Bringing Control to Global Supply Management Business Process Management (BPM) and Advanced Project Management Practices

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1 Bringing Control to Global Supply Management Business Process Management (BPM) and Advanced Project Management Practices Jason Klemow, CTP, Partner The JK Group 301/ ; Francine Holloway, ESQ, Senior Contracts Officer The World Bank 202/ ; 90th Annual International Supply Management Conference, May 2005 Abstract. One of the largest sources of aid to more than 100 developing countries, The World Bank has improved global sourcing and supplier management utilizing Business Process Management and proven project management practices. This workshop will focus on how The World Bank was able to more quickly and effectively manage project lifecycles using BPM for supply management. Presentation Objective. The World Bank Group (World Bank) is transforming its former, highly manual process of selecting consulting services into a robust Web-based, e- Procurement solution. As part of its procurement simplification and modernization agenda, the Bank is streamlining global sourcing, enhancing transparency, increasing open competition, and improving compliance with policies and regulations. Supply managers can learn practical and useful lessons from this implementation and gain insight into a new technology Business Process Management (BPM) that enables organizations to successfully and cost-effectively adapt software to their unique business conditions. Officials from The World Bank and The JK Group will discuss the project background, the e-procurement initiative, the implementation, software selection, best practices / lessons learned, and project results. World Bank Background. The World Bank Group lends around $20 billion each year to fight poverty and improve the living standards of people in the developing world. To fulfill that mission, the World Bank contracts with thousands of service providers and contractors every year to provide technical and managerial services for projects conducted in more than 80 countries around the world. These consultants help in a wide range of activities from policy advice; institutional reforms; management; engineering services; and construction supervision to financial services; procurement services; social and environmental studies; and identification, preparation, and implementation of projects to complement borrowers capabilities in these areas. Development projects funded by the World Bank typically involve multiple contracts and a large number of consultants. The Bank procurement model is decentralized where project or team leaders, not procurement officers, conduct selections with support from procurement specialist and central World Bank procurement offices and centralized policy and contracting offices in Washington D.C. In order to maintain a decentralized, international environment, the Bank needed to increase transparency, enhance compliance efforts, and improve institutional memory (as data is systematically collected during the process).

2 In addition to improving collaboration among dispersed project managers and central contracting officers, the World Bank wanted to increase execution efficiency throughout the entire contracting lifecycle. Pre-existing procurement and ERP systems burdened users by requiring them to access multiple systems, manage tasks manually, and perform redundant data entry. These systems also constrained The Bank with regard to process changes and often required customization when policies and procedures were amended. Business Process Management Background. Delphi Group defines Business Process Management (BPM) as an emerging layer of software for building new process-based applications. While similar technology has been around in some form or another for years, it has been largely thought of as incomplete, complex and difficult to implement. Only recently have organizations started to understand and realize how BPM and BPM software can dramatically improve their business and streamline their operations. By helping organizations model, automate, and manage their internal business processes, which encompass both people and enterprise systems, BPM software can yield repeatable, sustained increases in productivity, while providing an infrastructure for monitoring, simulating, and adjusting these processes so that they are continually optimized for efficiency. In addition, BPM suites provide additional capabilities including collaborative, knowledge-centric tools (e.g., document and content management), as well as security and personalization layers to ensure the appropriate context is delivered. Advanced Project Management Background. The project team responsible for the new solution used an interactive approach to formulate and delivery the overall vision. The approach included, Discovery & Assessment, Strategy & Prioritization, High Level Design, Low Level Design, Customization & Configuration, and finally, Deployment. Each stage had specific measurable outcomes. Project take-away: Having end-users assist with the writing of help text for mockup pages was one of the key lessons learned during this project, and is a practice that has recommended for similar projects. By assisting in the writing of the help text, the project teams were able to quickly identify non-documented processes and requirements. E-Procurement Initiative. The World Bank created a strategic initiative to implement a collaborative, web-based RFP solution that would foster open competition, consistency of practice and minimize process redundancy. They needed an automated system to manage all aspects of solicitations including advertising, vendor registration, issuing RFPs, managing responses to RFPs, responding to vendor questions, and evaluating and awarding contracts. Supplier firms would also need to monitor the procurement process online to view opportunities, express interest, obtain bidding documents and submit bids. Top officials created a set of objectives that included process simplification, open competition, enhanced transparency, strengthened controls and compliance, and automation of the current manual process. Planning Phases. The project team identified realistic goals and objectives from which they could create action plans. The first phase of the approach was Discovery & Assessment. The team conducted stakeholder interviews, user interviews, and focus group meetings on specific topics. This phase allowed the team to identify strengths and weaknesses in the current

3 process, and provide recommendations for process improvements. Balancing desired objectives with realistic, achievable goals, the team benchmarked the future state process design, mandatory and desired features, and formulated a project vision and action plans. To better understand the achievability of their desired goals and objectives, the team investigated the capabilities e-procurement software packages. They found that many software companies provided goods-based procurement tools that could not handle needs for services procurements. With this realization, the team expanded their search for software packages that offered the flexibility and adaptability needed to handle the processes for services procurements. The result of this phase was the creation of a competitive Request for Proposal with Appian Procurement, a solution based on the Appian Enterprise BPM framework, being chosen as the Bank s solution provider. Appian s solution was selected mainly because, in addition to its ability to facilitate and expedite process design and implementation to automate the end-to-end contracting process, Appian s BPM framework provided a unified solution that incorporated personalization, knowledge management, and backend integration capabilities. The second phase was Strategy & Prioritization. At this stage, the World Bank finalized the roadmap and determined the desired features that would be included, resulting in the Budget finalization and statement of work with the selected vendor. Design Phases. During the next phases, High Level Design and Low Level Design, the project team began transforming the vision into hard deliverables. They documented the business processes, created storyboards, created use case scenarios, and identified integration requirements for existing systems. The team created the work breakdown structure starting with a distinct outcome, determining the requirements for achieving this outcome, then methodically breaking down the requirements into small, straightforward tasks. At each step, plans and requirements were reviewed and confirmed with all stakeholders. Along with these objectives, The World Bank outlined technical requirements for the new system. These requirements included features not typically provided by e-procurement software packages: interconnected workflows to handle the entire contracting lifecycle, a web-based portal to provide remote access to a worldwide group of users, collaborative tools that allow group decision-making, document management tools to make contracts and documents easily accessible within the business process, and integration adapters to connect with backend systems such as SAP and legacy systems, and process analytics to track and report on all contracting activities and provide audit trails for each and every process, compliance check, and user action. The power of deploying a full-featured BPM suite to streamline the Bank s procurement process was evident in the ability to map the Bank s processes, while ensuring that the overall solution incorporated user-friendly features and functionality that made it intuitive and easy to use. Such features included: The power of using a BPM framework was evident in the ability to directly map the Bank s processes while making the overall solution intuitive and easy to use with distinctive features and functionality including: Intelligent Wizards: borne from mapping the World Bank procurement process into automated steps, the Pre-Selection Wizard allows non-experts to determine the best procurement solution. The Wizard eliminates guesswork and builds consistency.

4 Real-Time Access: XML-based interfaces to link directly to the World Bank s SAP R/3 system. Process Tracking: on-screen dashboards to provide cross-functional performance and productivity reports which enable users to have an appropriate degree of process monitoring at varying levels of granularity (e.g. person, function, project, or selection). Customization and Configuration Phase. The Development phase was straightforward and included configuration, customization, integration, and testing. While the Bank s processes and procedures were highly unique, the Appian Enterprise BPM framework enabled the Bank to reduce the need for customization in favor of configuration. This effort has become even easier with the latest releases of the Appian Process Modeler, which provides users with web-based visual environment for building and deploying process models without any programming, as shown in Figure 1. Figure 1 Activities and other parameter driven nodes can be dragged and dropped into the design area. An example of the parameters is shown in Figure 2.

5 Figure 2 Deployment Phase. For deployment, the project team relied on Focus group attendees to help determine appropriate training. Based on feedback from the attendees, the Bank created a series of online training videos, 10 to 15 minutes in length, which are accessible to staff before and during any procurement. In addition, demonstrations and hands-on clinics are offered throughout the year. During each of these demonstrations, the project team takes detailed notes on all suggestions and tracks issues in order to make recommendations about future product enhancements. Many of these findings have been documented as lessons learned and were published using a specific set of critical success factors, including: System Integration, Security and Authentication, Re-engineering the Process, Performance Measurement, Top Management Support, Change Management, eprocurement implementation strategy, and Technology Standards. (Leipold, Klemow, Holloway, Vaidya 2004) Results of the Implementation. The World Bank Group is fulfilling its project goals remarkably well. When the new, Web-based procurement solution was deployed, management began to achieve their objectives, and global World Bank staff received an intuitive, easy-touse application. Open competition is improving, as external firms are able to easily register, learn about opportunities, and submit bids. Compliance and consistency, critical to the World Bank, are now electronically enforced. Everyone from management to project managers can

6 access reports on status, performance, and compliance. And process transparency comes from more than reports as anyone with the right access level can view the current state of a selection through personalized dashboards. This top-to-bottom visibility is increasing consistency and communication across a global organization with a decentralized process. Systems integration onto a common business process platform is delivering efficiencies for management and users alike. A single interface to all procurement-related systems allows procurement officers to oversee a procurement process instead of merely providing support to project leaders scattered across the globe. A central point of entry for the entire procurement process, online discussion features, and uniform interfaces to enterprise data sources (e.g. SAP s R/3 system) all serve to streamline processes. Employees in Washington, D.C. can work with colleagues in India just as easily as if they were in the same office building. REFERENCES Liepold, K., Klemow, J., Holloway, F., and Vaidya, K. (2004) The World Bank E-Procurement For The Selection Of Consultants - Challenges & Lessons Learned Journal of Public Procurement, 4 (3): Palmer, Nathaniel (2004) BPM2003 Market Milestone Report Delphi Group White Paper.

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