Related Sidebar: A BPM Caveat
As lean organizations seek to become leaner, many are turning to a maturing technology that removes the spaces between business processes. "Today's business process management solutions differ significantly from reengineering efforts of the past," relates Richard Watson, a Burton Group analyst. "Where reengineering was about head count reduction, BPM focuses on aligning technology with business processes to drive out the hidden costs across the entire enterprise estate."
In other words, BPM seeks to streamline and govern the multitude of handoffs between functions, departments and divisions. BPM technology accomplishes this by first modeling processes and then executing the model.
"In particular, Wall Street firms are looking to BPM suites for assistance with complex trading," notes Watson. "This is because BPM tools provide granular, auditable, declarative process tracking to substantiate end-to-end regulatory compliance."
While compliance often helps sell BPM, business efficiency remains the primary motivator, according to Rod Favaron, chairman and CEO of BPM vendor Lombardi Software. "The pace of market changes, the unpredictability of change and the consequences of missing a change are the real drivers," he says. "To meet all of the demands, organizations are using BPM to break down the walls between business and IT."
Indeed, providing a collaboration tool that's appropriate for business and IT personnel is a key feature of BPM solutions. "After all, how many business users do you know who are also Java programmers?" asks Favaron rhetorically. "A good BPM solution should permit nonprogrammers to work confidently alongside programmers," he adds.
Successful BPM, however, is as much about philosophy as it is about technology, stresses Burton's Watson. "Although tools are the enabler, your organization must adopt a process mind-set, which is something you can't buy," he explains. "Not only do BPM projects identify opportunities for process improvement, they also can detect processes that could be reused throughout an organization. This means BPM can be quite disruptive. So senior management sponsorship is necessary to effect and support such dramatic change."
Under the Radar
It is that disruptive potential that led London-based Kleinwort Benson to pursue BPM as a stealth project. The work began a few years after Kleinwort's parent, Dresdner Bank, was acquired by Allianz AG. In early 2006 Allianz announced an enterprisewide restructuring and slashed budgets. At about the same time, reports Raju Oak, Kleinwort's head of process services, Kleinwort's new CTO was discovering that a decade of mergers had caused systemic business process redundancies.
As the belt-tightening pain trickled down and new regulatory requirements mounted, Kleinwort decided the emerging category of BPM suites was the way out. But introducing a solution was a chicken-or-the-egg paradox, Oak says. "We had to find a way to demonstrate the potential for streamlining processes without officially dedicating resources," he explains. "Plus we needed to show stakeholders such an initiative would be about business processes and not about IT."
By mid-2006 a pilot had been identified and potential technology vendors were narrowed to three candidates. "We decided to model our money market deal settlements process for the pilot," says Oak. "It was a fairly convoluted process that spanned three business geographies across the enterprise, so a successful pilot would show the value of BPM for revealing improvement potential and, ultimately, lead to executing the model. When we explained the pilot to vendors, we stipulated that we would build the model ourselves rather than have the vendor do it. Since most vendors want a quick and easy pilot, only Lombardi was flexible enough to work with us."
According to Oak, however, prior pushes to realign processes at Kleinwort had proved to be false starts, creating plenty of cynicism in the organization, even within IT. "It was a familiar story: Years after buying more technology and writing more code, nothing really changed," he says. "Not unexpectedly, our IT staff had started to think of process management as a fad pushed by consultants. So while we were selecting a technology vendor, we were also reorienting IT to create a coalition that spoke a common language and had started to think in terms of processes rather than workflow."
Pilot Goes Viral
Kleinwort licensed Lombardi's Teamworks BPM suite in September 2006, and a handful of developers volunteered to tackle the pilot in their spare time. Surprisingly, the team hit pay dirt quickly. "They discovered a great deal of technology had been developed just to link other bits of technology," Oak says. "By simply reorganizing subprocesses, some of the bits of technology could be removed and efficiencies immediately achieved. With such quick wins, IT people started getting really excited and spontaneously contacted business users. Soon business users were providing us with actual metrics that we could plug in to demonstrate tangible benefits. Then modeling really took off."Anne Rawland Gabriel is a technology writer and marketing communications consultant based in the Minneapolis/St. Paul metro area. Among other projects, she's a regular contributor to UBM Tech's Bank Systems & Technology, Insurance & Technology and Wall Street & Technology ... View Full Bio