Larry Goldberg from KPI helped me with the information in this post. Thanks! The Sucess Stores are based on an article written by Barbara von Halle.

Business Process Management (BPM) is the identification, understanding, and management of business processes that link with people and systems in and across organizations. Business Decision management (BDM) is the practice of identifying business decisions in the business processes and supporting these with business rules. BPM/BDM, a combination of technology and management approaches, is emerging as the leading path to business agility.

Most organizations and IT projects today do not have a consistent approach to controlling business process. They are unaware of important details of business processes, business rules and their importance to operational decisions. The process steps, policies and rules might be hidden - buried in manuals or in system designs. Here, details are likely to be lost, unknown and resistant to change. In many organizations this condition may be acceptable. Yet, if a firm experiences some of these symptoms they may consider reaching for a better approach. For Business people:

  • Staff seems unable to make objectives happen fast enough. Every new project is a struggle, like starting from scratch, and getting managers, operations and IT to agree is a major headache.
  • Business units don’t cooperate. Timelines are missed; reports are incomplete. Meshing agendas challenges everyone.
  • When business conditions change it is almost easier to start by developing a new system than to change the system.
  • IT doesn’t deliver on our requirements
  • Customers get different prices, service quality, and answers to their questions from different parts of our enterprise. Many of our processes are repeated across the business, each with their own IT system

For IT People:

  • Business doesn’t give us requirements that we can rely on, and they change them during the project
  • We have a growing backlog of changes and requirements and a shrinking budget

Many companies experience these common management and performance problems. The solution can be to adopt foundation practices in BPM/BPM. These practices formalize, document and position for change management decisions and the steps needed to carryout the plans. Business though leaders such as Michael Hammer, have shown that these practices will measurably improve your firm’s maturity and mature enterprises work through these challenges with ease.

Numerous firms have improved their performance with BPM/BPM. Here are a few BPM/BPM successes:

Responding to regulations: Oregon Public Employee Retirement System

The Oregon Public Employee Retirement System (OPERS) experienced many of these symptoms in meeting regulatory requirements, litigation concerns, and audit concerns. Businesspeople in OPERS sought more direct involvement in changing processes and decisions. They needed rapidly change processes and supporting decisions. To improve, OPERS took a BPM/BPM approach. It used BPM tools (IBM’s Rational RequisitePro) to capture rules and coordinate changes with business teams.

OPERS increased business agility by combining a process/decision repository with strong business involvement. Also, responsibility for documenting and specifying rules and rule change passed from IT to business users. Where the rule change, approval, test, and deploy process quickened from two to three weeks, to three to five days.

Deploying new products: Freddie Mac

Freddie Mac, the mortgage finance titan, experienced many challenges in creating new loan programs. To improve Freddie Mac’s management strived for continuous service improvement, quick response to dynamic market conditions and competitive advantage. The organization sought to standardize decision making control and business processes across projects. The approach included creating a Business Rules Center of Excellence, adopting BPM/BPM technology, and setting up standards and processes for business rule governance. As a result, Freddie Mac experienced rapid benefits: implementing a new loan program finished 5 times faster than the equivalent deployment on a legacy system.

A more complex scenario: Pershing, LLC

BPM/Decision Management technology is widely used in the financial services industry, so investment was seen as a competitive differentiator at Pershing LLC. This firm provides processing services to than 1,100 institutional and retail financial organizations and independent registered investment firms. A subsidiary of the Bank of New York, Pershing requires consistency and reliability in the face of financial market volumes, and conformity across business processes. These processes control compliance, credit and business risks. Pershing wanted the benefits of enterprise?level decision that could be shared and applied across the organization.

Before using BPM/BPM techniques, Pershing had difficulties meeting strict compliance requirements and transaction volumes. Also, decision needed to be broadly applied yet customized by individual business units.

The BPM/BPM effort bolstered rule reusability, uniformity and regulatory control. Pershing processes orders more quickly and efficiently, according to Ali Quraishi, a director in Pershing’s Technology Group. The approach improved business agility. When market conditions change, the firm can quickly respond, with business experts driving the rule changes.

Resolving a Customer Support Crisis, and Embarking on a Long Term Strategy from the Profits: A Major Telecom

A major telecom was experiencing a crisis in its customer support: many of its retail customers were receiving conflicting messages from various different operating units, resulting in confusion and customer dis-affection. The company had completed an enterprise data project to align its data models, but determined that embedded business rules, marketing and billing problems were the source of the problems.

The short term solution was to implement a BPM/BDM project that established a Center of Excellence to (1) Mine the existing business rules from code, (2) establish a Rules Governance Council, and (3) Fix the immediate business rule crisis.

The savings arising from this short term fix were considerable, and more than sufficient to encourage the organization to embark on an enterprise endeavor that embedded the BPM/BDM process into its methodology, particularly to enable it to support the offshore IT activities that it was engaging.

A Governance Process was adopted, the IT methodology was updated, and the company implemented the KPI BDM/BPM STEP WorkBench to manage business rules and process. The results are that the business rules have become consistent across the enterprise, and traceability drives continuous improvement.

A Ten Year Case Study of Strategic Success

In the mid-1990’s A mid-size financial institution in the mid-west was achieving significant success in the field of group stated contribution plans: however it was experiencing significant growth problems:

  • Employee growth was almost as rapid as business growth, making it difficult for the company to compete with its competitors on cost;
  • Service to customers was declining due to the fact that many of the processes and rules of the business were being managed outside of the business systems. Training of the growing staff was expensive and did not in itself resolve the problem of wide variances in the implementation of process and rules;
  • The company’s IT system was old, batch oriented, and did not lend itself to simple changes even though the regulatory and business environment the company was in demanded rapid evolution and changed.

After consideration the company embarked on a large scale, enterprise wide BPM/BDM solution that would utilize the existing IT assets, but place a tier of Process and Rules upon the legacy code. The company chose this course because of many considerations, chief of which was that the solution could be accomplished in less than half the time of a conventional approach.

Within a two year period the enterprise solution was rolled out, and over 2,000 users were deployed.

The medium term result was a significant drop in per-transaction cost, and a complete cessation of employee growth. The quality of the organization’s customer service improved dramatically, and the company was once of the first in its industry to roll out self-service on the web for its products. The company rated the system as a “significant strategic advantage”.

Now, more than ten years later the company is a global leader in its field, with one of the lowest per-transaction costs, and one of the highest customer satisfaction ratings, in its field.
The motivation for a business process and business decision management approach

Summary

Business Processes and Operational Decisions are important intellectual assets. Most businesses do not document and manage these assets. Ownership of the business processes and the operational decision are often surrendered it to IT. No standardized common repositories and tools to document and share these assets across the enterprise. Organizations can overcome these challenges with a combination of BPM/BPM technology and approaches. We have briefly described how several large firms improved business agility and cost costs through adopting BPM/BPM technology.