Better by Design: The Model for Business Process Change
by Amy Larsen DeCarlo

Change is a fact of life for businesses today. So in a market with no tolerance for rigidity or inefficiency, CIOs consistently focus their efforts on process improvement through increased automation. Of course, given the fluid nature of the enterprise, automating process improvement is an inherently difficult task. One way organizations are tackling this challenge is by automating business processes using a flexible service oriented architecture (SOA). The payoff can be big for an organization that executes on an effective business process management strategy (BPM) that leverages SOA; anecdotal reports show cite 25 percent increases in productivity and time-to-market and 10 percent reductions in operations cost. 

With rewards like these, business process management seems like a silver bullet for the myriad of manual tasks that can overwhelm organizations. And indeed, BPM implementations are soaring. Upside Research reported in 2006 that adoption of BPM solutions exploded by 55 percent in Q4 2006 compared with Q4 2005. But there is a downside; even a single seemingly straightforward business process can actually rely on dozens or even hundreds of components, sub-processes and other resources to run its course. Even the prospect of finding a good starting point for a new BPM initiative can seem impossible.

But it doesn’t have to be that way. Companies that are successfully implementing business process improvements don't try to boil the entire ocean with a grandiose BPM strategy; instead, these companies start by taking stock of exactly what processes are most critical to business and what their biggest business challenges are before committing any significant resources to an initiative. These organizations also protect their existing investments by preserving processes that are working well. 

Business and IT organizations need to work together to assess process improvement priorities. As part of this process, they need to analyze the sub-processes and components involved in making end-to-processes work, asses whether key metrics are being met, and identify where problems are occurring. While some organizations focus on bringing process improvements to tactical and often isolated operations, the greatest returns come from changes that address more strategic issues such as improving economies of scale across the organization to increase flexibility, drive innovation and exploit new business opportunities. In what areas are key performance metrics not being met? What are the biggest risks to corporate success? What opportunities is the company unable to exploit because of process inefficiencies or errors? The old adage “If you can’t monitor it, you can’t measure it” applies. Organizations need to continually monitor how processes perform in real time and over time (monthly, weekly, or even yearly). If an organization can see where the slow downs or bottle necks are occurring, then they can go in quickly and act to make improvements.
 
In the Upside Research paper The Business Impact of BPM with SOA, the authors  recommend separating the most critical business issues into categories and then describing their cost to the business in order to prioritize the areas of greatest concern to your company. For example, siloed organizations that fail to share information among different business units are usually highly efficient and carry excessive operations costs. This exercise will help you identify what process changes will deliver the biggest payback in the shortest time frame in order to identify which problems to attack first. These BPM projects often connect multiple processes and leverage existing components to address particular instances.

To get a clear picture of the components and resources associated with a process and how these coordinate with each other, you need to see the entire process flow. Of course, business process flows can be very involved, consisting of dozens or even hundreds of personnel and computing resources. Although you can use a static diagramming tool to map out these process flows, you'll end up with a flat picture that doesn’t account for the enterprise dynamics and external events that may impact the process flow.

More sophisticated solutions such as the IBM WebSphere Business Modeler 6.1 provide a much richer view of process flows to construct a realistic model that makes the connection between processes and real-world performance metrics. The IBM solution allows users to model processes by incorporating all the sequencing and sub-process relationships to create a true three dimensional picture. You can use the tool to simulate various scenarios. And users can input the number of hours and the cost of certain tasks, to see how automating processes can save time and money.

The drag-and-drop interface lets you make changes to see the impact on process efficiency. You can also use the interface to simulate how adding or changing components could impact key performance indicators (KPIs). IBM WebSphere Business Modeler also helps you see where different processes can be linked in certain scenarios to meet a particular need or instance. 

Organizations that use modeling tools like the IBM WebSphere Business Modeler get access to critical, quantifiable information to help them make educated decisions on how to proceed before they make any actual business process changes. Italian logistics firm Pacorini, a distributor of a variety of products from coffee to metals, used IBM’s modeling solution to plot out which process changes it could implement to become more efficient, responsive and save money. Pacorini was able to model its existing processes and simulate various scenarios to learn how integrating new applications and refining existing processes would impact key performance metrics. The company looked at how external and internal events would affect performance.

As a result of this work, Pacorini decided to deploy an online portal customers could use to place orders. The company also now has a system-to-system order management solution that leverages existing components and communicates with its largest coffee customer. According to the distributor, the company has been able to automate as many as 30,000 transactions annually already, which the vendor said equates to a savings of the salaries of four full-time employees. Pacorini plans to add similar system-to-system order management solutions for other large customers.

Being able to prioritize business needs and then work with different scenarios to see how processes can be changed or refined to improve operational efficiencies without having to deploy a single piece of software on the production network gives companies a head start on their BPM implementations. However, this is just the beginning. Businesses still need to translate these what-if scenarios into reality. Next month we will examine how, with the right tools, you can turn a model into actual code which can then be used to create new composite applications which automate processes and produce bottom line results.

Back to Homepage »

Related Articles by Amy Larsen DeCarlo