Defining & Selling Strategic Change Programs at Railinc
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1 1 Defining & Selling Strategic Change Programs at Railinc
2 2 What Strategic Change Program? Rules and Process Modernization (RPM) 5 year Program Total Investment ~ $5.5m 5 Business Units (34 product lines) 30 Business Analysts 100 Developers Software Development Lifecycle Changes
3 3 A Railinc Introduction
4 Railinc is the IT subsidiary of the Association of American Railroads (AAR) l BRMS/BPM 4 AAR Washington, DC TTCI Pueblo, CO Railinc Cary, NC Research & Development Information Technology 4
5 5 What business are we in? Software as a Service (SaaS) Information Technology for freight rail in North America Value Added Network Central Hub to Store, Process, Package and Distribute data Single Industry Source for Network Freight Rail Information Interline Operating Waybill Exchange Equipment Characteristics Interline Revenue Settlement Car Location Information Car Repair Billing Asset Health Alerts Reference Info for BOL and Waybill Creation 5
6 6 Translation What railcar? What type of railcar? When will it arrive? What are the loading and movement characteristics? Who owns it? Leases it? Is it loaded or empty? What commodity? Where is it going? Where is the railcar located now? What is the health of the railcar? Does it need repair? Who repaired it? Who pays? What inspections are relevant? How many miles has it been? What components are on it? What wayside detection info?
7 7 Class 1s Short Lines and Regionals Equipment Owners Railinc provides a network view combining online and offline data Events Mileage Network View Logistics Providers Detector Network Alerts Shippers Repairs / Inspections 7
8 Total Cost Railinc Strategic Approach l BRMS/BPM 8 CUSTOMER VALUE OPERATIONAL EXCELLENCE VISION MISSION VALUES Optimizing Quality, Total Cost and Convenience 8
9 9 Two Options To Sell The RPM I want to Invest in a rules engine and process workflow So our business analyst can manage the business logic And have more control over changes Can I? I want to Deliver additional customer value Through better business agility Higher quality products And reduced total cost of ownership Can I?
10 10 Why People don t buy what you do, they buy why you do it? -- Simon Sinek Why: Externalized business logic drives customer value Increase business agility Reduced total costs of ownership Increase product quality
11 11 How did we sell Rules and Process Modernization at Railinc? Case Study
12 12 Customer Driven Idea (June 2013) That Introduced Business Rules Managemen t Business Process Managemen t New Technical Capability Requirements Where We Started Which Kicked Off Technology Evaluations
13 13 I want to Invest in a rules engine and process workflow So our business analyst can manage the business logic And have more control over changes (June 2013) Very Few Understood Or Bought In
14 14 How We Changed the Conversation
15 15 We Turned an Idea Into a STORY Story
16 Business Story Telling 1. Tell a story of maturing business capabilities to deliver stakeholder value the ultimate why. Stakeholders Business Capabilities 16 Future State Story Issues Current State
17 Tell a story of maturing business capabilities to deliver stakeholder value the ultimate why 17 Establish WHAT Engage STAKEHOLDERS Describe HOW Create WHY Relate WHY the business capabilities are and why the story is important as co-authors of the story and take their temperature for change the business capabilities are currently produced; people, processes and technologies the organization should care about maturing business capabilities to the business strategy and stakeholder objectives
18 18 Business Capabilities 2. Establish what the business capabilities are and why the story is important. Story
19 Railinc Business Capabilities l BRMS/BPM 19 Railinc Business Capabilities Strategic Capabilities Business Strategy Development Capital Planning Business Operations Management Policy Management Enterprise Architecture Management Primary Customer-Facing Capabilities Secondary Customer-Facing Capabilities Asset Registration & Management Asset Health Monitoring Asset Movement Monitoring Asset Cost & Revenue Management Asset Analytics Support Customer Account Management Product Management Transportation Planning Support Transportation Performance Monitoring Transportation Cost & Revenue Management Industry AP/AR Settlement Services Industry Rules & Standards Support Product Development Customer Support Product Support Marketing & Brand Management Emergency Response Support Industry Messaging Services Shipment Consist Monitoring Reference Information Management Meeting Facilitation Program Management Supporting Capabilities Financial Management Information Technology Management Corporate Communication Employee & Contractor Management Training & Development Procurement Enterprise Data Management Business Rules Management Business Process Management Compensation & Benefits Management Business Capability = A particular ability or capacity that a business may possess or exchange to achieve a specific purpose or outcome. Capabilities are modelled in the Business Conceptual layer and represent WHAT the business does (or needs to do) in order to fulfil its objectives and responsibilities. Business Capability is at a higher level than a business process and is in the conceptual layer. It represents a conceptual service that a group of processes and people, supported by the relevant application, information and underlying technology, will perform. The capability represents the WHAT, whereas the process and people represent the HOW and WHO.
20 Rules & Workflow Capabilities in Railinc Applications 20 Generic Application Capabilities LCS Receive Data TRAIN Events Normalize Data Yes Apply Logic/Rules to Data Car Hire Liability Rules, Security Rules Control System Wkflow Corrects Event Record, Participates in Car Hire Wkflow Human Wkflow Interaction Notify/Alert Notify Impacted Parties DDCT (Rule Driven Wkflow) Damaged Car Events & Repairs Yes Notification, AAR, Validation Rules, Security Rules Interacts w/er (car Hire Liability), Adds cars to EW, Updates Umler Controls Notify Car Owner & Shop UMLER Equipment Registration, Inspections Yes Validation Rules, Security Rules, Procedure Rules, Calculation Rules Asset Transfers, Notice/Conflict Mgt Notify Customers CRB 500 Byte Repair Data, Industry Price Master Yes Industry & Custom Billing Rules, validation Rules, Security Rules Supports Claims and Reclaims Processes, Pricing Survey Process Billing Data Exchange Car Hire Data Exchange Car Hire Data Yes Data Exchange Validation Rules, Security Rules Railroad Clearinghouse Initiates Acct ing Processes NOTE: Chart derived from sessions with IT Application Architects
21 21 Rules & Workflow Capabilities Consume 45% of Railinc Application Development Major Applicable Project Activities Environment Setup 10% Messaging 10% Data Validation & Calculation Rules 10% % of Effort Approximately $XXm of the 2014 RPSWC budget will be Spent on Developing Rules and Workflows Security Rules 5% Industry/Operational Rules 10% System to System Integration (Workflow) 10% 45% Notifications/ Alerts (Workflow) 10% UI/CRUD/Query 10% Project Management 7.5% Hardware/Software 5% Customer Engagement 7.5% Activity and % s are based on historical knowledge of resources. We currently do not track project activities in major buckets as seen on the left.
22 Software Development & Rules and Process Management are the business capabilities for our story 22 Software Development Story Rules and Process Management
23 Assess Stakeholders 3. Engage the stakeholders as co-authors of the story and take their temperature for change. 23 Software Development
24 24 Goals of Assessing Stakeholders? Collect Positive Information Collect Negative Information Leverage Influence Educate People on the Story Create Co-Authors of the Story Identify/Recruit Sponsors Sell the Story Understand the Characters in the Story
25 How to Assess Stakeholders? l BRMS/BPM 25 Supporters Detractors On the Fence Don t Care Impacted Identify Leverage Supporters to Pre- Sell Information to Use in the Story Classify Stakeholders Determine Relationships Develop a Communication Plan Manage
26 Current State 4. Describe how the business capabilities are currently produced; people, processes and technologies. 26 Software Development
27 27 Rules Where Business Rules Exist Process Workflow/Process Today Applications Documents Applications Documents Activiti Workflow Tool 1 Application (LOA) Jboss Expert People People
28 BRMS/BPM Standardization & Simplification Umler was the first application which required Railinc to approach Rules development differently. Since then the introduction of multi-year programs and the business articulation of pain points have highlighted rules and process as a candidates for Railinc Modernization Purchased RedHat Jboss (was not a BRMS) Several Products on JBOSS BRMS (included in new releases) IT Lead Rules Mgt POC (IBM vs. RedHat) (AHSI) Requirements to Standardize Rules Mgt Umler Migrated to JBOSS BRMS AHSI Requirements for Integrated Rules and Wkflow MRR Phase 1 MRR Phase 2 RedHat POC? IBM Proof of Technology RedHat Demo Prolifics Engagement
29 Issues l BRMS/BPM 5. Create WHY the organization should care about maturing business capabilities 29 Software Development
30 30 Problems are identified by our customers first We have little to no visibility to why the software produced a certain result, i.e. what rules fired and why did the software reach the conclusion it did? We do a lot of work documenting and developing requirements and then it all gets lost. Something as simple as where is my file can turn into a 3 day effort. We have to dig around in spreadsheets, logs and code to figure out what went wrong. Evaluation Team Quotes We spend a lot of time supporting internal business units answering questions on why something happened. We do not have good technical documentation Our teams do not use the same vocabulary nor do they follow the same procedures. Our systems interact with queues differently, which results in higher maintenance costs. There are only a few people in the company that understand how the system works and even fewer that understand how to maintain and configure these rules without causing severe industry impact as a result of service disruptions. We use outdated Visio diagrams and dig through mainframe code to figure out how the system behaves. Service Delivery often cannot answer customers questions about how the system works and why certain data was or was not received. Every application is written differently and developers switch teams. It is not easy for Product Management to plan, figure out roadmaps and see the impact of product changes across the portfolio of products. The way business rules are expressed is currently too technical so business has to get development involved to change business rules.
31 31 Rules Where Business Rules Exist Issues Applications People Documents Jboss Expert Rules are not easily visible, they are hidden in code or isolated within the organization Changes are hard to track and maintain over time Rules used by systems have to be require IT resources Rules not leveraged across products resulting in duplication and multiple versions of the same rules Lack of auditability, traceability Decision changes cannot be easily tested or simulated
32 32 Current State Process/Workflow Workflow/Process Today Issues Applications Documents Activiti Workflow Tool 1 Application (LOA) Majority of workflow capabilities at Railinc are System to System processing Limited visibility into connections between industry operational processes and Railinc s enablement of those processes Workflow tools were built hard coding in Java not anticipating the need for flexibility Increased development costs and timelines Workflows can not be easily updated or modified People
33 33 Impacts to Railinc With the Current State Impacts Very difficult to answer customer questions, sometimes they can t be answered at all Challenged to manage industry business rules and business processes as Railinc assets Limited in having a consultative relationship with our customers Difficult to upgrade and maintain products Higher development costs and longer project timelines Flexibility, scalability and speed is limited Knowledge transfer and training is difficult across products for all resources Impedes responsiveness and agility to respond to Industry changes
34 Future State 6. Relate why to the business strategy and stakeholder objectives l BRMS/BPM 34 Software Development
35 Business Rules and Process Management Goals & Benefits... Externalizing business rules and workflow gives Railinc greater control, agility and visibility of industry applications, supporting Railinc strategic objectives. 35 Increase Railinc Agility Quicker customer responses Fix problems easier Provide changes faster Railinc Strategy Expand Railinc s Industry Expertise Operational insights into how Railincs products support the industry Increase Product Quality Create transparency and ease of maintenance Reduce Total Cost of Ownership Development Maintenance Management of Upgrades
36 Benefit Case l BRMS/BPM 36 Benefit Category Full Maturity Calculation Assumption % Decrease Reduce Development Cost 13% $500,000 project cost unit Reduce Rules Change Cost 41% Rules Change Labor Hours & Blended Hourly Rate Reduce Workflow Change Process Change Labor Hours & Cost 28% Reduce Rules & Process Application Errors and Time to Resolve 34% Blended Hourly Rate % Error Reduction, Labor Hours to Resolve Reduction, Blended Hourly Rate
37 Foundation l BRMS/BPM Rules & Process Modernization Roadmap RPM Strategy Training RPM COE Technology Asset Services Asset Services Interline UMLER Asset Utilization & Compensation AHSI Mechnical Services Commercial Gateway Services Central Services Technologies Business Rules Methodologies Project Level Learn by Doing Engagements Business Process Management Notation Program Design Governance Compliance Processes Technical Standards Business Standards RedHat JBoss V6 Rules Xpress Auditing POC BAM POC Simulation POC 37 Legacy Application Modernization (69 Applications) RPM Technical Compliance 0% 3% 10% 30% 43% New Development (500k project units) AAR Comm YEARLY COST TOTAL YEARLY 2015 BENEFITS Railinc. All rights reserved.
38 38 Tell a story of maturing business capabilities to deliver stakeholder value the ultimate why Establish WHAT Engage STAKEHOLDERS Describe HOW Create WHY Relate WHY the business capabilities are and why the story is important as co-authors of the story and take their temperature for change the business capabilities are currently produced; people, processes and technologies the organization should care about maturing business capabilities to the business strategy and stakeholder objectives
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