Highmark: Designing a Blueprint for a Process-Driven Business
by Amy Larsen DeCarlo

Business process management (BPM) is hardly a new concept. For years, vendors have evangelized the role their technology can play in helping companies improve efficiencies, and companies have bought into this notion, purchasing tools and suites that aim to streamline operations. But deficits both in the understanding of underlying business components that support business services and the BPM solutions that aimed to improve these processes produced only minor success stories and, in many cases, significant frustration.

The tide is beginning to turn as a number of elements converge to create an almost perfect storm of innovation and progress. For one thing, BPM technology itself is coming of age with more sophisticated applications for modeling and monitoring business environments and executing changes. Industry standards such as the Business Process Execution Language (BPEL), an executable language that guides for Web services process, are helping, too.

Perhaps most importantly, the underlying fundamentals of the relationship between businesses and their IT organizations are undergoing a major transformation. More companies are seeking ways to ensure that their IT initiatives support their corporate objectives. This desire to use technology to improve processes is driving vendors to produce more sophisticated automated BPM solutions.

A case in point is Highmark Inc, the largest healthcare insurer in Pennsylvania, which handles more than 81 million claims a year and has revenues of $11 billion. In 2005, Highmark initiated its SOA direction with the development of an SOA strategy. Then in February 2006, the company launched a strategic information systems initiative to establish more consistent processes to support application development. Highmark set several objectives to better map business and IT development, including getting a better grasp of current and future state business processes and their relationships to each other, instituting a business-driven service oriented architecture (SOA) to create a more flexible and efficient software environment, and establishing standard components for reuse in application development. The company also needed to create standard process terminology across the organization and deploy common tools throughout the business to collect, record, store, and distribute data.

The initiative came in the form of a legacy modernization project championed by Highmark’s CIO. The project took the long view to promoting business process improvements throughout the organization by providing a detailed five-year timeline to develop key processes to improve application development efficiency. First, the insurer tackled the job of developing a BPM framework, creating an organization to support it, and providing the right training and tools to back the effort. This initial phase of the project played out over 20 months – from April 2006 to December 2007. The bulk of that time was spent developing the BPM framework which, in conjunction with applications developed using an SOA foundation, will provide the basis for more agile and responsive business.

In supporting this initiative, the company focused on providing operational value by assessing where changes should be made. Highmark is applying a top-down approach, looking first at the highest level business domains (such as Sales, Client Management, and Integrated Clinical Services) and assessing which business services (such as “Provider Enrollment” and “Determine Provider Rate”) within those domains were good candidates for further analysis and process improvements. The company identified 26 business domains selected half of those as candidates for further evaluation. Within those domains, Highmark analyzed the interrelated processes and identified nearly 800 high-level business processes that required assessment. The processes were reviewed with the business community and validated against Highmark’s future state business requirements and process revisions were incorporated. All processes were created using process modeling tools.

Highmark is using IBM WebSphere Business Process Modeler and IBM Rational Base ClearCase software to help break business processes down to individual business tasks and then make necessary improvements. The company's initiative also depends on another key element: high-level executive backing to support the adequate staffing resources necessary to carry out its plans. Highmark devoted the equivalent of 12 full-time employees to the heavy-lifting work associated with the BPM initiative. Other concurrent activities, including the SOA initiative and the Enterprise Conceptual Data Model initiative were staffed with additional resources and were critical for BPM success. Highmark also emphasizes the importance of internal communication to make sure that key stakeholders are informed of their roles and kept up to speed on progress and to help the cultural change take hold that goes hand-in-hand with BPM.

Highmark created a BPM handbook and an internal training program, including an online component designed for both IT and business personnel, to help employees become more comfortable with the ongoing changes. The company also instituted a mentoring program to help educate employees on the evolving process model to reduce the learning curve for using new tools to just two or three weeks. Highmark also created a BPM users group to foster positive reception to a changing culture. Highmark has a team of 5 individuals to provide continuous evolution and ongoing support to BPM.

The insurer expects its efforts to develop and implement an SOA using BPM to pay off in a number of important ways. Not only will it provide the company with a mechanism to blend and reuse pre-built processes, thus accelerating development time and lowering associated costs, SOA with BPM will enable better communication between the business and IT, provide a long-term vision for systems development and eliminate costly redundancies. Highmark is also using BPM as a stand-alone discipline for process improvement in areas where SOA implementation is not required and is providing awareness on the value of process modeling. Although the BPM effort is still very much a work in progress, the company now has a clearly defined path to accomplishing tangible results: improved customer service, significant cost savings, and the foundation for continued success

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