Business Process Management Systems and SOA – Bridging the Business IT Gap

1. Business Process Management Systems and SOA – Bridging the Business IT Gap Edward Calusinski Consulting IT Architect – FSS Americas

2. A peek into the crystal ball Wouldn’t it be nice if: • You knew how many claims you turned around today? • You knew the number of policies processed today in real-time? • How many policies are waiting on calls? • Who had the highest policy per employee at Noon and at 5:00PM? • You could see in real-time a trend in claims that indicated a new business challenge or opportunity? • You could change your business process without changing your core applications? • You could see the impact of a change to a business process without implementing the change? • You could build applications faster, with less resources and reduce the complexity of your systems?

3. How to make the “Wouldn’t it be nice” questions a reality? A common approach to realizing a solution to these questions is through the blending of these key technologies: • Business Process Management Systems (BPMS) • Component Business Models (CBM) • Service Oriented Architecture (SOA) Key Technologies

4. What is a Business Process Management System? Defining BPMS: Business Process Management Systems (BPMS) is a system that is responsible for the design, deployment, monitoring and managing of key internal IT systems as well as key partner IT systems. BPMS are able to analyze, dissect and alter the behavior of an organizations key processes in such a way as to potentially reshape the way an organization does its business. By providing the tools, technologies and industry standards, BPMS will enable an organization to decompose every aspect of its key business processes and assess the value it provides to the organization, rip out inefficiencies in the process execution and if necessary, outsource the major pieces of the process to proven experts in an on-demand strategy”

5. Business Process Discovery Business Process Design Business Process Analysis Business Process Testing Business Process Modeler Business Process Monitor Business Process Server Business Process Repository Business Process Deployment Business Process Execution Business Process Operations Business Process Optimization Business Process Instrument SOAP Server Workflow Engine Web Server Process Aware Application Process Aware Application Application Module Application Module Integration Adapters Participant Application Participant Application Participant Application Participant Application Distributed Computing Infrastructure The Business Process Management System Stack Business Process Management Business Process Automation Business Process Integration Business Process Infrastructure

6. Modeling of your current business processes enables you to see how well you perform your process today. It also allows you to capture key performance metrics for process optimization or process change analysis

7. Simulating your current business processes allows you to see “hot spots” in the process. Simulating newly created or modified processes allows you to see the impact of change before the change is implemented.

8. Analysis of your processes “in action” enables you to visualize the your key performance metrics and allows you to make informed business decisions. These metrics could also be fed back into the simulation facility to support more accurate simulations.

9. Real Time Business Dashboard Real Time Business Dashboard Real time analysis of your business processes is essential for you to be proactive in instituting change, otherwise the damage has already been done before you can do anything about it.

10. A managers view to the business and the processes allows for closer control of the environment. Who is efficient? What are the pressing problems of the day?

11. A customer example leveraging BPMS Business Challenge Maintain leadership in an increasingly competitive European energy market by implementing a Business Process Management System (BPMS) that enables Electrabel to change existing and implement new business processes quickly and efficiently . Business Benefits: • Implemented a Business Process Nervous System in three months' time, including modeling and automation of first processes • Able to implement medium to-complex integrations at a rate of one per week. • Met the January 1, 2003 deadline specified by the Belgian government. Solution • A BPMS system that included: • Business Process Integration • Business Process Automation • Business Process Management Technology Benefits: • Modeling and automation of business processes • Rapid deployment of new processes • Clear return on investment

12. Component Business Model (CBM) Business Model Component Business Model (CBM) Business Process Integrated Response CBM + Architecture Views Technology Architecture Views Architecture Views To address business issues, an approach that effectively links business and technology is necessary. Business Issue

13. Business Administration New Business Development Relationship Management Servicing & Sales Product Fulfillment Financial Control and Accounting directing controlling Portfolio Planning Business Planning Sector Planning Account Planning Sales Planning Fulfillment Planning Business Unit Tracking Sector Management Relationship Management Sales Management Fulfillment Planning Compliance Reconciliation Product Management Credit Assessment Staff Appraisals executing Staff Administration Product Directory Credit Administration Sales Product Fulfillment Customer Accounts Marketing Campaigns Customer Dialogue Document Management General Ledger Production Administration Contact Routing A Business Component Map is a is a tabular view of the business components in the scope of interest. Columns are Business Competencies, defined as large business areas with characteristic skills and capabilities, for example, product development or supply chain. A Business Component is a part of an enterprise that has the potential to operate independently, in the extreme as a separate company, or as part of another company. An Accountability Level characterizes the scope and intent of activity and decision-making. The three levels used in CBM are Directing, Controlling and Executing. • Directing is about strategy, overall direction and policy. • Controlling is about monitoring, managing exceptions and tactical decision making • Executing is about doing the work

14. Business Administration New Business Development Relationship Management Servicing & Sales Product Fulfillment Financial Control and Accounting L L L L L L L H M M L M L M directing M M M M M H M M M M M M M M M M M M M L L L L L L L L L L L L L L L L L L L controlling executing For example, we can use evaluation criteria to produce a ‘heat map’ to help select and prioritise improvement projects. Portfolio Planning Business Planning Sector Planning Account Planning Sales Planning Fulfillment Planning Target Competency Business Unit Tracking Sector Management Relationship Management Sales Management Fulfillment Planning Compliance B = Base C = Competitive D = Differentiated Reconciliation Product Management Credit Assessment Revenue / Cost Staff Appraisals Revenue Cost (H, M, or L) Staff Administration Product Directory Credit Administration Sales Product Fulfillment Customer Accounts “Hot” Component Revenue/Profit improvement opportunity Marketing Campaigns Customer Dialogue Document Management M General Ledger Production Administration Cost control opportunity Contact Routing

15. At the enterprise level it is important to determine the key “Services” provided by a business component that is leveraged by multiple business processes that cut across the enterprise. Loan Underwriting Accept Loan Application Check Loan Application Status In this example, Loan Underwriting business component, provides two Business Services namely Accept_Loan_Application & Check_Loan_ Application_Status. Both of these Services can be leveraged by multiple variations of Loan_Application_Submission process executed by various channels including Call Center Operators, Customers who are performing Self-Service on the Web, or Data entry professionals who scans the loan applications submitted by postal mail.

16. Loan Underwriting Loan Funding & Setup Accept Loan Application Setup Loan Account Notify the Customer Check Loan Application Status The end to end Business Process such as “Submit Loan Application” itself may be exposed as a Business Service if it needs be invoked by another internal or external system Credit Analysis Check Credit History Submit Loan Application

17. Service Oriented Architecture Service Oriented Architecture (SOA) In order to fully understand what is meant by service oriented architecture, a common understanding of key terms becomes necessary: • Architecture • Service • Service Oriented

18. Defining the terms of Service Oriented Architecture Defining Architecture: • The art and science of designing and erecting buildings. • Buildings and other large structures: the low, brick-and-adobe architecture of the Southwest. • A style and method of design and construction: Byzantine architecture. • Orderly arrangement of parts; structure: the architecture of the federal bureaucracy; the architecture of a novel. • Computer Science. The overall design or structure of a computer system, including the hardware and the software required to run it, especially the internal structure of the microprocessor. “A service is a function that is well defined, self contained and independent of any other service” [1]. • A service can be a business function like an account open. • A service can be an IT function like logging. • A service can be a user interface function like a graphical weather map display. Source: Dictionary.com Defining Service: Defining Service Oriented: Service Oriented is to design with the intent of expressing a feature or function as a consumable service [1] D. Barry, Web Services and Service Oriented Architectures. Morgan Kaufmann Publishers, San Francisco CA 2003.

19. Defining Service Oriented Architecture Definition: Service Oriented Architecture is an architectural design style that expresses computing features as a collection of services. The services are described external from the service implementation, they are stored in a service repository and are consumable.

20. The principles and values of the SOA style of design. SOA Principles: • Modularity • Encapsulation • Loose Coupling • Security • Separation of Concerns • Composable • Single Implementation SOA Business Values: SOA IT Values: • Build once, use often • Services are built by contract • Promotes process consistency • Allows for localization of function and standardization of cross cutting concerns • Standardized integration • Increased responsiveness • Increased business agility • Transcends organizational boundaries • Reduces product development cycle times • Exposes commodities in business process

21. Service Registry Approval Process Service Property Appraisal Service Verify Insurance Service Verify Employment Service Credit Report Service Validate Identity Service Employment Verification Agency Appraisal Brokerage Approval Workflow Mortgage Application Service Provider Mortgage Application Service Requestor Credit Bureau Call Center Example of a Service Oriented Architecture Credit Bureau API Find Mortgage Application Service Publish Mortgage Application Service Credit Report Employment Verification Request Email Employment Verification Response Email Invoke Mortgage Application Service Call Center Work Order Call Center Response Appraisal Request Fax Appraisal Response Fax Initiate Workflow

22. Process Modeling and Analysis Real-time Monitoring and Management Business Process Workflows Invoke Invoke Invoke Invoke Invoke Evolution of business solutions – from BPMS and SOA to the next generation of IT systems. Enterprise Services – Business Functions Routing Pub/Sub Transformation Mediation Transport Distributed Resources: Modular Applications, Databases, Organizations, People

23. Summary How does BPMS, CBM and SOA address the “Wouldn’t it be nice if” questions? • You knew how many claims you turned around today? • You knew the number of policies processed today in real-time? • How many policies are waiting on calls? • Who had the highest policy per employee at Noon and at 5:00PM? • You could see in real-time a trend in claims that indicated a new business challenge or opportunity? • You could change your business process without changing your core applications? • You could see the impact of a change to a business process without implementing the change? • You could build applications faster, with less resources and reduce the complexity of your systems?