Business Process Management: The Third Wave

1. Business Process Management: The Third Wave The Next 50 Years of IT

2. Agenda • Today's Development Climate or Complexity that demands a BPM solution • The First Wave • The Second Wave • The Third Wave • Five (5) Core Starting Points for your BPM solutions

3. Agenda • Some Business Integration Challenges to Consider • Value of doing BPM on an SOA Foundation • Some Examples of How BPM enabled by SOA helped Companies • Questions?

4. Today's Development Climate or Complexity that demands a BPM Solution • CEOs cite that INNOVATION is the Top Priority for business • 65% of CEOs recognize that their organizations must make fundamental change to respond to external forces in the next few years • Fewer than half of CEOs believe they have managed this change successfully in the past • Business Model Innovation is the new Strategic Differentiator • Alignment of Business Models with the IT implementation while having the Flexibility between the two is the Driver of all of this

5. The First Wave • Began around the 1890s and early 1900s • Frederick Taylor with his theory of management • He was quoted as saying the following: “In our scheme we do not ask for our initiatives from men. All we want from them is to obey the orders we give them, do what we say, and do it quick.” • Times have changed a little bit since then!

6. The Second Wave • Business Process Re-engineering (BPR) • Processes implemented with ERP software, for example • Business and Process Logic Hard-Coded • Led to EAI (Enterprise Application Integration) i.e. application-to-application focus

7. The Third Wave:Business Process Management • We are now entering, and we are in, "The Third Wave," the wave of Business Process Management • The ABILITY to CHANGE is FAR MORE PRIZED than the ability to create in the first place • BPM enabled by an SOA Infrastructure is the "Secret Sauce" to implementing this for businesses • Goal is to facilitate Business Innovation

8. The Third Wave:Business Process Management • What is Business Process Management (BPM)? - a discipline of combining software capability and business expertise to accelerate process improvement and facilitate business innovation • Includes two (2) things: - Software that enables BPM * Integrate * Modeling * Monitoring * Workflow

9. The Third Wave:Business Process Management - Expertise that delivers BPM * People * Methodologies * Metrics * Process Knowledge * Pre-Built Models, Policies, and Rules

10. A Closer Look at BPM • Governs an organizational cross-functional and core business processes that achieve strategic business objectives • Provides value across three (3) dimensions: * Process Insight and Optimization - understanding what's going on - optimizing the processes * Accelerated Process Improvement - Not just about improving and optimizing - How Fast you can identify the parts of the business that will drive change and how fast you can implement them

11. A Closer Look at BPM - Continued * Flexible Design for Future Change - We do NOT want to "pour cement" into our solutions - Ability to change things easily - As business needs change your implementations change

12. Five (5) Core Starting Points for your BPM Solutions • 1) Modeling and Simulation - Design and simulate business processes - Get a hold of what are the processes that you have and how you can optimize them • 2) Business Activity Monitoring (BAM) - Tracking the performance of processes and operational activities via Key Performance Indicators (KPIs) - Knowing what is going on in your existing systems today in a non-intrusive way

13. Five (5) Core Starting Points for your BPM Solutions – Contd. • 3) Process Choreography - Being able to choreograph processes across applications and systems - Gain immediate value by orchestrating the steps or work flow and have control over them • 4) Pre-Built Frameworks, Reusable Assets, Business Services, etc. • 5) Content-Centric Processing - Managing the process where content is used as Input - Decisions that were used as Output

14. Some Business Integration Challenges to Consider • Spaghetti code; code all over the place • Hard to understand how the processes are implemented • What servers are running which processes? • If you were to shutdown one set of applications what would be the overall impact to the business?

15. Value of doing BPM on a SOA foundation • Leveraging existing investments (reuse) • Bringing these existing investments into a more flexible architecture

16. Some examples of how BPM enabled by SOA helped companies • Managing Change: IBM Corporation - IBM standardized its reusable components - Used its modeling capability to transform its customer order to manufacturing process into a dynamic environment that supports real-time transaction processing - Increased resiliencies with built-in performance monitoring - Reduced the time and cost of a new release/product/new piece of hardware by 25%

17. Some examples of how BPM enabled by SOA helped companies - Business Logic is Adaptable in Real-Time by Business Users - Improved significantly tolerance for errors and performance for doing faster order fulfillment • Responding Quickly: Banking Customer - Automation of many critical business processes affecting more than 10,000 employees - Significantly improved process task completion - Used a workflow management system

18. Some examples of how BPM enabled by SOA helped companies - Easier task completion by employees - Corporate-wide increase in productivity - Savings of $2M in the first year • Enhancing Business Flexibility: Principal Resident Mortgage, Inc. - Used modeling tool that reduced a twelve (12)- step loan process down to two (2) steps! - Found great value in doing modeling and What-If analysis

19. Some examples of how BPM enabled by SOA helped companies - Cut its labor- and paper-intensive post-closing mortgage processing time by an average of 53%! - Resulted in about 34% increase in efficiency - Realized an estimated annual savings of about $4M • As the above examples show effective use of a good BPM solution yields positive results indeed!

20. Business Process Management: The Third Wave Questions?