Architecture As mentioned above, in the short-to-medium term Surrenda-link s preferred development and deployment model is a hosted one, using Appian Anywhere. If the business decides to take the improved process and create a wholesale service around it, though, then it realises that it may need to consider repatriating the implementation to an on-site technology platform that is managed inhouse. However because Appian s on-premise and on-demand products are built on an identical code base, migrating processes from one to the other would be straightforward. Appian is working with the Enterprise Architect (EA) working at Surrenda-link to dovetail with the standard methods pursued by Appian and its professional services team. Organisation and people Today Surrenda-link and Appian are working together using an agile project delivery approach. The team delivers implemented features weekly, with Appian development resources spending three days off site and two days on site. The team has worked hard to ensure that there s complete traceability from process behaviour test cases all the way back to initial high-level specifications and requirements. Surrenda-link has worked hard to ensure active collaboration between business and technical specialists in this initiative from the outset. Spicer has found that the right mix of personnel is critical, because active and regular two-way communication is crucial to project progress. In the first phase of the project Surrenda-link relied heavily on external development resources from Appian, with Appian team members carrying out around 80% of the development work. In subsequent phases of project work, however, Spicer anticipates that the resource split will be much more even between Appian and in-house resources. The project will utilise a dedicated internal business/process analyst who s been trained specifically for the role. Governance To date, process governance has been handled by the project board. The board meets every 3-4 weeks to discuss progress and manage changes. Going forward, Surrenda-link s pursuit of ISO 9001:2008 certification means that a clear process governance framework will have to be put in place, to meet ISO s requirements for an explicit Quality Management System.

5 Case study: Surrenda-link Investment Management 5 Technology and infrastructure Surrenda-link considered two specialist BPM technology providers when it embarked on this project. Appian was chosen over its competitor because it offered the most user-friendly environment (both for process designers and process participants) and also because it was highly cost-effective. Today, the chief system with which the Appian process engine has to integrate is an in-house procurement system called ATLAS. Currently, integration with this system is tightly coupled and direct it s carried out by a combination of querying the underlying SQLServer database and screenscraping (although Spicer points out that this hasn t been difficult to do). As Surrenda-link s portfolio of applications is shifted away from custom-built to packaged systems, the integration will become more loosely coupled and standards-based. The company has also integrated Alfresco s content management system with Appian Anywhere to provide document management facilities within the life settlement buying process. Going forward, the organisation is dedicated to pursuing what Spicer calls a thin and crispy approach to the end-to-end process that is, automating those process activities opportunistically, where there are obvious and major business benefits to doing so, but being prepared to maintain some activities as manual activities where the case is less clear. The results Surrenda-link is still early on in its implementation of Appian Anywhere in support of an improved life settlements buying process, but it can already see significant improvements both internally and for Client service and quality Spicer is in no doubt that the company s BPM work is contributing to the execution of its overall corporate strategy. In return for its investment, Surrenda-link is already projecting around a 15% reduction in the effort required to carry out the complicated due diligence phase of a life settlement purchase, as well as decreased financial risk and improved regulatory compliance and improved business flexibility and scalability. Lastly, Spicer is already seeing vastly reduced staff training costs when it comes to bringing new staff members up to speed on the life settlements buying process (what used to take longer than two weeks now takes 2-3 days), making Surrenda-link more agile and responsive to client needs. Recommendations for BPM adopters In carrying out this study, we asked Surrenda-link to share any recommendations it would offer to other potential adopters of BPM. Three particular points were highlighted. Firstly, make sure you clearly understand the level of maturity and clarity of your current processes before you try and estimate the time and effort it will take to improve them or implement BPM technology. Secondly, don t be tempted to implement automated activities just because you can. In Surrenda-link s case the company reviewed the benefits from the initial stage of its development work and estimated that the vast majority of the benefits obtained will be achieved from just 40% of the automation implemented. But then as Spicer points out cost isn t the only objective improving the quality and flexibility of the client proposition is core to the investment. Focus on that automation work which will deliver the greatest improvement and be prepared to leave some activities for manual interpretation if automation won t deliver bang for buck. Thirdly, find ways to pull key business and technology personnel together as processes are explored and designed so that they can share ideas and work together to solve problems quickly. If you can physically co-locate them, then all the better.

6 Case study: Surrenda-link Investment Management 6 Best practice insights Although Surrenda-link still has some way to go in its project, the company s work has already highlighted a number of best practice insights that have wide applicability and that you should take into account as you progress with your own BPM journey. First, if you re carrying out a project where automation with a BPM toolset and platform is required, don t immediately assume that you ll have to install and maintain the tools and resulting application(s) in-house. Today s market provides a number of sourcing choices, and Appian Anywhere is one example of a hosted subscription service which may well provide a good fit for your requirements particularly if you need to demonstrate results quickly, if the environment isn t right for IT capital investment, or if you don t want the overhead of managing a BPM technology runtime environment yourself. Second, don t be tempted to automate process steps just because you can. Focus firmly on the business outcome that s required. If the most important thing is to drive process standardisation as quickly as possible, for example, the best course of action could well be to manage overall process flow using BPM technology, but to enable some individual tasks to remain as completely manual activities just focusing on automating (or part automating) those tasks where you ll get most bang for your buck. Third, make sure that you fully engage your Enterprise or Solution Architects to maximise the effectiveness of integration and make sure that they know about all the constraints and practices associated with the technology being used. Fourth, make sure that you take all steps possible to give key business and technology personnel opportunities to work together collaboratively as processes are discovered, explored, refined and improvements implemented. The more opportunities there are for business and technology personnel to collaborate and share information, the more likely it is that all parties will remain fully engaged and on side through an implementation.