BPM Enabled by SOA: End to End Process Visibility with Business Activity Monitoring

To learn how to make more of an Impact on your business with Business Process Management (BPM) enabled by Service Oriented Architecture (SOA), join us at IBM Impact 2008, April 6-11 in Las Vegas.

Executive viewpoint

Sandy Carter, Vice President, SOA & WebSphere Marketing, Strategy, and Channels, talks about the importance of building skills and the way to do it: at Impact 2008, IBM's premier conference on SOA. Read her commentary.

BPM enabled by SOA

BPM enabled by SOA is a discipline combining software capabilities and business expertise to accelerate process improvement and facilitate business innovation. Your organization must streamline business processes to become capable of responding rapidly to changing market conditions. And to create this responsive environment, you need to integrate your company's people, applications and information into your business processes. You also need to monitor, control and continuously improve business operations and can do this through Business Activity Monitoring (BAM). Achieving these goals can enable you to create more responsive business processes that go beyond meeting regulations and automating routine tasks — helping you to improve your company's bottom line and meet your strategic business goals.

BAM is integral to BPM and enables you to gain insight into current business operations and track business processes against your targets. This insight can give you the basis for improving your processes and be able see if expected improvements are realized. BAM also naturally aligns with SOA. BAM allows business users to gain role-based, real-time insight into business operations. SOA provides a flexible and componentized IT infrastructure that can help companies easily achieve their business activity monitoring goals. Discrete services can make data available to users and help them take action to quickly address actual and potential business issues. In addition, aligning BAM and SOA projects can reduce overall implementation costs.

What is BAM?

BAM refers to the aggregation, analysis and presentation of real-time, role-based information, including tracking processes, operational activity and business situations using key performance indicators (KPIs) visualized on business dashboards. BAM also facilitates taking action, either by a business user or via automated means, to proactively address current and potential issues that impact the business. As a result, business users can address problem areas quickly and reposition organizations to take full advantage of emerging opportunities. BAM positions you to leverage marketplace or competitive changes almost instantaneously, without the lag time that can hinder companies in this global marketplace.

BAM systems are driven by business events, which are received from a variety of applications and data sources such as workflow and process execution software, ERP, CRM, and other business applications, third party and legacy applications, and partner and supplier sources. Business measures are visualized on business dashboards that can be easily personalized based on users' roles and information needs.
The right software tools provide you with the capability to measure business performance, monitor in-flight and completed processes as well as staff work queues, and generate reports on business operations. BAM provides information via real-time insights from business dashboards, to identify business problems, correct exceptions, and change processes to increase business competitiveness.

Supporting SOA initiatives with BAM

For organizations that are implementing or looking to implement SOA, BAM-related goals can provide business rationale for the SOA implementation. BAM, as an integral part of BPM, allows you to understand business processes and compare actual performance against targets. If you are implementing or already have implemented an SOA, you are well positioned to realize the goals offered by BPM and BAM.

Refer to ibm.com/software/innovate for more information about BPM enabled by SOA. Let's explore BAM goals and how they apply to an SOA initiative, and how SOA facilitates building a BAM solution.

Achieving actionable business insight

A main BAM goal is providing business users real-time, role-based insight into processes and business performance in their domain. Within the IT infrastructure, the processes and business activity that need to be understood may be implemented across multiple monolithic applications, preventing access to important data and thereby inhibiting business insight.

Let's look at an example. An European insurer faced difficulty in tracking claims, resulting in increased losses from over-payments made to claims; roughly 80% of the organization's collected premiums were used to cover claims payments. This insurer implemented a solution to automate the claims process based on an SOA. The process integrates with external partners' systems to gather information in real-time. This integration allowed them to gain visibility into business operations through the real-time, business activity monitoring of the automated processes. Savings resulted from improved efficiencies, reduction of instances of fraud, decreased payouts to ineligible claims, and decreased payments of high taxes on claims.

The need for insight into business operations can be a driving force for the IT organization to adopt more flexible approaches to breaking implementations into reusable services, one of the key aspects of an SOA. Implementing reusable services and making the business data available to a BAM solution results in users having immediate access to the right information through business dashboards versus more static traditional reporting mechanisms.

Business event emission for BAM can be enabled directly from the services or at the layer that stitches together these services into composite applications. In an SOA solution, the linkage technology might be a workflow or process engine, an Enterprise Service Bus, or business applications such as those in the CRM and ERP realms either directly or via adapters. All of these can easily provide business event information to a BAM solution. As a result, users have immediate access to trends and other information that will help them to make the right adjustments to steer the business in the right direction.

Business insight for continuous process improvement

The insight into the current state of the business that BAM offers can be used as a basis for BPM process optimization efforts. Measuring, analyzing, and improving business processes is fundamental to continuous process improvement, cost-cutting, delivering differentiated products and services to customers, and enhancing customer satisfaction.

If you are exploring using the Process entry point for your SOA initiatives, tying in this facet of BAM can improve the effectiveness of process analysis and continuous improvement.

The Process entry point is a business-centric starting point for SOA that provides specific tools and services to help streamline and improve processes across the enterprise. By entering SOA from the process vantage, you can establish the foundation for business process management with SOA.

Taking action with the right information

Along with providing real-time business operation insight, BAM promotes taking proactive measures to mitigate and address issues that affect business performance.
The types of mitigating and corrective actions that can be taken are varied and include things such as adjusting staff workload within organizations and automatically invoking services within an SOA framework - for example human tasks or Web services. Implementing SOA ultimately achieves flexibility for the business and within IT, resulting in an IT infrastructure that is easily responsive to business needs.

Identifying and applying discrete actions based on the business insight obtained from BAM can add to the business rationale for implementing SOA. The componentization and flexibility realized via the SOA implementation facilitates proactive adjustments in response to normal business events or anomalous situations. For example, if an SOA implementation results in a well-defined work flow controlling the business process that includes human tasks and interactions, a manager can easily adjust staff work queues to cover unexpected spikes in demand.

Let's take as an example a state governmental tax and finance organization using SOA and BAM to improve tax return processing. Using BPM process automation software allows them to effectively prioritize work and enables the business to take action by allocating new and existing staff based on fluctuations in tax return inventory.

Measuring the success of an SOA implementation

Before you begin your SOA project, you need to establish your end goals. How will you measure and track the business gains you’ll realize as a result of the project? How will you know if the SOA implementation is being effective at achieving the business gains you expect to realize?

As we have discussed, BAM gives you a way to understand the current state of your business, set targets for improvement, and track towards these goals. By defining the key measures for your business and tracking these via BAM, you have a way not only to better understand what is important to the business, but also see if the key measures are improving over time. That way you can understand if the changes you are making to the IT infrastructure are resulting in the business improvements that you expect.

Aligning BAM and SOA efforts can reduce implementation costs

Aligning BAM and SOA implementations, rather than having separate implementations, allows for implementation cost savings. If your organization is embarking on an SOA project and has plans to implement BAM projects now or in the future, you can reduce overall implementation costs by integrating one or more parts of the BAM project along with your SOA implementation.

To explore how this can work, let's consider the goals of providing business process and activity insight to business users and taking action to mitigate and address potential issues. Take the time up front to understand which business processes are impacted by the SOA project and what business situations could arise in the processes that require mitigation or resolution. Then you'll be able to define what it means to have effective business insight into these processes for the business community, such as identifying the metrics and KPIs that need to be tracked against these processes. You can also identify appropriate actions to take to mitigate or address situations that may occur. This understanding can be applied during the SOA implementation, helping you to implement SOA to address these business requirements more holistically. If you implement an SOA project first without considering the requirements for business insight and what actions you might take to resolve potential business issues, you may overlook some critical requirements that allow you to most effectively implement SOA. These oversights could result in costly rework to your infrastructure down the road.

Aligning BAM and SOA efforts can also result in implementation efficiency by promoting skill growth in many areas critical to the success of an SOA rollout. Read the overview of skills needed when implementing SOA. For example, the task of defining and communicating key business measures between business and IT strengthens skills in all three skill areas important to SOA: business, IT, and alignment of business and IT. This skill growth can improve the efficiency of an SOA implementation.

Business activity monitoring, when applied to your SOA initiatives, will give you actionable insights, helping your business to become more responsive, competitive, and innovative. Want to learn more about BAM and SOA? Get the latest information on BAM and SOA at IBM Impact 2008.

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